41
Fla. L. Weekly D387bop of Form

Insurance
— General liability — Coverage — Injury to insured’s employee who was
attending an event at an attraction owned by county which was hosted by the
insured employer — Trial court properly found that the county and the
county-owned attraction were additional insureds under the policy — Trial
court erred in finding that coverage was excluded under the absolute employer’s
liability provision of the policy — Although there would have been no coverage
for a claim brought against the insured by its own employee, there was coverage
for claims against the additional insureds under the severability or separation
of insureds provision — Separation of insureds provision operated to permit
coverage for plaintiff’s claim against additional insureds, even if she was at
the attraction because of her employment with the insured employer — Error to
enter summary judgment for defendant insurer on claims of breach of contract
and bad faith

KERRY TAYLOR, Appellant/Cross-Appellee, vs. ADMIRAL
INSURANCE COMPANY, Appellee/Cross-Appellant. 3rd District. Case No. 3D14-720.
L.T. Case No. 11-7085. Opinion filed February 10, 2016. An appeal from the
Circuit Court for Miami-Dade County, Spencer Eig, Judge. Counsel: O’Brien &
Solomon and Vincent O’Brien and Julie Rannik Houston (Ft. Lauderdale), for
appellant/cross-appellee. Ritter Chusid and Shawn R. Horwick (Coral Springs),
for appellee/cross-appellant.

(Before
SUAREZ, C.J., and LAGOA and LOGUE, JJ.)

(SUAREZ, C.J.) Appellant Kerry Taylor (“Taylor”), as
assignee of Vizcaya Museum & Gardens, Villa Vizcaya and Miami-Dade County
(collectively the “Assignors”), appeals summary judgment entered in favor of
Appellee Admiral Insurance Company (“Admiral”) on her claims of breach of
contract, common law bad faith and statutory bad faith. Admiral cross appeals
the trial court’s underlying finding that the Assignors were additional insureds
under the insurance policy at issue in this action. We affirm the trial court’s
finding that the Assignors are each additional insureds under the Admiral
Policy, but we reverse the summary judgment entered in favor of Admiral as we
find that there is coverage for Taylor’s claim based on the Separation of
Insureds provision of the policy.

In April 2006 Taylor attended a private event at Villa
Vizcaya1, which was hosted by Mears
Acquisition Company d/b/a Hello Florida Inc. (“Hello Florida”). At the time of
the incident, Taylor was employed by Hello Florida. While leaving the event
Taylor slipped and fell, sustaining injury. Admiral had issued a general
liability policy to Hello Florida covering the pertinent time frame. Brown
& Brown, Inc. (“Brown & Brown”) was Hello Florida’s agent for the
policy. The parties disagreed about whether Villa Vizcaya was an additional insured
under the policy at the time of the incident.

Taylor sued the County as the result of her injuries and
later amended the Complaint to include Villa Vizcaya. When the County requested
a defense and indemnity from Admiral, Admiral declined stating that “none of the
parties named in the litigation are insureds under the policy.” Admiral did not
set forth any other grounds for refusing to defend. After Admiral refused to
defend, Taylor and Villa Vizcaya and the County entered into a Coblentz2 agreement under which Taylor was paid
$25,000 and a $550,000 consent judgment was agreed to. Villa Vizcaya and the
County assigned all of their rights under the policy to Taylor.

Taylor filed a Civil Remedy Notice of Insurer Violations
with the Florida Department of Financial Services on August 4, 2010 and then
filed suit against Admiral for breach of contract, common law bad faith and
statutory bad faith. After the action was removed to federal court, Admiral
alleged, for the first time, that Brown & Brown was not authorized to bind
coverage for it. Admiral argued that it is an excess and surplus lines insurer
which only sells products through its authorized excess lines brokers and that
Brown & Brown was not one of those brokers. Admiral moved for summary
judgment on that basis, but Taylor amended the Complaint to allege a claim of
fraud against Brown & Brown and the matter was remanded to state court.

