TOKIO MARINE SPECIALTY INSURANCE COMPANY v. CLEAR BLUE SPECIALTY INSURANCE COMPANY (2025)

ORDER DISMISSING PETITION

THIS CAUSE is before the Court upon the Motion To Dismiss [ECF No. 15] (the “Motion”) by Respondent Clear Blue Specialty Insurance Company (“Clear Blue”), filed on January 21, 2025. The Motion is fully briefed and ripe for resolution. [See ECF Nos. 16, 19]. The Court has reviewed the Motion and the Amended Petition as well as the exhibits attached thereto, along with the parties’ papers, the relevant portions of the record, and the governing law. Upon due consideration, the Motion is GRANTED for the reasons discussed below.

I. BACKGROUND

Petitioner, Tokio Marine Specialty Insurance Company (“Tokio”), seeks a declaration of its rights and Respondent Clear Blue's duties under commercial general liability policy number AR01-RS-2100823-02 (the “Policy”). [FAC, ECF No. 13]. Clear Blue issued the Policy to its Named Insured, GC Construction & Consulting Services, LLC (“GC”), effective August 31, 2021, to August 31, 2022. [Id. ¶ 1, 6; see ECF No. 13-1]. Two endorsements to the Policy list River Reach Condominium (“River”) as an “Additional Insured.” [See Policy, ECF No. 13-1 at 29, 32].

[Id. at 29].

[Id. at 32]. A third endorsement to the Policy provides Additional Insureds “blanket” coverage “as required by virtue of written contract.” [Id. at 27].

[Id.].

For context, Tokio is defending its insureds—River and Castle Management, LLC (“Castle”)—in an underlying state court tort action. See Toby Johnston v. River Reach, Inc., et al., No. CACE23002911, (17th Jud. Cir. Ct., Broward Cnty, Fla. Mar. 7, 2023) [Compl., ECF No. 13-3]. That lawsuit arises from personal injuries sustained by a business invitee on February 4, 2022, while visiting River's property located at 1301 River Reach Drive, Fort Lauderdale, Florida. [See id. ¶ 4]. Castle managed the River property at the time of the injuries. See id. GC is also a named defendant in the lawsuit. [See id. ¶ 6]. The state court complaint alleges “GC was hired by River and/or Castle to perform work on the property,” and that Plaintiff “tripped and fell over a dangerous condition created by ․ GC and allowed to remain on the property by ․ River and/or ․ Castle.” [See id. ¶ 7]. Plaintiff has sued each of the three defendants (River, Castle, and GC) for negligence. [See id. at 3–6]. Pertinent to the instant Motion, Plaintiff did not assert a vicarious liability claim against River for any acts or omissions committed by GC or its work. And according to the docket, the case is scheduled for trial this month—calendar commencing March 10, 2025, to March 28, 2025.

II. STANDARD OF REVIEW

“A pleading that states a claim for relief must contain ․ a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). To survive a motion to dismiss, the “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). While legal conclusions can provide the framework of the complaint, they must be supported by factual allegations. Id. at 679, 129 S.Ct. 1937. Detailed factual allegations are not required, but the complaint must offer more than “labels and conclusions” or “a formulaic recitation of the elements of the cause of action.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citation omitted). The factual allegations must be enough to “raise a right to relief above the speculative level.” Id. (citations omitted). Finally, at the motion to dismiss stage, the Court must view the allegations in the complaint in the light most favorable to the plaintiff and accept well-pleaded facts as true. See St. Joseph's Hosp., Inc. v. Hosp. Corp. of Am., 795 F.2d 948, 954 (11th Cir. 1986).

III. DISCUSSION

Tokio asserts four counts for declaratory relief under 28 U.S.C. § 2201 against Clear Blue: Count I (duty to defend River); Count II (duty to indemnify River); Count III (duty to defend Castle); and Count IV (duty to indemnify Castle), as well as a claim for contribution (Count V). [FAC, ECF No. 13 at 13–19]. Tokio alleges that because River is named as an “Additional Insured” under two “Additional Insureds” endorsements to the Policy, Clear Blue must pay (or reimburse) Tokio for its defense of River in the state court tort action. [See id. ¶¶ 25–29; 31–35]. As for Castle, Tokio relies on the “blanket” endorsement to allege that Castle is an Additional Insured “by virtue of written contract.” [See id. ¶¶ 38–41; 44–48].

