Homeowners Insurance — Severability — Intentional acts exclusion did not bar coverage for negligent supervision of insured’s son who committed intentional tort

Insurance — Homeowners — Liability — Trial court erred in finding that
homeowners policy did not provide personal liability coverage for claim of
negligent supervision for underlying intentional tort of battery committed by
insureds’ son — Intentional act exclusion and severability clause, which stated
that the insurance applied separately to each insured, created a policy
ambiguity which is resolved in insureds’ favor

MICHAEL J. HEYLIN, Appellant, v. GULFSTREAM PROPERTY AND CASUALTY INSURANCE,
CO., et al., Appellees. 5th District. Case No. 5D13-82. Opinion filed September
19, 2014. Appeal from the Circuit Court for Brevard County, John M. Harris,
Judge. Counsel: Patrick J. Deese of Patrick J. Deese, P.A., Melbourne, Philip M.
Burlington and Adam J. Richardson of Burlington & Rockenbach, P.A., West
Palm Beach, for Appellant. Hinda Klein and Scott James Edwards of Conroy,
Simberg, Ganon, Krevans, Abel, Lurvey, Morrow & Schefer, P.A., Hollywood,
for Appellee.

(WALLIS, Judge.) Michael Heylin (“Heylin”) appeals a final summary judgment
entered in favor of Gulfstream Property and Casualty Insurance, Co.
(“Gulfstream”). Heylin argues the trial court erred in interpreting a
homeowners’ insurance policy as not providing personal liability coverage for a
negligent supervision claim for an underlying intentional tort. Because we
previously held in Premier Insurance Co. v. Adams, 632 So. 2d 1054 (Fla.
5th DCA 1994), that a substantially identical severability provision rendered an
insurance policy ambiguous, resulting in a construction in favor of coverage for
the homeowner, we reverse and remand for the trial court to enter summary
judgment in favor of Heylin.1

Gulfstream filed a declaratory judgment action during a pending lawsuit where
Heylin filed a personal injury action against Benjamin Mutters, a 17-year-old,
for battery. Heylin included counts against Benjamin’s parents for negligent
supervision.2 In the declaratory judgment
action, Gulfstream sought summary judgment, arguing the policy precluded
personal liability coverage for all insureds because the alleged battery was an
intentional act. The policy contains an intentional-act exclusion, which
provides, as follows:

On appeal, Heylin argues only that the policy requires coverage for the
negligent supervision because the policy is ambiguous due to the presence of a
severability clause, which provides:

The trial court granted summary judgment, holding that the Mutterses’
insurance policy did not cover the Mutterses for either count, citing without
explanation to Hrynkiw v. Allstate Floridian Insurance Co., 844 So. 2d
739, 740 (Fla. 5th DCA 2003).

“The standard of review governing the ruling of a trial court on a motion for
summary judgment posing a pure question of law is de novo.” Wells Fargo Bank,
N.A. v. Morcom, 125 So. 3d 320, 321 (Fla. 5th DCA 2013) (citing Delta
Fire Sprinklers, Inc. v. OneBeacon Ins. Co., 937 So. 2d 695, 697 (Fla. 5th
DCA 2006)). Furthermore, this court reviews a trial court’s interpretation of a
contract de novo. State Farm Fla. Ins. Co. v. Phillips, 134 So. 3d 505,
507 (Fla. 5th DCA 2014) (citations omitted).

In Adams, we addressed this same issue. 632 So. 2d at 1055. There, a
homeowners’ insurance carrier filed a declaratory judgment action after the
Adamses’ son sexually abused another child. Id. This court analyzed the
language of the homeowners’ insurance policy and determined the language was
ambiguous. Id. Like this case, the insurance policy in Adams
contained both an intentional-act exception and a severability clause.
Id. at 1056. The Adams precedent controls our analysis in the case
at bar.

We reject Gulfstream’s argument that Hrynkiw controls. In
Hrynkiw, like Adams, this court addressed whether a homeowners’
insurance policy required an insurance carrier to defend or indemnify the policy
holders or their minor son in a personal injury action after the son allegedly
committed a battery by shooting. Hrynkiw, 844 So. 2d at 741. Unlike
Adams, however, this court in Hrynkiw held that the contract did
not require the insurance carrier to defend or indemnify the policy holders
because the policy contained a joint-obligations clause, which instead of
providing each insured his or her own policy, “forged the various parties
insured by a policy into a joint and inseparable legal entity.” Id. at
742-43 (quoting Allstate Ins. Co. v. Raynor, 21 P.3d 707, 713 (Wash.
2001)). As a result, “when the conduct of one insured defeats liability
protection for a given loss, the policy deprives all other insureds of liability
protection for that loss, even if the loss was also proximately caused by one of
those parties.” Id. (quoting Raynor, 21 P.3d at 713). The presence
of the joint-obligations clause eliminates Hrynkiw from any meaningful
application to the present case.

Consistent with Adams, we hold that the severability clause and the
intentional-act exclusion create an ambiguity that we resolve in the insureds’
favor. Adams is directly on-point and compels reversal. On remand, we
direct the trial court to enter summary judgment in favor of Heylin on
Gulfstream’s duties to defend and to provide liability coverage for the
negligence count. See R & L Constr., Inc. v. Cullen, 557 So.
2d 931, 932 (Fla. 5th DCA 1990) (noting that a trial court may grant summary
judgment for a non-moving party if there is no genuine issue of material
fact and judgment is appropriate as a matter of law).

REVERSED in part and REMANDED. (TORPY, C.J., and PALMER, J., concur.)

__________________

1Gulfstream argues that this issue is not
preserved for review because Heylin did not file a transcript as part of the
record on appeal. Because Heylin filed the controlling case with the trial court
before the summary-judgment hearing and Gulfstream admitted in response to the
motion for reconsideration that this issue was briefed, argued, and ruled upon
by the trial court, we find the issue preserved for appellate review.

2Gulfstream is not a party to the
underlying battery and negligence action.