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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 19-14508
Non-Argument Calendar
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D.C. Docket No. 3:18-cv-01392-TKW-EMT
BBG DESIGN BUILD, LLC,
Plaintiff - Appellant,
PATRICIA ARMOR,
Plaintiff - Cross Claimant,
versus
SOUTHERN OWNERS INSURANCE
COMPANY,
Defendant - Cross
Defendant - Appellee.
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________________________
Appeal from the United States District Court
for the Northern District of Florida
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(July 23, 2020)
Before WILLIAM PRYOR, Chief Judge, JILL PRYOR and BLACK, Circuit
Judges.
PER CURIAM:
BBG Design Build, LLC (BBG) appeals the district court’s grant of
summary judgment in favor of Southern Owners Insurance Company (Southern
Owners) in BBG’s action alleging Southern Owners breached its duty to defend
BBG in an underlying negligence action (underlying lawsuit) brought by Patricia
Armor. BBG contends the district court erred in looking outside the four corners
of the amended complaint and the insurance policy in determining Southern
Owners’ duty to defend. After review,1 we affirm the district court because we
agree that Southern Owners had no duty to defend BBG in the underlying lawsuit.
I. BACKGROUND
1
We review “the district court’s disposition of cross-motions for summary judgment de
novo, applying the same legal standards used by the district court, viewing the evidence and all
factual inferences therefrom in the light most favorable to the non-movant, and resolving all
reasonable doubts about the facts in favor of the non-moving party.” Am. Bankers Ins. Grp. v.
United States,
408 F.3d 1328, 1331 (11th Cir. 2005).
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Southern Owners issued BBG a general commercial liability policy that was
in effect from July 2, 2014, to July 2, 2015. The policy provided that Southern
Owners had a duty to both defend and indemnify BBG for covered losses.
In 2014, BBG was working as the general contractor on a renovation project
at Shelter House, a domestic violence resource center in Ft. Walton Beach where
victims received services and resources including temporary lodging. Patricia
Armor worked part-time with the Shelter House as a victim advocate. Armor
asserted that on or about December 7, 2014, she sustained “bodily injury” from
contact with “construction debris” at the Shelter House. She sued BBG for those
injuries in the Circuit Court of Okaloosa County, Florida. In the operative First
Amended Complaint, Armor claimed BBG was negligent in managing the
construction site by failing to ensure proper controls and protections were in place
to contain “construction debris.” The First Amended Complaint provided no
definition of “construction debris” nor did it further describe Armor’s “bodily
injury.”
Southern Owners refused to defend or indemnify BBG for the underlying
lawsuit based on the pollution exclusion in the policy. The policy’s pollution
exclusion denies coverage for “‘[b]odily injury’ or ‘property damage’ which would
not have occurred in whole or part but for the actual, alleged or threatened
discharge, dispersal, seepage, migration, release or escape of ‘pollutants’ at any
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time.” The policy defines “pollutants” as “any solid, liquid, gaseous or thermal
irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis,
chemicals and waste. Waste includes materials to be recycled, reconditioned or
reclaimed.”
BBG filed a breach of contract action against Southern Owners in the Circuit
Court of Okaloosa County, Florida. Southern Owners removed the case to federal
court on the basis of diversity jurisdiction. Southern Owners answered and
asserted the policy’s pollution exclusion as a defense to the alleged breaches of
contract. Later, Southern Owners and BBG filed cross motions for summary
judgment.
In its motion for partial summary judgment, BBG argued Southern Owners
breached the policy by refusing to provide BBG a defense in the underlying
lawsuit when Armor’s First Amended Complaint did not clearly and unequivocally
plead facts that fit “solely and entirely” within the policy’s pollution exclusion.
BBG contended the district court could not reach beyond the four corners of the
First Amended Complaint in making that determination.
In its motion for summary judgment, Southern Owners asserted it owed
BBG no duty to defend because Armor’s original Complaint and First Amended
Complaint alleged facts that fell squarely within the pollution exclusion. However,
if the district court did not agree the First Amended Complaint alleged facts that
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fell within the exclusion, Southern Owners insisted this case fit into the exceptional
line of cases that allows a court to consider facts outside the operative complaint in
deciding the duty to defend. To support this argument, Southern Owners relied on
the original Complaint, a pre-suit demand letter Armor’s attorney sent to Southern
Owners, and Armor’s deposition testimony in the underlying case.
The district court granted Southern Owners’ motion for summary judgment
and denied BBG’s partial motion. The district court agreed with Southern Owners
that it could consider extrinsic evidence outside of the First Amended Complaint to
analyze the duty to defend and found no duty existed.2 The district court
considered the allegations in Armor’s original Complaint and, by comparing it to
the First Amended Complaint, concluded the First Amended Complaint’s “more
general allegations” were an attempt to plead into coverage. The district court
reasoned that “the amended complaint cannot be fairly read to allege” that Armor
was injured by “materials that would not typically be considered irritants or
contaminants, such as lumber, nails, bricks, or sheets of glass.” The district court
concluded that at some point in legal proceedings “common sense should prevail,
which is in essence the basis for the limited exception to the four corners rule.”
2
Southern Owners also moved for summary judgment on the duty to indemnify issue,
which the district court also granted. BBG does not appeal the district court’s ruling on the duty
to indemnify.
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II. DISCUSSION
Under Florida law, 3 “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. Ass’n, Inc.,
908 So. 2d 435,
442-43 (Fla. 2005). In determining whether this duty exists, “the trial court is
confined to the allegations in the complaint.” State Farm Fire & Cas. Co. v.
