FI L ED U.S. COURT OF APPEAL S EL EVENTHCI RCUI T J ULY 14, 2011 J OHN L EY CL ERK [DO NOT PUBLISH] IN THE U

NITED STATE S COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 1 0- 12 82 1

__ __ __ __ __ __ __ __ __ __ __ __ D.C. Dock etNo. 0 :0 9- cv -6 11 19 -WPD PALM BEACH GRADING, INC., ll ll ll ll ll ll ll ll ll ll l Pl ai nt iff - App el la nt , vers us NAUTILUS INSURANCE COMPANY, ll ll ll ll ll ll ll ll ll ll l Defen da nt- App el le e.

__ __ __ __ __ __ __ __ __ __ __ __ App eal fro m

th e Uni te d S ta te s Di st ric t Co urt forth e So ut he rnDis tri ctof F lo rid a

__ __ __ __ __ __ __ __ __ __ __ __ (J ul y 14 , 20 11 )

Befo re BARKETT an d WILSON, Circu itJu dg es , andWALTER, Dis tri ctJu dg e. * PER CURI AM:
Honora ble Donald E. Walter, United States District J udg e for the Western District of * L ouisiana, sitting by

designation.Thi s ca se in vo lv es in te rp ret at io n o f a s tand ardco m m erci al ge ne ral li ab il it y in su ran ce p ol ic y

(“ CGL”). Pal m

Beac h Gra di ng (“ PBG”) ap pe al s t he di st ric t
co urt’s g ran t o f su m

m ary jud gm en t i n fa vo r of Naut il us Ins ur an ce Co m pa ny (“Nau ti lu s” ). PBG se ek s re im bu rs em en t u nd er the CGL po li cy pro vi de d b y Nau ti lu s fo r $2 56 ,20 8.0 1 s te m m in g fr om

th e rep ai r of

a de fect iv e se wer s y st em pi pe . The di st ric t co urt g ran te d s umm ary jud gm en t af te r co nc lu di ng th atth e cl ai m was no t co ve redby the po li cy . After t ho ro ug h re vi ew an d wi th th e b en efi t o f or al arg um en t, we af

firm . I. Thi s ca se ari se s fr om

anin su ran ce p ol ic y

be twee n Nau ti lu s an d ano n- pa rty, A-1 Und erg ro un d S erv ic es , Inc . (“ A-1 ”). PBG s erv edas t he ge ne ral co nt ract orfor th e Mo od y

Riv er Pro

ject a ndsubc on tra ct edwit h A-1 forA-1 t o c on st ru ctwate r ut il it ie s, s an it ary se wer u ti li ti es , andst orm dra in ag e; an d t o c om

pl et e o th er wo rk
on th e p ro ject. A-1 work edfro m

Feb ru ary 20 06 un ti l No ve m be r 20 06 , bu t n ev er co m pl et edth e p ro

ject. In st ead , A-1 ab an do ne d the pro ject, an d P BG hi redan ot he r subc on tra ct or , RDMC, In c., to co m pl et e it
. The workth atA-1 h adco m pl et edpro ve d d efec ti ve . As a res ul t, RDM C, In c. du g up, re pa ire d, an d re bu rie d c ert ai n s ect io ns of t he sewe r li ne . Rep ai rin g th e d efec ti ve sewe r li ne requi redda m ag in g o th er co m po ne nt s o f th e Mo od y

Riv er 2Pro

ject, i nc lu di ng , forex am

pl e, di gg in g thr ou gh an d b reak in g apart t he
su rro un di ng subg rad e, ro ad , curbi ng , si de walk , andasp ha lt . PBG all eg es th at , as a res ul t, i t i nc urredrep ai r co st s o f $2 56 ,20 8.0 1. To re co ve r th os e rep ai r co st s, PB G firs t s ue d A-1 , andul ti m at el y ob ta in eda fin al jud gm en t o f $9 54 ,83 3.6 2. PB G th ensu edNaut il us to reco ve r a p orti on of th e fi na l ju dg m en t u nd er the term s o f A-1 ’s CGL po li cy wit h Nau ti lu s. The di st ric t co urt g ran te d s umm ary jud gm en t i n fa vo r of Naut il us . The co urt re as on ed th atbo th Flo rid a la w andex cl us io ns co nt ai ne d i n t he pa rti es ’ po li cy pro hi bi te d
reco ve ry of t he rep ai r co st s. Th is is PBG’s ap pe al
. II. Ourrev ie w is de no vo . Fire m an ’s Fun d In s. Co . v. Tro pi cal Sh ip pi ng & Co ns tr. C o., 2 54 F.3d98 7, 1 00 3 (1 1t h C ir. 2 00 1) (“ The qu es ti on of t he ex te ntof
co ve rag e und er an in su ran ce p ol ic y is a qu es ti onof l aw to be de ci de d b y th e co urt
an d i s t he refo re s ub

