Opinion ID: 1735720
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Heading Rank: 2

Heading: Florida Court Interpretations of Arising Out of

Text: The specific language Taurus claims is ambiguous are the words arising out of in the phrase all bodily injury and property damage occurring away from premises you own or rent and arising out of your product. Taurus, 367 F.3d at 1253 (emphasis added). Florida courts have held similar language not to be ambiguous. In Hagen, 675 So.2d at 963, the Fifth District Court of Appeal held that the term arising out of was unambiguous and is broader in meaning than the term `caused by' and means `originating from,' `having its origin in,' `growing out of,' `flowing from,' `incident to' or `having a connection with.' Id. at 965 (citing Nat'l Indem. Co. v. Corbo, 248 So.2d 238 (Fla. 3d DCA 1971)); see also Allstate Ins. Co. v. Safer, 317 F.Supp.2d 1345, 1350 n. 4, 1354 (M.D.Fla.2004) (finding that the phrase arising out of in an exclusionary clause was not ambiguous); Ohio Cas. Ins. Co. v. Cont'l Cas. Co., 279 F.Supp.2d 1281, 1284 (S.D.Fla.2003) ([T]he language `arising out of' is not ambiguous. . . . `Arising out of' are words of much broader significance then [sic] `caused by.') (quoting Corbo, 248 So.2d at 240); Am. Sur. & Cas. Co. v. Lake Jackson Pizza, Inc., 788 So.2d 1096, 1099 (Fla. 1st DCA 2001) (noting that the term `arising out of' is not ambiguous). One Florida case, however, has found the arising out of language ambiguous. In Westmoreland v. Lumbermens Mutual Casualty Co., 704 So.2d 176 (Fla. 4th DCA 1997), the Fourth District interpreted a policy that excluded claims for `bodily injury' . . . arising out of the ownership, maintenance, use, loading or unloading of motor vehicles. Id. at 178. The court noted that the term arising out of was not defined and stated that [w]here a critical term is not defined in an exclusionary clause of the policy, it will be liberally construed in favor of an insured. Id. at 180. The court found the policy ambiguous and defined arising out of to require a showing of proximate causation. The Fourth District has since clarified, however, that the ambiguity found in the Westmoreland policy was a product of the arising out of language combined with other policy language. See Estate of Bombolis v. Cont'l Cas. Co., 740 So.2d 1229, 1230 (Fla. 4th DCA 1999). As clarified, therefore, Westmoreland does not hold that the arising out of language, standing alone, is ambiguous. [2] We, too, have interpreted the phrase arising out of, although we interpreted an insuring clause rather than an exclusion. In Race v. Nationwide Mutual Fire Insurance Co., 542 So.2d 347 (Fla.1989), the issue was whether uninsured motorist coverage covered injuries arising from a physical altercation that occurred just after an accident. Id. at 348. In analyzing the issue, we stated that the phrase `arising out of' does not have the same meaning as `proximately caused by,' and that the language of the policy should be liberally construed to effect broad coverage. Id. However, we found no coverage even under an expansive reading of arising out of: The most that can be said is that the driving of the uninsured motorist which caused the accident created an atmosphere of hostility between the parties. It had nothing to do with [the underlying plaintiff's] injuries, which only came about several minutes later. . . . Id. at 351. We did not decide whether the term arising out of was ambiguous. While Race stands for the proposition that arising out of does not equate to proximate causeat least in coverage provisionsit does require some level of causation greater than coincidence. See also Gov't Employees Ins. Co. v. Novak, 453 So.2d 1116, 1119 (Fla.1984) (`[A]rising out of' [in the context of automobile coverage] does not mean `proximately caused by,' but has a much broader meaning. All that is required is some nexus between the motor vehicle and the injury.); Hernandez v. Protective Cas. Ins. Co., 473 So.2d 1241, 1242 (Fla.1985) (same); Heritage Mut. Ins. Co. v. State Farm Mut. Auto. Ins. Co., 657 So.2d 925, 927 (Fla. 1st DCA 1995) (citing Race and finding coverage for injuries sustained by a child due to horseplay with other children in the back of the insured's van, but warning that some causal connection is necessary between the injury and the vehicle and that [i]t is not sufficient that the vehicle was merely the situs of the injuries). The Insurers rely heavily on our decision in Koikos v. Travelers Insurance Co., 849 So.2d 263 (Fla.2003), which they argue broadly interpreted