Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-06302/USCOURTS-cand-3_07-cv-06302-4/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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United States District Court

For the Northern District of California

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 Plaintiff styles its opposition as a “cross-motion for partial judgment on the pleadings.”

Because Plaintiff failed to notice its motion more than 35-days prior to the hearing date, the

Court treats Plaintiff’s response solely as an opposition brief. See Northern District of California

Civil Local Rule 7-2(a).

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

FIREMAN’S FUND INS.,

Plaintiff,

 v.

GERLING AMERICA INS.,

Defendant. /

No. C 07-06302 CRB

ORDER DENYING MOTION FOR

JUDGMENT ON THE PLEADINGS

Defendant Gerling America Insurance Co. moves for judgment on the pleadings on

the ground that the complaint of Plaintiff Fireman’s Fund Insurance Company (“FFIC”) fails

to state a claim for coverage under the governing Gerling insurance policy.1

 For the reasons

set forth below, the motion is DENIED.

Following a trial in the District Court for the Southern District of Florida, a jury found

that Gencor Industries was liable to FFIC for damages for breach of contract and negligence

in the amount of $1,751,913.10. In the amended final judgment, the court clarified that:

In accordance with the Stipulation of record executed by and between

the parties and GENCOR’s insurer, Gerling America Insurance Company, and

pursuant to the terms and requirements of the GENCOR bankruptcy

proceeding in United States Bankruptcy Court . . ., this is not an in personam

Judgment against GENCOR and shall not be subject to execution against

GENCOR.

Case 3:07-cv-06302-CRB Document 39 Filed 05/20/08 Page 1 of 2
United States District Court

For the Northern District of California

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G:\CRBALL\2007\6302\Order Re Judgment Pleadings.wpd 2

After judgment, the suit was transferred to this Court pursuant to 28 U.S.C. § 1404(a), so that

FFIC could seek to recover the judgment from Gerling – Gencor’s insurer – in a more

convenient forum. 

Gerling notes that pursuant to its agreement with Gencor, it only agreed to pay “those

sums that the insured becomes legally obligated to pay as damages because of . . . ‘property

damages’ to which this insurance applies.” See Fourth Amended Complaint Exh. 1 § I.1.a. 

In short, Gerling contends that because the judgment cannot be executed against Gencor,

Gencor is not legally obligated to pay any damages pursuant to the FFIC litigation. Hence,

Gerling argues, the Florida judgment does not trigger Gerling’s duty to provide coverage.

Of course, Gerling’s position is premised on the assumption that because FFIC cannot

execute the judgment against Gencor, Gencor is not “obligated to pay.” But because this

action was transferred from Florida district court, Florida law governs. See Van Dusen v.

Barrack, 376 U.S. 612, 634-36 (1964). Under Florida law, “the mere fact that a legallyobtained judgment may not be enforced against a party does not mean that the party is not

‘legally obligated to pay.’” Auto-Owners Ins. Co. v. St. Paul Fire & Marine Ins. Co., 547

So.2d 148, 152 (Fla. Dist. Ct. App. 1989). Florida courts have held that an insurer is

obligated to satisfy a judgment against the insured pursuant to insurance agreement language

identical to that at issue in this case even where the insured is judgment-proof. Id.; Rosen v.

Florida Ins. Guar. Ass’n, 802 So.2d 291, 298 (Fla. 2001). That Auto-Owners concerned a

settlement agreement that contained a covenant not to execute does not render the decision

inapposite. To the contrary, the conclusion that an insurer is obligated to pay a judgment

imposed against a judgment-proof insured under an “obligation to pay” clause is equally

controlling under the circumstances of this case. Accordingly, the motion for judgment on

the pleadings is DENIED; the hearing scheduled for May 30, 2008 is VACATED. 

IT IS SO ORDERED.

Dated: May 20, 2008 

CHARLES R. BREYER

UNITED STATES DISTRICT JUDGE

Case 3:07-cv-06302-CRB Document 39 Filed 05/20/08 Page 2 of 2