USCA11 Case: 22-12703 Document: 39-1 Date Filed: 06/28/2023 Page: 1 of 10
[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-12703
Non-Argument Calendar
____________________
SOUTHERN-OWNERS INSURANCE COMPANY,
Plaintiff-Appellant
versus
WATERHOUSE CORPORATION,
NURSERY SUPPLIES INC.,
DARRELL PATTERSON,
Defendants-Appellees
____________________
Appeal from the United States District Court
for the Middle District of Florida
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2 Opinion of the Court 22-12703
D.C. Docket No. 6:21-cv-00504-PGB-EJK
____________________
Before WILSON, ROSENBAUM, and JILL PRYOR, Circuit Judges.
PER CURIAM:
Is a cooling tower a “building” or “structure”? Or is it ma-
chinery or equipment? Plaintiff-Appellant Southern-Owners Insur-
ance Company contends that a cooling tower is a structure,
whereas Waterhouse Corporation, Nursery Supplies, Inc., and
Darrell Patterson (collectively, Defendants-Appellees) argue it is
equipment. At summary judgment, the district court agreed with
the Defendants-Appellees and held that a cooling tower is not a
building or structure, and therefore Southern-Owners has a duty
to defend Waterhouse under its insurance policies. Southern-
Owners now appeals the district court’s denial of its motion for
summary judgment. After careful review, we affirm.
I.
This case arises out of a Florida state court negligence action
filed by Darrell Patterson against Nursery Supplies and Water-
house. Nursery Supplies, which manufactures products for the
horticulture industry, had hired Waterhouse to perform monitor-
ing, maintenance, and water treatment services for the cooling
tower located on its property. Nursery Supplies also hired non-
party Del-Air Heating and Air Conditioning to perform certain
work on the cooling tower.
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22-12703 Opinion of the Court 3
In early July 2019, Patterson, a plumber and electrician em-
ployed by Del-Air, performed work in and around the cooling
tower. About two weeks later, he was admitted to the hospital and
diagnosed with Legionnaires’ disease. Water samples from the
cooling tower confirmed the presence of legionella bacteria—the
same subtype of legionella bacteria that was found in Patterson’s
urine when he was hospitalized. In January 2021, Patterson sued
Nursery Supplies and Waterhouse in Florida state court for negli-
gence (the Underlying Action).
When Patterson contracted Legionnaire’s disease, Water-
house was insured under policies issued by Southern-Owners. The
first policy provided commercial general liability coverage (CGL
Policy), and the second policy was a commercial umbrella policy
of insurance (Umbrella Policy). The CGL Policy contained the fol-
lowing fungi or bacteria exclusions:
A. Under SECTION 1 – COVERAGES, COVERAGE
A. BODILY INJURY AND PROPERTY DAMAGE
LIABILITY, 2. Exclusions, the following exclusions
are added:
1. “Bodily injury” or “property damage” arising out
of, in whole or in part, the actual, alleged or threat-
ened inhalation of, ingestion of, contact with, expo-
sure to, existence of, or presence of, any “fungi” or
bacteria, whether air-borne or not, on or within a
building or structure, including its contents. This ex-
clusion applies whether any other cause, event,
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4 Opinion of the Court 22-12703
material or product contributed concurrently or in
any sequence to such injury or damage. . . .
These exclusions do not apply to any “fungi” or bac-
teria that are on, or are contained in, a good or prod-
uct intended for human consumption.
The Umbrella Policy contained a similar fungi or bacteria exclu-
sion:
A. The following definition is added to the
DEFINITIONS section of the policy:
Fungi means any form or type of fungus, including,
but not limited to, any mildew, mold, spores, myco-
toxins, scents or byproducts released or produced by
any type or form of fungus.
B. The following exclusions are added to the
EXCLUSIONS section of the policy:
1. Bodily injury, property damage, personal injury or
advertising injury arising out of, in part or in whole,
the actual, threatened or alleged ingestion of, inhala-
tion of, exposure to, contact with, presence of, or ex-
istence of, any fungi or bacteria, whether airborne or
not, within or on a structure or building, including its
contents. This exclusion applies whether any other
event, cause, product or material contributed in any
sequence or concurrently to such damage or injury.
This exclusion shall not apply to any fungi or bacteria
that are contained in, or are on, a product or good in-
tended for human consumption.
