Case 1:13-cv BB Document 57 Entered on FLSD Docket 12/30/2014 Page 1 of 10

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1 Case 1:13-cv BB Document 57 Entered on FLSD Docket 12/30/2014 Page 1 of 10 BLACK KNIGHT PROTECTION, INC., UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA v. Plaintiff, LANDMARK AMERICAN INSURANCE COMPANY, Defendant. / ORDER THIS CAUSE is before the Court on Plaintiff s Motion for Summary Judgment, ECF No. [48], and Defendant s Motion for Summary Judgment, ECF No. [51]. The Court is fully advised after careful review of the record, the parties briefs, and the applicable law. I. Background Plaintiff originally filed this action on July 9, 2013, in the Circuit Court of the Eleventh Judicial Circuit for Miami-Dade County, Florida, for breach of an insurance contract under Florida law. 1 On August 5, 2013, Defendant filed a motion to dismiss the complaint in state court, and filed a notice of removal in this Court on August 8, This lawsuit was filed after Plaintiff was sued in a different case by a victim of sexual assault who was attacked in her residential community where Plaintiff provided security services. In Count III of that lawsuit for negligence under Florida law, the complainant alleged: BLACK KNIGHT PROTECTION, INC., was obligated by agreement and/or otherwise undertook the duty to exercise reasonable care to the public in general, and to the Plaintiff in particular to provide appropriate security... to protect its residents and invitees while on the property. That duty included, but was not limited to, the duty to conduct appropriate surveys on criminal incidents that had occurred prior to this time, or other inappropriate conduct including not only 1 Plaintiff s Complaint also raised claims of breach of fiduciary duty and breach of implied duty of good faith and fair dealing, which were later abandoned.

2 Case 1:13-cv BB Document 57 Entered on FLSD Docket 12/30/2014 Page 2 of 10 sexual battery, but also mugging, theft, vandalism, assault, battery, robbery, or other criminal acts occurring on the subject premises, the subject parking lots, and the surrounding areas. The duty also included the duty to provide and hire appropriate security personnel and equipment, or provide reasonable training and supervision of such security personnel, or any of its employees which were assigned to such security patrols, including security personnel either on foot, or in vehicles patrolling the condominium complex and parking lots. ECF No. [51-3] at The complainant further alleged specific ways in which Plaintiff breached this duty. See id. at (including failing to have appropriate security on the premises, negligently failing to obtain regular updates of criminal activity in the surrounding areas, and negligently failing to provide any deterrent measures whatsoever to the assailant s ability to enter the parking lot and carry out his attack. ). Plaintiff has an insurance policy with Defendant. See generally ECF No. [51-2]. The policy provides coverage for, among other things, Bodily Injury and Property Damages Liability. Id. at 14. Referred to as Coverage A, the insurance agreement for this coverage contains two sections, one titled Insuring Agreement, and the other titled Exclusions. The policy also contains a number of endorsements, two of which are pertinent. The first is an exclusion for Assault and Battery, which provides: This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART The following is added as an item to SECTION I COVERAGES, COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY, 2. Exclusions; COVERAGE B PERSONAL AND ADVERTISING INJURY LIABILITY, 2. Exclusions; and COVERAGE C MEDICAL PAYMENTS, 2. Exclusions: 1. Claims or suits to recover damages for bodily injury, property damage, personal or advertising injury or medical payments arising from actual or alleged assault and/or battery and claims or suits for false arrest, false detention or false imprisonment, where such false arrest, false detention or false imprisonment is connected to or arises in the sequence of events related to actual or alleged assault and/or battery. We are under no duty to 2

3 Case 1:13-cv BB Document 57 Entered on FLSD Docket 12/30/2014 Page 3 of 10 defend or indemnify an insured regardless of the degree of culpability or intent and without regard to: a. Whether the acts are alleged to be by or at the instruction or at the direction of the insured, his officers, employees, agents or servants; or by any other person lawfully or otherwise on, at or near premises owned or occupied by the insured; or by any other person; b. The alleged failure or fault of the insured, or his officers, employees, agents or servants, in the hiring, supervision, retention or control of any person, whether or not an officer, employee, agent or servant of the insured; c. The alleged failure or fault of the insured, or his officers, employees, agents or servants, to attempt to prevent, bar or halt any such conduct.... All other terms and conditions of this policy remain unchanged. Id. at 35. The exclusion defines assault as the apprehension of harmful or offensive contact between two or more persons by threats through words or deeds, and defines battery as the harmful or offensive contact between or among two or more persons. Id. The other is a coverage extension for Detective or Investigative Agency Professional Services which provides: Id. at 41. This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART A. SECTION I COVERAGES, COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY is amended to apply to damages because of bodily injury or property damage arising out of the rendering or failure to render detective or investigative services. B. For the purpose of this endorsement, SECTION V DEFINITIONS, Item 13, is amended to read as follows: Occurrence means an event including continuous or repeated exposure to substantially the same general harmful conditions. All other terms and conditions of this policy remain unchanged. 3

