23 Fla. L. Weekly Supp. 328a
Online Reference: FLWSUPP 2304COREInsurance — Commercial general liability — Action against several contractors and subcontractors, including insured, arising out of incident in which parking garage project partially collapsed — Duty to defend — Insurer has duty to defend its named insureds and its additional insureds from claims asserted by plaintiff in underlying litigation in which plaintiff sought damages for multiple acts of negligence alleged to have been committed by multiple persons or entities, any one of which can be seen to be an independent and proximate cause of damages sustained by plaintiff when garage partially collapsed — Application of Texas “cause test,” rather than “effects test,” in determining whether damages sustained by plaintiff were result of multiple occurrences
CORESLAB STRUCTURES (MIAMI), INC. and SOLAR ERECTORS U.S., INC., Plaintiffs, v. UNITED STATES FIRE INSURANCE COMPANY, et al., Defendants. AJAX BUILDING CORPORATION, Defendant/Cross-Claimant, v. UNITED STATES FIRE INSURANCE COMPANY, et al., Defendants/Cross-Defendants. AJAX BUILDING CORPORATION, Defendant/Third-Party Plaintiff, v. NATIONAL UNION FIRE INSURANCE COMPANY, Third-Party Defendant. Circuit Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 14-008893 CA 01. April 22, 2015. John W. Thornton, Judge. Counsel: Michael Kiernan and Lauren S. Curtis, Traub Lieberman Straus & Shrewberry, LLP, St. Petersburg, for United States Fire Insurance Company. Stuart Sobel, Steven M. Siegfriend and B. Michael Clark, Jr., Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel, P.A., Coral Gables, District Board of Trustees of Miami Dade College. Michael Jay Rune, II, Shutts & Bowen, LLP, Miami; and Stephen A. Marino, Jr. and Mallory L. Gold, Ver Ploeg & Lumpkin, P.A., Miami, for Ajax Building Corporation. Ira S. Bergman and Lionel F. Rivera, Mount Cotton Wollan & Greengrass, Fort Lauderdale; and Lee H. Ogburn and Steven M. Klepper, Kramon & Graham, P.A., Baltimore, MD, for Hartford Fire Insurance Company. Maritza Pena, Joel D. Adler, and Renee Gomez, Coral Gables, for National Union Fire Insurance Company of Pittsburgh, P.A. Matthew J. Fink, Joseph P. Lang and Jodi S. Green, Nicolaides Fink Thorpe Michaelides Sullivan LLP, Chicago, IL, for National Union Fire Insurance Company. Philip E. Glatzer and Joel D. Adler, Marlow, Adler Abrams Newman & Lewis, Coral Gables, for Starr Indemnity and Liability Company. Earleen H. Cote and Joshua Polsky, Kubicki Draper, Fort Lauderdale, for M.A.R. Contracting and Florida Lemark Corporation. H. Jeffrey Cutler, De La Cruz & Cutler, LLP, Coral Gables, for Sims Crane & Equipment, Co. Robert B. Birthisel, Cynthia M. Dennen and Stacey L. Papp, Hamilton, Miller & Birthisel, LLP, Tampa, for Alterra Excess & Surplus Insurance Company and Indian Harbor Insurance Company.
ORDER ON PLAINTIFFS’ SECOND AMENDED MOTIONFOR PARTIAL SUMMARY JUDGMENT AS TOTHE DUTY TO DEFEND AGAINST DEFENDANT, STARRINDEMNITY & LIABILITY COMPANY ANDINCORPORATED MEMORANDUM OF LAW DATEDSEPTEMBER 15, 2014 AND DEFENDANT, STARRINDEMNITY & LIABILITY COMPANY’S AMENDEDCROSS MOTION FOR SUMMARYJUDGMENT, DATED OCTOBER 31, 2014
THIS CAUSE having come before the Court on April 8, 2015 upon the Plaintiffs, Coreslab Structures (MIAMI), Inc. and Solar Erectors, U.S., Inc.’s (collectively “Coreslab”), Second Amended Motion for Partial Summary Judgment as to the Duty to Defend and Incorporated Memorandum of Law against Defendant, Starr Indemnity & Liability Company (“Starr”), dated September 15, 2014, and Starr’s Amended Cross Motion for Summary Judgment dated October 31, 2014, and this Court after reviewing the parties’ motions, hearing the arguments of counsel and being otherwise advised in the premises, the Court hereby finds as follows:
I. INTRODUCTION & SUMMARY ISSUES PRESENTED
This Court has been asked to determine whether the operative complaint filed by The District Board of Trustees of Miami Dade College, Florida (“MDC”) against several contractors, including Coreslab, contains sufficient allegations to give rise to a duty to defend Coreslab and any additional insureds under a policy of insurance issued by Starr to Coreslab. More specifically, this Court has been asked to determine whether under a “cause test”, as applied by both Florida and Texas courts, the operative complaint sufficiently alleges multiple occurrences to trigger the availability of the aggregate limits under the Starr policy despite the previous payment of the $1,000,000 per occurrence limit.
