Century Surety Company v. Seductions, LLC , 349 F. App'x 455 ( 2009 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 09-12126 ELEVENTH CIRCUIT
OCTOBER 19, 2009
Non-Argument Calendar
THOMAS K. KAHN
________________________
CLERK
D. C. Docket No. 07-21283-CV-KAM
CENTURY SURETY COMPANY,
Plaintiff-Counter-
Defendant-Appellee,
versus
SEDUCTIONS, LLC,
doing business as Hotties,
Defendant,
MAURICIO JAVIER ARANA-LANDEROS,
BLANCA IRIS ARANA,
Defendants-Counter-
Claimants-Appellants.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(October 19, 2009)
Before BIRCH, HULL and KRAVITCH, Circuit Judges.
PER CURIAM:
Mauricio Arana-Landeros and his wife, Blanca Arana, (collectively, “the
Aranas”) appeal the district court’s entry of final summary judgment in favor of
Century Surety Company (“Century”) on its claim for a declaratory judgment
against its insured, Seductions, LLC, and the Aranas. The Aranas argue that the
district court erred in concluding that an insurance policy issued by Century
covered only $25,000 of Seductions’s liability for injuries Mauricio suffered as a
patron at Seductions’s adult nightclub. Following a brief recitation of the relevant
facts, we affirm.
I. BACKGROUND
Mauricio Arana was injured in 2006 when Seductions employees allegedly
beat and threw him out of the company’s nightclub after he refused to leave at
closing time. The Aranas subsequently sued Seductions in state court to recover
damages for Mauricio’s injuries, medical expenses alleged to exceed $1 million,
and loss of consortium. The Aranas’ complaint alleged that Seductions had
negligently hired, retained, trained, and supervised the employees responsible for
the attack.
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Seductions tendered defense of the lawsuit to Century, its insurer under a
commercial general liability policy in effect at the time of Mauricio’s injuries.
The policy covered losses incurred by Seductions due to “bodily injury” arising
from “operations necessary or incidental to” its nightclub. The policy also
provided coverage for “personal and advertising injury,” which was defined to
include the “wrongful eviction from, wrongful entry into, or invasion of the right
of private occupancy of a room, dwelling or premises that a person occupies,
committed by or on behalf of its owner, landlord or lessor.” The policy’s
declarations page established a $2 million “General Aggregate Limit,” $1 million
“Personal and Advertising Injury” and “Each Occurrence” limits, and a $2,000 per
person “Medical Expense Limit” on coverage.
In addition, two endorsements to the policy, forms CGL 1704 and CGL
1717, limited coverage for losses arising from assault and battery. Through
Century’s inadvertence, however, CGL 1704, which explicitly excluded coverage
for assault, battery, and any related negligence claims, was neither attached to the
policy nor listed on the policy’s schedule of forms and endorsements.
Nevertheless, CGL 1717, entitled “Limited Coverage – Assault & Battery,” was
attached. CGL 1717 provided that “[t]he specific coverage excluded under CGL
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1704 is reinstated on a limited basis” and purported to establish a $25,000 per
occurrence sublimit for “covered loss arising from an assault and battery.”
Because of Mauricio’s allegations that he had been “attacked and beaten,”
Century offered $25,000 to settle the Aranas’ claims against Seductions, in
accordance with CGL 1717’s sublimit on injuries arising from assault and battery.
The Aranas rejected Century’s offer and demanded a $2 million “policy limits”
settlement in its place. Century then filed this action in federal court, seeking a
declaration that its duty to indemnify Seductions on the Aranas’ claims was
limited to $25,000.1
The parties filed cross motions for summary judgment with the district
court. The Aranas contended that the policy was ambiguous and should be
construed in favor of Seductions, the insured, to provide coverage in the amount of
$2 million. Specifically, they argued (1) that the policy did not limit coverage for
assault and battery claims, (2) that Mauricio’s injuries arose from Seductions’s
negligence rather than any assault or battery, (3) that the policy provided full
coverage because the injuries arose from the necessary and incidental operations
of Seductions’s nightclub, (4) that Mauricio had suffered separately covered
1
Century also sought reformation of Seductions’s insurance policy to incorporate CGL 1704’s
explicit exclusion of coverage for assault and battery claims. Century has not appealed the
district court’s denial of its motion for summary judgment on the reformation count.
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“personal and advertising injury” because Seductions had wrongfully evicted him
from its premises, and (5) that the policy’s cap on medical expenses was
ambiguous and therefore did not apply.
The district court rejected the Aranas’ arguments and entered summary
judgment in Century’s favor. The court concluded, first, that CGL 1717
effectively limited coverage for assault and battery claims to $25,000 and, second,
that Mauricio’s injuries arose from an assault and battery. Third, it concluded that
assault and battery were not necessary or incidental to the operation of
Seductions’s nightclub. Fourth, the court held that Mauricio could not have been
wrongfully evicted from the nightclub because he lacked a possessory interest in
the premises. Finally, the court concluded that the policy’s $2,000 Medical
Expense Limit applied to Mauricio’s medical expenses. This appeal followed.