4 Case 1:13-cv BB Document 57 Entered on FLSD Docket 12/30/2014 Page 4 of 10 The parties have filed cross-motions for summary judgment on the same legal issue. The Plaintiff contends that the policy, read as a whole, provides coverage and triggers a duty to defend and indemnify in the underlying action. Defendant seeks a contrary result. Neither party claims that disputed issues of fact exist. Rather, the issue presented rests purely on a question of law. II. Legal Standard A district court s disposition of cross-motions for summary judgment employs the same legal standards applied when only one party files a motion. See United States v. Oakley, 744 F.2d 1553, 1555 (11th Cir. 1984). Cross-motions may, however, be probative of the absence of a factual dispute where they reflect general agreement by the parties as to the controlling legal theories and material facts. S. Pilot Ins. Co. v. CECS, Inc., F. Supp. 3d,, 2014 WL , at *2 (N.D. Ga. 2014) (citing Oakley, 744 F.2d at ). A party may obtain summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The parties may support their positions by citation to the record, including inter alia, depositions, documents, affidavits, or declarations. Fed. R. Civ. P. 56(c). An issue is genuine if a reasonable trier of fact could return judgment for the non-moving party. Miccosukee Tribe of Indians of Fla. v. United States, 516 F.3d 1235, 1243 (11th Cir. 2008) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, (1986)). A fact is material if it might affect the outcome of the suit under the governing law. Id. (quoting Anderson, 477 U.S. at ). The Court views the facts in the light most favorable to the non-moving party and draws all reasonable inferences in the party s favor. See Davis v. Williams, 451 F.3d 759, 763 (11th Cir. 2006). The mere existence of a scintilla of evidence in support of the plaintiff s 4

5 Case 1:13-cv BB Document 57 Entered on FLSD Docket 12/30/2014 Page 5 of 10 position will be insufficient; there must be evidence on which a jury could reasonably find for the plaintiff. Anderson, 477 U.S. at 252. Further, the Court does not weigh conflicting evidence. See Skop v. City of Atlanta, Ga., 485 F.3d 1130, 1140 (11th Cir. 2007) (quoting Carlin Comm n, Inc. v. S. Bell Tel. & Tel. Co., 802 F.2d 1352, 1356 (11th Cir. 1986)). The moving party shoulders the initial burden of showing the absence of a genuine issue of material fact. Shiver v. Chertoff, 549 F.3d 1342, 1343 (11th Cir. 2008). Once this burden is satisfied, the nonmoving party must do more than simply show that there is some metaphysical doubt as to the material facts. Ray v. Equifax Info. Servs., L.L.C., 327 F. App x 819, 825 (11th Cir. 2009) (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). Instead, the non-moving party must make a sufficient showing on each essential element of the case for which he has the burden of proof. Id. (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). Accordingly, the non-moving party must produce evidence, going beyond the pleadings, and by its own affidavits, or by depositions, answers to interrogatories, and admissions on file, designating specific facts to suggest that a reasonable jury could find in the non-moving party s favor. Shiver, 549 F.3d at Even where the parties agree on the basic facts, but disagree about the factual inferences that should be drawn from those facts, summary judgment may be inappropriate. Warrior Tombigbee Transp. Co., Inc. v. M/V Nan Fung, 695 F.2d 1294, 1296 (11th Cir. 1983). Neither party claims the existence of a material issue of fact. The Court further agrees that this case rests on the proper interpretation of the policy language. III. Discussion Subject matter jurisdiction in this case is based on diversity of citizenship, 28 U.S.C. 1332, and Florida law, accordingly, governs. See State Farm Fire & Cas. Co. v. Steinberg, 393 5