Later discovery showed that Brown & Brown was the agent
for Hello Florida and had worked with Peachtree Special Risk (“Peachtree”),
undisputedly an authorized Admiral broker, to obtain and to bind the coverage
for Hello Florida. It appears that Brown & Brown requested that Peachtree
bind coverage for Hello Florida in 2005 after being assured by Peachtree that
the policy included coverage for blanket additional insureds. At the
instruction of Peachtree, Brown & Brown issued a Certificate to Peachtree naming
Villa Vizcaya as an additional insured. During the pertinent period, Brown
& Brown issued 90 such Certificates of Insurance in connection with Hello
Florida’s business, each of which was forwarded to Peachtree. Prior to Taylor’s
injury, no one from Admiral or Peachtree ever advised Brown & Brown that it
had no authority to issue the additional insured Certificates.

After remand, Taylor moved for summary judgment arguing that
recovery under the Coblenz agreement was proper, that Villa Vizcaya and
the County were additional insureds, that denial of coverage was improper and
that Admiral was in breach of contract and in bad faith. In response, Admiral
cross-moved for summary judgment claiming that coverage was excluded by the
Absolute Employer’s Liability provision of the policy.

The Absolute Employer’s Liability provision states:

e. Employer’s Liability 

“Bodily injury” to: 

(a) Employment by any
insured; or 

(b) Performing duties related
to the conduct of any insured’s business; or 

(2) The spouse, child,
parent, brother or sister of that “employee” as a consequence of Paragraph (1)
above.

This
exclusion applies:

(2) To any obligation to
share damages with or repay some-one else who must pay damages because of the
injury. (emphasis supplied).

After hearing, the trial court concluded that Villa Vizcaya
and the County were additional insureds under the Admiral policy based on the
evidence submitted in connection with the opposing summary judgment motions. We
affirm that conclusion.

7.
Separation of Insureds

Except
with respect to the Limits of Insurance, and any rights or duties specifically
assigned this Coverage Part to the first Named Insured, this insurance applies:

b.
Separately to each insured against whom claim is made or “suit” is brought.

The Separation of Insureds provision operated to permit
coverage for Taylor’s claim against Villa Vizcaya and the County, even if she
was on location because of her employment with Hello Florida. Neither Villa
Vizcaya nor the County were Taylor’s employer and under the Separation of
Insureds provision, each was separately insured by Admiral and subject to claim
by non-employee Taylor.

As
stated in Evanson Ins. Co. v. Design Build Interamerican, Inc., 569 Fed.
Appx. 739 (11th Cir. 2014):

Florida
courts have explained that severability clauses, like the separation of
insureds provision here, create separate insurable interests in each individual
insured under a policy, such that the conduct of one insured will not
necessarily exclude coverage for all other insureds. See Mactown, Inc. v.
Cont’l Ins. Co., 716 So. 2d 289, 292-93 (Fla. 3d DCA 1998).

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[I]n
Premier [Ins. Co. v. Adams, 632 So. 2d 1054 (Fla. 5th DCA 1994)],
the Fifth District considered the effect of a severability of insurance clause
in a homeowner’s policy on the policy’s exclusionary clause. Id. at
1056. The severability clause provided that ‘[t]his insurance applies
separately to each insured[,]’ id., and the exclusionary clause
precluded coverage for bodily injury ‘which is expected or intended by any
insured,’ id. at 1055. The Fifth District first noted that there were no
Florida cases dealing with the ‘interaction of exclusionary clauses and
severability clauses or the term ‘any insured’ as contrasted to ‘an insured’ or
‘the insured,’ in an exclusionary clause’ id., and thus looked to
decisions in several other jurisdictions, id. at 1056-57. The Fifth
District found persuasive the reasoning of the Massachusetts Supreme Court that
the severability clause created ‘a separate insurance policy for each insured,’
and thus the use of the term ‘any insured’ in the exclusionary provision of the
policy ‘referred only to persons claiming coverage under the policy.’ Id.
at 1056 (describing the reasoning of Worcester Mut. Ins. Co. v. Marnell,
398 Mass. 240, 496 N.E.2d 158 (1986)). The Fifth District agreed with the
Massachusetts Supreme Court that this interpretation ‘gave reasonable meaning
to both the exclusionary clause and the severability clause[,]’ which it found
preferable ‘to one which leaves a part useless or inexplicable.’ Id. at
1057. Moreover, the Fifth District concluded that, to the extent the
severability and exclusionary provisions created an ambiguity, the policy had
to be construed strictly against the insurer as the drafter of the policy. Id.
Noting that the policy at issue ‘contains an exclusion for the intentional acts
of ‘any insured’ and contains a severability clause creating a separate
insurable interest in each individual insured,’ the Fifth District in Premier
held that the ‘the most plausible interpretation is that the exclusionary
clause is to exclude coverage for the separate insurable interest of that
insured who intentionally causes the injury.’ Id. The reasoning and
holding of Premier govern our interpretation of the severability and
exclusionary provisions of [the] CGL policy in this case. . . . . Because we
are applying Florida law, we must interpret this language as requiring that
each insured has separate insurance coverage, Premier, 632 So. 2d at
1057, and therefore read all provisions of the policy, including the employer’s
liability exclusion, as if coverage is for only [each insured]. [ ] [W]hen
applying this construction of the severability provision to the employer’s
liability exclusion in the [ ] policy, we conclude that coverage is not
precluded for [other insureds]. The exclusion states that the insurance does
not apply to bodily injury to ‘[a]n ‘employee’ of any insured.”
(Emphasis added). Reading this provision as if [one insured] were the only
insured, coverage would not be precluded because [the tortfeasor] is not an
employee of [that insured]. The same construction is true for [the other
insureds]. Moreover, we note that this reading does not render the inclusion of
the employer’s liability exclusion superfluous because, as [the claimant]
concedes, the exclusion applies to [the employer for the tortfeasor].

