UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

Case No. 22-cv-62300-BLOOM/Valle

NAUTILUS INSURANCE COMPANY, 

Plaintiff, 

v. 

PINNACLE ENGINEERING & DEVELOPMENT, INC., 

EMUNA CONSTRUCTION, LLC,

Defendants. 

________________________________/ 

ORDER ON MOTION FOR SUMMARY JUDGMENT

THIS CAUSE is before the Court upon Defendant/Cross-Plaintiff Emuna Construction, 

LLC’s (“Emuna”) Motion for Summary Judgment, ECF No. [27] (“Motion”). Plaintiff/CrossDefendant Nautilus Insurance Company (“Nautilus”) filed a Response in Opposition, ECF No. 

[30], to which Emuna filed a Reply, ECF No. [32]. The Court has carefully reviewed the Motion, 

all opposing and supporting submissions,

1 the record in this case, the applicable law, and is 

otherwise fully advised. For the reasons set forth below, the Motion is denied. 

I. BACKGROUND

Nautilus initiated the instant action on December 8, 2022, by filing a Complaint for 

Declaratory Judgment seeking a declaration that claims asserted against Defendant Pinnacle 

Engineering & Development, Inc. (“Pinnacle”) by Emuna in an Underlying Lawsuit are not 

covered under insurance policies issued by Nautilus to Pinnacle. See ECF No. [1]. Nautilus further 

1

 Emuna filed a Statement of Material Facts, ECF No. [26] (“SMF”), with its Motion for Summary 

Judgment. Nautilus filed a Response to Defendant’s SMF (“RSMF”), and a Statement of Additional 

Material Facts (“SAMF”), ECF No. [31]. Emuna filed a Response to Nautilus’s SAMF (“RSAMF”), ECF 

No. [33]. 

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seeks a declaration that it has no duty to defend Pinnacle, no duty to indemnify Pinnacle, and 

Nautilus has the right to withdraw its defense of Pinnacle in the Underlying Lawsuit. Id. 

On March 20, 2023, Emuna filed its Answer and Counterclaim. ECF No. [17]. Therein, 

Emuna asserts one count of breach of contract, alleging that Nautilus breached its insurance policy 

“by denying coverage and/or failing to make a coverage determination for Emuna’s liability . . . 

for the property damage caused by Pinnacle.” Id. ¶ 33.

Emuna brings the instant Motion arguing that the Court should find that Emuna is an 

additional insured under the insurance policies issued by Nautilus to Pinnacle, Nautilus has a duty 

to indemnify Emuna for faulty work completed by Pinnacle, and Nautilus breached that duty. See 

generally ECF No. [27]. Nautilus responds that Emuna is not an additional insured under the 

policies, and even if the Court were to find that Emuna is an additional insured, it has not breached 

any obligations it owes to Emuna. See generally ECF No. [30].

II. MATERIAL FACTS

A. The Policies

Nautilus issued Pinnacle commercial general liability insurance under policy numbers 

NN1087682 and NN1254993 (collectively, the “Policies”). SMF ¶ 1. Policy NN1087682 was in 

effect from January 23, 2020 to January 23, 2021, and Policy NN1254993 was in effect from April 

22, 2021 to September 18, 2021. Id. ¶ 2. The Policies are subject to the Coverage Limitation and 

Exclusion – Residential Construction Operations Endorsement (the “Endorsement”) which 

provides that certain construction projects are excluded from coverage including “the following 

construction projects: a. Any new townhouse or residential condominium project where the total 

number of individual residential units is greater than twenty-five (25), regardless of number of 

buildings, developments, phases, or associations . . ..” Id. ¶ 4. The Policies define the term 

“Residential housing units” as “detached single family or multiple family dwellings, duplexes, 

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triplexes, dormitories or any other housing or dwelling built or used, in whole or in part, for the 

purpose of residential occupancy. For purpose of this endorsement, each duplex will be considered 

two residential housing units, each triplex will be considered three residential housing units, and 

so forth. Residential housing units does not include apartments.” Id. ¶ 5.

B. Townhome Development Project

Emuna contracted with BCD Dania Oaks, LLC (“BCD”), the owner of the real property 

located at 5461 SW 40th Ave, Dania Beach, Florida 33314 (the “Property”), to construct a 

townhome development at the Property. Id. ¶¶ 7-8. The townhome development contains 18 

detached townhome units, or 57 units including both attached and detached units. SAMF ¶ 27; 

RSAMF ¶ 27.