II. FINDINGS OF FACT
a. The Project & Collapse
On or about July 26, 2011, MDC, entered into a written contract with Ajax Building Corporation (“Ajax”) whereby Ajax undertook the obligation to design and build a parking garage on the west campus of Miami Dade College, located at 3800 NW 115 Avenue, Doral, Miami-Dade County, Florida (the “Project”). See Request to Take Judicial Notice filed Sept. 12, 2014 (“RJN”) and Exhibit L to Complaint for Declaratory Relief (“Complaint”), p.3; and Exhibit G to Complaint.
In furtherance of Ajax’s obligations under its contract with MDC, on April 17, 2012, Ajax subcontracted with M.A.R. CONTRACTING, INC. (“MAR”) to supply and install precast components, including concrete beams, columns and double tees at the Project. See RJN and Exhibit L to Complaint, p.4; and Exhibit H to Complaint. Also on April 17, 2012, MAR sub-subcontracted with Coreslab for the specialty design, fabrication, supply and installation of the precast components at the Project. See RJN and Exhibit L to Complaint, p.4; and Exhibit I to Complaint. On February 16, 2012, Coreslab entered into a sub-subcontract with Florida Lemark Corporation (“Lemark”) to provide grouting of columns at the Project. See RJN and Exhibit L to Complaint, p.4; and Exhibit J to Complaint.
On May 1, 2012, MAR also sub-subcontracted with Solar for the installation of the precast components at the Project. See RJN and Exhibit L to Complaint, p.4; and Exhibit K to Complaint. On or about July 6, 2012, Solar issued a purchase order to and Sims Crane & Equipment, Co. (“Sims”) for the supply and operation of cranes and other equipment utilized in the installation of the precast components at the Project. See RJN and Exhibit L to Complaint, p.5.
On or about October 10, 2012, the Project suffered a catastrophic partial parking garage collapse allegedly as a result of the negligence of Ajax, MAR, Coreslab, Solar, Lemark and Sims, among others. See RJN and Exhibit L to Complaint, p.6.
b. The Underlying Action & Claims
As a result of the partial collapse, on or about October 8, 2013, MDC filed suit against Ajax, MAR, Coreslab, Lemark, Solar and Sims, inter alia, for breach of contract, contractual indemnity, negligence and breach of the building code (the “Underlying Action”). See RJN. More specifically, the preliminary allegations applicable to all counts in the complaint in the Underlying Action contain the following relevant allegations:
a. On or about September 12, 2012, column B3 was placed. See RJN and Exhibit L to Complaint, p.4, ¶ 22.
b. Column B3 was not grouted within 48 hours of its erection. See RJN and Exhibit L to Complaint, p.4, ¶ 23.
c. After placement of column B3, before it was properly grouted and prepared to receive loads from beams, double tees and other building components, the column was loaded. See RJN and Exhibit L to Complaint, p.4, ¶ 24.
d. On October 8, 2012, Sims’ crane, working under the direction and supervision of Ajax, MAR and Solar, hit column B2, which is immediately adjacent to column B3. See RJN and Exhibit L to Complaint, p.5, ¶ 25.
e. On October 10, 2012, a portion of the Project suffered a catastrophic collapse, centered on column B3 (“Partial Collapse”). See RJN and Exhibit L to Complaint, p.5, ¶ 26.
f. The Partial Collapse caused death and other personal injury, property damage, completely destroyed a p01tion of the Project and rendered the remaining portion, which did not collapse, unsafe, unusable and not reparable to contractual tolerances or aesthetics. See RJN and Exhibit L to Complaint, p.5, ¶ 29.
g. Portions of the structure which remained after the Partial Collapse were rendered out of plumb beyond the contractually allowed tolerance. Some of the out-of tolerance portions were also overstressed and not suitable to resist design loads. See RJN and Exhibit L to Complaint, p.5, ¶ 30.
h. These overstressed portions of the Project would have to be corrected before proceeding to complete construction. In addition, the remaining portion of the Project exhibits cracking which must be addressed structurally and aesthetically. See RJN and Exhibit L to Complaint, p.5, ¶ 31.
i. As a direct and proximate result of Defendants’ wrongful acts or omissions, as set forth in all Counts in this Complaint, MDC has suffered damages and will continue to suffer damages, including: a. Costs to correct and complete the Project; b. Additional design and engineering costs; c. Costs associated with delay in the completion of the Project, including liquidated damages; d. Costs associated with delay in the completion of the Project, including actual damages, to the extent Ajax’ abandonment of the Project warrants them; e. Loss of use of property; f. Administrative expenses; g. Additional overhead associated with the remediation and delay; h. Additional transportation costs; I. . Additional security costs; J. Alternate facility costs. See RJN and Exhibit L to Complaint, p.5, ¶ 39.
