24 Fla. L. Weekly Supp. 31a

Online Reference: FLWSUPP 2401URSCInsurance — Commercial general liability — Coverage — Commercial general liability insurer’s duty to defend landscaping subcontractor whose president died in construction site accident against third party complaint and cross-claims brought against subcontractor by general contractor and construction site owner in wrongful death action that was brought by estate of deceased president — Where complaint and cross-claims contain indemnity/contribution claims that fairly and potentially fall within scope of coverage afforded by subcontractor’s commercial general liability policy, insurer has duty to defend subcontractor — Exclusion for obligations of subcontractor under workers’ compensation and similar laws is not applicable to claims brought by non-employees — Contractual liability and employer’s liability exclusions are not applicable where both except from their scope tort liability assumed by subcontractor under an insured contract, and subcontract between subcontractor and general contractor is an insured contract

SHARON URSCHELER, et. al., Plaintiff, vs. COASTAL CONSTRUCTION OF MIAMI DADE, INC., et. al., Defendant. Circuit Court, 11th Judicial Circuit in and for Miami-Dade County, Civil Division. Case No. 14-4189 CA 22. April 22, 2016. Michael A. Hanzman, Judge. Counsel: Judd G. Rosen and Glen Z. Goldberg, Goldberg & Rosen, P.A., Miami, for Plaintiff and Flora-Tech Plantscapes. Pamela Beckham, Beckham & Beckham, P.A., Miami, Co-Counsel for Plaintiff. Pedro P. Sotolongo, Sotolongo P.A., Miami, Co-Counsel for Flora-Tech Plantscapes. Peter H. Murphy and Steve Cornman, Kubicki Draper, Ft. Myers, for The Palace Management Group. Michael R. Jenks and Stephanie M. Suarez, Walton, Lantaff, Schroeder & Carson, LLC, Miami, for Twin Stone Design & Installation. Jeffrey F. Bogert and J. Lane Middleton, III, Bogert & Rembold, P.L., Coral Gables, for Defendant, Coastal Construction of Miami-Dade, Inc. Rick D. Ravine, Marshall, Dennehey, Warner, Coleman & Goggin, Fort Lauderdale, for Angelini Metal Works Corp. Hugo V. Alvarez, Alvarez Barbara, LLP, Miami, for D&C Home Services Corp.Edward T. Sylvester, Coral Gables, for Mid-Continental Casualty. Mark A. Pedisich, Ivan D. Solari, P.A., Ft. Lauderdale, for Color Factory, Inc.

ORDER ON CROSS-MOTIONSFOR SUMMARY JUDGMENT

I. Introduction

Before the Court are cross-motions for summary judgment filed by Flora-Tech Plantscapes, Inc. (“Flora-Tech” or “Insured”) and Mid Continental Casualty Company (“Mid-Continental” or “Insurer”). The question presented is whether the insurance policy issued by Mid-Continental obligates the carrier to defend the Third Party Complaint and Amended Cross-Claims brought against Flora-Tech by Coastal Construction of Miami Dade, Inc. (“Coastal”) and The Palace Management Group, LLC (“Palace”).¹ Because the Court finds that the third party and cross-claims filed against Flora-Tech contain allegations which could fall within the scope of coverage afforded by the “Commercial General Liability Policy” (“Policy”) issued by Mid-Continental, Flora-Tech’s “Motion for Summary Judgment” is GRANTED to the extent it seeks a ruling that the carrier has a “duty to defend,” and Mid-Continental’s “Motion for Summary Judgment” is DENIED.²

II. Undisputed Material Facts

A. The Claims

On April 26, 2013 David Urscheler (“Mr. Urscheler”) was fatally injured in an accident that took place at “The Palace,” an assisted living facility located in Coral Gables. The property was in the midst of a construction project pursuant to a contract entered into between the owner of the facility, Palace and its general contractor, Coastal. Mr. Urscheler was the President and Director of Flora-Tech, a company that had sub-contracted for landscape and irrigation work on the project.

