Court Opinion

ID: 9946339
Source: CourtListenerOpinion
Date Created: 2024-02-29 18:03:12.589898+00
Date Added: 2024-06-11T14:25:40.993395
License: Public Domain

USCA11 Case: 22-14037   Document: 73-1    Date Filed: 02/29/2024   Page: 1 of 9

                                                [DO NOT PUBLISH]
                                 In the
                United States Court of Appeals
                        For the Eleventh Circuit

                         ____________________

                              No. 22-14037
                         Non-Argument Calendar
                         ____________________

       COLONY INSURANCE COMPANY,
                                                    Plaintiﬀ-Appellee,
       versus
       COASTAL CONSTRUCTION MANAGEMENT, LLC, et al.,

                                                          Defendants,

       ROSALYNE HOLDINGS, LLC,

                                                Defendant-Appellant.

                         ____________________
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       2                     Opinion of the Court                 22-14037

                 Appeal from the United States District Court
                      for the Middle District of Florida
                  D.C. Docket No. 8:21-cv-02541-TPB-MRM
                          ____________________

       Before WILSON, NEWSOM, and ANDERSON, Circuit Judges.
       PER CURIAM:
               Defendant-Appellant Rosalyne Holdings, LLC, appeals the
       district court’s grant of judgment on the pleadings in favor of Col-
       ony Insurance Company regarding the application of a professional
       services exclusion exempting Colony from the duty to defend in an
       underlying state lawsuit. After a careful review of the record, we
       AFFIRM.
                                 I. Background
              Before reaching Colony’s federal lawsuit, we briefly outline
       the facts and underlying state court proceedings. In 2014, Rosalyne
       hired Forum Architecture & Interior Design, Inc. as the architect
       for a four-story, 228-unit apartment complex in Sarasota, Florida.
       Rosalyne hired Ascentia Development Group (ADG) as the project
       developer and WPC III, LLC as the general contractor. ADG then
       engaged Coastal Construction Management, LLC under a Profes-
       sional Services Agreement to provide construction management
       services as a construction manager and construction consultant for
       the project. In 2016, Rosalyne began contracting directly with
       Coastal under a Letter of Understanding. Coastal has two com-
       mercial general liability insurance policies issued by Colony.
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       22-14037               Opinion of the Court                         3

              In 2017, Rosalyne initiated the underlying action against
       WPC in Florida state court, alleging numerous defects and defi-
       ciencies in the completed project. Coastal and Forum were added
       as defendants when the second amended complaint was filed in
       2019. Rosalyne alleged one count of breach of contract and one
       count of negligence against Coastal.
              In 2021, Colony initiated this federal lawsuit against Coastal,
       Rosalyne, WPC, and ADG, asserting it had no duty to defend or
       indemnify Coastal for the claims alleged by Rosalyne in state court.
       Coastal, Rosalyne, and WPC answered and asserted affirmative de-
       fenses. Colony moved for judgment on the pleadings based on the
       “professional services” exclusion in its policies with Coastal.
       Rosalyne and WPC opposed Colony’s motion. The district court
       dismissed ADG as a party. Colony dismissed Coastal as a party, but
       Coastal stipulated it would be bound by the district court’s judg-
       ment. Based on the contents of Rosalyne’s complaint and the gov-
       erning policies, the district court granted Colony’s motion for judg-
       ment on the pleadings. Rosalyne timely appealed.
                  II. Standard of Review and Applicable Law
               “We review a judgment on the pleadings de novo.” Cannon
       v. City of W. Palm Beach, 250 F.3d 1299, 1301 (11th Cir. 2001). “Judg-
       ment on the pleadings is appropriate when there are no material
       facts in dispute and the moving party is entitled to judgment as a
       matter of law.” Cont’l Cas. Co. v. Winder Lab’ys, LLC, 73 F.4th 934,
       940 (11th Cir. 2023) (internal quotation omitted). In conducting
       this review, we “accept the facts alleged in the complaint as true
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       4                       Opinion of the Court                    22-14037