“Emuna and Pinnacle executed a subcontract for Pinnacle to perform underground utility 

construction services.” SMF ¶ 11. The Subcontract required that Pinnacle secure and maintain 

commercial general liability insurance to cover claims for property damages resulting for their 

services and that the policy name Emuna as an additional insured for liability arising out of the 

Subcontract. Id. ¶¶ 12-13.

On April 15, 2022, Emuna sent Nautilus notice that it was reporting “a claim on behalf of 

Emuna” for faulty work performed by Pinnacle. ECF No. [26-1] at 51-52. Emuna cooperated with 

Nautilus’s investigation. SMF ¶ 20. In December 2022, Emuna’s insurance carrier sent Nautilus 

notice of that BCD was alleging damages. ECF No. [26-1] at 54-56. A demand letter or claim from 

BCD to Emuna is not part of the record, and Nautilus disputes whether BCD’s counsel formally 

made a demand on Emuna. SMF ¶ 21; RSMF ¶ 21. 

Emuna and BCD entered into a Settlement Agreement dated June 2, 2023, which included 

the following language: “[w]hereas, the Owner has demanded that the Contractor be liable for the 

damage caused by the defective Pinnacle Work and that the Contractor compensate the Owner for 

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such damage.” ECF No. [26-1] at 58-62.

III. LEGAL STANDARD

A. Summary Judgment

A court may grant a motion for summary judgment “if the movant shows that there is no 

genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” 

Fed. R. Civ. P. 56(a). The parties may support their positions by citations to materials in the record, 

including depositions, documents, affidavits, or declarations. See Fed. R. Civ. P. 56(c). “A factual 

dispute is ‘material’ if it would affect the outcome of the suit under the governing law, and 

‘genuine’ if a reasonable trier of fact could return judgment for the non-moving party.” Miccosukee 

Tribe of Indians of Fla. v. United States, 516 F.3d 1235, 1243 (11th Cir. 2008) (citing Anderson 

v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)). 

A court views the facts in the light most favorable to the non-moving party, draws “all 

reasonable inferences in favor of the nonmovant and may not weigh evidence or make credibility 

determinations[.]’” Lewis v. City of Union City, Ga., 934 F.3d 1169, 1179 (11th Cir. 2019); see 

also Crocker v. Beatty, 886 F.3d 1132, 1134 (11th Cir. 2018) (“[W]e accept [the non-moving 

party’s] version of the facts as true and draw all reasonable inferences in the light most favorable 

to him as the non-movant.” (citation omitted)). “The mere existence of a scintilla of evidence in 

support of the [non-moving party’s] position will be insufficient; there must be evidence on which 

a jury could reasonably find for the [non-moving party].” Anderson, 477 U.S. at 252. “If more than 

one inference could be construed from the facts by a reasonable fact finder, and that inference 

introduces a genuine issue of material fact, then the district court should not grant summary 

judgment.” Bannum, Inc. v. City of Fort Lauderdale, 901 F.2d 989, 996 (11th Cir. 1990) (citation 

omitted).

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B. Evaluation of an Insurance Policy

An insurer’s duty to defend arises from the insurance contract and policy. See Allstate Ins. 

Co. v. RJT Enters., Inc., 692 So.2d 142, 144 (Fla. 1997) (“[I]f there is no contractual duty to defend 

in the parties' contract then there is no duty to defend.”). That is, an insurer’s duties toward its 

insured arise from the legal effects of the relevant policy provisions. See Nat’l Union Fire Ins. Co. 

of Pittsburgh, Pa. v. Brown, 787 F. Supp. 1424, 1427 (S.D. Fla. 1991). Therefore, summary 

judgment may be “appropriate in declaratory judgment actions seeking a declaration of coverage 

when the insurer’s duty, if any, rests solely on the applicability of the insurance policy, the 

construction and effect of which is a matter of law.” Northland Cas. Co. v. HBE Corp., 160 F.

Supp.2d 1348, 1358 (M.D. Fla. 2001) (citing Talat Enters., Inc. v. Aetna Life & Cas., 952 F. Supp. 

773 (M.D. Fla. 1996)). “An insurer’s duty to indemnify is narrower than its duty to defend and 

must be determined by analyzing the policy coverages in light of the actual facts in the underlying 

case.” Sinni v. Scottsdale Insurance Co., 676 F. Supp. 2d 1319, 1323 (M.D. Fla. 2010) (citing State 

Farm Fire & Cas. Co. v. CTC Dev. Corp., 720 So.2d 1072, 1077 n. 3 (Fla. 1998) and Hagen v. 

Aetna Cas. & Sur. Co., 675 So.2d 963, 965 (Fla. 5th DCA 1996)).

“Under Florida law, an insurance policy is treated like a contract, and therefore ordinary 

contract principles govern the interpretation and construction of such a policy.” Pac. Emp’rs Ins. 

