The following is a real-time transcript taken as closed captioning during the oral argument proceedings, and as such, may contain errors. This service is provided solely for the purpose of assisting those with disabilities and should be used for no other purpose. These are not legal documents, and may not be used as legal authority. This transcript is not an official document of the Florida Supreme Court.
Essex Insurance Co. V. Mercedes Zota
SC06-2031
>>> ALL RISE.
GOOD MORNING.
LADIES AND GENTLEMEN, THE FLORIDA SUPREME COURT. PLEASE BE SEATED.
GOOD MORNING, FRIENDS. WEMCOME TO THE FLORIDA SUPREME COURT AND OUR ORAL ARGUMENT CALENDAR FOR WEDNESDAY, NOVEMBER 7th. THE FIRST CASON OUR CALENDAR IS ESSEX INSURANCE COMPANY v. ZOTA. READY TO PROCEED?
YES, YOUR HONOR, I AM. AND I TAKE IT YOU'RE GOING TO DO 15 AND THEN DEFER FOR THREE AND 2 REBUTTAL IS THAT HOW THIS IS GOING TO WORK.
THAT'S CORRECT, YOUR HONOR.
OKAY.
MAY IT PLEASE THE COURT I'M DOUGLAS McINTOSH AND I REPRESENT ESSEX INSURANCE COMPANY. ESSEX INSURANCE COMPANY IS HERE BEFORE THE COURT ON FIVE QUESTIONS THE 11th CIRCUIT OF APPEALS HAS ASKED FOR AUTHORITATIVE QUESTIONS BEFORE THIS COURT.
LET'S GO CORRECTLY INTO DISCUSSING THOSE ON THE STATUTORY PROVISION AND ON THE QUESTION OF WHETHER THAT CHAPTER APPLIES TO SURPLUS LINES, HOW WOULD WE GET AROUND THE DECISIONAL BASIS IN THIS COURT? THIS SEEMS TO SAY THAT THAT ONE PROVISION WAS REGARDED -- WITH REGARD TO THESE STATUTES REALLY SHOULD BE READ AS PART NOT A CHAPTER. AND THEN ALSO THE ASPECT WITH REGARD TO OTHER PROVISIONS IN THE INSURANCE CODE THAT SPECIFICLY THEN EXCLUDE SURPLUS LINES FROM THOSE PROVISIONS AND BECOMES REDUNDANT SO COULD YOU HIT THOSE PRETTY QUICKLY.
YES, I CAN. THAT WOULD HAVE TO DO WITH THE FIFTH CERTIFIED AND QUESTION AND THAT HAS ADDRESSED THE DECISION THAT I THINK YOUR HONOR REFERENCES THAT WAS DECIDED BEFORE THE AMENDMENTS IN 1988 AND 1988 BY THE FLORIDA LEGISLATURE TO THE STATUTE IN QUESTION, 626. IN MUNARROW THE COURT FOUND THAT IN LOOKING AT THE, AT THAT TIME IT WAS A NONJOINDER STATUTE THAT APPLIED ARGUABLY TO ALL INSURERS IN THE STATE OF FLORIDA, THE PUBLIC POLICY AT THE SAME TIME UNDER SHINGLETON v. BUSY CASE LAW WHICH IS THEY SHOULD NOT BE JOINED IN CIVIL LAWSUITS BECAUSE OF THE PREJ JILSH EFFECT IT WOULD HAVE AND THAT WAS THE PURPOSE BEHIND THE NONJOINDER STATUTE AND IN THE MV CASE, THE COURT FOUND FAT THE NONJOINDER STATUTE SHOULD ONLY APPLY -- SHOULD APPLY TO ALL INSURERS AND NOT JUST TO THE ADMITTED CARRIERS GOVERNED BY 627. AFTER MUNARRO THE LEGISLATURE HAD A CHANCE ON NOT ONE BUT TWO CHANCES TO ADDRESS THAT WITH RESPECT TO THIS STATUTE CHAPTER 626. NOW CHAPTER 626 IS CREATED FOR THE SPECIFIC PURPOSE OF SURPLUS LINES INSURANCE IN THIS STATE AND, THAT'S AN IMPORTANT POLL START GUIDANCE FOR THIS COURT IN THESE DECISIONS.