The complaint in the Underlying Action contains the following relevant causes of action against Sims and Lemark, the two subcontractors primarily responsible for the scopes of work identified as the causes of the collapse:COUNT XI – Negligence Against Lemark
MDC realleges and reasserts paragraphs 1 – 36 as if fully set forth.
79. By virtue of the Lemark Subcontract, Lemark owed MDC a duty properly to perform, inspect, oversee, supervise and accomplish its scope of work at the Project and to ensure that the Project was structurally sound and secure and to recognize and correct any defects or deficiencies and to complete its scope of work at the Project.
80. Lemark owed this duty to foreseeable users of the Project, including MDC.
81. Lemark breached its duty to MDC in the manner set forth in paragraph 38 above.
82. As a direct and proximate result of the negligence of Lemark, MDC has suffered damage, as set forth in paragraph 39 above, as well as additional consequential damages, including damage to reputation and enrollment declines at the location of the Project.
WHEREFORE, MDC demands judgment against Lemark for damages, interest, court costs, attorney fees and such other relief as the Court deems proper.
See RJN and Exhibit L to Complaint, p.18-19, ¶ 79-82.
COUNT XII – Contractual Indemnity Against Lemark
MDC realleges and reasserts paragraphs 1 – 36 as if fully set forth.
83. By the Lemark Subcontract, Lemark agreed to “indemnify and hold[ ] harmless . . . the Owner . . . from any and all claims and damages (including court costs and reasonable attorney fees) claims for damage to property, both real and personal, arising out of the performlance of the Work . . . ”. Further, the Lemark Subcontract incorporates the Contract, including paragraph 12.5 of Pmt II of the Contract. As such, Lemark is obligated to indemnify, defend and hold MDC harmless from all claims, damages, economic losses and expenses, including attorney fees, arising out of or resulting from the performance of the work.
84. By virtue of Lemark’s failures as set forth in paragraph 38 above, MDC has suffered claims, damages, economic losses and expenses, including attorney fees and damages as set forth in paragraph 39 above, for all of which Lemark is obligated to indemnify MDC.
85. Lemark has failed and refused to indemnify MDC, despite demand.
WHEREFORE, MDC demands judgment against Lemark for damages, interest, court costs, attorney fees and such other relief as the Court deems proper.
See RJN and Exhibit L to Complaint, p.19, ¶ 83-85.COUNT XVI – Violation of Section 553.84,Florida Statutes Against Lemark
MDC realleges and reasserts paragraphs 1 – 36 as if fully set forth.
86. Section 553.84, Florida Statutes (2001), creates a cause of action on behalf of any person damaged as a result of a violation of the Flmida Building Codes Act (Sections 553.70, et seq., Florida Statutes), against the party or parties committing the violations. MDC is a person within the meaning of the statute.
87. Lemark owes a statutory duty to MDC, pursuant to the Florida Building Codes Act, to perform its work in the design and construction of the Project in compliance with all applicable local, state, and national building codes and regulations.
88. Lemark violated the Florida Building Codes Act by failing to comply with all applicable local, state and national building codes and regulations, including, but not limited to, the State Minimum Building Codes, and the Florida Building Code, including:
a. Not insuring that the Project was inspected and erected in accordance with project drawings, precast manufacturer’s drawings and erector’s procedures, failing to grout, failing to brace and failing to perform required welds, all as more specifically set forth in OSHA’s Notice of Violation;
b. Failing to grout column B3 in accordance with plans, specifications, submittals and prudent construction practices;
c. Loading column B3 without insuring that it was properly prepared to receive the load; or
d. Allowing column B3 to be loaded without insuring that it was properly grouted and ready to receive a load;
e. Failing to construct in accordance with permitted plans and specifications;
f. Failing to oversee, inspect and supervise its work and that of its subcontractors and sub-subcontractors; or
g. Failing to accomplish construction in a safe manner;
89. Lemark knew or should have known that violations of the Florida Building Codes Act existed.
90. As a result of the violations of the Florida Building Codes Act, there was personal injury or damage to other property.
91. As a direct and proximate result of the aforesaid code violations and resulting construction defects, MDC has suffered damages and will continue to suffer damage as set forth in paragraph 39.