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22-12703 Opinion of the Court 5
Southern-Owners agreed to defend Waterhouse in the Un-
derlying Action pursuant to a reservation of rights. In March 2021,
Southern-Owners filed suit against the Defendants-Appellees in the
United States District Court for the Middle District of Florida, seek-
ing declaratory relief that Patterson’s claims are not covered in the
Underlying Action due to the fungi or bacteria policy exclusions.
Southern-Owners filed a motion for summary judgment in which
it argued that the Underlying Action falls within the exclusions be-
cause the cooling tower is a “structure.” Nursery Supplies and Pat-
terson filed separate responses in opposition to the summary judg-
ment motion. Both parties argued that the cooling tower is not a
“structure” within the meaning of the exclusions.
In July 2022, the district court denied Southern-Owners’ mo-
tion for summary judgment and declared that the policies cover the
alleged injuries in the Underlying Action. The district court further
declared that the exclusionary provisions do not apply to the claims
in the Underlying Action because a cooling tower is not a building
or structure—rather, it constitutes large-scale machinery. In reach-
ing this conclusion, the district court relied on our unpublished
opinion in Westport Insurance Corporation v. VN Hotel Group, LLC,
513 F. App’x 927 (11th Cir. 2013) (per curiam) 1; principles of Florida
1 In Westport, the insurer brought a declaratory judgment action seeking to
determine whether it had a duty to defend and indemnify a hotel and its fran-
chisor.
Id. at 929. The underlying action was a wrongful-death suit brought
by the estate of a hotel guest who had contracted Legionnaires’ Disease in the
outdoor spa and died.
Id. We concluded that the fungi/bacteria exclusion of
the insurance policy did not exclude coverage because an outdoor spa does
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insurance and contract law; and the ejusdem generis and noscitur a
sociis canons of statutory construction. The district court declared
that Southern-Owners has a duty to defend, and potentially indem-
nify, Waterhouse in the Underlying Action. Judgment was entered
in favor of Nursery Supplies and Patterson.
II.
We review the district court’s ruling on a motion for sum-
mary judgment de novo. Owen v. I.C. Sys., Inc.,
629 F.3d 1263, 1270
(11th Cir. 2011). Summary judgment is appropriate when “there is
no genuine dispute as to any material fact and the movant is enti-
tled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).
“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). Since this is
a diversity action, we apply state law using the choice of law rules
of the forum state. Travelers Prop. Cas. Co. of America v. Moore,
763
F.3d 1265, 1270 (11th Cir. 2014). Florida follows the rule of lex loci
contractus, which provides that the law of the jurisdiction where
the insurance contract was executed governs. State Farm Mut. Auto.
Ins. Co. v. Roach,
945 So. 2d 1160, 1163 (Fla. 2006). Here, the insur-
ance policies were issued in Florida, so Florida law applies.
“Florida law provides that insurance contracts are construed
in accordance with the plain language of the policies as bargained
not qualify as a “structure.” Id. at 932. Thus, the insurer had a duty to defend
and indemnify. Id.
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22-12703 Opinion of the Court 7
for by the parties.” Auto-Owners Inc. Co. v. Anderson,
756 So. 2d 29,
34 (Fla. 2000). If the policy language is plain and unambiguous, “a
court must interpret the policy in accordance with the plain mean-
ing of the language used so as to give effect to the policy as it was
written.” Travelers Indem. Co. v. PCR Inc.,
889 So. 2d 779, 785 (Fla.
2004). If the policy language can be reasonably interpreted in more
than one way, one providing coverage and the other limiting cov-
erage, the policy is ambiguous. Anderson,
756 So. 2d at 34. Ambig-
uous provisions—including ambiguous policy exclusions—“are in-
terpreted liberally in favor of the insured and strictly against the
drafter.”
Id. “In fact, exclusionary clauses are construed even more
strictly against the insurer than coverage clauses.”
Id.
When an insurance policy does not define a word, we can
look to dictionary definitions for their plain meaning. See Cont’l
Cas. Co. v. Wendt,
205 F.3d 1258, 1264 (11th Cir. 2000) (per curiam);
Universal Underwriters Ins. Co. v. Evans,
565 So. 2d 741, 742 (Fla. Dist.
Ct. App. 1990).
