Opinion ID: 6346157
Heading Depth: 3
Heading Rank: 1

Heading: Applicable To Business Liability Coverage

Text: This insurance does not apply to:
d. Workers’ Compensation and Similar Laws Any obligation of the insured under a workers’ compensation, disability benefits or unemployment compensation law or any similar law. e. Employer’s Liability “Bodily injury” to:
and in the course of:

the insured’s business[.]
This exclusion applies: 3 Case: 20-20621 Document: 00516341209 Page: 4 Date Filed: 06/02/2022 No. 20-20621 (1) Whether the insured may be liable as an employer or in any other capacity; and (2) To any obligation to share damages with or repay someone else who must pay damages because of the injury. This exclusion does not apply to liability assumed by the insured under an “insured contract.” Regarding the insured’s “Duties In The Event of Occurrence, Of- fense, Claim Or Suit,” Section E.2 of the policy stated: E. LIABILITY AND MEDICAL EXPENSES GENERAL CONDITIONS 1. [omitted] 2. Duties In The Event of Occurrence, Offense, Claim Or Suit a. Notice of Occurrence or Offense You or any additional insured must see to it that we are notified as soon as practicable of an “oc- currence” or an offense which may result in a claim. To the extent possible, notice should include: (1) How, when and where the “occurrence” or offense took place; (2) The names and addresses of any injured persons and witnesses; and
damage arising out of the occurrence or offense. 4 Case: 20-20621 Document: 00516341209 Page: 5 Date Filed: 06/02/2022 No. 20-20621
If a claim is made or “suit” is brought against any insured, you or any additional insured must:
or “suit” and the date received; and
You or any additional insured must see to it that we receive a written notice of the claim or “suit” as soon as practicable.
You and any other involved insured must:
notices, summonses or legal papers received in connection with the claim or “suit”;
information; (3) Cooperate with us in the investigation, settlement of the claim or defense against the “suit”; and (4) Assist us, upon our request, in the enforce- ment of any right against any person or organiza- tion that may be liable to the insured because of injury or damage to which this insurance may also apply.
No insured will, except at that insured’s own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent. 5 Case: 20-20621 Document: 00516341209 Page: 6 Date Filed: 06/02/2022 No. 20-20621 Lastly, regarding suits against Sentinel, Section E.4 of the policy stated: 4. Legal Action Against Us No person or organization has a right under this Coverage Form: a. To join us as a party or otherwise bring us into a “suit” asking for damages from an insured; or b. To sue us on this Coverage Form unless all of its terms have been fully complied with. A person or organization may sue us to recover on an agreed settlement or on a final judgment against an insured; but we will not be liable for damages that are not payable under the terms of this insurance or that are in excess of the applicable limit of insurance. An agreed settlement means a settlement and release of liability signed by us, the insured and the claimant or the claimant’s legal representative. B. Despite being served with Moreno’s suit on March 9, 2017, N.F. Painting did not contact Sentinel to request, or even inquire about, coverage and/or a defense under its liability policy. Nor did it send Sentinel a copy of the petition or any other documentation received in connection with the suit. Instead, N.F. Painting retained the services of attorney Armando Lopez. On April 3, 2017, Lopez filed an answer on behalf of N.F. Painting and, on May 12, 2017, provided responses to Moreno’s requests for admissions and disclosures. In those discovery responses, N.F. Painting denied possessing any insurance that would cover the incident. N.F. Painting’s co-defendant, Beazer Homes, however, did not hesitate to contact Sentinel about Moreno’s suit. Specifically, the declaration of Julie Katchmir, Sentinel’s Claim Consultant, states that, on May 18, 2017, 6 Case: 20-20621 Document: 00516341209 Page: 7 Date Filed: 06/02/2022 No. 20-20621 Sentinel received a copy of an April 4, 2017 letter from counsel for Beazer Homes that was addressed to Attorney Lopez. The April 4, 2017 letter was accompanied by a copy of a March 23, 2017 letter, entitled “DEMAND AND TENDER FOR DEFENSE AND INDEMNITY,” that Beazer Homes had sent, via certified mail, to Nelson Flores for N.F. Painting. In both letters, Beazer Homes, referencing the state court suit filed by Moreno against it and N.F. Painting, demanded defense and indemnity (pursuant to the indemnification paragraph of its contract with N.F. Painting), asked that N.F. Painting’s insurance carrier be notified of the claim, and requested written confirmation of N.F. Painting’s agreement to defend and indemnify Beazer Homes.1 That same day, May 18, 2017, another Sentinel claims representative, Lori Toliver Cawley, sent a letter to “Nelson Flores dba N&F Painting,” notifying N.F. Painting of Sentinel’s receipt of the April 4, 2017 “claim” submitted by Beazer Home, and asking Flores to contact her “immediately” to “expedite the handling of your claim.”2 On May 22, 2017, after receiving no response to Cawley’s May 18, 2017 letter, Sentinel, through Katchmir, emailed and left a voice mail for Lopez, who was identified as N.F. Painting’s attorney in the April 4, 2017 letter from Beazer Homes’ attorney. Katchmir queried whether Lopez was representing N.F. Painting in the state court suit filed by Moreno, and indicated that she was seeking contact information for N.F. Painting, so that she 1 Both letters identify the state court suit by name, judicial district, and docket number. 