WHEREFORE, MDC demands judgment against Lemark for damages, interest, court costs, attorney fees and such other relief as the Court deems proper.
See RJN and Exhibit L to Complaint, p.20-21, ¶ 86-91.COUNT XVII – Negligence Against Sims
MDC realleges and reasserts paragraphs 1-36 as if fully set forth.
105. By virtue of the Sims Purchase Order, Sims owed MDC a duty to properly perform, inspect, oversee, supervise and accomplish its scope of work at the Project and to ensure that the Project was structurally sound and secure and to recognize and correct any defects or deficiencies and to complete its scope of work at the Project.
106. Sims owed this duty to foreseeable users of the Project, including MDC.
107. Sims breached its duty to MDC in the manner set forth in paragraph 38 above.
108. As a direct and proximate result of the negligence of Sims, MDC has suffered damage, as set forth in paragraph 39 above, as well as additional consequential damages, including damage to reputation and enrollment declines at the location of the Project.
WHEREFORE, MDC demands judgment against Sims for damages, interest, court costs, attorney fees and such other relief as the Court deems proper.
See RJN and Exhibit L to Complaint, p.24-25, ¶ 105-08.COUNT XVIII – Violation of Section553.84, Florida Statutes Against Sims
MDC realleges and reasserts paragraphs 1 – 36 as if fully set forth.
109. Section 553.84, Florida Statutes (2001), creates a cause of action on behalf of any person damaged as a result of a violation of the Flmida Building Codes Act (Sections 553.70, et seq., Florida Statutes), against the party or parties committing the violations. MDC is a person within the meaning of the statute.
110. Sims owes a statutory duty to MDC, pursuant to the Florida Building Codes Act, to perform its work in the design and construction of the Project in compliance with all applicable local, state, and national building codes and regulations.
111. Sims violated the Florida Building Codes Act by failing to comply with all applicable local, state and national building codes and regulations, including, but not limited to, the State Minimum Building Codes, and the Florida Building Code, including:
a. Not insuring that the Project was inspected and erected in accordance with project drawings, precast manufacturer’s drawings and erector’s procedures, failing to grout, failing to brace and failing to perform required welds, all as more specifically set forth in OSHA’s Notice of Violation;
b. Failing to grout column B3 in accordance with plans, specifications, submittals and prudent construction practices;
c. Loading column B3 without insuring that it was properly prepared to receive the load; or
d. Allowing column B3 to be loaded without insuring that it was properly grouted and ready to receive a load;
e. Failing to construct in accordance with permitted plans and specifications;
f. Failing to oversee, inspect and supervise its work and that of its subcontractors and sub-subcontractors; or
g. Failing to accomplish construction in a safe manner;
112. Sims knew or should have known that violations of the Florida Building Codes Act existed.
113. As a result of the violations of the Florida Building Codes Act, there was personal injury or damage to other property.
114. As a direct and proximate result of the aforesaid code violations and resulting construction defects, MDC has suffered damages and will continue to suffer damage as set forth in paragraph 39.
WHEREFORE, MDC demands judgment against Sims for damages, interest, court costs, attorney fees and such other relief as the Court deems proper.
c. The Insurance Policy
Starr issued a commercial general liability policy under Policy Number SISICNP07001611, with a policy period of December 31, 2011 through December 31, 2012 (the “Starr Policy”). See Exhibit A to Complaint. The Declarations of the Starr Policy state in relevant part as follows:
ITEM 4: LIMITS OF INSURANCE
The Limits of Insurance of this policy apply solely to the Coverage Section(s) for which corresponding limit of liability amount is set forth below.
A. AGGREGATE LIMIT OF INSURANCE FOR EACH SEPARATE COVERAGE FORM
(i)
| Separate Coverage Form: | |
| Commercial General Liability General Aggregate | 2,000,000 |
| Products/Completed Operations Hazard Aggregate | 2,000,000 |
C. EACH OCCURRENCE LIMIT FOR EACH SEPARATE COVERAGE FORM
(i)
| Separate Coverage Form: | |
| Commercial General Liability Each Occurrence | $1,000,000 |
| Damage to Premises Rented to your Limit | $1,000,000 |
| Medical Expense Limit | $N/A |
| Personal & Advertising Injury Limit | $1,000,000 |
Id. The aggregate limit reflects the most that Starr will pay regardless of the number of insureds, claims or suits brought for persons or organizations making claims or bringing suits. Id. Section I – Coverages of the Starr Policy provides in pertinent part as follows:
SECTION I- COVERAGES
COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE LIABILITY
1. Insuring Agreement
a. We will 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. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for “bodily injury” or “property damage” to which this insurance does not apply. We may, at our discretion, investigate any “occurrence” and settle any claim or “suit” that may result.
b. This insurance applies to “bodily injury” and “property damage” only if:
(1) The “bodily injury” and “property damage” is caused by an “occurrence” that takes place in the “coverage territory”; and
(2) The “bodily injury” or “property damage” occurs during the policy period;
The Starr Policy contains the following relevant definitions:
SECTION V — DEFINITIONS
9. “Occurrence” means an accident, including continuous or repeated exposure to substantially the same general harmful condition.