       and view them in the light most favorable to the nonmoving
       party.” Cannon, 250 F.3d at 1301.
               Because the underlying contract originated in Florida and
       comes to this court by way of diversity jurisdiction, we apply the
       substantive law of Florida. See Sutton v. Wal-Mart Stores E., LP, 64
       F.4th 1166, 1168 (11th Cir. 2023). “‘Under Florida law, insurance
       contracts are construed according to their plain meaning.’” Garcia
       v. Fed. Ins. Co., 473 F.3d 1131, 1135 (11th Cir. 2006) (quoting Taurus
       Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So. 2d 528, 532 (Fla.
       2005)). Florida courts interpret insurance coverage broadly and in-
       surance exclusions narrowly. Hudson v. Prudential Prop. & Cas. Ins.
       Co., 450 So. 2d 565, 568 (Fla. Dist. Ct. App. 1984). Therefore, “am-
       biguities are construed against the insurer and in favor of cover-
       age.” Westchester Gen. Hospital, Inc. v. Evanston Ins. Co., 48 F.4th
       1298, 1302 (11th Cir. 2022).
               We will not search for ambiguity when a contract is clear.
       See Sphinx Int’l Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 412 F.3d
       1224, 1228 (11th 2005). Further, in Florida, the absence “‘of a defi-
       nition of an operative term in a policy does not necessarily render
       the term ambiguous and in need of interpretation by the courts.’”
       Id. at 1229. (quoting Swire Pac. Holdings v. Zurich Ins. Co., 845 So.
       2d 161, 166 (Fla. 2003)).
              In Florida, the duty of an insurer to defend an insured arises
       “when the complaint alleges facts that fairly and potentially bring
       the suit within policy coverage.” Jones v. Fla. Ins. Guar. Ass’n, 908
       So. 2d 435, 442–43 (Fla. 2005). An insurer must defend an entire
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       22-14037               Opinion of the Court                          5

       case when the complaint includes claims that fall both within and
       beyond the exclusion. See Lime Tree Vill. Cmty. Club Ass’n, Inc. v.
       State Farm Gen. Ins. Co., 980 F.2d 1402, 1405–06 (11th Cir. 1993).
       Florida uses a burden shifting regime when analyzing insurance ex-
       clusions. Hudson, 450 So. 2d at 568. An insured must establish that
       policy coverage applies, but the burden then shifts to the insurer to
       show that the loss falls within an exception. Id. Florida law also
       instructs “that as a matter of public policy, commercial liability in-
       surance policies . . . do not cover claims for defective or deficient
       workmanship,” which can include compliance with regulatory re-
       quirements. Sekura v. Granada Ins. Co., 896 So. 2d 861, 862 (Fla.
       Dist. Ct. App. 2005).
              When determining whether a party rendered a professional
       service, Florida courts often use “a fact-intensive analysis” that “fo-
       cus[es] on the act itself and not the character of the individual per-
       forming the act.” Alicea Enterps., Inc. v. Nationwide Ins. Co. Am., 252
       So. 3d 799, 802 (Fla. Dist. Ct. App. 2018). “Florida’s courts have
       consistently interpreted the term ‘professional services’ to mean
       those types of services that require specialized training,” but the
       analysis also weighs the presence of a causal connection between
       the act at issue and the professional services provided. Westchester,
       48 F.4th at 1304. Overall, “[t]he duty to defend must be determined
       from the allegations in the complaint.” Jones, 908 So. 2d at 443.
                                   III. Analysis
              We find that the district court properly held that the profes-
       sional services exclusion in the commercial liability policy instructs
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       6                       Opinion of the Court                  22-14037

       that Colony had no duty to defend Coastal. To reach this conclu-
       sion, we rely on the text of the exclusion and the allegations in
       Rosalyne’s underlying state court complaint.
               Although the policy does not expressly define “professional
       services,” the professional services exclusion provides a nonexhaus-
       tive list of examples, including:
              (2) preparing, approving, or failing to prepare or ap-
              prove maps, drawings, opinions, reports, surveys,
              change orders, designs or speciﬁcations;

              (3) inspection, supervision, quality control, architec-
              tural or engineering activities done by or for you on a
              project on which you serve as construction manager;
              [and,]

              (4) engineering services, including related supervi-
              sory or inspection services[.]