2 Although other documents in the record identify Sentinel’s insured as N.F. Painting, the claims documentation completed by Sentinel’s claims representatives refers to the company as “Nelson Flores dba N&F Painting” or simply “N&F Painting.” The discrepancy presumably exists because certain portions of the insurance policy identify the insured as “Nelson Flores dba N&F Painting.”. When quoting the claims documentation or Katchmir’s declaration, we will use the same business name and spelling stated therein. 7 Case: 20-20621 Document: 00516341209 Page: 8 Date Filed: 06/02/2022 No. 20-20621 could “discuss the matter” with it. Eight days later, on May 30, 2017, after still receiving no response from Lopez or N.F. Painting, Sentinel contacted Nelson Flores, the owner of N.F. Painting, by telephone. According to Katchmir’s declaration, Flores told her that Lopez was representing N.F. Painting in the state court suit filed by Moreno and recommended that she contact Lopez to obtain a copy of the complaint; Flores did not request that Sentinel defend and indemnify N.F. Painting in the state court suit. By letter dated June 2, 2017, from Katchmir to counsel for Beazer Homes, Sentinel acknowledged receipt of the April 4, 2017 letter addressed to Attorney Lopez, identified itself as the business liability carrier for N.F. Painting, and agreed to defend and indemnify Beazer Homes “without a reservation of rights” (pursuant to the construction contract between Beazer Homes and N.F. Painting) in the state court suit filed by Moreno.3 On June 12, 2017, having not yet received a response to her inquires, Katchmir sent a letter to Lopez, by both email and U.S. Mail, referencing her May 22, 2017 email and phone call, Sentinel’s receipt of the letter addressed to Lopez from Beazer Homes’ counsel, and Sentinel’s insurance carrier status for N.F. Painting.4 Katchmir’s letter also requested that Lopez call her, as soon as possible, if he were representing N.F. Painting in the state court suit file by Moreno, to discuss the matter. The next day, June 13, 2017, Katchmir talked to Lopez by telephone. According to Katchmir’s declaration, Lopez confirmed, during the call, that he was representing N.F. Painting in the Moreno’s state court suit and that N.F. Painting had hired him, rather than reporting or tendering the suit to 3 The letter identified the name of the attorney to whom Sentinel would be assigning Beazer Home’s representation. 4 The letter indicates that a copy was sent to Flores via U.S. mail. 8 Case: 20-20621 Document: 00516341209 Page: 9 Date Filed: 06/02/2022 No. 20-20621 Sentinel, “because Flores did not believe that there would be coverage for [the suit] due to the fact that Moreno, the plaintiff [], was an employee of N&F Painting.” Katchmir’s declaration also states: “Despite the lack of tender from N&F Painting to Sentinel, I expressly asked Attorney Lopez to provide me with the complaint in the Underlying Litigation.”5 Later the same day, June 13, 2017, a person associated with Lopez’s law firm emailed N.F. Painting’s “Original Answer & Request for Disclosure,” “Responses to Plaintiff’s Request for Admissions,” “Responses to Plaintiff’s Request for Production,” “Responses to Plaintiff’s Request for Disclosures,” and “Answers to Plaintiff’s Interrogatories” to Katchmir, but failed to include the complaint that Katchmir had requested. On June 19, 2017, Katchmir sent another email to Lopez, thanking him for the previously sent documents and again requesting a copy of the complaint. Later that day, Lopez sent a copy of the complaint (petition) to Katchmir by reply email, which simply stated: “Attached.” As noted in Katchmir’s declaration, Lopez’s email communication did not request that Sentinel defend and indemnify N&F Painting [in the underlying state court suit]. Thereafter, in a July 5, 2017 letter to “Nelson Flores DBA N&F Painting,” which was sent to Flores by certified mail and by regular U.S. Mail to Lopez, Katchmir (on behalf of Sentinel) referenced the materials provided to her by Lopez and stated: “Based on our review, we must respectfully disclaim coverage under the Business Liability policy. As such, we will not be providing the Defense or Indemnification for Nelson Flores or 5 Although Katchmir refers to the document as a “complaint,” the document actually is styled as a “petition.” 9 Case: 20-20621 Document: 00516341209 Page: 10 Date Filed: 06/02/2022 No. 20-20621 N&F Painting under the policy in connection with [Moreno’s state court suit]. Our coverage determination is outlined below. The remainder of the July 5, 2017 letter explains that Sentinel’s “no coverage” determination is based on Moreno’s status as employee of N.F. Painting, who was injured while in the course and scope of his employment duties, thereby triggering Exclusions B(1)(d) and (e). Notably, however, the July 5 letter also states: Our analysis is based on the facts as we presently understand them. If there are new allegations or additional information that you feel may alter our position as to the coverage, please forward that information to us for consideration. Finally, the July 5 letter concludes with a request that Katchmir be contacted regarding any questions about “this matter or the contents of this letter.” In her declaration, Katchmir characterizes the July 5, 2017 letter as “confirm[ing] that Sentinel would not be providing a defense or indemnification to N&F Painting for the [Moreno state court suit].” In any event, the letter mailed to “Nelson Flores DBA N&F Painting” was returned “unclaimed” and, though a copy of the letter also was mailed to Lopez on July 5, and then emailed on September 6, 2017 (upon the return of the certified letter as “unclaimed”), Sentinel never received any response to the letter from Lopez or Flores.