Stephens v. Mid-Continent Casualty Co.
915 F. Supp. 2d 1320
S.D. Fla.2013Background
- Plaintiff Stephens, personal representative of the Becker estate and assignee of Anchorage Homes, sues Mid-Continent for breach of contract based on defense/coverage duties.
- Becker died while employed by a subcontractor (Jack Fritz) hired for a modular home project overseen by Anchorage Homes.
- Anchorage Homes held a Mid-Continent CGL policy with exclusions for workers’ compensation and employer’s liability.
- Underlying suit named Fritz, Kirklands, and Anchorage; Anchorage forwarded the complaint to Mid-Continent, who acknowledged potential non-coverage.
- Court credits extrinsic evidence showing Anchorage acted as general contractor and subcontracted work to Fritz, raising the statutory-employer/employee relationship under Florida law.
- Parties settled related claims (Stephens/Anchorage mediation; Stephens/Anchorage Consent Judgment) and Stephens later filed this federal action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Becker’s death is excluded by the Employer’s Liability exclusion. | Stephens contends coverage may apply despite exclusions. | Mid-Continent argues Becker was a statutory employee, triggering the exclusion. | Employer’s Liability exclusion applies; Becker was Anchorage’s statutory employee; no coverage. |
| Whether Mid-Continent had a duty to defend Anchorage in the underlying suit. | Stephens seeks defense-for-defendant breach based on policy duties. | Exclusion defeats defense obligation. | No duty to defend due to lack of coverage; indemnity not reached. |
| Whether extrinsic evidence was properly weighed to establish lack of coverage. | Evidence should be limited to the four corners of the contract. | Extrinsic evidence supports non-coverage. | Weight of extrinsic evidence supports lack of coverage under Employer’s Liability exclusion. |
| Whether the settlement/consent judgments affect this coverage determination. | Settlement assignments rights against Mid-Continent are relevant to coverage. | Settlement status does not create coverage where exclusions apply. | Court does not reach indemnity or settlement reasonableness due to alternative ruling on defense/coverage. |
| Whether Becker’s death falls within the statutory-employer framework under Florida law. | Becker’s status is not clearly a statutory employee. | Becker is a statutory employee via subletting relationships under §440.10. | Becker was Anchorage’s statutory employee; triggers exclusion and defeats coverage. |
Key Cases Cited
- Lime Tree Vill. Cmty. Club Ass’n, Inc. v. State Farm Gen. Ins. Co., 980 F.2d 1402 (11th Cir. 1993) (duty to defend analyzed with extrinsic evidence when coverage is in doubt)
- First Specialty Ins. Corp. v. 633 Partners, Ltd., 300 F. App’x 777 (11th Cir. 2008) (exceptional use of extrinsic evidence to deny coverage)
- Revoredo, Florida Ins. Guaranty Ass’n, Inc. v., 698 So.2d 890 (Fla. Dist. Ct. App. 1997) (statutory-employer concept governs coverage when subletting occurs)
- Motchkavitz v. L.C. Boggs Indus., Inc., 407 So.2d 910 (Fla. 1981) (describes statutory employer/employee relationship under workers’ comp framework)
- Chomat v. N. Ins. Co. of New York, 919 So.2d 535 (Fla. Dist. Ct. App. 2006) (insurer must prove coverage and defend rights under Coblentz framework)
- Wellington Specialty Ins. Co. v. Kendall Crane Service, 434 F. App’x 794 (11th Cir. 2011) (relevance of statutory-employer doctrine to coverage)