Case Information
*1 FLEET GLOBAL SERVICES, INC.,
Plaintiff, -vs- Case No. 6:04-cv-954-Orl- 18JGG REPUBLIC WESTERN INSURANCE CO.,
DefendantIThird-Party Plaintiff, TRANSPORTATION INSURANCE SPECIALISTS, INC., AON RISK SERVICES, IIVC. OF ARKANSAS,
Third-Party Defendants. ORDER 'THIS CAUSE
comes before the Court upon 'I'l~ird-Party Defendant Transportation Insurance Specialists. lnc.'s ("TIS") Motion for Summary Judgment (Doc. 99-1. filed May 1. 2006). 10 which Defendarlt/Third-Party Plaintiff Republic Western Insurance Company ('-Republic Western") has responded in opposition. (Doc. 120. filed June 1.2006.) The original action in this suit was filed by Plaintiff Fleet Global Services. Inc. ("Fleet") against Republic Westcrn. asserting a claim for fraud in the inducement. Republic Western. in turn. asserted a claim against TIS for contsibution. pursuant to Fla. Sial. $ 768.31. Florida's Uniform Contribution Among Tortfeasors Act ("UCATA"), and contractual indemnification. Republic Western also asserted a claim against Third-Party Defendant Aon Risk Services. Inc. of *2 Arkansas ("AON") for contribution pursuant to UCATA. After reviewing the motions and memoranda provided by each party. the Court denies sumnary judgment to TIS.'
I. BACKGROUND
This action ariscs from Fleet's purchase of a trucking liability policy from Republic Western. effective May 15,2003. Fleet is a long-haul trucking company licensed to operate as a trucking n~otor carrier in the Unitcd States. Republic Western is a casualty insurance company. in the business of providing liability insurance for trucking companies such as Fleet. TIS was a Managing General Agent for Republic Western. authorized pwsuant to a General Agency Agreement ("the Agreement") to solicit and bind coverage for Republic Western with companies such as Fleet. TIS negotiated the trucking liability policy with AON, Fleet's retail insurance agent. All co~ninunications regarding the trucking liability policy occurred betwecn TIS and AON.
Under the Agreement between TIS and Republic Western. TIS was authorized to: (1) collect. receive and account for premiums on insurance policies issued p~~rsuant to the Agreement: (2) deliver and countersign policies of insurance. which had been executed by Republic [Western]; (3) makc endorsements. changes. assignments, transfers, and modifications to policies as authorized by Republic [Western]; (4) effect cancellation and non-renewal of policies as provided in Section X of the Agreement: 'and (5) enter into agreements with sub- agents upon specilic authority from Republic [Western].
(Doc. 99-1 at 4, citing Agreement Section I(B)(l)-I(B)(5).) The Agreement also contains an indenuification provision that states:
'Sununqjudgment motions have also been filed, individually. by both Republic Western and ACIN. and have been dealt with by this Court in separate crders. *3 General Agent [?'IS1 hereby agees to. at all times hereafter, defend. indemnify and hoid the Comptuny [Repubiic Western] hariniess from all claims, liability or loss which result lrom real or alleged. negligent or willful acts. or Errors or Onlissions of the General Agent, or the servants, agents. and employees of the General Agent. in thc perl'or~nance of duties undcr this Agreement. Included are all costs. espenscs, attorney's fces aid other lcgal lees. pcnalties, fines. direct or consequential damages. assessments. verdicts (including punitive damages to the extent permissible under the law of the state where the General Agent maintains its principal office) and a n y other expense or expenditure incurred by Company as a result of the General Agent's performance or lack ofperfoinlance under ihe tenns of this Agreement.
(Doc. 99- 1 at 4. Agreemcnt Section IX(C).) Additionally, pursuant to the terms of the Ageenlent. the laws of'the State of Arizona shall apply to its construction.
In short. Fleet alleges that it relied on Republic Western's A.M. Best' rating when purchasing the liability policy, and that Republic Western failed to disclose to Fleet that its A.M. Best rating would probably be lowered shortlv after the purchase of the policy. Based on this allegation, Republic Western has asserted third-party claims for contribution. pursuant to UCATA. and contractual indemnification against TIS. Republic Western alleges that because all comn~unication regarding the liability policy occurred between TIS and AON, TIS was responsible for any misrepresentations that may have occ~li-sed in the negotiations regarding the A.M. Best rating.
' ~ . h l . Best is one of live organizations designated as a Na~ionally Recognizcd Statistical Rating Organization by the United States Securities and Exchange Commission. A.M. Best issues financial strength ratings that measure an insurance company's ability to pay claims.