ject t o p le na ry

rev ie w by th is Co urt.”) ; Hu ff v . Deka lb Cn ty., Ga., 51 6 F .3d12 73 , 12 77 (11 th Cir . 20 08 ) (“ Thi s C ou rt r ev ie ws d e n ov o adi st ric t
co urt’s g ran t o r de ni al of s umm ary jud gm en t.”) . “ Bec au se fed eral juri sd ic ti on ov er thi s m at te r is ba se d o n d iv ers it y , Flo rid a la w go ve rn s t he de te rm in at io n o f th e is su es on th is ap pe al .” Sta te Farm Fir e & Ca s. Co . v. St ei nb erg , 39 3 F .3d12 26 , 12 30 (11 th Cir . 20 04 ). W e are als o m in df ul th atwe m ay

affi rm on an y gro un d 3supp orte d b y th e rec or d. Tro tt er v . Sec’y , Dep’t o f Co rr., 53 5 F .3d12 86 , 12 91 (1 1t h C ir. 2 00 8)
. W e co nc lu de th atth e rep ai r co st s PB G in cu rredas ares ul t o f A-1 ’s
ne gl ig en ce ar e n otco ve redun de r th e CGL po li cy be twee n Nau ti lu s an d A-1 , be cau se th e d am ag e d idno t co ns ti tu te “pr op ert y da m ag e” wi th in th e m ean in g o f th e p ol ic y . Whi le fau lt y

work m an sh ip m ay

co ns ti tu te an“ oc cu rren ce” u nd er the po li cy , “ th e fac t t ha t d am ag es m ay res ul t fr om

an‘ oc cu rren ce’ un de r a CGL p ol ic y is on ly the fir stst ep in de te rm in in g wh ethe r th e d am ag es are co ve red .” U.S. Fire In s. Co . v. J .S.U.B., Inc ., 97 9 S o. 2 d 8 71 , 88 8 (F la . 20 07 ). In t hi s ca se , we de te rm in e th atth e “ oc cu rren ce”—A-1 ’s def ect iv e work— di d n otcau se “pr op ert y da m ag e” wi th in th e m ean in g o f th e p ol ic y . The po li cy

pro vi de s t ha t Nau ti lu s wi ll in su re A-1 for cert ai n “ pr op ert y da m ag e,” wh ic h t he po li cy de fin es as, i nt er al ia , ph y si cal in jury to t an gi bl e pr op erty . The Fl or id a Supr em e Co urt h as ex pl ai ne d t ha t “ th ere i s a d iff eren ce be twee n acla im

forth e co st s o f rep ai rin g o r rem ov in g d efec ti ve work , whi ch is
no t a c la im

for‘ pr op erty

da m ag e,’ anda cl ai m

for th e co st s o f rep ai rin g d am ag e cau se d b y th e d efec ti ve work , whi ch is a cl ai m for‘ pr op ert y

da m ag e.’” Id. at88 9 (ex pl ai ni ng th at“ [i]f th ere i s n o d am ag e b ey on d t he fau lt y work m an sh ip or de fect iv e work, t he n the re m ay be no res ul ti ng ‘ pr op ert y da m ag e’”); s ee al so 4Aut o- Owner s In s. Co . v. Po zzi W in do w Co., 9 84 So . 2d12 41 , 12 48 (Fl a. 20 08 )

(“ [T]he m ere i nc lu si on of ade fect iv e co m po ne nt , su ch as ade fect iv e win do w or th e d efec ti ve in st al la ti on of awin do w, do es no t co ns ti tu te pro pe rty dam ag e u nl es s th atde fect iv e co m

po ne ntres ul ts in ph y si cal in jury to s om e o th er t an gi bl e pr op erty .”). The pro bl em

with P BG’s cla im

is th atth e d efec ti ve pi pe di d n otcau se da m ag e in de pe nd en t o f th e rep ai r an d re pl acement o f th e p ip e. Fo r ex am pl e, th e pi pe s n ev er b ur st , cau se d s in kh ol es , or c au se d b ack -ups . Rath er, PBG’s cl ai m is
so le ly for the co st s o f rep ai rin g a ndrem ov in g t he de fect iv e p ip e, whi chis no t a cl ai m for“pr op ert y

dam ag e.” See J.S.U.B., 9 79 So . 2dat 8 90 ; Po zzi W in do w Co., 98 4 S o. 2 d a t 1 24 8. As a res ul t, we h ol d t ha t t he di st ric t co urt co rrec tl y co nc lu de d th atNaut il us ’s po li cy

do es no t co ve r PBG’s rep ai r co st s. AFFIRMED.

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