Case 0:14-cv-62819-JEM Document 1 Entered on FLSD Docket 12/11/2014 Page 1 of 12 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA FORT LAUDERDALE DIVISION ATAIN SPECIALTY INSURANCE COMPANY, a Michigan corporation, CASE NO.: Plaintiff, vs. 911 FITNESS INC., d/b/a/ 911 CROSSFIT, a Florida Profit corporation and FLORIDA INTERNATIONAL UNIVERSITY, a Florida Non-Profit corporation. Defendants. / PLAINTIFF, ATAIN SPECIALTY INSURANCE COMPANY'S COMPLAINT FOR DECLARATORY JUDGMENT COMES NOW, Plaintiff, ATAIN SPECIALTY INSURANCE COMPANY (ATAIN) by and through its undersigned counsel and brings this action for declaratory judgment against Defendants, 911 FITNESS, INC., d/b/a/ 911 CROSSFIT (911 CROSSFIT), a Florida Profit corporation, and FLORIDA INTERNATIONAL UNIVERSITY (FIU), a Florida Non-Profit corporation, and states as follows: NATURE OF THE ACTION 1. This is an action for Declaratory Judgment to determine ATAIN'S obligations under insurance policies issued to 911 CROSSFIT, as those insurance policies relate to claims of property damage asserted against 911CROSSFIT by FIU. 2. This action for Declaratory Judgment is brought pursuant to 28 U.S.C. 2201 et seq., for the purpose of determining a question in actual controversy between the parties as described in detail herein.
Case 0:14-cv-62819-JEM Document 1 Entered on FLSD Docket 12/11/2014 Page 2 of 12 JURISDICTION, VENUE AND PARTIES 3. This Honorable Court has jurisdiction over this matter pursuant to 28 U.S.C. 1332, as the parties are citizens of different states and the amount in controversy, exclusive of interest and cost, is in excess of $75,000.00. 4. Venue for this matter exists under 28 U.S.C. 1391(a), as all defendants reside in the district or maintain offices in the district and a substantial part of the events or omissions giving rise to the claim occurred in this district. 5. At all material times hereto, Plaintiff, ATAIN, was and is a Michigan corporation with a principal place of business in Farmington Hills, Michigan and was authorized under the laws of the state of Florida to conduct business as a foreign corporation issuing policies of insurance for delivery to policyholders within Florida. 6. At all material times hereto, Defendant 911 CROSSFIT was and is a Florida Profit corporation with its principal place of business at 1119 NW 143 rd Avenue, Pembroke Pines, Broward County, Florida. 7. At all material times hereto, Defendant FIU was and is a Florida Non-Profit corporation with its principal place of business at University Park, Miami, Miami-Dade County, Florida. 8. Plaintiff is a citizen and/or entity domiciled in a different state from all Defendants. 9. Based on the above, there is complete diversity between the Plaintiff and Defendants and the amount in controversy, exclusive of interest or costs, exceeds the jurisdictional requirements for diversity jurisdiction. 10. Accordingly, there is original jurisdiction in this Court and Plaintiff respectfully 2
Case 0:14-cv-62819-JEM Document 1 Entered on FLSD Docket 12/11/2014 Page 3 of 12 requests this action proceed, pursuant to 28 U.S.C. Section 1332, et. seq. OPERATIVE FACTS 11. ATAIN files this action for declaratory judgment with respect to the claim submitted by 911 CROSSFIT for coverage and/or indemnification of property damage claims raised against it by FIU. 12. 911 CROSSFIT has sought coverage for the property damage claims raised by FIU pursuant to contracts of insurance issued by ATAIN to 911 CROSSFIT, with policy periods of September 14, 2013 to September 14, 2014 under policy number CIP 193020, and from September 14, 2014 to September 14, 2015 under policy number CIP 193786 (the Policies), with policy limits of $1,000,000.00 per occurrence. See Policy dated September 14, 2013 through September 14, 2014 attached hereto as Exhibit "A" and Policy dated September 14, 2014 through September 14, 2015 attached hereto as Exhibit "B." 13. The property damage claims of FIU allegedly arise from 911 CROSSFIT's use of FIU's US Century Bank Area on September 13 and 14, 2014, for the purpose of hosting an athletic competition called the "RAID Games." 14. Based upon information and belief, prior to the dates in questions, 911 CROSSFIT and FIU entered in to a Premises Use Agreement on or about September 4, 2014. See the FIU Premises Use Agreement (Rental Agreement) attached hereto as Exhibit "C". 15. In accordance with the terms of the Rental Agreement, 911 CROSSFIT paid a base rental fee of $1,000.00 for the use of Lime Court at FIU Arena. Exhibit "C," page 2. 16. The use of the Arena by 911 CROSSFIT was for the purpose of holding the "Closed Door 911 Crossfit Event" on September 13 and 14, 2014. Exhibit "C," page 1. 17. Following execution of the Rental Agreement, and during the "911 Crossfit Event," the basketball floor, upon which certain activities of the event were conducted, became 3
