Opinion ID: 157823
Heading Depth: 1
Heading Rank: 3

Heading: Coverage Under the Personal Umbrella Policy

Text: 9 In addition to Auto-Owners’ homeowners’ policy, Hermann purchased a personal umbrella policy from Cincinnati. The district court found that coverage under the umbrella policy was dependent on a finding of coverage under Auto-Owners’ homeowners’ policy. Because the district court determined that no coverage existed under the homeowners’ policy, it concluded that no coverage existed under the personal umbrella policy. On appeal, Hermann argues that because the homeowners’ policy provides coverage, the umbrella policy provides coverage as well. Apparently relying on their argument that the homeowners’ policy does not provide coverage, Cincinnati’s brief does not respond to this point of error. After reviewing the policy, we conclude that the umbrella policy also provides coverage. The personal umbrella policy provides coverage for personal injuries “arising out of business or business property” if such injuries are covered by an underlying policy. The personal umbrella policy defines business as “[including] but not limited to a trade, occupation, profession or other activity engaged in as a means of livelihood or from which you or a relative intend to derive income (other than farming).” The record demonstrates that Hermann intended to derive income from the Dome venture. Furthermore, the underlying policy relevant to this umbrella policy, Auto-Owners’ homeowners’ policy, provides coverage. Thus, coverage exists under Cincinnati’s personal umbrella policy. Accordingly, we reverse the district court’s decision regarding the personal umbrella policy and remand for further proceedings. 10 III. Coverage Under Business Owner’s and Commercial Umbrella Policies Finally, we must determine whether the district court erred in concluding that Cincinnati owed no duty to defend and indemnify under the business owner and commercial umbrella policies issued to Hermann. The parties agree that Florida law governs our interpretation of these policies. Under Florida law, an insurance company’s duty to defend depends upon the facts and legal theories alleged in the pleadings. The duty arises when the facts alleged “fairly and potentially bring the suit within policy coverage.” Lime Tree Village Community Club Ass’n, Inc. v. State Farm Gen. Ins. Co., 980 F.2d 1402, 1405 (11th Cir. 1993)(applying Florida law). Any ambiguities in the policy must be construed in favor of the insured. Stuyvesint v. Butler, 314 So.2d 567 (Fla. 1975). The district court assumed that the policies named Hermann in his individual capacity as an insured. The district court then analyzed the policy to determine whether Hermann’s claim was covered. The district court found that the policy covered an individual’s “business” only where such business is solely owned by the named individual. The court determined that because Hermann was not the sole owner of the oil and gas venture giving rise to the claims, the policies did not provide coverage. On appeal, Hermann argues that the district court’s conclusion that the business owners’ and commercial excess policies provide no coverage is inconsistent with its finding that his oil and gas activities are “business” activities for purposes of the 11 homeowners’ policy. The thrust of this argument appears to be that the homeowners’ and business owners’ policies are interrelated, in that if there is not coverage under one, there must be coverage under the other. Cincinnati argues that the district court correctly found no coverage because Hermann was not the sole owner of the oil and gas venture.3 The policies at issue provide coverage for an individual insured only “with respect to the conduct of a business of which [he or she is] the sole owner.” Aplt. App. at 150 & 258. The record clearly shows that Hermann was not the sole owner of the Dome venture. The venture had numerous working interest owners to whom the persons operating the well were accountable. Indeed, when Hermann became unsatisfied with the operators, he was unable to replace them without support from the other owners. Thus, the district court correctly found that the business owners’ and commercial umbrella policies provided no coverage.