       Despite the list’s lack of an explicit definition for “professional ser-
       vices,” the policy is not ambiguous by default. See Sphinx, 412 F.3d
       at 1228. With the text of the professional services exclusion in
       mind, we turn to a discussion of Rosalyne’s allegations against
       Coastal.
              In its second amended complaint in state court, Rosalyne
       brought two counts against Coastal. The first count alleges that
       breaches by Coastal’s predecessors are imputed to Coastal, includ-
       ing the following conduct:
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       22-14037              Opinion of the Court                       7

             failed to properly and timely complete its Work; failed
             to timely and properly complete punch-list items; and
             failed to correct inadequate, defective, and noncom-
             plying Work at the Project; and failed to perform ser-
             vices in a good and workmanlike manner and to pro-
             vide necessary materials in accordance with and pur-
             suant to approved plans and speciﬁcations, industry
             standards and all applicable codes.

       The second count against Coastal concerns its role as “construction
       manager/construction consultant/owner’s representative for the
       Project.” Within this count, Rosalyne alleged that Coastal
       “breached its duty to Rosalyne . . . by failing to ensure that WPC
       correctly and timely constructed the Project.” Individual defects
       included the following:
             (a) Delivering the Project with the Defects and Deﬁ-
             ciencies (exclusive of the trash-compactor claim and
             the Air-Flow Report);

             (b) Failing to timely complete the Project;

             (c) Failing to construct the Project in compliance with
             the Florida Building Code and/or other applicable
             codes;

             (d) Failing to construct the Project in compliance with
             the permitted plans, the speciﬁcations, shop-drawings
             and/or other submittals, manufacturers’ require-
             ments, and/or other approved Project documents;
             and/or
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       8                      Opinion of the Court                  22-14037

              (e) Failing to construct the Project in accordance with
              the prevailing industry standards.

              As we examine each defect enumerated by Rosalyne, our fo-
       cus remains rooted in the individual actions, not the actor. How-
       ever, the actions at issue in this case are closely intertwined with
       Coastal’s role as a construction manager and consultant. As
       Rosalyne’s reply brief recognizes, “[a]dmittedly, some of the alle-
       gations cited by Colony, such as supervising the construction of the
       project, undoubtedly would fall within the [exclusion].” Since the
       duty to defend arises as long as only one allegation against the in-
       sured party falls beyond an exclusion, see Lime Tree Vill., 980 F.2d at
       1405–06, Rosalyne argues that three specific tasks fall beyond the
       exclusion: “scheduling, compliance, and liaison tasks.” Rosalyne
       alleges that these tasks fall beyond the exclusion because they do
       not require any specialized training, experience, or skill. Rosalyne
       suggests that because a few tasks fall beyond the exclusion, Colony
       has a duty to defend Coastal.
              Here, even the scheduling, compliance, and liaison tasks do
       not trigger a duty to defend Coastal. First, professional service ex-
       clusions can apply in Florida when compliance is at issue. Just as
       the duty to defend was not triggered by the allegations of noncom-
       pliance with federal regulation in Sekura, 896 So. 2d at 862, the al-
       legations related to compliance here do not create a duty to defend.
       Similarly, Coastal’s actions in setting schedules and as a liaison can-
       not be separated from what Rosalyne’s brief describes as “supervis-
       ing the construction.” The text of the exclusion includes inspection
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       22-14037               Opinion of the Court                         9

       and quality control activities done “on a project on which you serve
       as construction manager” among the types of claims barred. Over-
       all, the allegations brought by Rosalyne closely parallel the specific
       provisions of the professional services exclusion within Coastal’s
       commercial liability policy with Colony.
              Viewing Rosalyne’s allegations against Coastal in its second
       amended complaint, the wrongs appear to fall within the profes-
       sional services exclusion of the commercial liability policies pro-
       vided by Colony to Coastal. Therefore, because the professional
       services exclusion applies, Colony had no duty to defend. We thus
       find that the district court did not err in granting judgment on the
       pleadings in favor of Colony.
             AFFIRMED.