Case 0:14-cv-62819-JEM Document 1 Entered on FLSD Docket 12/11/2014 Page 4 of 12 damaged. 18. As a result of the damage to the basketball floor of the Arena, FIU has submitted a claim to 911 CROSSFIT for the cost a temporary basketball floor in the amount of approximately $72,000.00, and for the cost of the repair, replacement or restoration of the damaged basketball floor in the amount of approximately $350,000.00. 19. As of the filing of the instant Declaratory Judgment Complaint, no litigation has been filed by FIU against 911 CROSSFIT as a result of the property damage. 20. 911 CROSSFIT has tendered FIU's claim to ATAIN, which has acknowledged receipt of the claim and has issued a denial of any obligation or duty to indemnify 911 CROSSFIT for the FIU claim or to defend 911 CROSSFIT should FIU eventually commence litigation for the recovery of the damages to the basketball floor. COUNT I DECLARATORY JUDGMENT 21. ATAIN incorporates by reference the allegations contained in paragraphs 1 through 20, as if more fully set forth herein at length. 22. FIU has claimed it is entitled to indemnification for all damages caused to the basketball floor during the "Crossfit Event" from 911 CROSSFIT as a result of its rental and use of the Arena. 23. ATAIN asserts there is no coverage for the FIU claims at issue in accordance with the terms of the General Liability Insurance Policies issued to 911 CROSSFIT. 24. The insuring agreement contained in the Policies (Exhibits "A" and "B") states: 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 4
Case 0:14-cv-62819-JEM Document 1 Entered on FLSD Docket 12/11/2014 Page 5 of 12 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" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory"; (2) The "bodily injury" or "property damage" occurs during the policy period. * * * * 25. Further, the Policies define "property damage" and "occurrence" as follows: "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 b. 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. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions." 26. ATAIN's investigation of the claim revealed the basketball flooring became damaged by the dropping of heavy weights on the flooring that was not properly protected. 27. Based upon the nature of the damages to the basketball floor, should it be determined that 911 CROSSFIT expected such damage to occur, the claims asserted against it by FIU would not constitute an "occurrence", as that term is defined in the Policies and interpreted by Florida Law. 5
Case 0:14-cv-62819-JEM Document 1 Entered on FLSD Docket 12/11/2014 Page 6 of 12 28. The Policies also contain specific exclusions which are applicable to the facts of the present claim against 911 CROSSFIT and exclude coverage for the claims being asserted by FIU. 29. There is no coverage under the Policies in accordance with Exclusion b. Contractual Liability, which states: b. 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 for 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. 30. The Rental Agreement between FIU and 911 CROSSFIT states that 911 CROSSFIT assumed the risk of loss and that it would indemnify FIU (or assume the liability) for all claims and damage to property "sustained as a result of the use of the Premises for the Event for which the Agreement is entered into. "Exhibit "C," page 4 and 5. 31. Thus, in accordance with the terms of exclusion b., since 911 CROSSFIT has assumed the liability for the property damage by contract or agreement, there would be no coverage for this assumption of liability under the Policies. 6