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Essentially,
the exclusion’s use of the term ‘any insured’ when read in conjunction with the
severability clause creates a class of insureds who are excluded from coverage,
i.e. employers of the injured claimant. Accordingly, as to other insureds who
are not in the class of excludable insureds, but against whom a claim could be
asserted, i.e. non-employers of the injured claimant, coverage is not
precluded.

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Significantly,
the Fifth District in Premier concluded that the severability clause, in
and of itself, created a separate insurable interest in each individual insured
under the policy, which when applied to the policy’s use of the term “any
insured” means that each insured must be treated independently from other
insureds. This principle is applicable regardless of the type of insurance
policy at issue. [ ]Another Florida appellate court has applied a severability
of insurance clause to an employee exclusion in an automobile liability policy
and concluded that ‘[t]he exclusion as to employees of the insured is thus
limited and confined to the employees of the employer against whom the claim is
asserted.’ Shelby Mut. Ins. Co. v. Schuitema, 183 So. 2d 571, 574 (Fla.
4th DCA 1966), approved 193 So. 2d 435 (Fla. 1967). Like the Fifth District in Premier,
the Fourth District in Schuitema recognized that ‘the principle that the
severability of interests clause must be construed as intended to treat each
insured independently from the other insured’ must be applied to other
pertinent provisions of the policy. Id. Specifically, when applying this
principle to the employee bodily injury exclusion, the court in Schuitema
held that ‘where the claimant is not the employee of the additional insured
against whom the claim is made, then there is coverage.’ Id.

Id. at 742-43.

Applying those principles here, coverage for Taylor was not
precluded with respect to Villa Vizcaya or the County because neither was her
employer. While the Absolute Employer’s Liability Provision prevented Taylor
from making a claim against Hello Florida, the Separation of Insureds provision
permitted her to pursue her claims against additional insureds Villa Vizcaya
and the County.

We therefore reverse the summary judgment entered for
Admiral and remand with instructions to the trial court to grant Taylor’s
opposing summary judgment motion.

Affirmed in part, reversed in part and remanded with
instruction to enter summary judgment for Taylor.

__________________

1Vizcaya Museum & Gardens is an
attraction in Miami-Dade County which is comprised of an estate known as Villa
Vizcaya and ten acres of gardens. We refer to the villa and gardens
collectively as “Villa Vizcaya” herein. Villa Vizcaya is owned and operated by
Miami-Dade County (the “County).

2Coblentz v. Am. Sur. Co. of New York,
416 F.2d 1059 (5th Cir. 1969). A Coblentz agreement is a negotiated settlement
in which the defendant agrees to a consent judgment and assigns, to the injured
party, any cause of action the defendant had against the defendant’s insurer.

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