6 Case 1:13-cv BB Document 57 Entered on FLSD Docket 12/30/2014 Page 6 of 10 F.3d 1226, 1230 (11th Cir. 2004). In insurance coverage cases under Florida law, courts look at the insurance policy as a whole and give every provision its full meaning and operative effect. Id. (internal quotation marks omitted). Under Florida law, courts examine insurance policies by starting with the plain language of the policy, as bargained for by the parties. Id. (citing Auto- Owners Ins. Co. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000)). [P]rinciples governing the construction of insurance contracts dictate that when construing an insurance policy to determine coverage the pertinent provisions should be read in pari materia. U.S. Fire Ins. Co. v. J.S.U.B., Inc., 979 So. 2d 871, 877 (Fla. 2007). Unambiguous policy language controls, but if the language is susceptible to more than one reasonable interpretation, one providing coverage and the other limiting coverage, the insurance policy is considered ambiguous, and must be interpreted liberally in favor of the insured and strictly against the drafter who prepared the policy. Id. The insurer bears the burden of proving that an exclusion of a policy precludes coverage. See U.S. Concrete Pipe Co. v. Bould, 437 So. 2d 1061, 1065 (Fla. 1983). Plaintiff asserts that Defendant owes a duty to defend. It is well settled that an insurer s duty to defend its insured against a legal action arises when the complaint alleges facts that fairly and potentially bring the suit within policy coverage. Jones v. Fla. Ins. Guar. Asss n, Inc., 908 So. 2d 435, (Fla. 2005). The duty to defend must be determined from the allegations in the complaint... and the insurer must defend even if the allegations in the complaint are factually incorrect or meritless. Id. at 443. Any doubts regarding the duty to defend must be resolved in favor of the insured. Id. However, if the insurer has no duty to defend, it necessarily follows that it ha[s] no duty to indemnify. Burlington Ins. Co., Inc. v. Normandy General Partners, 560 F. App x 844, (11th Cir. 2014) (citing Fun Spree Vacations, Inc. v. Orion Ins. Co., 659 So. 2d 419, ) (Fla 3d DCA 1995)). 6

7 Case 1:13-cv BB Document 57 Entered on FLSD Docket 12/30/2014 Page 7 of 10 Plaintiff argues that the Assault and Battery exclusion does not preclude coverage because of the applicability of the Detective and Investigative Agency Professional Services coverage extension. See ECF No. [48] at 9-10 ( When construing insurance policies, courts are to read the policy as a whole and attempt to give every provision its full meaning and operative effect. ) (citing Auto-Owners Ins. Co. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000)). Plaintiff contends that it is clear and undisputed that this endorsement which was specifically bargained for between the parties changes the policy and expanded coverage at the time of the subject loss. Id. at 10. Defendant, in response and in support of its own summary judgment motion, argues that the existence of the exclusion and the extension create no inconsistency and that the extension is still modified by the exclusion. See ECF No. [53] at 8-9. The extension and the exclusion address the same coverage of the insurance policy Coverage A, Bodily Injury and Property Damage Liability. See ECF No. [51-2] at 35, 41. The exclusion states that: [t]he following is added as an item to SECTION I COVERAGES, COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY, 2. Exclusions. ECF No. [51-2] at 35. The extension, however, states that: [t]his endorsement modifies insurance provided under the following:... SECTION I COVERAGES, COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY. Id. at 41. Unlike the exclusion, which modifies a subsection of Coverage A 2. Exclusions the extension modifies the entirety of Coverage A, rather than the subsection of Coverage A that provides for coverage. See ECF No. [51-2] at 14 ( 1. Insuring Agreement. ). Thus, a plain reading of this language indicates that the extension modifies the subsection 2. Exclusions, which includes the Assault and Battery exclusion. 7