II. STANDARD OF REVIEW
We review a grant of summary judgment de novo. State Farm Fire & Cas.
Co. v. Steinberg, 393 F.3d 1226, 1230 (11th Cir. 2004). We likewise review the
district court’s determination of coverage under an insurance policy de novo.
Fireman’s Fund Ins. Co. v. Tropical Shipping & Constr. Co., 254 F.3d 987, 1003
(11th Cir. 2001). Because our subject matter jurisdiction in this case is based on
diversity of citizenship, 28 U.S.C. § 1332, Florida law governs the determination
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of the issues on appeal. Steinberg, 393 F.3d at 1230. Under Florida law,
“insurance contracts are construed according to their plain meaning,” but any
ambiguities must be construed in favor of the insured. Taurus Holdings, Inc. v.
U.S. Fid. & Guar. Co., 913 So. 2d 528, 532 (Fla. 2005). Policy provisions are
only ambiguous if “susceptible to more than one reasonable interpretation, one
providing coverage and the []other limiting coverage.” Auto-Owners Ins. Co. v.
Anderson, 756 So. 2d 29, 34 (Fla. 2000).
III. DISCUSSION
On appeal, the Aranas repeat the arguments made before the district court,
and we address them in turn. First, we agree with the district court that the policy
unambiguously limited coverage for losses arising from assault and battery. Even
in the absence of form CGL 1704’s explicit exclusion of coverage, CGL 1717’s
provision of “Limited Coverage – Assault & Battery” clearly limited Century’s
indemnification obligation to $25,000 per occurrence of injury “arising from an
assault and battery.”
We also conclude that CGL 1717’s $25,000 sublimit applies to Mauricio’s
injuries because they arose from an assault and battery. We find unpersuasive the
Aranas’ arguments that CGL 1717 narrowly encompassed intentional acts and that
Mauricio’s injuries arose instead from acts of negligence. The Florida Supreme
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Court has held that the words “arising out of” in an insurance policy are
unambiguous and broad in scope: “The term ‘arising out of’ is broader in meaning
than the term ‘caused by’ and means ‘originating from,’ ‘having its origin in,’
‘growing out of,’ ‘flowing from,’ ‘incident to’ or ‘having a connection with.’”
Taurus Holdings, 913 So. 2d at 539 (citation omitted). CGL 1717’s “arising
from” language is entitled to the same broad interpretation. Cf. Church & Tower
of Fla., Inc. v. BellSouth Telecomms., Inc., 936 So. 2d 40 (Fla. Dist. Ct. App.
2006) (applying Taurus Holdings to a coverage provision including the term
“arising from”). The Aranas’ artful pleading of claims sounding in negligence
does not change the fact that Mauricio’s injuries arose directly from an allegedly
intentional attack.
Our interpretation of CGL 1717’s application to the Aranas’ negligence
claims is consistent with the general approach Florida courts have taken when
considering negligence claims related to assault and battery. See Miami Beach
Entm’t, Inc. v. 1st Oak Brook Corporate Syndicate, 682 So. 2d 161, 162 (Fla. Dist.
Ct. App. 1996) (“Although the complaint was couched in terms of the bar owner’s
negligence . . . for purposes of determining insurance coverage, the injuries arose
from the assault and battery.”); Britamco Underwriter’s, Inc. v. Zuma Corp., 576
So. 2d 965, 965 (Fla. Dist. Ct. App. 1991) (“Appellee concedes that the patron was
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injured by an assault and battery but contends that coverage is nevertheless
available because the legal theory upon which the patron obtained a judgment was
negligence in failing to provide adequate security. We agree with the appellant
that the policy excludes coverage for this claim, which clearly arises out of an
assault and battery.”).2 Although the court in one Florida case refused to apply an
assault and battery exclusion to a negligent retention claim, its decision relied on
the fact that the exclusion at issue “cover[ed] a number of intentional torts,” and
the court construed the lengthy list of excluded torts as ambiguous with respect to
acts of negligence. Mactown, Inc. v. Cont’l Ins. Co., 716 So. 2d 289, 291 (Fla.
Dist. Ct. App. 1998). In this case, by contrast, CGL 1717 refers only to injuries
arising from assault and battery, and we agree with the district court that this
limitation on coverage unambiguously extends to the Aranas’ negligence claims.
We accordingly reject the Aranas’ argument that CGL 1717’s sublimit does
not apply here because Mauricio’s injuries were caused by the negligent provision
of security services “necessary or incidental to” the operation of Seductions’s
nightclub. “Under Florida law, insurance contracts are construed according to
2
The Aranas argue that Miami Beach Entertainment and Britamco Underwriter’s involved
policies that explicitly excluded negligence claims related to assault and battery, but neither
decision relied on that fact in determining whether the claims at issue arose from an assault and
battery.
