Amerisure Insurance v. Orange & Blue Construction, Inc.

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 13-10313
________________________
D.C. Docket No. 9:11-cv-80112-KAM
AMERISURE INSURANCE COMPANY,
a foreign corporation,
Plaintiff - Appellee,
versus
ORANGE AND BLUE CONSTRUCTION, INC.,
a Florida corporation, et al.,
Defendants,
EPOCH PROPERTIES, INC.,
Defendant - Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(November 4, 2013)
Before MARTIN and JORDAN, Circuit Judges, and BAYLSON, * District Judge.
MARTIN, Circuit Judge:
*
Honorable Michael M. Baylson, United States District Judge for the Eastern District of
Pennsylvania, sitting by designation.
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Defendant-Appellant Epoch Properties, Inc. (Epoch) appeals the District
Court’s grant of summary judgment to Plaintiff-Appellee Amerisure Insurance
Company (Amerisure) and denial of summary judgment to Epoch. On appeal,
Epoch argues that the District Court incorrectly found that Amerisure has no duty
to defend or indemnify Epoch in a tort action brought by an employee of one of
Epoch’s subcontractors. Because we agree with the District Court that no such
duty exists, we affirm.
I. FACTS AND PROCEDURAL HISTORY
Epoch was hired as the general contractor on a project called Portofino at
Lakes Laguna in Florida. Epoch entered into a subcontract for part of the work
with Orange & Blue Construction, Inc. (Orange & Blue). Orange & Blue then
subcontracted most of its work to CL & B Contracting, which further
subcontracted its work to Sandi Construction, Inc. (Sandi).
Jose Tejeda, who was working as a laborer for Sandi, fell at the construction
site and died as a result. Shortly after his death, Mr. Tejeda’s estate (the Estate)
filed a wrongful death action in the 15th Judicial Circuit Court in and for Palm
Beach County. The Estate’s Fourth Amended Complaint contains two claims
against Epoch. The first claim is that Epoch negligently failed to provide and
maintain a reasonably safe workplace. The second claim is fashioned as an
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intentional tort claim, alleging that Epoch acted in a manner that was virtually
certain to cause serious injury or death.
The subcontract agreement between Orange & Blue and Epoch required
Orange & Blue to purchase Worker’s Compensation Insurance, Employer’s
Liability Insurance, and Commercial General Liability Insurance, and to name
Epoch as an additional insured on these policies. In compliance with this
agreement, Epoch was named as an additional insured on Orange & Blue’s
Commercial General Liability policy with Amerisure (the CGL policy).
Under the CGL policy, Amerisure agreed to defend Epoch against any suit
seeking damages arising from bodily injury or property damages “to which this
insurance applies.” Conversely, the CGL policy also provided that Amerisure
would have no duty to defend against any suit seeking damages “to which this
insurance does not apply.” For example, Exclusion 2.d. of the CGL policy (the
Worker’s Compensation Exclusion) stated that the policy did not apply to “[a]ny
obligation of the insured under a workers’ compensation, disability benefits or
unemployment compensation law or any similar law.” Under Exclusion 2.e. of the
CGL policy (the Employer’s Liability Exclusion), Amerisure also had no duty to
defend or indemnify for bodily injuries suffered by Epoch’s employees “arising out
of and in the course of: (a) Employment by the insured; or (b) Performing duties
related to the conduct of the insured’s business.”
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After the Estate filed the County Court action against Epoch, Amerisure in
turn filed a declaratory judgment action in the federal district court for the
Southern District of Florida. In its complaint, Amerisure sought a declaration from
the District Court that it had no duty under the CGL policy to defend or indemnify
Epoch against the Estate’s tort claims. Epoch filed a counterclaim seeking a
declaratory judgment to the contrary, that Amerisure was, in fact, obligated to
defend and indemnify Epoch. Amerisure and Epoch then filed cross-motions for
summary judgment, and the District Court found that both the Workers’
Compensation Exclusion and the Employer’s Liability Exclusion applied to bar
coverage. Epoch now appeals from this grant of summary judgment to Amerisure.
