Mid-Continent Casualty Co. v. Royal Crane, LLC
169 So. 3d 174
| Fla. Dist. Ct. App. | 2015Background
- Cloutier (lessee) signed a Rental Agreement with Hunter Crane (lessor) that included an indemnity clause requiring Cloutier to defend and indemnify Hunter Crane for damages arising from the crane’s use.
- Damiano injured when a truss fell from the crane on a construction site; he sued Hunter Crane and the crane operator in April 2006 for negligence and related claims.
- Hunter Crane tendered defense to Cloutier; Cloutier declined, following its insurer Mid-Continent Casualty Company’s position not to defend.
- Hunter Crane, as Cloutier’s assignee, sued the insurer for breach of contract and for declaratory relief to force defense/indemnity under the policy.
- The policy excludes coverage for bodily injury or property damage that a party is obligated to pay by contract, with two exceptions allowing coverage in certain insured contracts.
- A Coblentz settlement was reached: Damiano’s claim settled for $100,000 with Hunter Crane, plus $163,746.53 in fees, totaling $263,746.53, with Cloutier assigning its claims against the insurer to Hunter Crane.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Rental Agreement indemnity constitutes an insured contract under the policy | Cloutier contends the indemnity clause makes the Rental Agreement an insured contract. | Insurer argues the contract does not create an insured contract as defined by the policy. | No insured contract; insurer had no duty to defend or indemnify. |
| Whether the insurer had a duty to defend under the eight corners rule | Alleges allegations in the third-party complaint show Cloutier assumed liability; thus a duty to defend exists. | Alleges the complaint and policy terms do not trigger a duty to defend because the contract exclusion applies. | No duty to defend; eight corners do not establish coverage. |
| Effect of the Coblentz settlement on insurer liability | Coblentz agreement should bind insurer to pay if settlement is reasonable and coverage exists. | Without coverage or defense, the insurer is not liable despite the settlement; coverage must be proven. | Insurer liable for neither defense nor indemnity; Coblentz does not create coverage where none exists. |
| Relation between coverage and liability as to indemnity versus settlement | Settlements can be used to enforce indemnity if coverage exists. | Liability and coverage depend on policy terms, not just settlement outcomes. | Settlement does not establish coverage; liability does not equate to coverage absent a policy exception. |
Key Cases Cited
- United Rentals, Inc. v. Mid-Continent Cas. Co., 843 F.Supp.2d 1309 (S.D. Fla. 2012) (insured contract scope and vicarious liability considerations)
- King Cole Condo. Ass’n v. Mid-Continent Cas. Co., 21 F.Supp.3d 1296 (S.D. Fla. 2014) (insured contract interpretation in coverage disputes)
- Hayden Bonded Storage Co. v. U.S. Fire Ins. Co., 930 So.2d 686 (Fla. 4th DCA 2006) (consent judgments and coverage considerations)
- Wrangen v. Pa. Lumbermans Mut. Ins. Co., 593 F.Supp.2d 1273 (S.D. Fla. 2008) (consent judgments and defense/coverage issues)
- Sinni v. Scottsdale Ins. Co., 676 F.Supp.2d 1319 (M.D. Fla. 2009) (consent judgments and insurer defense/coverage relation)
- Nat’l Trust Ins. Co. v. Graham Bros. Constr. Co., 916 F.Supp.2d 1244 (M.D. Fla. 2013) (duty to indemnify vs. duty to defend; coverage analysis)