Plaintiff, Sharon K. Urscheler, as Personal Representative of Mr. Urscheler’s Estate, filed a wrongful death action against a number of parties including Palace and Coastal. Her Complaint alleges that on the date in question Mr. Urscheler “was a business invitee lawfully on the job site at The Palace Coral Gables,” and that while he “was on the second or third floor, he slipped and/or fell on an inconspicuous slippery substance due to workers marble polishing, and/or painting, and/or dusting.” The Estate alleges that this accident, which resulted in Mr. Urscheler’s death, was caused by the Defendants’ failure to “exercise reasonable care in the maintenance, inspection, repair, warning, or mode of operation of the business premises.” See Second Amended Complaint, ¶¶ 29, 40, 51, 63 and 74.³

In response to the Estate’s “Second Amended Complaint” both Palace and Coastal asserted claims against Flora-Tech. Through its “Amended Cross-Claim” Palace seeks “Contractual Indemnity Against Flora-Tech” (Count X) and “Common Law Indemnity Against Flora-Tech” (Count XI). In its “contractual indemnity” claim Palace alleges that “[p]ursuant to Article 12 of the subcontract agreement between Coastal and Flora-Tech, Flora-Tech agreed to ‘defend, indemnify and save harmless’ Coastal and The Palace, ‘from and against any and all claim, cost, expense or liability (including attorney’s fees, and including costs. . .), attributable to bodily injury, sickness, disease or death, or to damage to or destruction of property (including loss of use thereof), caused by, arising out of, resulting from, or occurring in connection with the performance of the Work by Subcontractor. . . .” See Amended Cross Claim, ¶ 80. And through its “common law indemnity” claim, Palace alleges that the Estate’s damages “occurred because Flora-Tech failed to perform its duties as a subcontractor in accordance with safety and industry standards, and pursuant to its contract with Coastal.” See Amended Cross-Claims ¶ 89.

Similarly, and also in response to the Estate’s wrongful death suit, Coastal brought third party claims against Flora-Tech for: (a) Breach of Contract (Count I); (b) Common Law Indemnity (Count II); and (c) Contribution (Count III). Through its breach of contract claim, Coastal maintains that Flora-Tech violated the terms of its “subcontractor agreement” by, among other things, failing “to post danger and warning signs” — failing to “erect proper barricades and other safeguards” — and failing to “require that its personnel (i.e., Mr. Urscheler) wear hard hats while at the Project.” See Amended Third Party Complaint, ¶¶ 15-17. In Count II — Common Law Indemnity — Coastal alleges that its potential liability to Plaintiff is “vicarious, constructive, technical, or derivative for the wrongful acts or omissions of Flora-Tech in the performance of its work on the Project.” Id., ¶ 30. And in Count III Coastal claims a right to contribution based upon “Flora-Tech’s failure to train and protect DECEDENT when he was exposed to a fall six (6) feet or greater by using a personal fall arrest systems or otherwise.” Id, ¶ 36.

Flora-Tech has denied the material allegations of Coastal’s Third Party Complaint and Palace’s Cross-Claim.

B. The Subcontract Agreement

As noted earlier, some (but not all) of the claims asserted against Flora-Tech are based upon Article 12 of its subcontract agreement with Coastal, which provides:

Article 12 — INDEMNITY

a. To the full extent permitted by law, [Flora-Tech] agrees to defend, indemnify and save harmless [Coastal] and [The Palace] (and their respective officers, directors, shareholders, members, employees and agents), as well as any other parties which [Coastal] is required under the Contract Documents to defend, indemnify and hold harmless, and their agents, servants and employees, from and against any claim, cost expense, or liability (including attorneys’ fees and including costs and attorneys’ fees incurred in enforcing this indemnity at mediation, arbitration and all trial and appellate levels), attributable to bodily injury, sickness, disease, or death, or to damage to or destruction of property (including loss of use thereof), caused by, arising out of, resulting from, or occurring in connection with the performance of the Work by [Flora-Tech], its subcontractors and suppliers, or their agents, servants, or employees, whether or not caused in party [sic] by the active or passive negligence or other fault of a party indemnified hereunder, provided, however, [Flora-Tech]’s duty hereunder shall not arise if such injury, sickness, disease, death, damage or destruction is caused by the sole gross negligence of a party indemnified hereunder.

