771 F. Supp. 2d 1336
S.D. Fla.2011Background
- American Empire insured Chabad House under a Commercial General Liability policy.
- Underlying state court case alleges abuse by Friendship Circle volunteers against a special needs child, J.D.
- Two teenage volunteers allegedly restrained, harmed, and taunted J.D., threatening him to conceal abuse.
- Does parents sued Chabad House for negligence in selecting/training volunteers; American Empire seeks declaratory relief on coverage.
- Dispute centers on abuse or molestation exclusion and a designated premises endorsement, with the facts undisputed.
- Magistrate Judge recommended summary judgment for Empire; Does objected; court conducted de novo review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Abuse exclusion bars coverage | Empire argues exclusion unambiguously bars coverage for arising abuse claims. | Does contend two-paragraph structure creates ambiguity allowing coverage for negligent conduct enabling abuse. | Abuse exclusion bars coverage. |
| Designated premises endorsement ambiguity | Empire contends endorsement limits to designated premises and project; language unambiguous. | Does argue endorsement creates ambiguity and can be construed to cover non-premises injuries. | Ambiguity exists; construed in insured's favor; endorsement does not bar coverage. |
| Policy should be read as a whole or in pari materia | Policy provisions should be read in light of the entire contract to determine coverage. | Does argue related provisions could alter interpretation to favor coverage. | No need to re-write; read abuse clause plain language; pari materia not controlling here. |
Key Cases Cited
- Taurus Holdings, Inc. v. United States Fid. & Guar. Co., 913 So.2d 528 (Fla. 2005) (arising out of meaning does not require proximate cause)
- Miami Beach Entm't v. First Oak Brook Corp. Syndicate, 682 So.2d 161 (Fla. 3d DCA 1996) (injuries arising from abuse despite negligence pleadings)
- Union American Ins. Co. v. Haitian Refugee Center, Inc., 858 So.2d 1076 (Fla. 3d DCA 2003) (designated premises language and ambiguity in policy language)
- Southeast Farms v. Auto-Owners Insurance Co., 714 So.2d 509 (Fla. 5th DCA 1998) (ambiguous premises endorsement may create coverage overlap)
- State Farm Fire and Casualty Co. v. CTC Dev. Corp., 720 So.2d 1072 (Fla. 1998) (read provisions together; pari materia guidance)
- Pridgen, State Farm Mut. Auto. Ins. Co. v. Pridgen, 498 So.2d 1245 (Fla. 1986) (interpretation against ambiguous policy language)
- Deni Assoc. of Florida, Inc. v. Stuyvesant Ins. Co., 678 So.2d 397 (Fla. 4th DCA 1996) (strict construction of exclusionary clauses)
- Brown v. Budget Rent-A-Car Systems, Inc., 119 F.3d 922 (11th Cir. 1997) (disjunctive language indicates separate alternatives)
- Littell v. Law Firm of Trinkle, 345 Fed. Appx. 415 (11th Cir. 2009) (Florida law contract interpretation principles applicable)