…..
12. “Property damage” means:
a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
c. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the “occurrence” that caused it.
Id.
Starr has paid the $1,000,000 per occurrence limit for the incidents which occurred on October 10, 2012. $1,000,000 remains available under the general aggregate limit to pay claims against Coreslab and Solar. See Coreslab’s Second Amended Motion for Summary Judgment as to the Duty to Defend, dated September 15, 2014 and Starr’s Amended Cross Motion for Summary Judgment, dated October 31, 2014.
III. CONCLUSIONS OF LAW
a. Interpretation of Insurance Policies Under Texas Law
The Parties stipulated that Texas law applies to the interpretation of the Starr Policy. As such, this Court has made its determinations pursuant to Texas law. An insurance policy is a contract of adhesion; accordingly, Texas follows the in contra proferentem rules of construction against the drafter. In the interpretation of insurance policies, it is axiomatic that a policy is construed against its drafter. State Farm Life Ins. Co. v. Beaston, 907 S.W. 2d 430, 433 (Tex. 1995).
Specifically, provisions of an insurance policy which define insuring or coverage clauses are construed in the broadest possible manner to effect the greatest extent of coverage. Evanston Ins. Co. v. ATOFINA Petrochemicals, Inc., 256 S.W.3d 660, 668 (Tex. 2008). In contrast to insuring clauses, however, exclusionary clauses are always narrowly construed against the insurer. Id. Exclusionary clauses are typically read strictly and in a manner that affords the insured the broadest possible coverage. Id.
b. Duty to Defend
Under Texas law, the duty to defend is analyzed under what is colloquially called the “eight corners” rule. See GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d 305, 307 (Tex. 2006). The eight corners refer to the comparison of the “four corners” of the complaint with the “four corners” of the insurance policy. Id. The duty to defend is not affected by facts ascertained before suit, developed in the process of the litigation, or by the ultimate outcome of the suit. See Argonaut Southwest Ins. Co. v. Maupin, 500 S.W. 2d 633, 625 (Tex. 1973).
Importantly, the duty to defend is much broader than the duty to indemnify, as it is based solely upon the allegations in the complaint against the insured and should be interpreted broadly. GuideOne Elite Ins. Co., 197 S.W.3d at 310. The duty to defend is separate and apart from the duty to indemnify, and the insurer is required to defend the suit even if true facts later show there is no coverage. Id. The carrier’s duty to defend does not depend on the factual accuracy of the complaint. Id. Even if the allegations are “factually incorrect or meritless,” the carrier must defend. Id.
If the complaint alleges facts which are partially within and partially outside of coverage of the policy, the insurer is obligated to defend the entire lawsuit. Evanston Ins. Co. v. Legacy of Life, Inc., 370 S.W.3d 377, 380 (Tex. 2012). So long as the complaint alleges facts which create potential coverage under the policy, the insurer must defend. See id. at 380; and St. Paul Ins. Co. v. Tex. Dept. of Transp., 999 S.W. 2d 881, 884 (Tex. App 1999)(holding an insurer has a duty to defend the entire suit if there is any claim in the underlying petition that is potentially covered by the policy). An insurer must defend if the allegations in the complaint could bring the allegations of the complaint within coverage under the subject policy; this is true even if the allegations in the complaint “at least marginally and by reasonable implication” can be construed to invoke a duty to defend. Evanston Ins. Co., 370 S.W.3d at 380. All doubts as to whether the duty to defend exists must be resolved in favor of the insured and against the insurer. Id.
