Empire Indemnity Insurance Co. v. Ashley Winsett , 325 F. App'x 849 ( 2009 )


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  •                                                          [DO NOT PUBLISH]
    IN THE UNITED STATES COURT OF APPEALS
    FOR THE ELEVENTH CIRCUIT            FILED
    ________________________ U.S. COURT OF APPEALS
    ELEVENTH CIRCUIT
    No. 08-12359                   MAY 4, 2009
    ________________________           THOMAS K. KAHN
    CLERK
    D. C. Docket No. 06-00439-CV-4-SPM-WCS
    EMPIRE INDEMNITY INSURANCE COMPANY,
    Plaintiff-Appellant,
    versus
    ASHLEY WINSETT,
    LINDSAY CARR,
    CHRISTINA HARRIS,
    MORGAN LYNCH,
    ADAM LYNCH, et al.,
    Defendants-Appellees.
    ________________________
    Appeal from the United States District Court
    for the Northern District of Florida
    _________________________
    (May 4, 2009)
    Before BIRCH, DUBINA and WILSON, Circuit Judges.
    PER CURIAM:
    The Preserve at San Luis, LLC and The Housing Trust Group of Florida,
    LLC (“Preserve”) were sued by Ashley Winsett and fifty-five other tenants
    (“Renters”) who rented apartments at The Preserves in Tallahassee, Florida. The
    Renters alleged, among other things, that the Preserve’s failure to build a vapor
    barrier was both the direct and proximate cause of their mold-related damages and
    injuries. That lawsuit has been settled.
    What has not been settled, however, is the insurance coverage dispute
    between Preserve and its insurance provider, Empire Indemnity Insurance
    Company (“Empire”). Before the Renters’ lawsuit against Preserve was settled,
    Empire sought a declaratory judgment that it did not owe a duty to defend and
    indemnify Preserve. Empire asserted, among other things, that the insurance
    policy that it issued to Preserve excluded coverage for the Renters’ mold claims.
    Empire appeals the district court’s grant of summary judgment declaring that
    Empire has a duty to defend and indemnify. It also appeals the court’s declaration
    that Empire is liable for attorneys’ fees. For the reasons below, we reverse the
    grant of summary judgment; vacate the declaration regarding attorneys’ fees; and
    remand for further proceedings.
    S TANDARD OF R EVIEW
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    We review de novo the district court’s grant of summary judgment. Lime
    Tree Vill. Cmty. Club Ass’n v. State Farm Gen. Ins. Co., 
    980 F.2d 1402
    , 1405 (11th
    Cir. 1993). Summary judgment is appropriate where “the pleadings, the discovery
    and disclosure materials on file, and any affidavits show that there is no genuine
    issue as to any material fact and that the movant is entitled to judgment as a matter
    of law.” F ED. R. C IV. P. 56(c). “The interpretation of an insurance contract is also
    a matter of law subject to de novo review.” LaFarge Corp. v. Travelers Indem.
    Co., 
    118 F.3d 1511
    , 1515 (11th Cir. 1997) (per curiam).
    D ISCUSSION
    This is a diversity case in which Florida insurance law applies. We first
    discuss the Renters’ mold claim. Then we briefly address the defenses raised by
    Empire that the district court did not reach. Finally, we address attorneys’ fees.
    A. Renters’ Mold Claim
    Empire’s general liability insurance policy contained a mold provision
    excluding coverage for the following:
    a.     “Bodily injury” or “property damage” which would not
    have occurred, in whole or in part but for the actual,
    alleged or threatened inhalation of, ingestion of, contact
    with, exposure to, existence of, or presence of, any
    “fungi” or bacteria on or within a building or structure,
    including its contents, regardless of whether any other
    cause, event, material or product contributed
    concurrently or in any sequence to such injury or
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    damage.
    b.     Any loss, cost or expenses arising out of the abating,
    testing for, monitoring, cleaning up, removing,
    co n tain in g , treatin g , d eto xifying, neutralizin g ,
    remediating or disposing of, or in any way responding to,
    or assessing the effects of, “fungi” or bacteria, by any
    insured or by any insured or by any other person.
    This exclusion does not apply to any “fungi” or bacteria
    that are, are on, or are contained in, a good or product
    intended for consumption.
    (Dist. Ct. Doc. 54-2).
    Empire argues that the district court erred twice, first, by applying Florida’s
    efficient proximate cause doctrine to the policy and, second, by disregarding the
    policy’s plain language against applying the doctrine and rendering the mold
    exclusion meaningless. Preserve responds that the doctrine applies. It argues that
    the district court properly found that the mold, the allegedly excluded cause, is
    dependent on the negligent failure to construct a vapor barrier, a covered cause.
