86 F. Supp. 3d 1307
M.D. Fla.2015Background
- American Casualty seeks a declaratory judgment on its duty to defend and indemnify Defendants in an underlying TCPA/conversion class action by Florida First.
- Florida First filed a January 2011 class action alleging TCPA and conversion violations based on unsolicited faxes in January 2007, with Exhibit A showing the fax.
- The class action defines all persons receiving unsolicited advertising faxes allegedly sent by Defendants, and Florida First’s counts incorporate these facts.
- American Casualty agreed to defend under reservation of rights in February 2013; others also defended under reservation, with American Casualty withdrawing in June 2014.
- Policy No. 2090658080 covered June 18, 2006 to June 18, 2011 and includes a Violation of Statutes exclusion targeting TCPA, CAN-SPAM, and other statutes that prohibit sending material or information.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the Violation of Statutes Exclusion bar coverage for the TCPA and conversion claims? | ACIC argues exclusion precludes defense and indemnity for both claims. | Defendants contend exclusion does not apply to conversion and only to TCPA, or may not encompass §365.1657 allegations. | Yes, exclusion bars both TCPA and conversion claims. |
| Is ACIC's duty to defend moot since it no longer defends the underlying action? | ACIC argues it remains liable for defense fees and has counterclaims, so not moot. | Defendants argue the duty to defend is moot because ACIC isn’t defending anymore. | Not moot; insurer reserved rights and incurred defense costs, so duty to defend remains at issue. |
| If there is no duty to defend, is there a duty to indemnify? | Without defense, indemnity determination is premature. | Indemnity follows the duty to defend. | No indemnity if there is no duty to defend. |
Key Cases Cited
- Irvine v. Prudential Prop. & Cas. Ins. Co., 630 So.2d 579 (Fla. 3d DCA 1993) (duty to defend determined by allegations, not facts)
- Jones v. Fla. Ins. Guar. Ass’n, Inc., 908 So.2d 435 (Fla.2005) (well-pleaded allegations control duty to defend)
- Composite Structures, Inc. v. Cont’l Ins. Co., 560 F. App’x 861 (11th Cir. 2014) (insurer must show exclusion covers alleged claims)
- State Farm Fire & Cas. Co. v. Tippett, 864 So.2d 81 (Fla. 4th DCA 2008) (insurer bears burden to prove exclusion applies)
- Castillo v. State Farm Fla. Ins. Co., 971 So.2d 820 (Fla. 3d DCA 2007) (burden to demonstrate exclusion applies)
- Interline Brands, Inc. v. Chartis Specialty Ins. Co., 749 F.3d 962 (11th Cir. 2014) (exclusion precludes defense/indemnity for TCPA violations)
- Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So.2d 528 (Fla.2005) (‘arising out of’ broader than ‘caused by’ for coverage concepts)
- Garcia v. Fed. Ins. Co., 969 So.2d 288 (Fla.2007) (explains breadth of ‘arising out of’ in TCPA context)
- Condon v. Office Depot, Inc., 855 So.2d 644 (Fla.2d DCA 2003) (statutory reference not required for private action; governs exclusion scope)