HOW DO YOU DEFINE SURPLUS LINES INSURANCE?
SURPLUS LINES INSURANCE IS A NONADMITTED CARRIER THAT FILLS THE GAP THAT IS NOT CARRIED BY ADMITTED CARRIERS IN THE STATE. IT IS A NECESSARY MARKET THAT IS PROVIDED TO THE CONSUMERS OF THE STATE OF FLORIDA UNDER THE AUSPICES OF THE FLORIDA SURPLUS LINES INSURANCE LAW SO THAT COVERAGES THAT CANNOT BE BOUND FOR PEOPLE THAT NEED THEM IN CATASTROPHIC MEDICAL MALPRACTICE NURSING HOME AND OTHER AREAS WHERE ADMITTED CARRIERS WILL NOT WRITE THE COVERAGE, THE SURPLUS LINES COVERAGE -- MARKET FILLS THAT GAP AND COMES AND IN PROVIDES THAT COVERAGE.
YOU ARE SAYING CHAPTER 626 REGULATES ONLY SURPLUS LINES INSURANCE?
CHAPTER 626 IS THE SURPLUS LINES LAW T. HAS OTHER AREAS, BUT THOSE ARE SURPLUS CARRIERS IN OTHER AREAS SUCH AS MARINE INSURANCE AND OTHER AREAS OF THE INSURANCE MARKET ITSELF, INSURED PLANS WHERE COMMERCIAL SELF-INSUREDS ARE GOVERNED BY THAT STATUTE.
SO NOTHING IN 627 IS APPLICABLE TO THE SURPLUS LINE INSURERS?
THERE ARE ONLY SEVERAL AREAS SUBSTANTIVELY WHERE 627 MAY BE DEEMEDS APPLICABLE AND THOSE AREAS DEAL WITH HOUSEKEEPING MATTERS. ONE IS THE AREA WHERE THE REPORTING REQUIREMENT FOR MEDICAL NEGLIGENCE EVENTS NEEDS TO BE GATHERED AS A, GATHERING POINT AND THAT SECTION OF THE STATUTE DOES APPLY TO SURPLUS LINES CARRIERS SO WHAT THE -- THAT WHEN THEY INSURE A MEDICAL NEGLIGENCE CLAIM AT CLOSURE OF THE CASE LOF THE DATA GETS INTO THE FLORIDA LEGISLATURE IN THE SPOT WHERE IT NEEDS TO GO.
WHERE IS THE LANGUAGE IN THAT SECTION THAT MAKES IT APPLICABLE TO SURPLUS LINE INSURERS WHERE NONE OF THE OTHER SECTIONS WOULD BE?
THE LEGISLATURE SPECIFICALLY PUTTING IN THE PHRASE SURPLUS LINES INSURERS IN THAT STATUTE IS WHERE IT WOULD APPLY. IN ANSWER TO CHIEF JUSTICE LEWIS'S QUESTION, THE, THE DIFFERENCE IS IN 88 WHEN THIS STATUTE, 626 WAS AMENDED THE FLORIDA LEGISLATURE SPECIFICALLY LEFT THE WORD CHAPTER OR PUT THE WORD CHAPTER IN WHEN IT ACCEPTED SURPLUS LINES INSURANCE FROM CHAPTER, FROM THE 627.
BUT THE, THE DECISION JUST THE YEAR BEFORE HAD INTERPRETED THAT TO MEAN ONLY AS TO THE RATES OR RATING, CORRECT.