Id. (Emphasis added). Pursuant to this indemnification provision, Flora-Tech obligated itself to indemnify and hold harmless both Coastal and Palace from and against any “claim” or “liability” “attributable” to “bodily injury” or “death” “caused by,” “arising out of,” or “occurring in connection with” the performance of Flora-Tech’s work, even if caused, in part, by fault on the part of Coastal or Palace; an agreement to indemnify that is commonly used and fully enforceable. See, e.g., Etiole Intern., N.V. v. Miami Elevator Co., Inc., 573 So. 2d 921 (Fla. 3d DCA 1990) (contracts of indemnification which clearly and unequivocally express an intent to indemnify against the indemnitee’s own wrongful acts will be enforced); Camp, Dresser & McKee, Inc. v. Paul N. Howard Co., 853 So. 2d 1072 (Fla. 5th DCA 2003) [28 Fla. L. Weekly D1412a] (contracts purporting to indemnify a party against its own negligence will only be enforced if they clearly express such an intent).

C. The Insurance Dispute

On May 18, 2015 Flora-Tech filed its “Complaint for Declaratory Judgment” seeking a “judicial declaration that [Mid-Continental] must defend and indemnify [Flora-Tech] for the claims asserted in [Coastal’s] third party complaint and [Palace’s] crossclaim.” Id., ¶ 21. On October 28, 2015 Mid-Continental filed its “Amended Counterclaim and Cross-claim for Declaratory Relief,” asking that the Court “find and declare” that Mid-Continental “has no duty to defend — and necessarily no duty to indemnify — Flora-Tech” for Coastal’s “Third Party Complaint” or Palace’s “Amended Crossclaim.” Id., ¶26. Mid-Continental named both Coastal and Palace as cross-defendants, thereby providing each with an opportunity to litigate all coverage issues.⁴

D. The Relevant Policy Provisions

The Policy obligates Mid-Continental to “pay those sums the insured [Flora-Tech] becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damages’ to which this insurance applies.” It also obligates Mid-Continental to “defend the insured [Flora-Tech] against any suit seeking those damages.” See Insuring Agreement, §1.a. The insurance “applies” to any “bodily injury” or “property damage” caused by an “occurrence” that takes place in the “coverage territory.” Id., ¶ b(1). An “occurrence” is defined to include “an accident. . . which first becomes known by any person or organization on or after the date of inception of this policy period. . . but prior to the earlier of the date of expiration or cancellation of this policy.” See Endorsement ML13-70 (11 11) Definition — Occurrence, ¶ 13. And there is no doubt that the tragic “occurrence” which spawned this case took place in the “coverage territory.”

Because both Coastal and Palace claim that Flora-Tech is “obligated to pay as damages” amounts they may be held liable for “because” of a death (i.e., bodily injury) caused by an “occurrence” (i.e., an accident) that took place within the “coverage territory,” Flora-Tech’s exposure on the Third Party and Cross-Claims falls comfortably within the basic “insuring agreement.” Mid-Continental, however, raises the following three (3) exclusions which it claims negate coverage:

2. Exclusions

This insurance does not apply to:

c. Contractual Liability

“Bodily injury” or “property damage” for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages:

(1) That the insured would have in the absence of the contract or agreement; or

(2) Assumed in a contract or agreement that is an “insured contract,” provided the “bodily injury” or “property damage” occurs subsequent to the execution of the contract or agreement. Solely for the purposes of liability assumed in an “insured contract”, reasonable attorney fees and necessary litigation expenses incurred by or for a party other than an insured are deemed to be damages because of “bodily injury” or “property damage”, provided:

(a) Liability to such party for, or the cost of, that party’s defense has also been assumed in the same “insured contract”; and

(b) Such attorney fees and litigation expenses are for defense of that party against a civil or alternative dispute resolution proceeding in which damages to which this insurance applies are alleged.

d. Workers’ Compensation and Similar Laws

Any obligation of the insured under a workers’ compensation, disability benefits or unemployment compensation law or any similar law.

e. Employer’s Liability

“Bodily injury” to:

(1) An “employee” of the insured arising out of and in the course and scope of:

(a) Employment by the insured; or

(b) Performing duties related to the conduct of the insured’s business; or

(3) The spouse, child, parent, brother or sister of that “employee” as a consequence of Paragraph (1) above.

This exclusion applies whether the insured may be liable as an employer or in any other capacity and to any obligation to share damages with or repay someone else who must pay damages because of the injury.

This exclusion does not apply to liability assumed by the insured under an “insured contract”.