8 Case 1:13-cv BB Document 57 Entered on FLSD Docket 12/30/2014 Page 8 of 10 Defendant cites Colony Ins. Co. v. Nicholson, No CIV, 2010 WL , (S.D. Fla. Jul. 19, 2010) in support of its argument. In Colony, an insurance company sought a declaratory judgment after the insured a nail salon sought defense and indemnification after the nail salon was sued by a patron who contracted an infection. The insurance agreement, like the agreement here, had numerous riders containing coverage exclusions and extensions. The extension modified coverage to cover damages arising in connection with a salon, and two exclusions provided that no coverage existed for communicable disease or for fungi or bacteria. Granting summary judgment in favor of the insurer, the Court held that there was no inconsistency among these provisions because the extension and exclusions modified two different sections of the insurance policy. Id. at *2. Specifically, the court explained, [t]his is not a situation of one rider containing specific exclusions and another rider containing a broad, unconditioned extension of coverage, with no express guidance as to which shall be accorded controlling weight. Id. Unlike Colony, however, that situation is precisely the one here. The Assault and Battery exclusion contains a specific exclusion, and the Investigative and Detective Agency Professional Services extension contains a broad, unconditioned extension of coverage, with no express guidance as to which shall be accorded controlling weight. Also in Colony, unlike here, the extension of coverage was subsequently modified by the specific exclusion. See id. at *2. Here, the extension and the exclusion do not modify different sections of the policy the extension of coverage subsequently modifies the specific exclusion, and as written, the extension of coverage modifies a broader section than the specific exclusion. Thus, Defendant has not shown that reading the extension and exclusion in pari materia, as written within the four corners of the insurance policy, see State Farm Fire & Casualty Company v. CTC Development 8

9 Case 1:13-cv BB Document 57 Entered on FLSD Docket 12/30/2014 Page 9 of 10 Corporation, 720 So. 2d 1072, 1075 (Fla. 1998), would add meaning that is not present or reach results contrary to the intentions of the parties. State Farm Mut. Auto Ins. Co. v. Pridgen, 498 So. 2d 1245, 1248 (Fla. 1986). Defendant contends that even if the extension is applicable, notwithstanding the exclusion, the allegations in the underlying complaint do not fall within the purview of Investigative and Detective Agency Professional Services. Neither party directly contends that the policy is ambiguous, though the policy does not define what these services are. The lack of a definition of an operative term in a policy does not necessarily render the term ambiguous and in need of interpretation by the courts. CTC Development Corp., 720 So. 2d at But when an insurer fails to define a term in a policy, the insurer cannot take the position that there should be a narrow, restrictive interpretation of the coverage provided. Id. (internal quotations and citations omitted). Even if the parties had expressed competing, reasonable interpretations of this term to create an ambiguity, see Travelers Ins. Co. v. Smith, 328 So. 2d 870, 872 (Fla. 3d DCA 1976), this ambiguity would have to be resolved against Defendant and in favor of Plaintiff. See id. Even if the term was ambiguous, Defendant s argument would require the Court to look beyond the four corners of the insurance policy in order to determine what Investigative and Detective Agency Professional Services means, which the Court declines to do. See Washington Nat. Ins. Corp. v. Ruderman, 117 So. 3d 943, 945 (Fla. 2013) ( We hold that under Florida law applicable to construction of insurance policies, because the policy is ambiguous it must be construed against the insurer and in favor of coverage without resort to consideration of extrinsic evidence. ). Thus, because the allegations of the underlying complaint, fairly read, allege facts that create potential coverage under the policy, Acceptance Insurance Company v. 9

10 Case 1:13-cv BB Document 57 Entered on FLSD Docket 12/30/2014 Page 10 of 10 Bates, Dunning & Associates, Inc., 858 So. 2d 1068, 1069 (Fla. 3d DCA 2003), Defendant has the duty to defend Plaintiff in the underlying lawsuit. The Court, however, need not now decide whether Defendant has the duty to indemnify. The duty to defend is broader than the duty to indemnify. See Jones v. Fla. Ins. Guar. Ass n, Inc., 908 So. 2d 435, 443 (Fla. 2005). The duty to indemnify, unlike the duty to defend, turns on the actual facts, not the facts as alleged in the complaint. Colony Ins. Co. v. Barnes, 410 F. Supp. 2d 1137, 1143 (N.D. Fla. 2005). Because there has been no resolution of the underlying suit, it is premature to rule on the issue of Defendant s duty to indemnify. See Axis Surplus Ins. Co. v. Conravest Const. Co., 921 F. Supp. 2d 1338, 1344 (M.D. Fla. 2012). IV. Conclusion For these reasons, it is hereby ORDERED AND ADJUDGED that: 1. Plaintiff s Motion for Summary Judgment, ECF No. [48], is GRANTED; 2. Defendant s Motion for Summary Judgment, ECF No. [51], is DENIED; 3. The Clerk shall ADMINISTRATIVELY CLOSE this case. 4. The Court reserves jurisdiction for an award of attorneys fees and costs. DONE AND ORDERED in Fort Lauderdale, Florida, this 30th day of December, BETH BLOOM UNITED STATES DISTRICT JUDGE cc: counsel of record 10