THAT'S CORRECT SO THE LEGISLATURE IS PRESUMED TO KNOW OF THIS COURT'S DECISION UNDER THE LONG-STANDING DECISION AND IT HAS ACCEPTED TO KEEP THE STATUTE. IN 1990 WHEN IT TOOK PLACE, THEY DID IT AGAIN WHEN THEY MOVED US TO SECTION I BELIEVE 4 OF THE STATUTE IS PUT A MARINE INSURANCE CATEGORY IN, ONCE AGAIN, THEY LEFT THE WORD CHAPTER IN THE STATUTE. AND SO UNDER STRICT CONSTRUCTION OF STATUTORY LAW, THE LEGISLATURE IS CERTAINLY PRESUMED TO HAVE KNOWN OF YOUR DECISION AND INDEED DECIDED THAT THEY WANTED SURPLUS LINES INSURANCE EXCEPTED FROM CHAPTER 627.
GO AHEAD.
THANK YOU. I'M CONFUSED BY YOUR ARGUMENT THOUGH BECAUSE YOU SEEM TO SAY THAT 627021 SAYS THE CHAPTER DOES NOT APPLY TO SURPLUS LINES INSURANCE BUT THEN IN ANSWER TO JUSTICE QUINCE'S QUESTION I THINK YOU SAID THAT SOME SECTIONS DO APPLY TO SURPLUS LINES INSURANCESURANCE. IT SEEMS TO ME IT'S ALL OR NOTHING F. IT SAYS THIS CHAPTER DOES NOT APPLY TO IT, THEN NOTHING DOES.
WELL, I THINK THAT THAT IS CERTAINLY THE ARGUMENT THAT WE HAVE MADE IN THE AMEEKA HAS MADE, YOUR HONOR. JUSTICE CANTERO. THE ONLY TWO SECTIONS IN HONESTY TO THE COURT WHERE IT COULD POSSIBLY APPLY FROM A SUBSTANTIVE NATURE AND THERE ARE 25 TIMES IN THE STATUTE WHERE WE FOUND SURPLUS LINES IS MENTIONED. IT JUST ISN'T GOVERNED BY THE AMBIT OF 627. THE REGULATORY SECTIONS OF 627, ALL OF THE RATING AND CODELING SECTIONS OF 627, AND THE ONLY AREAS WHERE INTELLECTUALLY HONESTLY IT COULD POSSIBLY APPLY IS IN THOSE MINISTERIAL STATUTES WHERE THE LEGISLATURE WANTS INFORMATION REPORTED TO IT FOR INFORMATION GATHERING ON MEDICAL NATURE CLAIMS BECAUSE OF THE MEDICAL MALPRACTICE CRISIS THAT HAS BEEN SEVERAL DECADES OLD IN THE STATE.
ARE YOU -- BUT THE SECTION THAT SEEMS TO HAVE GOTTEN YOU AT THE FEDERAL DISTRICT COURT SPECIFICALLY APPLIES TO SURPLUS LINES COVERAGE, CORRECT?
THE 626922?
YES.
YES.
ALL RIGHT SO, I KNOW, AND I KNOW JUSTICE LEWIS ASKED YOU ABOUT THE, THE, THE BROADER QUESTION, BUT THAT STATUTE, THAT'S THE ONE THAT WE'VE GOT TO INITIALLY CONSTRUE BECAUSE THERE'S NO QUESTION THAT APPLIEDS TS TO SURPLUS LINES COVERAGE.
THAT IS CORRECT. THAT IS THE STATUTE THAT IS AT ISSUE.
AND YOUR POINT ON IT IS THAT FROM A MATTER OF STATUTORY CONSTRUCTION, THAT THE DELEGATION AND THE DUTY ONLY HAS TO DO WITH THE ISSUE AND NOT THE DELIVERY.
EXACTLY. YOUR HONOR, THAT'S CORRECT.
WHAT I'D LIKE -- WHAT I DON'T KNOW OR, OR, YOU KNOW, DIDN'T SEE IN THE RECORD IS THAT, AND THIS WAS REALLY A QUESTION FOR THE RESPONDENTS AS WELL IS THAT IT WOULD SEEM THAT AT THE VERY LEAST, EVEN IF THERE WAS TO BE A DUTY TO DELIVER, THERE WOULD HAVE TO BE A SHOWING, SOMEONE WOULD HAVE TO SHOW PREJUDICE FROM THE FAILURE OF DELIVERY. WAS THAT RAISED BELOW -- IS THAT, AND THAT'S NOT SOMETHING THAT'S WITHIN THE SCOPE OF OUR CERTIFIED QUESTION. BUT IT WOULD SEEM THAT THERE WOULD HAVE TO BE -- THAT THEY WOULD HAVE TO SHOW PREJUDICE.
