27 Fla. L. Weekly D513c
Insurance — Commercial general liability — Exclusions — Spoliation of evidence claim — Action by insured’s employee, who was injured when a ladder collapsed, against insured for spoliation of evidence by losing or disposing of ladder which was needed as evidence in plaintiff’s product liability suit against manufacturer and distributor of ladder — Plaintiff’s claim for spoliation of evidence is properly viewed as being “because of bodily injury” and is within scope of insuring agreement in commercial general liability policy — Coverage for spoliation of evidence claim is excluded under exclusion for “bodily injury to an employee of the insured arising out of and in the course of employment by the insured” — Because plaintiff’s claim is for bodily injury suffered in the course of employment, exclusion is applicable, and trial court erred in entering summary judgment finding that coverage existed
LINCOLN INSURANCE COMPANY, Appellant, v. HOME EMERGENCY SERVICES, INC., KELLER LADDERS, INC., ALBERT MILIAN, ROSE MILIAN, HOME DEPOT USA, INC., and PCA SOLUTIONS, INC., Appellees. 3rd District. Case No. 3D99-1806. L.T. Case No. 98-14677. Opinion filed March 6, 2002. An appeal from the Circuit Court for Dade County, Murray Goldman, Judge. Counsel: George, Hartz, Lundeen & Fulmer and Esther E. Galicia (Ft. Lauderdale), for appellant. Langbein & Langbein and Evan J. Langbein (Aventura); Kenneth E. Cohen, for appellees. Parenti, Falk, Waas, Hernandez & Cortina for Florida Defense Lawyers Association, as amicus curiae; Steven M. Goldsmith for the Academy of Florida Trial Lawyers, as amicus curiae.
(Before SCHWARTZ, C.J., and JORGENSON, COPE, LEVY, GERSTEN, GODERICH, GREEN, FLETCHER, SHEVIN, SORONDO, and RAMIREZ, JJ.)On Rehearing En Banc[Original Opinion at 26 Fla. L. Weekly D229a]
(COPE, J.) The question before us is whether a commercial general liability insurance policy issued by appellant Lincoln Insurance Company provides coverage for a claim for spoliation of evidence.1 We conclude that there is an applicable policy exclusion, and thus no coverage.I.
Albert Milian was a carpenter for defendant Home Emergency Services, Inc. While working, the ladder on which he was standing collapsed. Milian fell, suffering permanent injury to his arm.
At Milian’s request, Home Emergency agreed to preserve the ladder. Milian needed it as evidence for his lawsuit against the manufacturer, Keller Ladders, Inc., and the distributor, Home Depot U.S.A., Inc. By statute, Home Emergency was obligated to cooperate with Milian on this request. See § 440.39(7), Fla. Stat. (1995); General Cinema Beverages of Miami, Inc. v. Mortimer, 689 So. 2d 276, 278-79 (Fla. 3d DCA 1995).
According to Milian, Home Emergency lost the ladder or disposed of it. He filed suit against Home Emergency for spoliation of evidence (“the Milian complaint”). The Milian complaint alleged that the loss of the ladder had caused a significant impairment of his cause of action against Keller Ladders and Home Depot.2
Lincoln Insurance began defending Home Emergency against the spoliation claim under a reservation of rights. Lincoln then filed a declaratory judgment action to determine whether its insurance policy provided coverage for spoliation of evidence.
On cross motions for summary judgment, the trial court found that coverage existed. Lincoln has appealed.II.
Lincoln first argues that a claim for spoliation of evidence does not fall within the coverage of this liability insurance policy. The policy promises to “pay those sums that the insured becomes legally obligated to pay as damages because of `bodily injury’ or `property damage’ to which this insurance applies.”
Lincoln reasons that a claim for spoliation of evidence is not a claim for bodily injury or property damage, but instead is a claim for breach of contract (the agreement to preserve the ladder) or loss of an economic expectancy (the expected damages in the underlying tort case). We do not agree with Lincoln on this point.