As the policy plainly states, the “Contractual Liability” and “Employer’s Liability” exclusions do not apply to liability assumed by the insured [Flora-Tech] under an “insured contract,” which is defined as follows:

9. “Insured contract” means:

f. That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for “bodily injury” or “property damage” to a third person or organization, provided the “bodily injury” or “property damage” is caused, in whole or in part, by you or by those acting on your behalf. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.

C. The Parties’ Positions

Flora-Tech asserts that the claims brought against it by Coastal and Palace do not seek to enforce any “obligation of the insured” under a workers compensation (or similar) law — but are rather garden variety indemnity/contribution claims. And because these claims are based — at least in part — on an undertaking pursuant to an “insured contract” (i.e., the subcontract agreement), neither the “Contractual Liability” nor the “Employer’s Liability” exclusion is implicated. Thus, Flora-Tech insists that Mid-Continental has a duty to defend and indemnify against these claims. Mid-Continental disagrees and claims that:

(a) A commercial general liability policy does not cover an insured’s obligation to its employees arising out of the employment. See Motion, p. 7;

(b) That the “Employer’s Liability” exclusion is triggered because the claims involve “bodily injury” to an “employee” [Mr. Urscheler] occurring within the course and scope of his employment, and in the performance of duties “related to the conduct of the insured’s business.” See Motion, p. 13;

(c) The “Contractual Liability” exclusion is triggered because the claims seek damages caused by “bodily injury” Flora-Tech may be obligated to pay “by reason of the assumption of liability in a contract or agreement,” See Motion, p. 14; and

(d) The Subcontractor Agreement is not an “insured contract” because “Flora-Tech agreed to assume that tort liability of Coastal and Palace for bodily injury caused in whole or in part by Coastal and Palace’s own acts or omissions — not Flora-Tech’s acts or omissions.” See Motion, p. 16, 17.

III. Governing Law

The legal principles to be applied here are well settled. Like any contract, an insurance agreement is “construed in accordance with the plain language of the policy as bargained for by the parties.” Fayad v. Clarendon Nat. Ins. Co., 899 So. 2d 1082 (Fla. 2005) [30 Fla. L. Weekly S203a]; Auto-Owners Ins. Co. v. Anderson, 756 So. 2d 29, 33 (Fla. 2000) [25 Fla. L. Weekly S211a]. Furthermore, to the extent any ambiguity exists, the carrier — as the writer of the contract — “is bound by the language of the policy, which is to be construed liberally in favor of the insured and strictly against the insurer.” Washington Nat. Ins. Corp. v. Ruderman, 117 So. 3d 943 (Fla. 2013) [38 Fla. L. Weekly S511a]; St. Paul Fire & Marine Ins. Co. v. Llorente, 156 So. 3d 511 (Fla. 3d DCA 2014) [40 Fla. L. Weekly D67a]. It also is well settled that the interpretation of an insurance contract presents a question of law because: (a) the interpretation of an unambiguous contract provision raises no factual dispute; and (b) even if the relevant provision is found to be ambiguous (i.e., susceptible to more than one reasonable interpretation) the ambiguity is to be construed against the insurer and in favor of coverage. See Penzer v. Transp. Ins. Co., 29 So. 3d 1000 (Fla. 2010) [35 Fla. L. Weekly S73a]; Stuyvesant Ins. Co. v. Butler, 314 So. 2d 567 (Fla. 1975); Jones v. Utica Mut. Ins. Co., 463 So. 2d 1153, 1157 (Fla. 1985). Consideration of extrinsic evidence is a rare matter of last resort to be employed only when an ambiguity cannot be resolved without “outside aid.” Friedman v. Virginia Metal Products Corp., 56 So. 2d 515, 517 (Fla. 1952).

In construing the policy the Court should read it “as a whole, endeavoring to give every provision its full meaning and operative effect,” and the contract should receive a construction that is “reasonable, practical, sensible, and just.” See Gen. Star Indem. Co. v. W. Florida Vill. Inn, Inc., 874 So. 2d 26 (Fla. 2d DCA 2004) [29 Fla. L. Weekly D348a]. But “[i]f the relevant policy language is susceptible to more than one reasonable interpretation, one providing coverage and the [other] limiting coverage, the insurance policy is considered ambiguous,” Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So. 2d 528, 532 (Fla. 2005) [30 Fla. L. Weekly S633a], and “any ambiguity which remains after reading the policy as a whole and endeavoring to give every provision its full meaning and operative effect must be liberally construed in favor of coverage and strictly against the insurer.” Ruderman, supra at 949-950.

