JACKSONVILLE – Southern-Owners Insurance Co. (SOIC) was recently ordered to reimburse excess liability provider Zurich American Insurance Co. for a settlement to a man for injuries in a case against construction companies both providers had policies for.
U.S. District Judge Marcia Morales Howard in U.S. District Court for the Middle District of Florida, Jacksonville Division, wrote the May 21 order granting Zurich's motion for summary judgment and for SOIC to reimburse Zurich $275,000 for the settlement, as well as attorney’s fees and costs, noting “there is no dispute that SOIC has a duty to defend, not simply indemnify, an additional insured for claims falling within the coverage of the policy.”
Charles McMillan filed a negligence claim against Catamount Constructors Inc. in Florida's Fourth Judicial Circuit Court in 2013, later amending the complaint to add Duval Concrete Contracting. McMillan claims debris from the construction project caused him to slip and fall while walking on the construction site parking lot and claims the defendants knew or should have known that the debris would cause a hazard. The district court filing did not specify McMillan's injuries.
Catamount and Duval worked at the Dr. Pepper West Point Trade Center in Jacksonville under a subcontracting agreement. Duval purchased a liability insurance policy through SOIC to provide coverage for Catamount as an additional insured. The policy stated Catamount was an additional insured “only with respect to liability arising out of ‘your work’ for that additional insured by or for you (Duval).” Catamount purchased an excess policy through Zurich to provide insurance over SOIC’s coverage. The policy states, “when this insurance is excess, we will have no duty ... to defend the insured against any ‘suit’ if any other insurer has a duty to defend the insured against that ‘suit.’”
Zurich settled McMillan’s claim against Catamount in 2015 for $275,000. When Zurich discovered SOIC was the general liability provider for Duval, they submitted tenders to both Duval and SOIC, who refused the tender.
Zurich filed a third-party claim against Duval for “indemnification, contribution, and negligence.” Duval was granted summary judgment in 2015 in Catamount’s third-party indemnification claims.
In 2017, Zurich filed the motion against SOIC. Zurich claims SOIC had an obligation to provide primary coverage to Catamount as their additional insured and is required to reimburse Zurich for the attorney’s fees and costs Zurich incurred defending Catamount under the “equitable subrogation” theory. Zurich also made a claim in the alternative for “equitable contribution as to ZAIC’s indemnity payment.”
SOIC argued that Catamount was not liable because McMillan did not sue them “based on a theory of vicarious liability for Duval’s negligence,” and that “none of McMillan’s pleadings in the underlying action triggered additional insured coverage.”
Judge Howard stated that McMillan’s claims “raised the possibility that Catamount’s liability arose from Duval’s work” and were “sufficient to trigger SOIC’s duty to defend Catamount.”
Howard stated that Zurich, as an excess insurance provider, “had no duty to defend Catamount.” The order granted Zurich summary judgment for equitable subrogation, stating “SOIC breached its duty to defend Catamount.”
Howard ordered Zurich and SOIC to confer and settle on the fees Zurich expended during Catamount’s defense. Zurich is ordered to file appropriate motions for summary judgement on the contribution claim or notify the court if that claim will be dismissed.
U.S. District Court for the Middle District of Florida, Jacksonville Division, Case Number 3:15-cv-1041-J-34PDB