Clear Blue moves to dismiss the Complaint with prejudice because Florida law is clear that “Additional Insureds” coverage extends only to claims asserted under a theory of vicarious liability. [ECF No. 15 at 3–6]. Because the state court plaintiff sued GC, River, and Castle for direct negligence only, Clear Blue argues it has neither a duty to defend nor a duty to indemnify River or Castle. [Id.]. In short, Clear Blue's position is that the Additional Insureds endorsement applies only where an additional insured is being held vicariously liable for the acts or omissions of the named insured. [Id.].

A. Insurance coverage on a motion to dismiss.

Courts generally disfavor resolving contract interpretation issues at the motion to dismiss stage; however, insurance coverage disputes are regularly dismissed for failing to state a claim when “a review of the insurance policy and the underlying claim for which coverage is sought unambiguously reveals that the underlying claim is not covered.” Goldberg v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa., 143 F. Supp. 3d 1283, 1291 (S.D. Fla. 2015) (collecting cases). That is because the duty to defend inquiry is based on whether the facts alleged in the underlying complaint can be fairly read to support coverage. Capitol Specialty Ins. Corp. v. Ortiz, No. 17-23329-CIV-Scola, 2018 WL 7291057, at *3 (S.D. Fla. Apr. 20, 2018) (citing Goldberg, 143 F. Supp. 3d at 1293). In the case at bar, no factual dispute exists. Rather, the parties disagree solely over the correct interpretation of the Policy. The Court thus finds it appropriate to resolve the coverage question now.

At this stage, the Court is generally confined to considering the Amended Complaint and any of its attachments. See Zodiac Grp., Inc. v. Axis Surplus Ins. Co., 542 F. App'x 844, 848 (11th Cir. 2013) (per curiam) (citing SFM Holdings, Ltd. v. Banc of Am. Sec., LLC, 600 F.3d 1334, 1337 (11th Cir. 2010)). Because the Policy and the subcontract between River as owner and GC as contractor were filed by Tokio as attachments to the Amended Complaint [see ECF Nos. 13-1, 13-4], the Court may consider the language of these documents in deciding whether Clear Blue has the duty to defend (or indemnify) River and/or Castle in the underlying state court action.

Under Florida law, which the parties agree applies here, an “insurer must defend when the complaint alleges facts which fairly and potentially bring the suit within policy coverage.” Lime Tree Vill. Cmty. Club Ass'n, Inc. v. State Farm Gen. Ins. Co., 980 F.2d 1402, 1405 (11th Cir. 1993) (citations omitted). That is true regardless of the facts and merits of the underlying case. Capitol Specialty Ins. Corp., 2018 WL 7291057, at *3 (citing Lime Tree Vill. Cmty. Club Ass'n, Inc. v. State Farm Gen. Ins. Co., 980 F.2d 1402, 1405 (11th Cir. 1993)). To determine whether the insurer has a duty to defend, the Court must apply the language of the applicable policy to the facts in the complaint. Goldberg, 143 F. Supp. 3d at 1293. If the complaint asserts multiple bases for liability and one allows for insurance coverage while another does not, the insurer is obligated to defend the entire suit. Lime Tree Vill. Cmty. Club Ass'n, Inc., 980 F.2d at 1405 (citation omitted). And if the allegations in the complaint “leave any doubt as to the duty to defend, the question must be resolved in favor of the insured.” Id.

In Florida, insurance contracts are construed according to their plain meaning. Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So.2d 528, 532 (Fla. 2005). “[I]f a policy provision is clear and unambiguous, it should be enforced according to its terms whether it is a basic policy provision or an exclusionary provision.” Id. (citation omitted). It is “when a genuine inconsistency, uncertainty, or ambiguity in meaning remains after resort to the ordinary rules of construction” that an ambiguity will be construed in favor of coverage. Id. (citation omitted). But “if the pleadings show that there is no coverage or that a policy exclusion applies to bar coverage, the insurer has no duty to defend.” Goldberg, 143 F. Supp. 3d at 1294 (citations omitted).