ACTUALLY, YOUR HONOR, THAT IS CONSUMED WITHIN QUESTION NUMBER TWO BECAUSE IF THE DRUCONIAN MEASURE OF REQUIRING THE CARRIERS SOLUTIONS NOT TO APPLY, WHICH IS WHAT THE DISTRICT COURT BELOW FASHIONED. THE REMEDY WAS WE FIND NONDELIVERY, THEREFORE, YOU CANNOT STAND ON THE CLEAR SOLUTIONS IN YOUR POLICY. -- EXCLUSIONS IN YOUR POLICY. UNDER THE LONG-STANDING PRECEDENT OF THIS COURT A FROM THE LAST 20 YEARS FROM CROWN AND McBRIDE, THE ONLY WAY TO DO THAT IS THROUGH DOCKET OF A STOPPLE WHERE PREJUDICE INDEED IN ALL THE CASES MUST BE SHOWN TO THE INSURED. THE INSURED MUST BE PREJUDICE.
SO WHO HAS THE BURDEN OF PROVING PREJUDICE?
THE INSURED WOULD HAVE TO HAVE THE BURDEN TO SHOW PREJUDICE, AND THAT IS NOT IN THIS RECORD. THIS INSURED WAS NOT PREJUDICED IN THIS RECORD. INDEED, THE RECORD REFLECTS THAT ISDORA FARJI, THE --
KNEW WHAT HE WAS --
BUT AGAIN IF WE DECIDE TO INTERPRET THE -- DECIDE, DETERMINE THAT THE STATUTE IS TO BE INTERPRETED TO REQUIRE DELIVERY TO THE INSURED, THE ISSUE OF THEN PREJUDICE, THAT WOULD GO BACK TO, I MEAN, THAT'S NOT FOR THIS COURT NOW --
NO, I THINK THAT YOU WOULD NEED TO ADVISE IN AN AUTHORITATIVE MANNER IN THE 11th CIRCUIT WHETHER YOU FIND DELIVERY WAS REQUIRED AND I DON'T BELIEVE THAT IT IS UNDER THE LONGSTANDING LAW OF THIS STATE BUT IF YOU WERE TO FIND THAT DELIVERY WAS REQUIRED TO THE INSURED DIRECTLY BY THE SURPLUS LINES AGENT HERE, THEN YOU STILL NEED TO TELL THE 11th CIRCUIT BUT THE REMEDY FASHIONED BY THE U.S. DISTRICT COURT IS NOT COUNTENANCED IN ANY OF THE JURISPRUDENCE OF THE STATE OF FLORIDA INDEED IN THE FACTS OF THIS CASE THERE WAS NO PREJUDICE DEMONSTRATED, AND --
SHOW THAT THE POLICY WAS SENT TO THE AGENT -- THER OR THE PRODUCER AGENT, IS THAT CORRECT?
YES, INDEED, THE, WHAT'S CRITICAL HERE IS SURPLUS LINE --
THE POLICY, BUT IT WAS NEVER SENT TO THE LIGHTHOUSE INTERCOASTAL AND AVENTURA ADDRESS.
ACCORDING TO THEIR TESTIMONY, THAT'S CORRECT.
THEY DON'T HAVE A POLICY OF EVER DELIVERING IT TO THE INSURED?
BRANDON INSURANCE COMPANY, WHO IS THE RETAIL AGENT, THE AGENT OF LIGHTHOUSE TOICH TESTIFIED THROUGH FIG ROSAS THAT THEIR POLICY IS THAT THEY SEND IT TO AND INDEED HERE THEY TESTIFIED THAT WHEN THEY GOT IT SEVEN DAYS AFTER WE ISSUED THE POLICY, WE ISSUED IT ON OCTOBER 14th, THEY GOT IT OCTOBER 21st THEY CHECKED THE POLICY FOR ACCURACY, THE RETAIL AGENT, THEY CHECKED TO MAKE SURE THAT IT WAS THEIR CLIENT PURCHASED AND THEY TESTIFIED THEY SENT IT ON TO THEIR CLIENT. THEY HAD NO PROOF OF THAT BY -- BY WAY OF LETER.