II. DISCUSSION
A. JURISDICTIONAL ISSUES
During this appeal, we instructed the parties to brief two jurisdictional
issues: (1) whether the District Court’s judgment was a final and appealable
judgment in light of the fact that it did not resolve the Estate’s rights and liabilities;
and (2) whether the pleadings sufficiently alleged the citizenship of the Estate in
order to invoke federal diversity jurisdiction.
First, the District Court’s judgment was a final and appealable judgment,
even though the rights and liabilities of the Estate were never resolved by the
District Court. Although Amerisure named the Estate as a defendant in its
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complaint for declaratory relief, the rights and liabilities of the Estate were never at
stake in this case. Indeed, the Estate described itself in its Motion to Set Aside
Clerk’s Default as “a nominal defendant” and “not a substantive player.” As a
result, the District Court’s grant of summary judgment to Amerisure and denial of
summary judgment to Epoch was a final appealable judgment under 28 U.S.C.
§ 1291. See Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 867, 114
S. Ct. 1992, 1995 (1994) (defining a final decision as one which “ends the
litigation on the merits and leaves nothing more for the court to do but execute the
judgment” (quoting Catlin v. United States, 324 U.S. 229, 233, 65 S. Ct. 631, 633
(1945))).
In the same way, the Estate was merely a “nominal party” for purposes of
diversity jurisdiction. See Navarro Sav. Ass’n v. Lee, 446 U.S. 458, 461, 100 S.
Ct. 1779, 1782 (1980) (“[A] federal court must disregard nominal or formal parties
and rest jurisdiction only upon the citizenships of real parties to the controversy.”);
Broyles v. Bayless, 878 F.2d 1400, 1403 (11th Cir. 1989) (stating that for purposes
of diversity jurisdiction, “a real party in interest is a party that has a real and
substantial stake in the litigation and who exercises substantial control over the
litigation”). Because the Estate had no real stake or control over this litigation, the
parties did not need to plead the Estate’s citizenship to satisfy the requirements of
this Court’s diversity jurisdiction.
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B. EMPLOYER’S LIABILITY EXCLUSION
We review de novo the District Court’s grant of summary judgment. Skop
v. City of Atlanta, 485 F.3d 1130, 1136 (11th Cir. 2007). Summary judgment is
appropriate only when “there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). In
making this determination, we view the evidence and all factual inferences in the
light most favorable to the non-moving party. Skop, 485 F.3d at 1136.
The District Court correctly found that Amerisure had no obligation to
defend or indemnify Epoch because the Employer’s Liability Exclusion clearly
barred coverage in this case. Because this determination resolves the dispute, we
do not address whether the Worker’s Compensation Exclusion also applies.
Under the Employer’s Liability Exclusion, Amerisure had no duty to defend
or indemnify Epoch for injuries suffered by Epoch’s employees “arising out of and
in the course of: (a) Employment by the insured; or (b) Performing duties related to
the conduct of the insured’s business.” There is no dispute that Mr. Tejeda was
injured while working as a laborer for Sandi at Epoch’s construction site. Thus, if
Mr. Tejeda can be considered one of Epoch’s employees under the insurance
policy, Amerisure had no duty to defend Epoch against the Estate.
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Epoch argues that Mr. Tejeda cannot be considered one of Epoch’s
employees because he was working for Sandi, Epoch’s third-tier sub-contractor.
This argument fails under Florida law. Although Mr. Tejeda may not have been
one of Epoch’s employees in the traditional sense, Mr. Tejeda was a “statutory
employee” of Epoch for purposes of workers’ compensation law. See Fla. Ins.