The obligation of an insurer to pay defense fees and costs under a commercial general liability policy like that which Starr issued to Coreslab and Solar does not reduce the limits of available insurance. Donald S. Malecki, Commercial General Liability Coverage Guide p.25 (10th ed. 2013).
c. Multiple Occurrences
i. Texas Applies a “Cause” Test
Texas applies the “cause” test and examines the number of events that lead to the injury or damage that give rise to the insured’s liability, not the number of effects. H.E. Butt Grocery Co. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 150 F.3d 526, 530 (5th Cir. 1998); Axis Ins. Co. v. Buffalo Marine Servs., Inc., WL 5231619 (S.D. Tex. 2013). Under the “cause” test, the relevant question in interpreting the word “occurrence” is how many events that occurred that caused the injuries, not how many injurious effects resulted. Lennar Corp. v. Great Am. Ins. Co., 200 S.W.3d 651, 682 (Tex. App. 2006) (abrogated on other grounds by Gilbert Texas Const., L.P. v. Underwriters at Lloyd’s London, 327 S.W. 3d 118 (Tex. 2010). Furthermore, when property damage has multiple causes and occurs in multiple locations, courts have rejected the argument that it only constitutes one occurrence because the entire project is covered under one policy. U.E. Texas One-Barrington, Ltd. V. General Star Indem. Co., 243 F. Supp. 2d 652, 669-70 (W.D. Tex. 2001) (aff’d, 332 F.3d 274 (5th Cir. 2003)).
In H.E. Butt Grocery Co., the court held that, when two girls were sexually abused at different times by the insured’s employee, the acts of sexual abuse constituted two separate occurrences. Id. at 535. In so holding, the court dismissed the notion that the negligent hiring of the employee could constitute the sole “occurrence,” stating that “when the underlying basis for liability is negligent supervision, yet the damage is caused by an intervening intentional tort, the court cannot look past the immediate cause of the damage for purposes of the insurance policy.” Id. at 531. Furthermore, in reaching its decision that the acts of separate sexual abuse constituted multiple occurrences, the court relied upon Home Indem. Co. v. City of Mobile, 749 F.2d 659, 662 (11th Cir. 1984), stating, “While ‘a single occurrence may result in multiple injuries to multiple parties over a period of time . . .[,] if one cause is interrupted and replaced by another intervening cause, the chain of causation is broken and more than one occurrence has taken place.’ ” H.E. Butt Grocery Co., 150 F.3d at 534.
In Buffalo Marine, the court held that when four separate barges were loaded with contaminated fuel and delivered to customers, these deliveries of the contaminated fuel constituted multiple occurrences. Id. at *17. The court began its analysis by first noting that, in determining what constitutes an occurrence under Texas law, “The courts do not focus on an overarching cause, but on the event or events that give rise to the insurer’s liability under the policy.” Id. at *5. Texas courts call this the “ ‘liability-triggering event’ test.” Id. at 15. In this manner, the court held that “The contamination of the barges did not make Buffalo Marine liable to bunkers customers; instead the later loadings of bunkers on the four contaminated barges and delivery of them to customers gave rise to Buffalo Marine’s liability here.” Id. at *17.
Similarly, the court in Lennar Corp. v. Great American Ins. Co., 200 S.W.3d 651 (Tex. App. 2006), held that the defective nature of a product put into use on multiple occasions constituted multiple occurrences because it was the application of the defective product that triggered liability, not the defective nature of the product itself. Id. at 682. Furthermore, the court noted that the consequence of the defective product (entrapped water) which caused damage to the homes was not the same entrapped water for each home. Id. at 682-83. As a consequence, the insured was exposed to new and separate liability for each home on which the defective product was applied. Id. at 683.
Although Texas law applies to the instant action, Florida law also applies a “cause” test, and is therefore instructive and persuasive, though not controlling. See Koikos v. Travelers Ins. Co., 849 So. 2d 263 (Fla. 2003) [28 Fla. L. Weekly S194a]; and Mid-Continent Cas. Co. v. Basdeo, 742 F.Supp.2d 1293 (S.D. Fla. 2010) [22 Fla. L. Weekly Fed. D445a]. Under the “cause theory” of analyzing what is an “occurrence” under an insurance policy in Florida, the Florida Supreme Court has held that the courts should analyze the immediate acts that give rise to the injuries. Koikos, 849 So. 2d at 273. In Koikos, the Florida Supreme Court held that each of two gun shots fired close in time were each an “occurrence” which meant that there were two “occurrence limits” available to pay the claims against the insured. Id. The court went on to explain “the insured’s alleged negligence is not the ‘occurrence’, the insured’s alleged negligence is the basis upon which the insured is being sued by the injured party.” Id. at 271. In Koikos the court found that it was the gunshots, not Koikos’ failure to provide security, which determined the number of occurrences. Id.