the phrase arising out of. In reaching its decision after reconsideration in this case, the federal district court also relied on Koikos. In that case, two individuals were shot in a restaurant. The victims sued the owner for negligence. The policy covered bodily injury or property damage arising out of any one occurrence. Id. at 266. The policy defined occurrence as an accident, including continuous or repeated exposure to substantially the same general harmful conditions. It did not define accident. Id. The Eleventh Circuit certified a question, which we rephrased as follows: When the insured is sued based on negligent failure to provide adequate security arising from separate shootings of multiple victims, are there multiple occurrences under the terms of an insurance policy that defines occurrence as an accident, including continuous or repeated exposure to substantially the same general harmful conditions? Id. at 264. We answered the question in the affirmative, holding that the policy's definition of occurrence as applied to the facts of this case is susceptible to more than one reasonable interpretation. Id. at 273. Because the term occurrence was ambiguous, we construed it in the insured's favor. Id. We held that the injuries arose from the shooting and not from the insured's negligence. The Insurers argue that our interpretation of arising out of any one occurrence in Koikos should control our interpretation of the language arising out of in Taurus's policies. We disagree. We did not base our decision in Koikos on a construction of arising out of but rather on the definition of occurrence as an accident. Id. at 269. We found that term susceptible to varying interpretations including not only an `accidental event' but also `injuries or damage' that are `neither expected nor intended from the standpoint of the insured.' Id. (quoting State Farm Fire & Cas. Co. v. CTC Dev. Corp., 720 So.2d 1072, 1076 (Fla.1998)). Therefore, Koikos does not resolve the present issue. Taurus, on the other hand, relies heavily on the First District's decision in Florida Farm Bureau Mutual Insurance Co. v. Gaskins, 405 So.2d 1013 (Fla. 1st DCA 1981). In Gaskins, the insured, a chemical supply retail distributor, delivered an herbicide to a customer who had ordered an insecticide. 405 So.2d at 1013-14. Thinking it was an insecticide, the customer unwittingly sprayed his tobacco crop with the herbicide. Id. When the customer lost his entire crop, he sued the distributor. Id. The distributor settled the claim and sought indemnity from the insurer. Id. The insurer argued that the claims were excluded under the policy's products hazards and completed operations exclusions. Id. at 1014. The court phrased the issue as whether the distributor's liability arose out of the products sold and/or after it had completed operations away from the store premises as defined in the policy's products hazards and completed operations exclusions. Id. The court found the policy language unambiguous and concluded that the exclusions did not apply because liability arose out of the distributor's on-premises negligence in delivering the wrong product to the customer and not out of the product delivered. Id. The court focused on proximate cause, stating that the herbicide was not the cause of the damage, but merely the incidental instrumentality through which the damage was done. Id. at 1015. Taurus argues that under Gaskins, coverage is not excluded in this case because the claims against Taurus allege, among other things, negligence, negligent supervision, negligent marketing, negligent distribution, negligent advertising, negligent entrustment, public and private nuisance, failure to warn, false advertising, and unfair and deceptive trade practices. Taurus, 367 F.3d at 1252-53. But in interpreting policies, the language is the key. The court in Gaskins does not directly quote the policy language. Therefore, we cannot tell whether it interpreted the same language at issue here. Moreover, the circumstances in Gaskins were substantially different from those involved here. The court held that the negligence occurred on the premises, when the employee provided a herbicide instead of an insecticide. [3] Therefore, the court held, the damages did not arise from the product, but from the distributor's on-premises negligence. We conclude that neither our opinion in Koikos nor the Fourth District's opinion in Gaskins answers the question before us. We therefore analyze how other states have interpreted the phrase arising out of in the context of insurance contracts.