We are obliged to construe the insurance policy language favorably to the insured. See Grissom v. Commercial Union Ins. Co., 610 So. 2d 1299, 1304 (Fla. 1st DCA 1992).
The policy covers “damages because of `bodily injury’ or `property damage’ to which this insurance applies.” (Emphasis added). The bodily injury or property damage must be caused by an “occurrence.” “ `Occurrence’ means an accident. . . .”
Milian’s fall from the ladder was an “occurrence.” Reading the policy favorably to the insured, we think that Milian’s claim for spoliation of evidence is properly viewed as being “because of `bodily injury’ . . . .” We therefore conclude that the claim for spoliation of evidence is within the scope of the insuring agreement.3
We acknowledge that the Fourth District Court of Appeal has taken the opposite view in construing identical insurance policy language. Norris v. Colony Insurance Co., 760 So. 2d 1010 (Fla. 4th DCA 2000). We disagree with Norris.III.
We conclude, however, that there is no coverage in this case because there is an applicable policy exclusion. By the policy’s terms, the insurance does not apply to “ `[b]odily injury’ to . . . [a]n employee of the insured arising out of and in the course of employment by the insured . . . .” Milian’s claim is for bodily injury suffered in the course of employment. It follows that the exclusion is applicable and there is no coverage under the insurance policy.4IV.
For the stated reasons, we conclude that there is no coverage. Accordingly we reverse the summary judgment and remand for entry of judgment in favor of Lincoln Insurance Company.
Reversed and remanded. (JORGENSON, GERSTEN, GODERICH, SHEVIN, SORONDO, and RAMIREZ, JJ., concur.)
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(SCHWARTZ, C.J., specially concurring.) Like the court, I am for reversal solely because of the applicability of the standard employee exclusion provision of Lincoln’s comprehensive liability policy. As reflected by my dissenting opinion to the panel, and as now agreed by the majority of the en banc court — but directly contrary to the panel and to Norris v. Colony Ins. Co., 760 So. 2d 1010 (Fla. 4th DCA 2000) — the spoliation claim falls within the general insuring agreement for the payment of “damages because of `bodily injury.’ ” Nevertheless, coverage is unambiguously precluded by exclusion 2(e)(1) which provides that the insurance does not apply to:
“ `Bodily Injury’ to: (1) An employee of the insured arising out of and in the course of employment by the insured; . . . This exclusion applies: (1) Whether the insured may be liable as an employer or in any other capacity.”5
See Florida Ins. Guar. Ass’n v. Revoredo, 698 So. 2d 890 (Fla. 3d DCA 1997) (applying standard employee exclusion provision), review denied, 703 So. 2d 477 (Fla. 1997); accord Aetna Commercial Ins. Co. v. American Sign Co., 687 So. 2d 834 (Fla. 2d DCA 1996), review denied, 698 So. 2d 543 (Fla. 1997). See generally Griffin v. Speidel, 179 So. 2d 569 (Fla. 1965); Greathead v. Asplundh Tree Expert Co., 473 So. 2d 1380 (Fla. 1st DCA 1985); Aetna Fire Underwriters Ins. v. Williams, 422 So. 2d 7 (Fla. 2d DCA 1982). Although I rather cavalierly took a contrary view as to this exclusion at footnote five of the panel dissent, I was wrong.
I have also considered, but rejected, the insured’s argument that to avoid the supposedly undesirable result that, under this holding,6 there is apparently no spoliation protection available to the ordinary businessman under any extant policy,7 “public policy” requires the existence of coverage under a self-denominated “comprehensive” policy, at least in the absence of a provision which excludes spoliation by name. See National Mut. Ins. Co. v. McMahon & Sons, Inc., 177 W.Va. 734, 356 S.E. 2d 488 (1987). Such an approach, however, would introduce the doctrine of consumer-or-insured-expectations into the law of insurance coverage, a field in which the rule’s uncertainty and unpredictability emphatically do not belong. See Deni Associates of Florida, Inc. v. State Farm Fire & Cas. Ins. Co., 711 So. 2d 1135, 1140 (Fla. 1998) (“Construing insurance policies upon a determination as to whether the insured’s subjective expectations are reasonable can only lead to uncertainty and unnecessary litigation.”); State Farm Fire & Cas. Co. v. Metropolitan Dade County, 639 So. 2d 63 (Fla. 3d DCA 1994), review denied, 649 So. 2d 234 (Fla. 1994). Even in this area, it is enough to consider only the terms of the contract itself, buttressed of course by the familiar rules of construction against the insurer, to determine whether coverage exists. In this instance, because of the exclusion, it simply does not.