    Preserve argues that because the negligent failure to construct a vapor barrier
    caused the mold, Empire has a duty to defend and indemnify.
    Preserve’s argument accurately illustrates how the efficient proximate cause
    doctrine works in Florida. The efficient proximate cause is “the one that sets
    others in motion.” Hartford Accident & Indem. Co. v. Phelps, 
    294 So. 2d 362
    , 364
    (Fla. 1st Dist. Ct. App. 1974). If the efficient proximate cause is covered, then the
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    claim for damages will be covered even if the other causes are not covered. See 
    id.
    But “the efficient cause doctrine cannot be incorporated into an insurance
    policy if doing so would render part of the policy meaningless.” Arawak Aviation,
    Inc. v. Indem. Ins. Co. of N. Am., 
    285 F.3d 954
    , 958 (11th Cir. 2002). Under
    Florida law, “insurance contracts must be construed in accordance with the plain
    language of the policy.” Swire Pac. Holdings, Inc. v. Zurich Ins. Co., 
    845 So. 2d 161
    , 165 (Fla. 2003). “[I]f a policy provision is clear and unambiguous, it should
    be enforced according to its terms whether it is a basic policy provision or an
    exclusionary provision.” Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 
    913 So. 2d 528
    , 532 (Fla. 2005).
    However, “[i]f the relevant policy language is susceptible to more than one
    reasonable interpretation, one providing coverage and [] another limiting coverage,
    the insurance policy is considered ambiguous.” Auto-Owners Ins. Co. v. Anderson,
    
    756 So. 2d 29
    , 34 (Fla. 2000). “Exceptions to coverage in an insurance policy are
    strictly construed against the insurer and any doubt or ambiguity is resolved in
    favor of the insured.” Hartford, 
    294 So. 2d at 364
    .
    Here, the district court agreed with Preserve that the negligent failure to
    build a vapor barrier was the efficient proximate cause of the mold. It noted that
    the failure to build a vapor barrier was a covered cause. It thus concluded that
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    Empire had a duty to defend and indemnify even though the policy excluded
    coverage for injury or damage caused by mold.
    The district court, however, overlooked the policy’s unambiguous language
    against applying the efficient proximate cause doctrine to mold claims. Preserve
    denies that the language is unambiguous because the mold exclusion does not
    expressly prohibit coverage when damage is the result of causes dependent on each
    other. We disagree with Preserve. The policy plainly excludes coverage for mold
    “regardless of whether any other cause, event, material or product contributed
    concurrently or in any sequence to such injury or damage.” (Dist. Ct. Doc. 54-2 at
    30). By the plain language “in any sequence,” the policy was written to exclude
    applying the efficient proximate cause doctrine. Overlooking that plain language,
    the district court erroneously concluded that the efficient proximate cause doctrine
    applies and triggers Empire’s duty to defend and indemnify Preserve.
    Accordingly, we reverse the district court’s grant of summary judgment.
    B. Empire’s Other Defenses
    The district court did not reach Empire’s other defenses to the Renters’
    claims. The court properly recognized that, under Florida law, “[w]here the
    complaint contains allegations partially within and partially outside the scope of
    coverage, [Empire would be] required to defend the entire suit.” Tropical Park,
    6
    Inc. v. U.S. Fid. & Guar. Co., 
    357 So. 2d 253
    , 256 (Fla. 3d Dist. Ct. App. 1978).
    In reversing the district court’s declaratory judgment that Empire has a duty to
    defend and indemnify Preserve based on the Renters’ mold claims, we do not reach
    Empire’s other defenses. On remand, the district court will have the opportunity to
    rule on them in the first instance.
    C. Attorneys’ Fees
    The district court concluded that Preserve is entitled to attorneys’ fees under
    under Florida law. Florida law makes an insurer liable for trial and appellate
    attorneys’ fees “[u]pon the rendition of a judgment or decree by any of the courts
    of this state against an insurer and in favor of any named . . . insured . . . .” F LA.
    S TAT. § 627.428(1). Since we reverse the district court’s grant of summary
    judgment, we vacate the district court’s declaratory judgment that Preserve is
    entitled to attorneys’ fees. The outcome of further proceedings will resolve which
    party, if any, should be liable for attorneys’ fees.
    C ONCLUSION
    We would agree with Preserve that Empire had a duty to defend and
    indemnify if the efficient proximate cause doctrine applied here. But according to
    the policy’s unambiguous language, it does not. Therefore, we REVERSE the
    district court’s grant of summary judgment; VACATE its declaratory judgment
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    that Preserve is entitled to attorneys’ fees; and REMAND for further proceedings
    consistent with this opinion.
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