Auto-Owners Insurance Company v. Elite Homes, Inc.
676 F. App'x 951
| 11th Cir. | 2017Background
- Elite Homes built a residence for the Croziers; post-construction water intrusion and mold problems emerged and alleged repairs failed.
- Croziers gave statutory notice under Fla. Stat. Ch. 558 and sued Elite Homes (breach of contract, negligence) alleging damage to the home and "other property" (frame subsurface, sheathing, insulation, drywall, interior finishes).
- Elite Homes had a Commercial General Liability policy from Auto-Owners containing coverage for "property damage" but excluding "Damage To Your Work" (damage to the insured's work or materials furnished in connection with that work).
- Auto-Owners defended under a reservation of rights and filed this declaratory-judgment action seeking a ruling that it had no duty to defend or indemnify Elite Homes. The duty-to-indemnify issue was abated.
- The district court granted summary judgment to Auto-Owners, concluding the amended complaint alleged only damage to Elite Homes’ work (excluded), not to "other property" so as to trigger a duty to defend; Elite Homes appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Auto-Owners has a duty to defend Elite Homes based on the amended complaint alleging damage to "other property" | The amended complaint's references to "other property" and listed building components fairly and potentially allege damage to property beyond Elite Homes' own work, triggering a duty to defend. | The allegations are conclusory/vague and, fairly read, allege only damage to the home (Elite's work), which is excluded by the policy's "Damage To Your Work" exclusion. | Held for Auto-Owners: no duty to defend because the amended complaint does not plead factual allegations of damage to property other than Elite Homes' work; conclusory "other property" phrasing is insufficient. |
Key Cases Cited
- State Farm Fire & Cas. Co. v. Steinberg, 393 F.3d 1226 (11th Cir. 2004) (conclusory "buzz words" unsupported by factual allegations do not trigger insurer duty to defend)
- Jones v. Florida Insurance Guaranty Ass'n, Inc., 908 So.2d 435 (Fla. 2005) (duty to defend arises when the complaint fairly and potentially alleges facts bringing suit within coverage)
- Trizec Props., Inc. v. Biltmore Construction Co., Inc., 767 F.2d 810 (11th Cir. 1985) (insurer's duty to defend broader than duty to indemnify; duty may attach even if indemnity later is found absent)
- Nova Casualty Co. v. Willis, 39 So.3d 434 (Fla. 3d DCA 2010) ("your work" exclusion bars coverage for damage to work performed on insured's property but may not apply where work affected third-party property)
- Keen v. Florida Sheriffs' Self-Insurance Fund, 962 So.2d 1021 (Fla. 4th DCA 2007) (insurer has no duty to defend when complaint shows applicability of policy exclusion)