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(LEVY, Judge, concurring in part and dissenting in part.) While I agree with the majority that the standard employee exclusion provision of Lincoln’s comprehensive liability policy applies to deny coverage, I disagree that Milian’s spoliation claim falls within the general insuring agreement.
In reviewing the Lincoln policy at issue, we start with the basic legal principle that the scope and extent of insurance coverage is defined by the language and terms of the policy. See Union Am. Ins. Co. v. Maynard, 752 So. 2d 1266, 1268 (Fla. 4th DCA 2000); United States Fire Ins. Co. v. Morejon, 338 So. 2d 223, 225 (Fla. 3d DCA 1976). Where the language of the policy is plain and unambiguous, “there is no need for judicial construction and the contract must be enforced as written.” Florida Power & Light Co. v. Penn Am. Ins. Co., 654 So. 2d 276, 278 (Fla. 4th DCA 1995) (citing Great Global Assurance Co. v. Shoemaker, 599 So.2d 1036 (Fla. 4th DCA 1992)). After reviewing the policy and giving its provisions their plain and ordinary meaning, I would hold that the policy does not extend coverage to a spoliation of evidence claim.
Lincoln’s “Insuring Agreement” provides that the insurer “will pay those sums that the insured becomes legally obligated to pay as damages because of `bodily injury’ or `property damage’ to which th[e] insurance applies.” (emphasis added). The policy then explains that: “[t]his insurance applies to `bodily injury’ and `property damage’ only if: (1) [t]he `bodily injury’ or `property damage’ is caused by an `occurrence’ that takes place in the `coverage territory,’ and (2) . . . occurs during the policy period.” (emphasis added). “Occurrence” is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.”
The majority opinion correctly recognizes that the policy covers bodily injury and property damage, and that the bodily injury or property damage must be caused by an occurrence. However, I cannot agree with the majority’s holding that the occurrence for which coverage is being sought in the instant case is Milian’s fall from the ladder. While Milian’s fall from the ladder is definitely an occurrence which caused the bodily injury, it cannot be said that this same occurrence gives rise to coverage for a spoliation of evidence claim under this policy. When faced with the question of whether coverage should be afforded under an insurance policy, it is important to first consider who the insured party is and what the claim is against the insured party for which coverage is sought. See, e.g., New Hampshire Ins. Co. v. RLI Ins. Co., 27 Fla. L. Weekly D377, 378 (Fla. 3d DCA Feb. 13, 2002) (Levy, J., dissenting) (quoting Phillips v. Ostrer, 481 So. 2d 1241, 1247 (Fla. 3d DCA 1985)) (“[t]he act which causes the damage constitutes the occurrence.”). Here, the insured party is HES and the claim against it is for spoliation of evidence. Therefore, the occurrence giving rise to the spoliation claim is the loss of the ladder.
The majority’s analysis of the policy’s application to the instant case omits any discussion of the policy provision which states that the insurance only applies to bodily injury or property damage caused by the occurrence. The damage or loss sought by the spoliation of evidence claim was caused by HES’s negligence in failing to preserve evidence, and is, therefore, not the result of Milian’s fall from the ladder. See Norris v. Colony Ins. Co., 760 So. 2d 1010 (Fla. 4th DCA 2000).8 Consequently, I cannot agree that this insurance policy covers Milian’s spoliation of evidence claim, the occurrence of which is the loss of the ladder. I also have to disagree with the majority’s refusal to follow Norris v. Colony Insurance Co., 760 So. 2d 1010 (Fla. 4th DCA 2000). Regrettably, although acknowledging the conflict, the majority and concurring opinions fail to specifically certify conflict with Norris. I agree with the holding in Norris and would follow it in all respects.