Case 0:14-cv-62819-JEM Document 1 Entered on FLSD Docket 12/11/2014 Page 7 of 12 32. Regarding the above stated exception to the applicability of the exclusion in the instance of an "insured contract," the Policies define such a contract as: 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. However, such part of a contract or agreement shall only be considered an "insured contract" to the extent your assumption of the tort liability is permitted by law. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement. 33. Based upon its facts of the present matter, the FIU claim against 911 CROSSFIT does not arise as a result of FIU's "tort liability" to a third party and thus this exception to the exclusion b would be inapplicable. 34. Additionally, the Rental Agreement would not qualify as an "insured contract" since 911 CROSSFIT did not assume FIU's "tort liability" which maybe "solely caused by any act or omission of FIU." Exhibit "C," page 5. 35. Thus, any claim for "property damages" arising from 911 CROSSFIT's assumption of that liability pursuant to the terms of the Rental Agreement is excluded from coverage. 36. The Policies also contain the following exclusion which states in relevant part: j. Damage to Property "Property damage" to: (1) Property you own, rent, or occupy, including any costs or expenses incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another's property; * * * * (3) Property loaned to you; 7
Case 0:14-cv-62819-JEM Document 1 Entered on FLSD Docket 12/11/2014 Page 8 of 12 (4) Personal property in the care, custody or control of the insured; * * * * Paragraphs (1), (3), and (4) of this exclusion do not apply to "property damage" (other than damage by fire) to premises, including the contents of such premises, rented to you for a period of seven or fewer consecutive days. A separate limit of insurance applies to Damage To Premises Rented To You as described in Section III Limits Of Insurance. 37. Regarding the above exception to the application of exclusion j., paragraphs (1), (3) and (4), the Policies contain the Damage To Premises Rented to You Limitation Fire Legal Liability Coverage Endorsement, form no. AF 001 401 07/12, which states as follows: DAMAGE TO PREMISES RENTED TO YOU LIMITATION - FIRE LEGAL LIABILITY COVERAGE This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE FORM This endorsement changes the policy effective on the inception date of the policy unless another date is indicated below. Named Insured 911 CROSSFIT * * * * A. The following language ("Exclusions c. through n. do not apply to damage by fire to premises while rented to you or temporarily occupied by you with permission of the owner. A separate limit of insurance applies to this coverage as described in Section III - Limits of Insurance ") of Paragraph 2. Exclusions under SECTION I COVERAGES - COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY is deleted. B. The following language ("Paragraphs (1), (3) and (4) of this exclusion do not apply to "property damage" (other than damage by fire) to premises, including the contents of such premises, rented to you for a period of 7 or fewer consecutive days. A separate limit of insurance applies to Damage To Premises Rented To You as described in Section III Limits of Insurance ") of Exclusion j., Damage To Property of Paragraph 2., Exclusions of SECTION I COVERAGES - COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY is deleted. 8
Case 0:14-cv-62819-JEM Document 1 Entered on FLSD Docket 12/11/2014 Page 9 of 12 C. Reference in the Declarations to Damage To Premises Rented To You Limit is changed to read Fire Damage Limit. D. Paragraph 6. of SECTION - LIMITS OF INSURANCE, is deleted and replaced with the following: Subject to 5. above, the Fire Damage Limit is the most we will pay under Coverage A for damages because of "property damage" to premises, while rented to you or temporarily occupied by you with permission of the owner, arising out of any one fire. 38. As stated above, paragraph B. of the Endorsement deletes from the Policies the exception to the applicability of exclusions j. (1), (3) and (4) as they would relate to premises rented to 911 CROSSFIT for a period of seven or fewer days. 39. Since the exception to these exclusions has been deleted, the exclusions would be applicable in the present matter regardless of the length of the rental period. 