Co. v. Wausau Bus. Ins. Co., No. 3:05-cv-850-J-32TEM, 2007 WL 2900452, at *4 (M.D. Fla. Oct. 

2, 2007) (citing Graber v. Clarendon Nat’l Ins. Co., 819 So.2d 840, 842 (Fla. 4th DCA 2002)). As 

with all contracts, the interpretation of an insurance contract—including determining whether an 

insurance provision is ambiguous—is a question of law to be determined by the court. Id.; 

Travelers Indem. Co. of Illinois v. Hutson, 847 So.2d 1113 (Fla. 1st DCA 2003) (stating that 

whether an ambiguity exists in a contract is a matter of law).

Further, “[u]nder Florida law, insurance contracts are construed according to their plain 

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meaning.” Garcia v. Fed. Ins. Co., 473 F.3d 1131, 1135 (11th Cir. 2006) (quoting Taurus 

Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So.2d 528, 532 (Fla. 2005)). The “terms of an 

insurance policy should be taken and understood in their ordinary sense and the policy should 

receive a reasonable, practical and sensible interpretation consistent with the intent of the partiesnot a strained, forced or unrealistic construction.” Siegle v. Progressive Consumers Ins. Co., 819 

So.2d 732, 736 (Fla. 2002) (quoting Gen. Accident Fire & Life Assurance Corp. v. Liberty Mut. 

Ins. Co., 260 So.2d 249 (Fla. 4th DCA 1972); see also Gilmore v. St. Paul Fire & Marine Ins., 

708 So.2d 679, 680 (Fla. 1st DCA 1998) (“The language of a policy should be read in common 

with other policy provisions to accomplish the intent of the parties.”). However, if there is more 

than one reasonable interpretation of an insurance policy, an ambiguity exists and it “should be 

construed against the insurer.” Pac. Emp’rs Ins., 2007 WL 2900452, at *4 (citing Purrelli v. State 

Farm Fire & Cas. Co., 698 So.2d 618, 620 (Fla. 2d DCA 1997) ).

A coverage clause is generally interpreted as broadly as possible to ensure the greatest 

amount of insurance coverage. Id. at *5 (citing Westmoreland v. Lumbermens Mut. Cas. Co., 704 

So.2d 176, 179 (Fla. 4th DCA 1997)). To determine the parties’ contractual intent, a court may 

only consider the language in the insurance policy, unless the policy is ambiguous. Fireman’s 

Fund Ins. Co. v. Tropical Shipping & Constr. Co., Ltd., 254 F.2d 987, 1003 (11th Cir. 2001) (citing 

Towne Realty v. Safeco Ins. Co. of Am., 854 F.2d 1264, 1267 (11th Cir. 1988)). “As a general rule, 

in the absence of some ambiguity, the intent of the parties to a written contract must be ascertained 

from the words used in the contract, without resort to extrinsic evidence.” Id. (quoting Lee v. 

Montgomery, 624 So.2d 850, 851 (Fla. 1st DCA 1993)).

IV. DISCUSSION

Emuna argues that summary judgment is appropriate because (1) it is an additional insured 

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under the Policies; (2) Pinnacle performed faulty work triggering coverage under the Policies so 

(3) Nautilus had a duty to defend and indemnify Emuna from claims brought by BCD; and (4) 

breached that contractual duty. See generally ECF No. [27]. Emuna further asserts that exclusions 

asserted by Nautilus do not bar coverage. Id. at 6-8. Nautilus responds that that “(a) Emuna has 

not established it qualifies as an additional insured on the Policies; (b) even if Emuna qualifies as 

an additional insured, Emuna cannot seek first-party coverage for the claims it asserts against 

Pinnacle Engineering in the Underlying Lawsuit; (c) Nautilus could not have breached any defense 

obligations to Emuna because no suit has been filed against Emuna; (d) Nautilus could not have 

breached any indemnity obligations to Emuna because Emuna has not been found ‘legally 

obligated to pay damages’ because of ‘property damage’ to which the insurance applies and 

Nautilus cannot be bound to the putative settlement entered into by Emuna and BCD; and (2) the 

Policies’ Residential Construction Operations Exclusion is clear and unambiguous and plainly bars 

coverage for the claims asserted in the Underlying Lawsuit–– relative to any potential insured.” 

ECF No. [30] at 9. The Court considers each argument in turn.

A. Additional Insured

First, Emuna argues that it is an additional insured under the Policies. ECF No. [27] at 3-

4. Nautilus responds that Emuna cannot meet its burden to demonstrate that it was an additional 

insured under the Policies.