It follows then, that the damages sought against HES, under the spoliation claim, were not the result of “ `bodily injury’ or `property damage’ to which this insurance applies.” Therefore, I would hold that the Lincoln policy does not provide coverage for the allegations contained in Milian’s Complaint and, accordingly, Lincoln does not have a duty to defend or indemnify HES in connection with the spoliation claims. I would reverse the Final Summary Judgment entered below. (GREEN and FLETCHER, JJ., concur.)
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1The court expresses its appreciation to the Academy of Florida Trial Lawyers and the Florida Defense Lawyers Association for the amicus briefs they have submitted at the invitation of the court.
2The Milian complaint included a count for common law spoliation of evidence as well as a count claiming a violation of subsection 440.39(7), Florida Statutes.
In the same complaint Milian also sued Keller, Home Depot, and PCA Solutions, Inc. for personal injury. The suit included a claim for loss of consortium by Rose Milian.
3We need not reach the alternative argument that the spoliation claim is also properly viewed as a claim “because of . . . `property damage’ . . . .”
4This employee exclusion does not apply to an “insured contract,” but the exception for an insured contract is not applicable in this case. The term “insured contract” has a lengthy definition in the policy which we need not quote here. Suffice it to say that an agreement for preservation of evidence does not qualify as an “insured contract” under this policy.
5I also agree with Judge Cope that no exception to this exclusion applies. The most arguable one is contained in 2(e) itself which states that “[t]his exclusion does not apply to liability assumed by the insured under an `insured contract’ ” which is defined in part as:
“That part of any other contract or agreement pertaining to your business . . . under which you assume the tort liability of another party to pay for `bodily injury’ or `property damage’ to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contact or agreement.”
In this case, while the agreement with the plaintiff to preserve the ladder might well qualify as one in which the insured assumed the tort liability of another party, the ladder manufacturer, if the contract were breached, that undertaking was to pay the plaintiff himself not, as the exception states, “a third person,” as in an indemnity or contribution agreement, to which the exception is applicable. See Florida Municipal Power Agency v. Ohio Cas. Ins. Co., 714 So. 2d 660 (Fla. 5th DCA 1998); Allianz Ins. Co. v. Goldcoast Partners, Inc., 684 So. 2d 336 (Fla. 4th DCA 1996).
6The force of this argument is considerably diminished because, as we believe, there is spoliation coverage for any case in which the plaintiff is not an employee who sustained her injuries in the course of employment with the employer-alleged spoliator. Moreover, the fact that there is no protection in this instance applies to every non-spoliation situation to which the exclusion applies. See generally Revoredo, 698 So. 2d at 892 (Fla. 3d DCA 1997)(“[T]he only coverage intended, and for which the premium has been paid, is the liability of the insured to the public, as distinguished from liability to the insured’s employees whether or not they are protected by the workers’ compensation law.”), review denied, 703 So. 2d 477 (Fla. 1997).
7It seems clear the employer’s worker’s compensation policy does not cover the claim either.
8In Norris, the Fourth District, construing policy language identical to the provisions at issue here, found that a spoliation of evidence claim was not covered by the general provisions of the insuring agreement. The plaintiff sought damages for defendant’s negligence in erasing a videotape which may have recorded the assault on plaintiff. See Norris, 760 So. 2d at 1011. The Court noted that the insured agreed to “pay those sums that the insured becomes legally obligated to pay as damages because of `bodily injury’ or `property damage’ to which this insurance applies.” Moreover, like in the instant case, the policy required that the bodily injury or property damage be caused by an “occurrence”. See Norris, 760 So. 2d at 1012. The Court held that “[c]learly this occurrence, the destruction of evidence, did not result in bodily injury.” Norris, 760 So. 2d at 1012.