Guar. Ass’n, Inc. v. Revoredo, 698 So. 2d 890, 890 (Fla. 3d. DCA 1997) (holding
that an employee of a subcontractor is a “statutory employee” of the general
contractor); Yero v. Miami Dade Cty., 838 So. 2d 686, 687 (Fla. 3d. DCA 2003)
(same). Beyond that, Florida courts have consistently held that the term
“employee” in insurance policies also includes statutory employees. See, e.g.,
Revoredo, 698 So. 2d at 892 (“Statutory employees have been treated identically to
actual employees in relation to standard employee exclusion clauses.”); Dodge v.
Fidelity & Cas. Co. of N.Y., 424 So. 2d 39, 40 (Fla. 5th DCA 1982) (“[T]he term
employee in the policy should be construed to include ‘statutory employees,’ as
that term is used in the workers’ compensation law.”). Because Mr. Tejeda was
one of Epoch’s statutory employees and was injured during the course of his
employment, Amerisure had no duty to defend or indemnify Epoch against his
Estate.
Our interpretation of the CGL policy is consistent with the purpose of
commercial general liability policies like this one. Unlike worker’s compensation
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insurance or employer’s liability insurance, which exist to provide employers with
coverage for injuries that occur to employees during the scope of employment, the
sole purpose of commercial general liability insurance is to provide coverage for
injuries that occur to the public-at-large. As the Florida Third District Court of
Appeal stated in Revoredo, “[t]he logic in the exclusion from coverage . . . is
simple and compelling: the only coverage intended, and for which the premium has
been paid, is the liability of the insured to the public, as distinguished from liability
to the insured’s employees.” 698 So. 2d at 892. Because the terms of the CGL
policy did not cover injuries to Epoch’s employees or the employees of Epoch’s
subcontractors like Mr. Tejeda, Amerisure has no duty to indemnify or defend
Epoch in this case.
Epoch also points to language in the CGL policy stating that the Employer’s
Liability Exclusion does not apply to liability assumed by Epoch under an “insured
contract.” The CGL policy defines an “insured contract” as “[t]hat part of any
other contract or agreement pertaining to your business . . . under which you
assume the tort liability of another party.” Epoch argues that the subcontract
agreement between Epoch and Orange & Blue is an insured contract because
Orange & Blue agreed to maintain safety at the construction site, and thus the
Estate’s claims should be considered liabilities under an “insured contract.”
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Epoch’s argument that the “insured contract” exception applies here
ultimately misses the mark because it cannot apply under the unambiguous terms
of the policy. The “insured contract” exception applies only to contracts in which
Epoch assumed the tort liability of another party. In the Estate’s suit against
Epoch, however, the Estate is not alleging that Epoch assumed the tort liability of
any other party as the result of an “insured contract.” Instead, the Estate’s tort
claims flow directly from Epoch’s own alleged acts and omissions. As a result, the
“insured contract” exception of the CGL policy does not apply. 1
III. CONCLUSION
For the reasons stated above, we affirm the District Court’s grant of
summary judgment to Amerisure and denial of summary judgment to Epoch. 2
AFFIRMED.
1
In its appeal, Epoch also argues for the first time that Mr. Tejeda could have been a “temporary
worker” under the CGL policy. We have long held that an issue not raised in the District Court
and raised for the first time on appeal will not be considered by this Court. See Terrell v. USAir,
132 F.3d 621, 628 n.9 (11th Cir. 1998); Depree v. Thomas, 946 F.2d 784, 793 (11th Cir. 1991).
2
Epoch also moved to stay this decision pending the outcome of the underlying state court
action. Although it was not mentioned at oral argument, this argument was raised in Epoch’s
brief. We conclude that the District Court’s denial of the stay was within its discretion. See
CTI-Container Leasing Corp. v. Uiterwyk Corp., 685 F.2d 1284, 1288 (11th Cir. 1982) (“The
inherent discretionary authority of the district court to stay litigation pending the outcome of
related proceeding in another forum is not questioned.”).
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