The Policies contain an Endorsement which pertains to Additional Insureds under the 

Policies, (the “AI Endorsement”). Pursuant to the AI Endorsement:

Who is An Insured is amended to include as an additional insured any person or 

organization for whom you are performing operations when you and such person 

or organization have agreed in writing in a contract or agreement that such person 

or organization be added as an additional insured on your policy. Such person or 

organization is an additional insured only with respect to liability for ‘bodily 

injury’, ‘property damage’ or ‘personal and advertising injury’ caused, in whole or 

in part, by:

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a. Your acts or omissions, or the acts or omissions of those acting on your 

behalf in the performance of your ongoing operations for the additional insured; or

b. “Your work” and included in the “products-completed operations hazard” 

that was completed by or on behalf of any insured after the date shown in the 

Schedule of this endorsement

but only for “occurrences” or coverages not otherwise excluded in the Coverage 

Part to which this endorsement applies.

ECF No. [1-6] at 75.

Emuna argues that because the AI Endorsement affords it coverage for property damage 

caused by Pinnacle’s acts or omissions, “Emuna is additional insured when Pinnacle’s work is 

ongoing and after it completes the work.” ECF No. [27] at 4.

Nautilus relies on multiple cases from this district applying Florida law, in which the courts 

determined that a putative additional insured’s liability is caused in whole or in part by the named 

insured only where the additional insured faces vicarious liability for acts or omissions of the 

named insured. See Cincinnati Specialty Underwriters Ins. Co. v. KNS Group, LLC, 561 F. Supp. 

3d 1298, 1314-16 (S.D. Fla. 2021), aff’d, No. 21-13628, 2022 WL 5238711 (11th Cir. Oct. 6, 

2022) (finding that allegations of vicarious liability were necessary to find an insurer liable for the 

coverage of an additional insured where the policy specified liability only for the acts or omissions 

of the named insured); Amerisure Ins. Co. v. Seneca Specialty Ins. Co., No. 20-20442-CIV, 2020 

WL 3317035, at *5 (S.D. Fla. June 18, 2020) (finding that because an additional insured “was not 

held vicariously liable for the direct negligence of [the named insured], and therefore, because the 

liability was not premised on injuries ‘caused, in whole or in part by’ [the named insured], it 

necessarily follows that [the additional insured] is not covered as an additional insured under the 

[policy endorsement].”). Nautilus argues that “Emuna has provided no evidence that it is being 

held vicariously liable for [Pinnacle’s] acts or omissions” and therefore “the terms of the AI 

Endorsement are not satisfied, and Emuna cannot qualify as an additional insured.” ECF No. [30] 

at 10.

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The underlying Complaint makes clear Emuna’s position that “Pinnacle failed to perform 

underground utility construction services” and “[a]s a result of Pinnacle’s failure to perform the 

services required under the Subcontract, Emuna has incurred and continues to incur substantial 

damages.” ECF No. [1-5] ¶¶ 28-30. It is therefore apparent that the AI Endorsement applies 

because Emuna seeks coverage as an additional insured for property damage caused by the acts or 

omissions of Pinnacle, the primary insured under the Policies. The underlying complaint alleges 

that BCD is not seeking to hold Emuna liable for its own negligence as in the cases cited by 

Nautilus, but instead to hold it vicariously liable for the failings of its subcontractor Pinnacle. 

Accordingly, the Court finds that there is no dispute of material fact. Emuna is an additional 

insured under the AI Endorsement.

B. Whether Coverage was Triggered

Emuna argues that defective work performed by Pinnacle under the Subcontract caused 

property damage covered under the Policies. ECF No. [27] at 4-5. Emuna further argues that 

Nautilus therefore had a duty to defend and indemnify Emuna from claims asserted by BCD, the 

Property’s owners. Id. at 5-6. Nautilus responds that “it is undisputed that no third-party lawsuit 

has been asserted against Emuna, nor has it otherwise become ‘legally obligated to pay’ damages 

associated with Pinnacle Engineering’s work. Therefore, Emuna’s potential additional insured 

status does not provide a direct basis for recovery under the Policies.” ECF No. [30] at 11.

Emuna submits in its SMF that “BCD made claims against Emuna to repair the subject 

property damage.” In support, Emuna cites to the attached affidavit of Miguel Bubis, a manager 

and principal of Emuna. ECF No. [26-1]. However, as Nautilus correctly points out, “Emuna has 

yet to provide any documentation of a third-party claim against it by BCD prior to the June 2, 2023 

settlement agreement between the parties.” ECF No. [30] at 13. As such, a genuine dispute of fact 

exists as to when a claim was made by BCD to Emuna for damage caused by Pinnacle and the 

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precise nature of that claim. Moreover, the case law cited by the parties suggests that the dispute 

of fact regarding when a claim or demand was made, and whether its contents are material.