With these principles in mind, we turn to the language of
the fungi or bacteria exclusions in the CGL and Umbrella Policies.
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8 Opinion of the Court 22-12703
III.
We agree with the district court’s conclusion that a cooling
tower does not constitute a building or structure and is more
properly considered machinery. Thus, Patterson’s claims are not
excluded from coverage under the fungi or bacteria exclusions.
The district court properly denied Southern-Owners’ motion for
summary judgment.
Both the CGL Policy and the Umbrella Policy excludes cov-
erage for “[b]odily injury . . . arising out of . . . exposure to . . . any
fungi or bacteria . . . within or on a building or structure.” 2 Here,
the policy language can be reasonably interpreted in two ways—
one providing coverage and the other excluding coverage. Ander-
son,
756 So. 2d at 34. One could reasonably interpret “structure” to
include a cooling tower, but it would be equally reasonable to in-
terpret “structure” to mean something more akin to a building.
Thus, the policy language is ambiguous.
Neither policy defines “building” or “structure,” so we may
look to dictionary definitions to determine the plain meaning of the
terms. Wendt, 205 F.3d at 1264. The Merriam-Webster dictionary
defines “building” as “a usually roofed and walled structure built
for permanent use (as for a dwelling).” Building, MERRIAM-
WEBSTER (2023), https://www.merriam-
2 The language of the Umbrella Policy exclusion mirrors the CGL Policy ex-
clusion, except that “structure” is listed before “building.” Southern-Owners
does not argue that this difference in the sequence of terms is material, thus
we will disregard this minor difference.
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webster.com/dictionary/building. It defines “structure” as “some-
thing (such as a building) that is constructed.” Structure, MERRIAM-
WEBSTER (2023), https://www.merriam-webster.com/diction-
ary/structure.
While a cooling tower may indeed qualify as a “structure”
under a broad definition of the term, Florida law clearly instructs
that ambiguous provisions in insurance policies must be inter-
preted strictly against the drafter. Anderson,
756 So. 2d at 34. Ex-
clusionary provisions are to be construed “even more strictly
against the insurer than coverage clauses.” Id.; see also State Com-
prehensive Health Ass’n v. Carmichael,
706 So. 2d 319, 320 (Fla. Dist.
Ct. App. 1997) (listing cases). Here, given the ambiguity of the lan-
guage in the fungi or bacteria exclusions, we must construe the
provisions strictly against Southern Owners and liberally in favor of
coverage.
The doctrine of noscitur a sociis (a word is known by the com-
pany it keeps) further supports our view that a cooling tower is not
a structure. When applying this canon of construction, “one exam-
ines the other words used within a string of concepts to derive the
[drafter’s] overall intent.” Nehme v. Smithkline Beecham Clinical
Lab’ys,
863 So. 2d 201, 205 (Fla. 2003); see also Air Quality Assessors
of Fla. v. S.-Owners Ins. Co.,
354 So. 3d 569, 572 (Fla. Dist. Ct. App.
2022) (applying noscitur a sociis to an exclusionary provision in an
insurance policy). Here, applying noscitur a sociis to the fungi or
bacteria exclusions, we must examine the word “structure” in rela-
tion to the word “building” to derive its meaning.
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Southern-Owners argues that, even under a narrow defini-
tion of structure, the cooling tower constitutes a “building like”
structure because it is two stories tall, has four sides, a bottom, and
a door. We reject this argument because, in our view, a cooling
tower is not similar to a building. As the district court noted in its
order, a cooling tower
is designed to remove heat from a building or facility
by spraying water down through the tower to ex-
change heat into the inside of the building. Air comes
in from the sides of the tower and passes through the
falling water. . . . The cooled water is collected at the
bottom of the tower and pumped back into the plant
or building for reuse. Cooling towers are primarily
used for heating, ventilation, and air conditioning and
industrial purposes.
Doc. 75 at 25 (citations omitted and alterations adopted).
We are persuaded by the district court’s logic that, given its
purpose and function, a cooling tower constitutes large-scale ma-
chinery or equipment rather than a building or building-like struc-
ture.
We conclude that the language “building” or “structure” in
the fungi or bacteria exclusionary provisions does not encompass a
cooling tower, thus the underlying claims are not excluded from
coverage. Accordingly, we affirm the district court’s denial of
Southern-Owners’ motion for summary judgment.
AFFIRMED.