Whether a contract provision is ambiguous is a question of law for the Court to decide. Cmty. Asphalt Corp. v. Travelers Indem. Co. of Am., No. 16-21758-CIV, 2017 WL 4712199, at *4 (S.D. Fla. Apr. 26, 2017) (citing Strama v. Union Fid. Life Ins. Co., 793 So.2d 1129, 1132 (Fla. 1st DCA 2001)). Undefined provisions are governed by “common everyday usage.” Id. (citing Certain British Underwriters v. Jet Charter Serv., Inc., 789 F.2d 1534, 1536 (11th Cir. 1986)).

To determine whether Clear Blue has a duty to defend River and/or Castle, the Court must first determine whether River and/or Castle are Additional Insureds under the Policy. If they are, then the Court can decide whether the Policy extends coverage to River and/or Castle as an additional insured for their liability in the underlying state court lawsuit. If it does, then Clear Blue has a duty to defend. If it does not, Clear Blue does not have a duty to defend.

B. Additional Insureds under the Policy.

River is clearly an Additional Insured under the Policy by the express language of the two endorsements shown above. [See ECF No. 13-1 at 29, 32]. Clear Blue does not dispute this fact. [See generally, ECF No. 15]. Accordingly, the Court finds that River is an Additional Insured under the Policy.

Castle is another story. Nowhere does the Policy expressly name Castle as an Additional Insured. Instead, Tokio relies on the “blanket” endorsement to assert that Castle is an Additional Insured under the Policy “as required by virtue of written contract.” [ECF No. 16 at 6 n.1 (citing ECF No. 13-1 at 27)]. The relevant written contract is the subcontract between GC (as contractor) and River (as owner) dated October 22, 2020, which provides in relevant part as follows:

To the fullest extent permitted by law, the Contractor [GC] shall indemnify, defend, and hold harmless the Owner [River], ․ and their respective agents [Castle] ․ from and against claims, damages, losses and expenses, including but not limited to attorneys’ fees arising from performance of the Work or any act, omission, or default of the Contractor ․

[ECF No. 13-4 ¶ 9.15]. The Work referred to in the subcontract is the Work performed by GC for River that led to the injuries alleged in the state court tort action. See Toby Johnston v. River Reach, Inc., et al., No. CACE23002911 (17th Jud. Cir. Ct., Broward Cnty, Fla. Mar. 7, 2023) [Compl., ECF No. 13-3]. Relying on the indemnification language of the subcontract, Tokio argues as follows: “Because GC agreed to indemnify, defend, and hold harmless River ․ and its agents, including Castle, from and against claims, damages, losses and expenses resulting from performance of GC's work at the property, Tokio ․ asserts that the Blanket Endorsement applies to both River and Castle.” [ECF No. 16 at 6 n.1. and 12 (citing ECF No. 13-4, Contractor Agreement at Paragraph 9.15, dated October 22, 2020)].

Clear Blue counters that “Contractual Indemnity status does not equate with Additional Insured status.” [ECF No. 19 at 4–5 (citing Container Corp. of Am. v. Maryland Cas. Co., 707 So.2d 733, 734–37 (Fla. 1998); Liberty Mut. Fire Ins. Co. v. State Farm Fla. Ins. Co., No. 15-20941-CIV, 2019 WL 4739393, at *16 (S.D. Fla. July 19, 2019)) (“it is the language of the Policy, not the Contractors Agreement, that is controlling”) (citation omitted), aff'd, No. 20-12970, 2022 WL 1025164 (11th Cir. Apr. 6, 2022)]. Clear Blue is correct.