Finally, the Court must be mindful that the insurer, as the drafter of its policy, is in the best position to construct the contract as it sees fit, and the Court’s task is to apply the parties’ contract as written, not “rewrite” it under the guise of judicial construction. Gulliver Sch., Inc. v. Snay, 137 So. 3d 1045 (Fla. 3d DCA 2014) [39 Fla. L. Weekly D457a](“[w]here contracts are clear and unambiguous, they should be construed as written, and the court can give them no other meaning”); Pol v. Pol, 705 So. 2d 51, 53(Fla. 3d DCA 1997) [23 Fla. L. Weekly D75a] (“a court cannot rewrite the clear and unambiguous terms of a voluntary contract”). The Court’s duty is to simply apply the terms of the insurance agreement as they would be understood by the “man-on-the-street.” State Farm Fire & Cas. Co. v. Castillo, 829 So. 2d 242 (Fla. 3d DCA 2002) [27 Fla. L. Weekly D1845a].

IV. Analysis

Applying these settled principles of construction, the Court has no difficulty concluding that Mid-Continental has — at the very least — a “duty to defend” the claims brought against its insured — Flora-Tech — by both Coastal and Palace.

A. The Worker’s Compensation Exclusion

The “Worker’s Compensation and Similar Laws” exclusion plainly and unambiguously provides that the carrier will not be obligated to defend or indemnify against:

Any obligation of the insured under a workers’ compensation, disability benefits or unemployment compensation law or any similar law.

Both the plain meaning and purpose of this exclusion are obvious. The clause, as clearly written, prevents the insured — Flora-Tech — from seeking coverage that is (or should be) afforded through workers’ compensation insurance, and every case that has applied this “exclusion” has done so in an action brought directly by an injured employee against an employer/insured that either had — or was required to have — workers’ compensation coverage that would attach to the claim. See, e.g., Pac. Employers Ins. Co. v. Wausau Bus. Ins. Co., 508 F. Supp. 2d 1167 (M.D. Fla. 2007) (insurance dispute between two carriers over which had the obligation to cover claim brought directly by worker seeking compensation for injuries sustained while working at insured’s business); Scottsdale Ins. Co. v. GFM Operations, Inc., 789 F. Supp. 2d 1278 (S.D. Fla. 2011) (“Worker’s Compensation and Similar Laws” exclusion analyzed in the context of a claim brought directly by an employee against insured employer); Sinni v. Scottsdale Ins. Co., 676 F. Supp. 2d 1319 (M.D. Fla. 2009) (exclusion applied in case brought directly by employee who was provided “significant workers’ compensation benefits for the very injuries for which she subsequently sought relief in the underlying tort action”); Oppenheim v. Reliance Ins. Co., 804 F. Supp. 305 (M.D. Fla. 1991) (worker’s compensation exclusion applied to a claim brought directly by an employee of insured who “was entitled to Workers’ Compensation benefits and received them”); Indian Harbor Ins. Co. v. Williams, 998 So. 2d 677, 679 (Fla. 4th DCA 2009) [34 Fla. L. Weekly D186a] (workers’ compensation exclusion applied to negligence claim brought directly by employee against employer/insured which “violated his statutory duty to maintain workers’ compensation insurance for his employees”); Florida Ins. Guar. Ass’n, Inc. v. Revoredo, 698 So. 2d 890 (Fla. 3d DCA 1997) [22 Fla. L. Weekly D2023a] (exclusion applied because obligation to decedent who was “deemed to be employed” by insured “is under workers’ compensation law”).⁵

What these cases all have in common is that the exclusion was analyzed — or applied — in the context of a claim brought directly by an employee against an employer/insured “liable under workers’ compensation.” Oppenheim, supra at 308. Applying the exclusion in this context is not only consistent with its plain language, it furthers its intended purpose — which is to prevent commercial liability policies from being “turned into” workers’ compensation polices, and ensure that coverage under commercial liability polices is extended to the employer/insured only for claims by third parties, not for “liability to the insured’s employees whether or not they are protected by the workers’ compensation law.” See Revoredo, supra at 890.

