Opinion ID: 2682712
Heading Depth: 3
Heading Rank: 3

Heading: Insurance Coverage Dispute

Text: On January 11, 2011, J.B.D. sued MCC in Hillsborough County Circuit Court. MCC subsequently removed the action to the Middle District of Florida on February 11, 2011 on the basis of diversity jurisdiction. In its Second Amended “subcontractor exception,” see id., stating that “[t]his exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor.” However, it was eliminated by Endorsement CG 22 94 10 01. 8 Case: 13-10138 Date Filed: 07/11/2014 Page: 9 of 25 Complaint, J.B.D. brought damage claims against MCC based on MCC’s alleged breach of its duty of defense, breach of its duty to indemnify, and for a declaration of its rights under the MCC Policy. MCC answered, asserting various affirmative defenses and a counterclaim for a declaration of no coverage. On April 13, 2012, both parties filed cross-motions for summary judgment on all claims. The motions disputed whether MCC owed J.B.D. a duty of defense or indemnification, whether MCC breached either duty, and, if so, whether and to what extent J.B.D. was entitled to consequential damages flowing from MCC’s breach. On October 25, 2012, the district court entered an order denying J.B.D.’s motion for summary judgment and granting in part and denying in part MCC’s motion for summary judgment. The court reasoned that to the extent any of the Sun City claims were for the costs to repair the defectively installed roof, doors and windows, these costs were not “property damage” and therefore not covered by the MCC Policy under Florida law. The district court then held that the scope of J.B.D.’s “work” included construction of the entire fitness center. Therefore, to the extent that any of the Sun City claims were for the costs to repair damage to the other components of the fitness center caused by the defectively installed roof, doors and windows, those costs fell under the “your work” exclusion and were not covered by the MCC Policy. Accordingly, the district court held that J.B.D.’s 9 Case: 13-10138 Date Filed: 07/11/2014 Page: 10 of 25 coverage under the MCC Policy was limited only to claims for damage to nonfitness center property caused by J.B.D. or its subcontractor’s construction defects. Applying these coverage limits to the suit before it, the court held that MCC did not have a duty to defend J.B.D. in the underlying Sun City Litigation because “there [was] nothing on the face of the Counterclaim which indicate[d] damage to property other than the Fitness Center itself.” 4 The court then held that MCC did not have a duty to indemnify J.B.D. as a matter of law because J.B.D. had not demonstrated the existence of actual damage to property other than the fitness center itself, and, therefore, J.B.D. had not established it paid Sun City to settle claims for any covered “property damage.” Judgment was entered in favor of MCC on the duty to defend, duty to indemnify, and declaratory judgment claims on December 11, 2012. J.B.D. filed its Notice of Appeal on January 8, 2013.