Looking at the plain language of the blanket endorsement of the Policy, Castle would be an Additional Insured “as required by virtue of a written contract,” only if the subcontract “required” Castle to be an Additional Insured under the Policy. [ECF No. 13-1 at 27]. The subcontract does not so require. GC may have a duty to indemnify and defend Castle, but GC is not required to name Castle an Additional Insured under the Policy. Accordingly, the Court finds that Castle is not an Additional Insured under the Policy, and Clear Blue has no duty to defend or indemnify Castle in the underlying state court action. Counts III, IV, and V as they relate to Castle are, therefore, due to be dismissed.

Moving on, the next issue is whether the Policy extends coverage to River as an Additional Insured for its liability in the underlying state court lawsuit.

C. Coverage does not extend to River as an Additional Insured.

The Policy clearly and unambiguously provides that River is an Additional Insured under the Policy only in the following circumstances:

(1) “only with respect to liability for ‘bodily injury’ ․ caused, in whole or in part, by” GC's “acts or omissions; or ․ the acts or omissions of those acting on [GC's] behalf.” [ECF No. 13-1 at 29 (emphasis added)].

(2) “only with respect to liability for ‘bodily injury’ ․ caused, in whole or in part, by” GC's work at the location [River Reach Condominium, 940 River Reach Condominium, Ft. Lauderdale, FL 33315].” [ECF No. 13-1 at 32 (emphasis added)].

After reviewing the case law cited by the parties, the Court finds that this Additional Insured endorsement does not extend coverage to River. That is because the liability sought against River in the underlying state court lawsuit is premised solely on River's direct negligence. [See Toby Johnston, No. CACE23002911, Compl., ECF No. 13-3].

In Garcia v. Fed. Ins. Co., 969 So.2d 288 (Fla. 2007), the Florida Supreme Court addressed the certified question as to whether “an insurance policy providing coverage for an additional insured ‘with respect to liability because of acts or omissions’ of the named insured limit[s] coverage to instances in which the additional insured is vicariously liable for acts of the named insured?” Id. at 289 (emphasis added). The Court answered the question in the affirmative. Id. The Court found that the phrase “because of” in the additional-insured endorsement was “relevant” and that “there is a more circumscribed meaning to ‘because of’ than merely being a sequential link in the chain of events ․ The phrase appears to include persons or organizations held in by way of vicarious liability for derelictions of [the named insured].” Id. at 293 (emphasis added) (quoting Long Island Lighting Co. v. Hartford Accident & Indem. Co., 76 Misc.2d 832, 350 N.Y.S. 2d 967, 972 (N.Y. Gen. Term. 1973) (alteration in original)). Thus, the Court reasoned that “[t]he omission of the words ‘but only’ in [the insurer's] policy [did] not materially change the limitation of the additional insured provision to instances of vicarious liability.” Id. (emphases added). The Court further explained that “the presence of the words ‘because of’ in [the insurer's] policy require[d] that an additional insured's liability be ‘caused by’ the acts or omissions of the named insured.” Id. (emphases added). In short, the Florida Supreme Court held that the insurer's policy did not cover the additional insured's “independent acts of negligence” and that “[b]ecause the accident victim's suit against [the additional insured] sought recovery only for her direct negligence, and did not allege any liability based on acts or omissions of [the named insured], [the additional insured] [was] not entitled to coverage.” Id. at 294.

After the Florida Supreme Court decided the certified question, the Eleventh Circuit affirmed the district court's previous granting of the defendant's motion to dismiss. See Garcia v. Fed. Ins. Co., 508 F.3d 1331, 1332 (11th Cir. 2007) (per curiam), affirming Garcia v. Fed. Ins. Co., No. 05-20708-CIV, 2005 WL 8157692 (S.D. Fla. July 22, 2005). The Eleventh Circuit explained that, based on the Florida Supreme Court's decision, the policy in question was not ambiguous and that “coverage for additional insureds ․ [was] limited to instances in which the additional insured [was] vicariously liable for acts of the named insured.” Id. (citing Garcia, 969 So.2d at 289). And since the additional insured was sued for her own negligence and not the named insured's negligence, the additional insured was not covered by the terms of the policy. Id.

