Wellington Specialty Ins. Company v. Kendall Crane Service

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 10-12718 JULY 12, 2011
JOHN LEY
________________________ CLERK
D.C. Docket No. 1:08-cv-22745-JAL
WELLINGTON SPECIALTY INSURANCE COMPANY,
lllllllllllllllllllll Plaintiff - Counter
lllllllllllllllllllll Defendant -Appellant,
versus
KENDALL CRANE SERVICE,
lllllllllllllllllllll Defendant - Appellee,
JUAN FRANCISCO GARCIA,
lllllllllllllllllllll Defendant - Counter
lllllllllllllllllllll Claimant - Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(July 12, 2011)
Before BARKETT, WILSON and ARNOLD,* Circuit Judges.
PER CURIAM:
Wellington Specialty Insurance Company, an Arizona corporation, appeals
from an adverse summary judgment declaring that insurance coverage exists under
a policy it issued to Kendall Crane Service, a Florida corporation, for an accident
in which Juan Francisco Garcia, a Florida resident, was injured. After careful
review and with the benefit of oral argument, we affirm.
I. Background
A general contractor, Thales Builders Corp., hired two separate
subcontractors, Alameda Construction, Inc. and Kendall Crane, to work on a
residential construction project. Alameda was hired to perform rough carpentry
and rebar replacement work, and Kendall Crane was hired to provide a crane and
operate it. Garcia was an employee of Alameda. He was not in privity with
Kendall Crane; nor was Alameda in privity with Kendall Crane. At no time did he
perform any work for Kendall Crane, and Kendall Crane never supervised or paid
him.
Garcia was injured when a crane, which was operated by Kendall Crane’s
employees, struck him and caused him to fall to the cement floor below. He
*
Honorable Morris S. Arnold, United States Circuit Judge for the Eighth Circuit, sitting
by designation.
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received workers’ compensation benefits through Alameda’s workers’
compensation insurance policy. Neither Thales nor Kendall Crane provided
workers’ compensation benefits to him. Garcia also sued Kendall Crane,
Alameda, and Thales in state court, alleging that Kendall Crane was grossly
negligent in operating the crane, which caused his injuries.
Kendall Crane then filed a claim with Wellington under its commercial
general liability policy. Wellington defended under a reservation of rights, and
brought this declaratory judgment action, arguing that an exclusion precluding
coverage for bodily injury to employees applies. This exclusion states, in relevant
part:
This insurance policy does not apply to:
“Bodily injury” to:
(1) An “employee”, “temporary worker”, independent contractor of
any insured or employee of any independent contractor arising out of
and in the course of:
(a) Employment by any insured; or
(b) Performing duties related to the conduct of any
insured’s business; or
(c) Arising out the injured party’s employment; or
(2) A fellow “employee”, “temporary worker”, or independent
contractor of any insured arising out of and in the course of such
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employment when the insured is an “executive officer” of such
employer; or
....
The policy defines the term “employee” as follows: “‘Employee’ includes a
‘leased worker.’ ‘Employee’ does not include a ‘temporary worker.’” The term
“leased worker,” in turn, is defined as “a person leased to you by a labor leasing
firm under an agreement between you and the labor leasing firm to perform duties
related to the conduct of your business. ‘Leased worker’ does not include a
‘temporary worker.’”
Wellington conceded that Garcia was not Kendall Crane’s actual employee,
leased worker, or temporary worker. But it argued that the term “employee” in the
exclusion refers not only to Kendall Crane’s actual employees, but also to its
statutory employees, as that term is defined in Florida’s workers’ compensation
laws, and that Garcia was Kendall Crane’s statutory employee as a matter of law.
The district court rejected this argument, concluding that the employee exclusion
does not apply, and thus that coverage exists.
II. Discussion1
1
We review the district court’s grant of summary judgment de novo, drawing all facts
and inferences in the light most favorable to the non-moving party. Dryer v. Lee, 488 F.3d 876,
878 (11th Cir. 2007).