Emuna cites to a district court case from this circuit in which the court, applying Florida 

law, determined that an insured need not wait to be sued and lose a reasonable opportunity to 

compromise when faced with an obligation it cannot resist. Zurich Am. Ins. Co. v. Cutrale Citrus 

Juices USA, Inc., 5:00-CV-149-OC-10GRJ, 2002 WL 1433728, at *4 (M.D. Fla. Feb. 11, 2002) 

(citing Post Houses, Inc. v. Fireman’s Fund Ins. Co., 469 So. 2d 863, 864 (Fla. 1st DCA 1985)). 

In Post Houses, the First District Court of Appeal found that “the fact of voluntary payment does 

not negative the right to indemnity, since a person confronted with an obligation that he cannot 

legally resist is not obligated to wait to be sued and to lose a reasonable opportunity for 

compromise.” Id. That court noted that “Post Houses had notice and a reasonable opportunity to 

intervene and failed to do so.” Id. In its Reply, Emuna cites St. Paul Fire & Marine Ins. Co. v. 

Rosen Millennium, Inc., 337 F. Supp. 3d 1176 (M.D. Fla. 2018), in which the court looked to the 

notice of claim and demand letter because there was no underlying litigation to determine whether 

the insurer had a duty to defend after a data breach. Id. at 1182. The court determined that the 

detail in both the notice and demand letter was sparse and ruled that “because Defendants have not 

made such claims, the issue of whether the CGL Policies would cover those claims is not ripe.” 

Id. at 1183.

Nautilus relies on Ayers v. State Farm Mut. Auto. Ins. Co., 316 F. Supp. 3d 1324 (M.D. 

Fla. 2018), in which a district court in this circuit considered a coverage dispute on cross motions 

for summary judgment. Id at 1327. There, the plaintiff sought to recover the costs of hiring presuit counsel. Id. at 1329. The Ayers court interpreted the relevant insurance policy and found “the 

Defense Provision’s unambiguous language—that is, State Farm's “right to defend”—does not 

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compel a reading that State Farm is obligated to defend a claim by hiring pre-suit counsel for an 

insured.” Id. Nautilus also argues that because Emuna has not provided a claim or demand letter 

served on it by BCD, Emuna is not entitled to summary judgment.

There is record evidence that demonstrates that Emuna sent Nautilus notice on April 15, 

2022, indicating that Emuna was making a claim for faulty work performed by Pinnacle. ECF No. 

[26-1] at 51-52. Emuna also attached a notice provided from its insurance carrier to Nautilus 

notifying Nautilus that BCD was making a claim against Emuna for damages exceeding 

$1,200,000,00. Id. at 54-56. The Settlement Agreement between Emuna and BCD dated June 2, 

2023, is also attached to Emuna’s SMF. Id. at 58-62. The Settlement Agreement between Emuna

and BCD specifically states “Whereas, the Owner has demanded that the Contractor be liable for 

the damage caused by the defective Pinnacle Work and that the Contractor compensate the Owner 

for such damage.” ECF No. [26-1] at 58. Despite that line in the Settlement Agreement, the nature 

and extent of any claim made is uncertain as a claim or demand letter from BCD to Emuna is not 

part of the record. Like in St. Paul Fire, the Court is therefore left without an adequate basis to 

determine whether the Policies are applicable for the purpose of determining that no dispute of 

material fact exists regarding Nautilus’s duty to defend and/or indemnify Emuna. See 337 F. Supp. 

3d at 1182-83.

Nautilus correctly points out that “Emuna has yet to provide any documentation of a thirdparty claim against it by BCD prior to the June 2, 2023 settlement agreement between the parties.” 

ECF No. [30] at 13. As such, whether Emuna was confronted with an obligation it could not legally 

resist and provided notice of such obligation to Nautilus prior to entering the Settlement 

Agreement is a disputed material fact. Because Emuna is the moving party and has not established 

that there are no genuine disputes of material fact allowing it to be entitled to judgment as a matter 

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of law, the Motion must be denied. The Court need not address the parties’ remaining arguments.

V. CONCLUSION

Accordingly, it is ORDERED AND ADJUDGED that Emuna’s Motion for Summary 

Judgment, ECF No. [27], is DENIED.

DONE AND ORDERED in Chambers at Miami, Florida, on September 21, 2023.

_________________________________

BETH BLOOM

UNITED STATES DISTRICT JUDGE

Copies to: 

Counsel of Record

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