Tippett,
864 So. 2d 31, 33 (Fla. 4th DCA 2003). Thus, courts generally determine
the existence of a duty to defend based solely on the allegations in the complaint,
with all doubts resolved in favor of the insured. Jones,
908 So. 2d at 443. The
duty to defend is distinct from and broader than the duty to indemnify, meaning
that insurers are obligated to defend even if the allegations in the complaint are
inconsistent with the actual facts or meritless. See
id.
If we confine our analysis to the allegations in the operative First Amended
Complaint, Southern Owners had a duty to defend BBG in Armor’s underlying
suit. The allegations in the First Amended Complaint were that Armor suffered
bodily injury because of BBG’s negligence and BBG’s failure to train its
employees to prevent construction debris from escaping the renovation activities.
Armor never defines construction debris or bodily injury, so it is impossible to tell
3
The parties agree the issue framed by the cross motions for summary judgment is
governed by Florida contract law.
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what type of construction debris escaped the renovation activities, or what type of
bodily injury Armor suffered from BBG’s alleged negligence. The First Amended
Complaint, on its own, cannot be read to allege actions consistent with the policy’s
pollution exclusion.
This Court has recognized a limited exception to the four corners rule,
however, and stated that Florida courts have found “in special circumstances, a
court may consider extrinsic facts if those facts are undisputed, and, had they been
pled in the complaint, they clearly would have placed the claims outside the scope
of coverage.” Stephens v. Mid-Contintent Cas. Co.,
749 F.3d 1318, 1323 (11th
Cir. 2014) (citing, inter alia, Nationwide Mut. Fire Ins. Co. v. Keen,
658 So. 2d
1101 (Fla 4th DCA 1995)). Such cases are “exceptional cases in which courts
have crafted an equitable remedy when it is manifestly obvious to all involved that
the actual facts placed the claims outside the scope of coverage.”
Id. (quotations
omitted). Further, “[t]he right to an early resolution of a coverage issue should
turn on the merits—on whether a policy exclusion applies and not on creative
pleading.” State Farm Fire & Cas. Co. v. Higgins,
788 So. 2d 992, 1005 (Fla. 4th
DCA 2001).
Keen involved an underlying complaint that omitted a reference to an
uncontroverted fact, that, if pled, would have placed the claim clearly outside the
scope of coverage. The plaintiff was piloting a watercraft which used an engine
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that was too powerful to be covered under the insurance policy and conceded that
the craft was more powerful than coverage afforded shortly after the incident. See
Keen,
658 So. 2d at 1102-03. That concession was also backed up by
corroborative evidence.
Id. at 1103. However, the underlying complaint did not
allege anything about the horsepower of the craft.
Id. The court held that “if
uncontroverted evidence places the claim outside of coverage, and the claimant
makes no attempt to plead the fact creating coverage or suggest the existence of
evidence establishing coverage, we think the carrier is relieved of defending.”
Id.
The instant case is one of those exceptional cases where the actual facts
place the claims outside the scope of coverage. See Stephens, 749 F.3d at 1323.
The First Amended Complaint omitted a “crucial, undisputed fact in a patent
attempt to ‘plead into coverage.’” Wilson ex rel. Estate of Wilson v. Gen. Tavern
Corp.,
469 F. Supp. 2d 1214, 1220 (S.D. Fla. 2006). Before Armor filed the First
Amended Complaint, Southern Owners had pre-suit knowledge of uncontroverted
facts that placed Armor’s claims outside the scope of the Policy’s coverage. On
February 17, 2016, Southern Owners received a pre-suit demand package from
Armor’s attorney that included a letter asserting Armor was injured after being
“exposed to hazardous fumes and dust” due to BBG’s remodeling activities at the
Shelter House. The demand package also referenced Armor’s medical records
where she reported being exposed to fiberglass at a construction site at work and
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was diagnosed with bronchitis due to fiberglass exposure. Based on the assertions
contained in the demand letter, which were corroborated by Armor’s medical
records, Southern Owners had knowledge that Armor was claiming bodily injury
which would not have occurred in whole or part but for the alleged release or
escape of pollutants. These facts were uncontroverted and remain so. In her initial
complaint, she alleged that while BBG was carrying out renovation activities at
Shelter House, “[s]ignificant amounts of construction debris” including “dust and
airborne fiberglass” were placed into the air without proper controls or protections,
which caused Armor respiratory illness. While the First Amended Complaint
attempts to plead into coverage by not describing the “construction debris” or her
“bodily injury,” it was undisputed that Armor’s alleged injuries included bronchitis
resulting from fiberglass exposure, as was made clear by Armor’s demand letter,
initial complaint, and medical records.
The policy’s pollution exclusion denies coverage for “‘[b]odily injury’ or
‘property damage’ which would not have occurred in whole or part but for the
actual, alleged or threatened discharge, dispersal, seepage, migration, release or
escape of ‘pollutants’ at any time.’” The policy defines “pollutants” as “any solid,
liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot,
fumes, acids, alkalis, chemicals and waste. Waste includes materials to be
recycled, reconditioned or reclaimed.”
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We agree with the district court that there is no ambiguity in the policy’s
pollution exclusion, and it clearly encompasses the construction debris of the sort
of which Armor complained—fiberglass particulates and other bits of dust in the
air as a result of construction work—which caused irritation to her lungs, eyes, and
skin when it contaminated the air she breathed.
Thus, this case is one of the rare cases where uncontroverted facts place the
claim outside the scope of coverage, and the First Amended Complaint is an
attempt to plead into coverage despite the uncontroverted facts. Southern Owners
did not breach its duty to defend BBG in the underlying lawsuit, and the district
court is affirmed.
AFFIRMED.
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