Kenneth Cole Productions, Inc. v. Mid-Continent Casualty Co.
2010 U.S. Dist. LEXIS 141155
| S.D. Fla. | 2010Background
- Mid-Continent issued a Florida commercial general liability policy to Cohen; the contract governs bodily injury and property damage caused by Cohen.
- Cohen did construction work at Dolphin Mall; Kenneth Cole Productions and Cole South Beach hired Cohen and Jason Asbury LLC under a joint venture-looking arrangement.
- An employee of Cohen caused water damage; Kenneth Cole and Cole South Beach paid Dolphin Mall and sought indemnification under a joint venture indemnity clause in the contract with Cohen and Jason Asbury LLC.
- The New York complaint alleged Cohen and Jason Asbury LLC were joint venture partners and liable for indemnification, triggering Mid-Continent's defense/coverage obligations.
- Cohen informed Mid-Continent that no joint venture existed; Cohen later confessed liability for the incident; Kenneth Cole and Cole South Beach obtained an assignment of Cohen's rights to pursue coverage, leading to a declaratory action in federal court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty to defend based on underlying allegations | Cole/South Beach argue allegations create coverage under the policy. | Mid-Continent contends allegations show a joint venture exclusion; no defense duty arises. | No duty to defend; allegations show no coverage due to joint venture exclusion. |
| Duty to indemnify where no defense duty exists | Indemnification should follow the defense obligation if coverage exists. | If no defense duty exists, indemnity cannot arise; no coverage under the joint venture theory. | No duty to indemnify; absence of defense duty precludes indemnity. |
Key Cases Cited
- Pa. Lumbermens Mut. Ins. v. Ind. Lumbermens Mut. Ins., 43 So. 3d 182 (Fla.Dist.Ct.App.2010) (duty to defend determined by underlying allegations)
- Sunshine Birds & Supplies v. U.S. Fid. & Guar., 696 So. 2d 907 (Fla.Dist.Ct.App.1997) (allegations control defense obligations)
- Fed. Ins. v. Applestein, 377 So. 2d 229 (Fla.Dist.Ct.App.1979) (defense duty may arise if later claims fall within coverage)
- WellCare of Fla., Inc. v. Am. Intl. Specialty Lines Ins., 16 So. 3d 904 (Fla.Dist.Ct.App.2009) (coverage limitations in the insurer's duties)
- Capoferri v. Allstate Ins., 322 So. 2d 625 (Fla.Dist.Ct.App.1975) (principal rationale on indemnity under insurance contracts)
- Nat'l Union Fire Ins. v. Lenox Liquors, Inc., 358 So. 2d 533 (Fla.1977) (settlement not based on coverage theory poses no indemnity duty)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (Supreme Court, 1986) (summary judgment standard and reasonable-doubt standard)
- Celotex Corp. v. Catrett, 477 U.S. 317 (Supreme Court, 1986) (burden shifting in summary judgment proceedings)