Here, Flora-Tech is not being sued by an “employee” who would be protected by workers’ compensation law or any “similar” legislation. It is being sued by third parties it agreed to indemnify, or may owe a common law duty of indemnity or contribution. Put simply, Flora-Tech is not being sued for “any obligation” under a workers’ compensation law or “similar” law. And while it is true that the “origin” of this litigation is the workplace death of a Flora-Tech employee, this clause does not apply simply because an indemnification or contribution claim “arises out of,” “relates to,” is “premised upon,” or “connected with,” a workplace occurrence.

Mid-Continental was of course free to draft this exclusion in a manner that would preclude coverage for any claim brought by any party “arising out of” or “related to” any “bodily injury” inflicted upon an insured’s “employee,” including indemnity and contribution claims. In fact, the carrier did exactly that when it drafted its “Employer’s Liability” exclusion, which: (a) attaches to any claim for “bodily injury” “arising out of and “in the course of” employment by the insured, or the performance of “duties related to the conduct of the insured’s business”; and (b) “applies whether the insured may be liable as an employer or in any other capacity” (i.e., indemnitor). But Mid-Continental did not draft its “Workers’ Compensation or Similar Laws” exclusion so as to cover indemnity and third party claims brought by non-employees, and no court has ever applied this exclusion to bar coverage for (or preclude a duty to defend) such a claim. This Court will not be the first to do so by judicially “rewriting” the exclusion to expand its scope — the polar opposite of what the law compels it to do. See Flores v. Allstate Ins. Co., 819 So. 2d 740 (Fla. 2002) [27 Fla. L. Weekly S499a] (“[p]olicy provisions that tend to limit or avoid liability are interpreted liberally in favor of the insured and strictly against the drafter who prepared the policy, and exclusions to coverage are construed even more strictly against the insurer than coverage clauses”).⁶

B. The “Contractual Liability” and “Employer’s Liability” Exclusions

Turning next to the “Contractual Liability” and “Employer’s Liability” exclusions, the Court need not dissect these clauses in order to determine whether they would otherwise apply to the facts of this case, the reason being that: (a) both exclude from their scope “liability assumed by the insured” [Flora-Tech] under an “insured contract”; and (b) the Court concludes that the subcontract agreement between Flora-Tech and Coastal is in fact an “insured contract.” These exclusions therefore do not apply to the claims pled by Coastal and Palace that are premised on the subcontract and, as a result, Mid-Continental has a duty to defend both cases in their entirety. See Jones v. Florida Ins. Guar. Ass’n, Inc., 908 So. 2d 435 (Fla. 2005) [30 Fla. L. Weekly S581a].⁷

i. The “Insured Contract” Exception to the “Contractual Liability” and “Employer Liability” Exclusions

As noted earlier, the policy expressly provides that liability assumed by the insured under an “insured contract” will be covered even if the claim would otherwise fall within the ambit of either the “Contractual Liability” or “Employer Liability” exclusion. For purposes of this “exception” to these “exclusions” an “insured contract” again means:

e. That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for “bodily injury” or “property damage” to a third person or organization, provided the “bodily injury” or “property damage” is caused, in whole or in part, by you or by those acting on your behalf. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.

Here there is no doubt that the subcontract is an agreement “pertaining” to Flora-Tech “business,” and that through Article 12 Flora-Tech “assumed” “tort liability” that might be imposed upon “another,” including Coastal and Palace.⁸

Notwithstanding that: (a) the Estate has sued both Coastal and Palace in a case alleging “tort liability”; and (b) Flora-Tech agreed to assume that “liability,” Mid-Continental insists that the subcontract is not an “insured contract” because Flora-Tech “agreed to assume the tort liability of Coastal and Palace for bodily injury caused in whole or in part by Coastal’s and Palace’s own acts or omissions — not Flora-Tech acts or omissions,” and — according to Mid-Continental — the “policy does not extend coverage to a written agreement in which the insured agrees to indemnify another party for that party’s own acts or omissions.” Motion, p. 16-17. Mid-Continental’s argument is factually incorrect and legally wide of the mark.