4
As Wellington concedes that Garcia was not an actual employee, leased
employee, or temporary worker of Kendall Crane, the only way that the policy’s
employee exclusion applies is if it incorporates the concept of a statutory
employee as defined in Florida’s workers’ compensation laws, and if Garcia in
fact qualified as Kendall Crane’s statutory employee.
The concept of a statutory employee under Florida law comes from §
440.10(1)(b), Florida Statutes, which provides:
In case a contractor sublets any part or parts of his or her contract
work to a subcontractor or subcontractors, all of the employees of
such contractor and subcontractor or subcontractors engaged on such
contract work shall be deemed to be employed in one and the same
business or establishment, and the contractor shall be liable for, and
shall secure, the payment of compensation to all such employees,
except to employees of a subcontractor who has secured such
payment.
Based on the plain language of the statute, “[i]t is absolutely basic . . . that one
cannot be a ‘contractor’ (and thus a statutory employer) within the meaning of this
statute unless the ‘contractor’ has a contractual obligation, a portion of which is
sublet to another.” Woods v. Carpet Restorations, Inc., 611 So. 2d 1303, 1304
(Fla. Dist. Ct. App. 1992). Here, Kendall Crane did not sublet its contractual
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obligation to Alameda. Thus, it could not have been the statutory employer of
Alameda’s employees, including Garcia.2
Moreover, the purpose and structure of § 440.10(1)(b) confirm that the
statute does not confer statutory-employer status on Kendall Crane. “[T]he
obvious legislative intent [of § 440.10(1)(b) is] to insure that a person performing
a contractor’s work, even as an employee of a subcontractor, shall be entitled to
workers’ compensation protection with the primary employer if the subcontractor
fails to provide such coverage.” Roberts v. Gator Freightways, Inc., 538 So. 2d
55, 60 (Fla. Dist. Ct. App. 1989). In other words, it seeks “to insure that a
particular industry will be financially responsible for injuries to those employees
working in it, even though the prime contractor employs an independent contractor
to perform part or all of its contractual undertaking.” Id. The statute does this by
making the general contractor “responsible for securing coverage for the
subcontractor’s employees.” Amorin v. Gordon, 996 So. 2d 913, 916 (Fla. Dist.
Ct. App. 2008). In return, the statute immunizes general contractors from tort
liability for the injuries of its subcontractors’ employees. See Fla. Stat. §
440.10(1)(e). As such, the statute concerns the vertical relationship between a
2
To be sure, under § 440.10, Kendall Crane’s and Alameda’s employees were deemed to
be “employed in one and the same business or establishment.” But that does not help
Wellington, because the policy’s exclusion only applies to employees of Kendall Crane, not to
employees of some other business or establishment, which in this case is Thales’s business.
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contractor and subcontractor, not the horizontal relationship between two
subcontractors, which is the relationship at issue here. Indeed, the statute does not
impose any obligation on a subcontractor to obtain workers’ compensation
coverage for another subcontractor’s employees, and thus it would be nonsensical
to call one subcontractor the statutory employer of the other subcontractor’s
employees.
The case that Wellington principally relies upon for the contention that
Garcia was Kendall Crane’s statutory employee, Florida Insurance Guaranty Ass’n
v. Revoredo, involved the vertical relationship between a subcontractor’s
employee and the general contractor, not the horizontal relationship between the
subcontractor’s employee and another subcontractor. 698 So. 2d at 890, 890 (Fla.
Dist. Ct. App. 1997). As this case involves a horizontal relationship between a
subcontractor’s employee and another subcontractor, Revoredo’s holding that the
subcontractor’s employee was a statutory employee of the general contractor, and
thus that the employee exclusion in the general contractor’s insurance policy
applied, is inapposite here.
Accordingly, the district court correctly determined that Garcia was not
Kendall Crane’s statutory employee and that the employee exclusion is
inapplicable.
AFFIRMED.
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