*4 11. DISCUSSION A. Stlnlmcwy .Judgment Stc~n&rd A court will grant summary judgment if "the pleadings. depositions, ansn-ers to interrogatories. and ad~nissions on file. together with affidavits. if any. show that there is [110] genuine issue as to any material fact and that the moving party is entitled to a judgmcnt as a matter of law." Fed. R. Civ. P. 56(c); see. e.g., Stachel v. Citvof Cape Canaveral. 5 1 F. Supp. 2d 1326. 1329 (M.D. Fla. 1999). Material facts are those that may affect the outcon~c of the case under the applicable substantive law. Disputed issues of material fact preclude the entry of suimlary judgment. but [actual disputes that are irrelevant or unnecessary do not. Anderson v. Liberty Lobbv. Inc, 477 U.S. 242. 248 (1986).
'The moving party bears thc initial burden of proving that no genuine issue of material fact exists. Celotex Corp. v. Catrett. 477 U.S. 3 17.324-25 (1 986). In detennining whether the moving party has satisfied its burden. the Court considers all inferences drawn from the underlying facts in a light most favorable to the party opposing the motion and resolves all reasonable doubts against the moving party. Matsushita Elec. lnd. Co. v. Zenith Radio Corp.. 475 U S . 574.587-88 (1986). The moving party may rely solely on the pleadings to satisfy its burden. Celotex. 477 U.S. at 323-24. A non-moving party bearing the birrden of proof. however. must go beyond the pleadings and submit affidavits. depositions, answers to interrogatories, or adniissions that designate specific facts indicating there is a genuine issue for trial. Id. at 324. If the evidence offered by the non-moving party is merely colorable, or is not sigllificantly probative, the Court may grant summary judgment. Anderson, 477 U.S. at 249-50. *5 S i m i l ~ l y . sumnary judgment is mandated against a party who fails to prove an esse~ltial element of its case. Celotex, 477 U.S. at 322.
B. C.'ontr~rctzi~rl lndemnificntioiz The parties agree on the law of indenmification in Arizona. IJnder Arizona law, "[tlhe extent of a contractual duly to indemnify must be determined from the contract itself." Sugerior Cos. v. Kaiser Cement Corn.. 733 P.2d 1 158.1160 (Ariz. Ct. App. 1986). Furthermore. words in a contract should be given their ordinary meaning. Triangle Constr. v. Cihr of Phoenix. 720 P.2d 87. 90 (Ariz. Ct. App. 1986). However. "[wlhere an indemnity provision docs not specifically address what efi'ect the indemnitee's negligence will have on the indenmitor's obligation, it is regarded as a general indemnity agreement." Su~erior Cos., 733 P.2d at 1 16 1. Under such a general indenmity agreement. "an indemnitee is not entitled to indemnification for a loss resulting from its own active negligence but is entitled to indemnification for its own passive negligence." Id.
The indemnity clause in the Agreement is a general indemnity agseemcnt which does not contain specific language dealing with Republic Western's potential negligence. W i l e a finding of "active negligence" would not entitle Republic Western to indemnification in this situation. a finding of "passive negligence" would. Such a determination of active versus passive negligence is not one for the Court to make at the summary judgment stage of this suit. Therefore, TIS is not entitled to sunmary judgment on the issue of contractual indemnification.
Evcn if it were to be deternilled that the indemnity clause was not a '-general indenmity agreement." and instead that simply the plain words of the contract should be used to determine *6 the extent of1'1S's potential indemnification. sunmary judgment is still inappropriate. There are issues of material fact as to what TIS co~mnunicatcd to AON in the insurance negotiations. as well as to what TIS shol~ld l m v conlrnunicated to AON in the negotiations. Again. tlis type of disputed issue (or question) of material fact is within a j~1ry.s province, and should not be determined by this Court on sunmary judgment.
C'. Contribzrtioi~ Pursuant to UCATA. there is a right ofcontribution "when two or more persons become jointly or severally liable in tort for the same injury." Fla. Stat. $ 768.3 1(2)(a). Furthermore, "[tlherc is no righr of contribution in favor of any tortfeasor who has intentionally (willf'ully or wantonly) caused or contributed to the injury." Id. 5 768.3 1(2)(c). TIS's contention is that. because the underlying claim in Fleet's suit against Republic Western is for one of fraudulent inducement, contribution is not allowed. TIS argues that fraud in the inducement is an intentional tort which contains a scienter element. and that there is no right to contribution for a party who has intentionally caused an injury.
Florida courts have found, however. that ..Lslcienter may be established by proof of misconduct which is knowing or extremely reckless in that it reflects an extreme departure from the standards of ordinary care." Page v. Derrickson. 10 Fla. L. Weekly Fed. D. 586 (M.D. Fla. 1997) (quoting In re Checkers Sec. Litig.. 858 F. Supp. 1168, 11 76 (M.D. Fla. 1994)). The intent element of the claim for fraud in the inducen~ent may be established not only by "willful[] or wanton[]" conduct. but also by conduct that is deemed by the fact-tinder to be reckless or negligent. See First Union Disc. Brokerage Sews.. Inc. v. Milos, 744 F. Supp. 1 145. 1 1 5 5 (S.D.