Contrary to Mid-Continental’s “reading” of the subcontract, “Article 12 obligates Flora-Tech to indemnify and hold Coastal and Palace harmless against only claims “caused by, arising out of, resulting from, or occurring in connection with the performance of the work by” Flora-Tech. The provision does not, as Mid-Continental posits, obligate Flora-Tech to indemnify either Coastal or Palace for any exposure resulting from acts or omissions unrelated to Flora-Tech’s contractual performance. The indemnity provision again contemplates, and in fact requires, that exposure to an indemnitee result from “work” performed by the insured, and the claims filed against Flora-Tech both allege that Coastal and Palace face liability caused, in whole or in part, by acts or omissions on the part of FloraTech.⁹

Of course this is precisely what the Policy requires in order the trigger a duty to defend or indemnify, as it clearly and unambiguously provides that the “insured contract” exception to the ‘Contractual Liability” and “Employer Liability” exclusions will apply when the insured agrees to “assume” the tort liability of another, “provided the ‘bodily injury’ or ‘property damage’ is caused, in whole or in part, by you [Flora-Tech] or by those actions on your [Flora-Tech] behalf.” See Policy, Form CG 24 26 07 04. And because the exposure only has to be caused in part by the insured, there is no requirement that the indemnitee (Coastal and Palace) be blameless. Or put another way, the “insured contract” exception contemplates the precise situation here — one where the insured is being sued for indemnity and contribution by a party who may bear some responsibility for the “bodily injury” or “property damage” realized by the original plaintiff. See, e.g., Mid-Continent Cas. Co. v. Royal Crane, LLC, 169 So. 3d 174 (Fla. 4th DCA 2015) [40 Fla. L. Weekly D1371c] (“. . .an indemnity agreement can be an ‘insured contract’ under the policy where the injury is caused by the indemnitee’s negligence, so long as the named insured ‘caused’ some part of the injuries or damages or is otherwise vicariously liable”).

The bottom line is that this case presents the exact scenario contemplated by — and addressed in — the “insured contract” exception. The insured [Flora-Tech] assumed the “tort liability of another” (Coastal and Palace) for “bodily injury” or “property damage” caused by or related to the performance of the insured’s [Flora-Tech’s] work. Its indemnitees (Coastal and Palace) allege that they are exposed to liability to Mr. Urscheler’s Estate due to Flora-Tech’s neglience. And the Policy clearly and plainly insures against this exposure so long as the “bodily injury” or “property damage” is found to have resulted, “in whole or in part,” from acts or omissions of Flora-Tech or those “acting on” its behalf. The subcontract’s indemnity provision and the Policy’s “insured contract” clause are simpatico in all respects.

V. CONCLUSION

Based upon the plain language of the Policy, as clearly and unambiguously written, as well as a reading of the policy “as a whole,” the Court finds that Mid-Continental has a “duty to defend” Flora-Tech against the claims brought by Coastal and Palace, as both the third party and cross-claims allege facts that fairly and potentially bring the suit within coverage. Furthermore, even if the “exclusions” relied upon by Mid-Continental are not clear (and the Court finds that they are) any ambiguity would be construed in favor of the insured, as the “exclusions” would be read strictly and in a manner that affords the broadest possible coverage. Indian Harbor Ins. Co. v. Williams, 998 So. 2d 677 (Fla. 4th DCA 2009) [34 Fla. L. Weekly D186a]. And one thing here is certain: None of the “exclusions” advanced by Mid-Continental clearly and unambiguously encompass the claims asserted against Flora-Tech by Coastal and Palace.

Based upon the foregoing it is hereby,

ORDERED AND ADJUDGED:

1. Flora-Tech’s Motion for Summary Judgment is GRANTED to the extent it seeks a declaration finding that Mid-Continental has a “duty to defend” it against the claims asserted by Coastal and Palace.

2. Mid-Continental’s Motion for Summary Judgment is DENIED.

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¹The policy — [Editor’s Note: Number Omitted] — covered the period of December 1, 2012 to December 1, 2013. The parties do not dispute its terms or whether it was in force at all times material to this dispute.