The case of Mid-Continent Cas. Co. v. Basdeo, 742 F.Supp.2d 1293 (S.D. Fla. 2010) [22 Fla. L. Weekly Fed. D445a] further illustrates the existent of multiple occurrences in the instant action. In Basdeo, Hurricane Wilma inflicted significant damage on the buildings of a condominium association, and to repair the damage to the buildings, the condo association hired a contractor. Mid-Continent Cas. Co. v. Basdeo, 742 F.Supp.2d 1293 (S.D. Fla. 2010) [22 Fla. L. Weekly Fed. D445a]. The contractor was insured by Mid-Continent Casualty Company under a CGL policy. Id. Basdeo was one of the condo owners. Id. In Basdeo, the Southern District of Florida analyzed the meaning of “occurrence” in CGL policies, including undertaking a thorough review of the Koikos case. The court held that three occurrences transpired. Id. In Basdeo, the definition of “occurrence” was identical as it is in the Starr Policy, and the court held that damages caused in connection with the insured’s tarping work, the damages caused in connection with the insured’s work on the roofs, and damages caused in connection with the insured’s work on the mansards were three separate occurrences. Id. The court determined that each of these categories of damages resulted from a separate force, and that the separate forces inflicting the damages are what determine the number of occurrences. Id. In Basdeo, the record reflected that the work done on the flat roofs differed substantially from work performed on mansards, and the insured undertook different types of work on different parts of the buildings, and as such, the insured’s work on each of the parts of the buildings set in motion a separate force and the damages stemming from the work on the mansards and the flat roofs constituted two separate occurrences. Id.
In this case, the alleged negligence of Lemark (in failing to properly grout the column within 48 hours) and the alleged negligence of Sims (in striking column B2 with the crane), are separate forces which are alleged to have caused damage to the Project. Therefore, the incidents of October 10, 2012 can be seen as multiple occurrences, thus triggering the full general aggregate limits available under the Starr Policy of $2 million.
ii. The Additional Cases Relied Upon by Starr are Inapplicable or Unpersuasive
In its summary judgment briefing, Starr relies upon the case of United Nat. Ins. Co. v. International Petroleum & Exploration, 2007 WL 4561460 (D. Utah 2007). The court in the United Nat. case confirms that Texas applies a “cause” analysis to determine whether a set of facts involves more than one occurrence. United Nat. Ins. Co. v. International Petroleum & Exploration, 2007 WL 4561460 (D. Utah 2007). According to the court, under Texas law, “ ‘the proper focus in interpreting “occurrence,” is on the events that cause the injuries and give rise to the insured’s liability, rather than on the number of injurious effects.’ ” Id. at *20. Contrary to Starr’s recitation, the facts of the United Nat. case offer no insight into how this Court should resolve this case as that case only discusses one act of negligence which resulted in damage, the unloading of the waste. Additionally, none of the parties to the United Nat. case “proffered any specific evidence regarding what exactly caused the accident.” Id. Conversely, the complaint filed by MDC in the Underlying Action very clearly alleges that multiple parties’ negligent acts were allegedly responsible for the injurious effects — the bodily injury claims and the property damage, which includes the partial parking garage collapse.
Starr encouraged this Court to focus on the analysis in the United Nat. case, particularly the portion where the court states “the pertinent question is not whether the accident had multiple causes, but instead what caused the injuries that gave rise to the insureds liability”. To that end, it is important to recognize that MDC has filed suit against Coreslab for, inter alia, the “property damage” associated with the parking garage collapse. Coreslab has never argued that it is entitled to the aggregate limits under the Starr Policy because there were multiple bodily injury claims and property damage claims. Instead, Coreslab contends, and the Court agrees, that the complaint filed by MDC in the Underlying Action alleges that multiple events and/or negligent acts, i.e. the lack of grouting on column B3 and the crane strike to column B2, lead to the partial collapse, which is just one of the resulting injuries.
While the Court recognizes that there is only one explicit allegation of resulting damage in the complaint in the Underlying action, namely the collapse, the Court is not persuaded by this because the relevant inquiry is not whether the underlying complaint clearly lays out all of the resulting damage, but whether the underlying complaint forecloses the possibility of resulting damage from the crane strike. Evanston Ins. Co., 370 S.W.3d at 380. The Court finds the underlying complaint does not foreclose the possibility that the crane strike caused independent damage.
Likewise, Starr’s reliance on Snelling & Snelling, Inc. v. Fed. Ins. Co., 205 F. App’x 199 (5th Cir. 2006), and Am. States Ins. Co. of Texas v. Arnold, 930 S.W.2d 196 (Tex. Civ. App. 1996), is not persuasive.