Federal district courts applying Florida law to additional-insured endorsements such as the ones in this case have consistently ruled in line with Garcia. These courts have found that similar additional-insured endorsements did not extend coverage where the underlying lawsuit did not allege that the additional insured was vicariously liable for the direct negligence of the named insured. See Mid-Continent Cas. Co. v. Constr. Servs. & Consultants, Inc., No. 06-CV-80922-Marra 2008 WL 896221, at *3 (S.D. Fla. Mar. 31, 2008); United Rentals, Inc. v. Mid-Continent Cas. Co., 843 F. Supp. 2d 1309, 1314–16 (S.D. Fla. 2012) (Altonaga, J.) (citing Constr. Servs. & Consultants, Inc., 2008 WL 896221, at *8–9); King Cole Condo. Ass'n, Inc. v. Mid-Continent Cas. Co., 21 F. Supp. 3d 1296, 1299 (S.D. Fla. 2014) (Huck, J.) (citing United Rentals, Inc., 843 F. Supp. 2d 1309; Constr. Servs. & Consultants, Inc., 2008 WL 896221); Cmty. Asphalt Corp., 2017 WL 4712199, at *8–10 (citing Garcia, 969 So.2d at 294; United Rentals, Inc., 843 F. Supp. 2d at 1314; Constr. Servs. & Consultants, Inc., 2008 WL 896221, at *3–5; Bradfield v. Mid-Continent Cas. Co., 143 F. Supp. 3d 1215, 1229 (M.D. Fla. 2015); White Springs Agr. Chemicals, Inc. v. Gaffin Indus. Servs., Inc., No. 3:11-cv-998-J-32JRK, 2014 WL 905545, at *5 (M.D. Fla. Mar. 7, 2014)).

Here, like the endorsements in all these cases, the Policy is clear and unambiguous. Like the similarly-worded endorsements in the cases cited above, the Policy provides coverage to an additional insured “only with respect to liability for ‘bodily injury’ ․ caused, in whole or in part by” the named insured's acts or omissions (or work). [ECF No. 13-1 at 29, 32 (emphasis added)]. As the Florida Supreme Court and several other district courts interpreting similar language have concluded, because the liability in the underlying state court lawsuit is not being pursued for injuries “caused, in whole or in part by” GC, it necessarily follows that River is not covered as an Additional Insured under the Policy.

In sum, River is not being held vicariously liable for the direct negligence of GC, nor is River's liability premised on injuries “caused, in whole or in part by” GC or GC's work. Thus, River is not covered as an Additional Insured under the Policy. Florida law is clear: “to pursue a vicarious liability claim, the claimant must specifically plead it as a separate cause of action.” See Gen. Asphalt Co., Inc. v. Bob's Barricades, Inc., 22 So.3d 697, 699 (Fla. 3d DCA 2009) (citing Goldschmidt v. Holman, 571 So.2d 422, 423 (Fla. 1990)). The state court plaintiff has not pleaded a claim for vicarious liability. See Toby Johnston v. River Reach, Inc., et al., No. CACE23002911 (17th Jud. Cir. Ct., Broward Cnty, Fla. Mar. 7, 2023) [Compl., ECF No. 13-3]. Therefore, this case is due to be dismissed with prejudice. See Strauss v. Gemini Ins. Co., 742 F. Supp. 3d 1184, 1201 (S.D. Fla. 2024) (dismissing additional insured claims with prejudice on futility grounds) (citing In re Engle Cases, 767 F.3d 1082, 1108–09 (11th Cir. 2014)).

IV. CONCLUSION

The Court concludes that Clear Blue has no duty to defend or indemnify River or Castle under the Policy. In the absence of such a duty, Clear Blue has no obligation to contribute to Tokio's expenses. Counts, I, II, III, IV, and V must be dismissed. Accordingly, it is hereby ORDERED AND ADJUDGED as follows:

1. Defendant's Motion to Dismiss [ECF No. 15] is GRANTED.

2. This case is DISMISSED WITH PREJUDICE.

3. All pending motions are DENIED AS MOOT.

4. The Clerk is DIRECTED to CLOSE THIS CASE.

DONE AND ORDERED in the Southern District of Florida on March 19, 2025.

DAVID S. LEIBOWITZ, UNITED STATES DISTRICT JUDGE