40. Further, in accordance with the terms of the Endorsement, reference in the Declarations page to "Damage To Premises Rented To You Limit" has been changed to read "Fire Damage Limit." 41. Based upon the terms of the FIU Rental Agreement, 911 CROSSFIT rented the FIU Arena for the purpose of holding the RAID Games, and those Games were held on the FIU basketball floor. 42. During the time that 911 CROSSFIT was renting and occupying the FIU Arena and using the basketball floor, the floor allegedly became damaged. 43. As a result of the damage, FIU now seeks the cost to repair, replace or restore the basketball floor. 44. Therefore, since the seven day or fewer rental exception to exclusion j.(1) has been deleted from the Policies by the terms of Damage To Premise Rented To You Limitation - Fire Legal Limit Coverage Endorsement, exclusion j.(1) is applicable to exclude from coverage the cost to repair, replace or restore the basketball court. 9
Case 0:14-cv-62819-JEM Document 1 Entered on FLSD Docket 12/11/2014 Page 10 of 12 45. Additionally, exclusion j.(3) is also applicable to the extent the FIU property is considered to be loaned to Crossfit. 46. Lastly, exclusion j.(4), would be applicable to exclude from coverage the damages sought by FIU to the extent the basketball flooring would be considered personal property of FIU, since the basketball flooring would have been in the care, custody or control of 911 CROSSFIT at the time the alleged damage occurred. 47. Thus, there is no coverage under the Policies for any of the claims asserted by FIU for the damages caused to the basketball floor as a result of 911 CROSSFIT conducting the RAID Games on September 13 and 14, 2014. 48. ATAIN has a present bona fide need for a declaration with respect to its rights and obligations under the Policies as to its obligation to indemnify and potentially defend 911 CROSSFIT for the claims presently being made by FIU. 49. The facts necessary for this Honorable Court to render ATAIN's Declaration of Rights are set forth in this Complaint, the Exhibits, or are ascertainable by this Court. 50. ATAIN'S rights under the Policies and Florida law are dependent on this Honorable Court's findings of fact and/or application of applicable statutory and case law. 51. The Defendants' interest in this Declaration of Rights is actual, present, adverse, and antagonistic in fact and/or in law to ATAIN's interest. 52. ATAIN seeks relief in order to determine and enforce contractual/legal rights under the Policies, not merely to seek legal advice from this Honorable Court. WHEREFORE, ATAIN SPECIALTY INSURANCE COMPANY hereby respectfully requests this Court enter a judgment in its favor and against the Defendants: 10
Case 0:14-cv-62819-JEM Document 1 Entered on FLSD Docket 12/11/2014 Page 11 of 12 a) Declaring to the extent 911 CROSSFIT expected damages to the FIU basketball floor, there would be no coverage under the ATAIN Policies; b) Declaring in accordance with the terms of exclusion b., there is no coverage under the ATAIN Policies for any liability 911 CROSSFIT has assumed in the FIU Rental Agreement; c) Declaring in accordance with the terms of exclusion j. (1), (3) and (4) there is no coverage under the ATAIN Policies for any of the damages sought by FIU for the repair, replacement and/or restoration of the basketball floor; d) Declaring ATAIN has no duty indemnify 911 CROSSFIT for the claims asserted by FIU arising from the use of the FIU Arena on September 13 and 14, 2014; e) Declaring the Defendants are estopped from pursuing a claim, defense and/or indemnity against ATAIN for any claims arising from the use of the FIU Arena on September 13 and 14, 2014. ATAIN SPECIALTY INSURANCE COMPANY respectfully requests such further relief as this Court may deem appropriate. Respectfully submitted this 11 th day of December, 2014. 11
Case 0:14-cv-62819-JEM Document 1 Entered on FLSD Docket 12/11/2014 Page 12 of 12 MARSHALL, DENNEHEY, WARNER COLEMAN & GOGGIN By: /s/ Stephen J. Poljak Stephen J. Poljak Florida Bar No. 81717 sjpoljak@mdwcg.com Michael A. Packer Florida Bar No. 121479 mapacker@mdwcg.com Danielle N. Robinson Florida Bar No. 13921 dnrobinson@mdwcg.com 100 NE 3 rd Avenue, Suite 1100 Fort Lauderdale, FL 33301 Telephone: (954) 847-4947 Facsimile: (954) 627-6640 Attorneys for ATAIN SPECIALTY INSURANCE COMPANY 12