Snelling & Snelling, Inc. v. Fed. Ins. Co., 205 F. App’x 199 (5th Cir. 2006) is inapplicable. Not only is Snelling an unpublished opinion with no persuasive value, but it is factually distinguishable from the instant case. In Snelling, the court held that the injury or destruction to the insured’s customers in or near each tower (9/11 terrorist attack) resulted from the same cause — airplanes flying into the Twin Tower. Id. at 205. More importantly, the court notes that Texas law, specifically Goose Creek Consolidated Indep. School District v. Continental Cas. Co., 658 S.W. 2d 338 (Tex. Civ. App. 1983), and U.E. Texas One-Barrington, Ltd., 332 F.3d 274, 278 (5th Cir. 2003), support an argument that:
the destruction of the towers by separate planes and at different times were two separate occurrences rather than one produced by a single terrorist attack — a theory under which Snelling might be entitled to recover up to $250,000 for damage to Dependent Business Premises in each tower — Snelling concedes that it has never advanced this argument.
Snelling, 205 F. App’x at 205. (emphasis added). As such, Snelling supports Coreslab’s application of Texas law that multiple occurrences were triggered when Lemark failed to properly grout column B3 and when Sims operated a crane which hit column B2. The court in Snelling failed to adopt the multiple occurrences because the insured never advanced this argument, whereas Coreslab has.
Similarly, American States Ins. Co. of Texas v. Arnold, 930 S.W. 2d 196 (Tex. Civ. App. 1996) is inapplicable in this case. Arnold held that when a carrier exhausts its limits, its duty to defend ends if stated as such in the policy. Id. at 201. Arnold specifically involved a car crash, which resulted in one occurrence. Id. at 199. That is not the case here. Rather, Starr’s policy limits have not been exhausted as shown on Starr’s policy limits of insurance provision, which states that policy limits for an aggregate limit of insurance is $2,000,000.00. Since Starr has already paid $1,000,000.00, it still has available $1,000,000.00 under the general aggregate limit to pay claims against Coreslab. Specifically, at least a potential of more than one occurrence which caused damage to property other than the subject contract and the fact that Starr has not exhausted its full aggregate limits of insurance, requires Starr Indemnity & Liability Company to defend Coreslab and Solar from the claims of MDC in the Underlying Action.
IV. CONCLUSION
It is clear that Texas applies a “cause” test. The “effect” or end result is irrelevant, particularly for determining the duty to defend. The operative complaint in the action styled The District Board of Trustees of Miami-Dade College, Florida v. Ajax Building Corporation, Inc., under Case No. 2013-031900-CA-40, alleges multiple occurrences and damage to other property.
More specifically, there are multiple acts of negligence alleged to have been committed by multiple persons or entities, any one of which can be seen to be an independent and proximate cause of damages sustained by MDC in the incidents which occurred on October 10, 2012. The alleged independent and immediate acts of Lemark in failing to properly grout column B3 within 48 hours of erection is one immediate alleged proximate cause for the collapse. The alleged negligence of Sims in operating the crane which hit column B2, immediately adjacent to column B3, is yet another independent alleged proximate cause of the damages sustained at the Project. Thus, it is clear that no less than two (2) entities are alleged to have committed independent acts of negligence which gave rise to the damages sustained by MDC in the Underlying Action.
The Complaint in the Underlying Action also clearly alleges that because of those actions and inactions, damage to property other than the subject contract resulted. Thus, the complaint in the Underlying Action sufficiently alleged damage to “other property”. See Exhibit L to Complaint, ¶ 90 and 113. More specifically, the direct causes of action against Sims and Lemark all clearly identify that the collapse resulted in damage to “other property.” Id. It also does not foreclose the possibility that independent damages occurred as a result of Sims actions, namely the crane strike to column B2. The complaint in the Underlying Action is completely silent as to the specific damages resulting from the crane strike, which necessarily means that independent damages were possible.
These factors combined with the fact that Starr has not exhausted its full aggregate limits of insurance, requires Starr to defend its named insureds Coreslab Structures (MIAMI), Inc. and Solar Erectors, U.S., Inc. and its additional insureds from the claims asserted by MDC in the Underlying Action.
The Court therefore ORDERS and ADJUDGES as follows:
1. Plaintiffs, Coreslab Structures (MIAMI), Inc. and Solar Erectors, U.S., Inc.’s Second Amended Motion for Partial Summary Judgment as to the Duty to Defend and Incorporated Memorandum of Law against Defendant, Starr Indemnity & Liability Company dated September 15, 2014 is GRANTED;
2. Defendant, Starr Indemnity & Liability Company’s Amended Cross Motion for Summary Judgment dated October 31, 2014 is DENIED;
3. This Court retains jurisdiction to determine any and all indemnity obligations Starr Indemnity & Liability Company owes to Plaintiffs, Coreslab Structures (MIAMI), Inc. and Solar Erectors, U.S., Inc., along with any other matters framed by the pleadings in this action; and
4. This Court explicitly holds that in making the foregoing rulings the Court is not making any determinations about whether there is or is not a duty to indemnify at this time.