²Flora-Tech’s Motion for Summary Judgment was filed and served on March 4, 2016. The Motion requests that the Court enter an order finding that the policy “provides coverage” for both the Third Party Complaint asserted by Coastal, and the Cross-Claims asserted by Palace. Mid-Continental’s “Motion for Summary Judgment” also was filed and served on March 4, 2016. The Motion asserts that Mid-Continental “has no duty to defend Flora-Tech for the claims asserted against Flora-Tech by Coastal and Palace; thus, there is no corresponding duty to indemnify Flora-Tech for any claims asserted by Coastal and Palace.” See Motion, p. 20. The Court has decided at this point to address only the question of whether Mid-Continental has a duty to provide a defense, an issue determined by examining the allegations of the pleadings filed against the insured and the Policy itself. If those pleadings, “fairly read, contain any allegations which could fall within the scope of coverage, the insurer is obliged to defend the entire action.” Psychiatric Associates v. St. Paul Fire & Marine Ins. Co., 647 So. 2d 134, 137 (Fla. 1st DCA 1994). The question of whether Mid-Continental has a duty to indemnify Flora-Tech against any damages ultimately awarded will be left for another day.

³The Second Amended Complaint brings claims against not only Palace, as the owner of the property, and Coastal, as the general contractor, but also against a number of other participants in the construction project. It does not, however, assert any claim against Flora-Tech.

⁴Both are “additional insureds” under the Policy. This Order, however, does not address any issue regarding Coastal’s or Palace’s right to a defense or indemnification against the claims brought against them by the Estate as: (a) apparently neither has demanded that Mid-Continental “defend” the case; (b) no judgment has been entered against either; and (c) the cross-motions for summary judgment filed by Flora-Tech and Mid-Continental do not tee up those issues.

⁵Many decisions applying this exclusion involve situations where the parties to the underlying dispute entered into a Coblentz agreement, Coblentz v. Am. Sur. Co. of New York, 416 F.2d 1059 (5th Cir. 1969), a contract whereby the parties stipulate to a judgment collectable only against the defendant’s insurer — a judgment by which an insurer which has wrongfully refused to defend may be bound if it is later determined that coverage exists. To recover under a Coblentz agreement it must be established that: (a) the policy provides coverage; (b) the carrier wrongfully failed to defend; and (c) the settlement (i.e., consent judgment) was objectively reasonable and made in good faith. Chomat v. N. Ins. Co. of New York, 919 So. 2d 535 (Fla. 3d DCA 2006) [31 Fla. L. Weekly D169a].

⁶Mid-Continental devotes considerable time arguing that Mr. Urscheler was an employee of Flora-Tech; that the “major contributing cause” of his injury was a “workplace accident”; and that his injury was thus compensable under the “Florida’s Worker’s Compensation Act.” See Mid-Continental’s Reply pp.10-13. The Court agrees. That is precisely why the Worker’s Compensation” exclusion would apply if the Estate had sued Flora-Tech. But the claims Flora-Tech faces are not brought by the Estate. They are brought by third parties claiming a right to indemnity and contribution. And if Mid-Continental wants its “Worker’s Compensation” exclusion to apply any time a claim “arises out of” injury to an employee, it should draft the exclusion to say just that.

⁷Though the Court need not decide whether these exclusions would apply even absent the “insured contract” exception, it rejects Mid-Continental’s contention that the claims brought against Flora-Tech are “wholly premised upon the existence of a contract or agreement.” Motion p. 15. To the contrary, the common law indemnity and contribution claims are not dependent upon the subcontract at all, and for this additional reason the “contractual liability” exclusion would not preclude coverage for those claims. See Exclusion, ¶ b (1) excepting any liability the “insured would have in the absence of the contract or agreement.”

⁸The “insured contract” provision of the Policy defines “tort liability” as “a liability that would be imposed by law in the absence of any contract or agreement” It is undeniable that both Coastal and Palace are being sued by the Estate for a “tort liability,” and that each are attempting to shift that “tort liability” onto Flora-Tech through enforcement of the indemnification clause contained in subcontract.

⁹The Palace acknowledges that “the clear purpose, intent and language of the indemnity provision in the subcontract is to require Flora-Tech to defend and indemnify Coastal and The Palace for bodily injury or death caused in whole or in part by Flora-Tech’s negligence, and there can be no other purpose for the subcontract to have such indemnity provisions.” See Palace Response to Mid-Continental’s Motion for Summary Judgment, p. 19. The Court agrees.