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their plain meaning,” Taurus Holdings, 913 So. 2d at 532, and courts may consult
dictionaries to supply the accepted meanings of words, Garcia v. Fed. Ins. Co.,
969 So. 2d 288, 291–92 (Fla. 2007). Common definitions of incidental include
“occurring merely by chance or without intention or calculation,” “being likely to
ensue as a chance or minor consequence,” and “met or encountered casually or by
accident.” Webster’s Third New International Dictionary 1142 (1986). Although
negligence in the provision of security services might qualify as “incidental to” the
operation of an adult nightclub under other circumstances, the Seductions
employees’ alleged attack did not occur merely by chance, without intention, or by
accident. The assault and battery Mauricio suffered thus were not “incidental” to
the operation of Seductions’s business. Nor were they “necessary.”
The Aranas next argue that the policy provided coverage for Mauricio’s
injuries because Seductions wrongfully evicted him from its nightclub. At issue is
whether his lack of a possessory interest in the premises meant that he could not
have been wrongfully evicted. Although we previously have noted, applying
Florida insurance law, that “[b]oth ‘wrongful entry’ and ‘eviction’ imply an
interference with possessory rights,” City of Delray Beach v. Agric. Ins. Co., 85
F.3d 1527, 1534 (11th Cir. 1996), no Florida court has directly confronted the
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issue.3 Courts in many jurisdictions with decisions on point have required at least
a temporary possessory interest in the premises before finding a wrongful eviction,
but other courts have disagreed.4
Ultimately, however, CGL 1717’s sublimit on assault and battery coverage
applies regardless of whether Mauricio was wrongfully evicted from Seductions’s
nightclub.5 The Aranas’ wrongful eviction argument relies on the assumption that
“personal and advertising injury” is not subject to CGL 1717’s sublimit, but no
language in the policy supports such a restrictive interpretation of the
endorsement’s scope. On the contrary, CGL 1717 simply states that a $25,000
sublimit is “applicable to a covered loss arising from an assault and battery.” In
the absence of ambiguity, Florida law “does not allow courts to rewrite contracts,
add meaning that is not present, or otherwise reach results contrary to the
3
The Aranas cite Accredited Bond Agencies, Inc. v. Gulf Insurance Co., 352 So. 2d 1252 (Fla.
Dist. Ct. App. 1977), but that case involved a child allegedly assaulted in the doorway of his own
home. Although the court concluded that the claims in that case fell within the defendant
company’s insurance coverage for “wrongful eviction,” it did not discuss the legitimacy or
significance of the child’s possessory interest in the home.
4
Compare, e.g., Zelda, Inc. v. Northland Ins. Co., 66 Cal. Rptr. 2d 356, 363–64 (Cal. Ct. App.
1997) (rejecting an injured restaurant patron’s argument that an employee’s assault and battery
constituted a “wrongful eviction” under the restaurant’s liability insurance policy), with Z.R.L.
Corp. v. Great Cent. Ins. Co., 510 N.E.2d 102, 104 (Ill. App. Ct. 1987) (“‘[W]rongful eviction’
includes making a patron leave a restaurant.”).
5
Although the district court did not discuss CGL 1717’s application to the policy’s “personal and
advertising injury” coverage, we may affirm its judgment “on any ground that finds support in
the record.” Jaffke v. Dunham, 352 U.S. 280, 281 (1957).
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intentions of the parties.” Excelsior Ins. Co. v. Pomona Park Bar & Package
Store, 369 So. 2d 938, 942 (Fla. 1979). There is no ambiguity here; Seductions’s
insurance policy “covered” losses due to “bodily injury” and “personal and
advertising injury” alike, and CGL 1717’s $25,000 sublimit applies by its terms to
both.
Finally, we conclude that the policy’s $2,000 Medical Expense Limit
applies to the Aranas’ claims. They argue that the policy is ambiguous because,
although the declarations page provides for a $2,000 limit on medical expenses,
“Section III – Limits of Insurance” states, “The [$2 million] General Aggregate
Limit is the most we will pay for the sum of . . . [m]edical expenses.” We
conclude, however, that these two provisions are unambiguous and entirely
consistent with one another. On one hand, Section III explains that “the Medical
Expense Limit is the most [Century] will pay . . . for all medical expenses because
of ‘bodily injury’ sustained by any one person” (emphasis added). The policy’s $2
million General Aggregate Limit, on the other hand, is the most Century will pay
for the sum of medical expenses, including those incurred by multiple persons
across multiple occurrences. Mauricio Arana is one person seeking medical
expenses arising from a single occurrence, and the policy caps coverage for said
expenses at $2,000.
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IV. CONCLUSION
In light of our conclusion that the policy in this case unambiguously limited
Century’s indemnification obligation for Mauricio Arana’s injuries to $25,000,
with a $2,000 limit on coverage for his medical expenses, the district court’s
summary judgment in Century’s favor is
AFFIRMED.
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