BUT AGAIN, IT'S NOT AN ISSUE WHETHER IT WAS ACTUALLY DELIVERED, IT IS FRAUGHT FOR THIS COURT TO DETERMINE. BUT --
IN FACT,.
CURRENTLY, SO THEY DIDN'T GET THE POLICY UNTIL THE DAY AFTER THE ACCIDENT BECAUSE THEY CALLED AND ASKED TO SEE THE POLICY?
THAT IS THEIR TESTIMONY THAT THE FIRST TIME MR. FARJI SAYS HE SAW THE ACTUAL POLICY WAS WHEN HE CALLED TO GET IT FROM HIS AGE THNT DAY AFTER, WHO INDEED HAD THE POLICY.
DID HE TESTIFY THAT THE POLICY WASN'T WHAT HE EXPECTED TO BE?
NO, HE DIDN'T, YOUR HONOR, HE DID. TO THE CONTRARY HE TESTIFIED THAT THEE CHANGE SAID HIS SCHEME FROM BEING THE GENERAL CONTRACTOR ON THESE JOBS, THESE PEOPLE BUILD SPEC HOMES AND HE PUT HIS SON IN AS A GENERAL CONTRACTOR UNDER A OUTFIT CALLED BROWARD EXECUTIVE BUILDERS AND HE CHANGED HIS INSURANCE WHY? BECAUSE THE COST HAD GONE UP BUT HE CHANGED HIS INSURANCE AND DIRECTED HIS AGENT NOT TO GET WHAT HE PURCHASED IN YEARS PRIOR.
BUT IN YEARS PRIOR, THERE WAS DIRECT BUILDING GOING ON, SO THEY CHANGED THE SCHEME SO AND THIS IS WHAT IS SOMEWHAT PUZZLING TO ME IS THAT THEY CHANGED THE -- ACCORDING AS I READ THIS AND PLEASE CORRECT ME IF I'M WRONG AND THIS GOES TO THE PREJUDICE ASPECT, THEY CHANGED THEIR SCOPE OF HOW THEY DID BUSINESS AND SO THEY HAD OTHER PEOPLE DOING THE ACTUAL CONSTRUCTION. YET THEY GET A CGL POLICY THAT IF YOU INTERPRET DEVELOPER TO INCLUDE THESE PEOPLE, THEY PURCHASED NOTHING. BECAUSE I MEAN THAT'S REALLY WHAT IT IS. THIS IS A TOTALLY ILUSERY SITUATION. AND THEIR A DEVELOPER AND THEY GET LIABILITY POLICY THAT EXCLUDES DEVELOPERS, WHAT DID THEY BUY?
NO IN ENACT WHAT THEY DID BUY IS COVERAGE BY THE COMBINATION ENDORSEMENT WOULD'VE PROVIDED THEM COVER FPBLG UNDER THE EXCEPTION TO THE EXCLUSION THEY HAD REQUIRED THEIR SURCONTRACTERS TO PURCHASE LIKE CERTIFICATES OF INSURANCE FOR THEMSELVES ON THE JOB AND THEN THEY QUALIFY FOR THE COVERAGE --
BUT THEN THAT WENT BACK TO THEN YOU HAVE TO DO SOMETHING ELSE BESIDES THIS INSURANCE AND IT'S A VICIOUS CIRCLE S. THERE AN ISSUE WITH REGARD TO WHETHER THESE EXCLUSIONS WERE ACTUALLY DELIVERED BECAUSE IT SEEMS TO MENTION THAT IT DIDN'T SURFACE UNTIL AFTER THE LAWSUIT WAS FILED IN THE FEDERAL COURT AND THERE WAS A JUDGMENT ON THE PLEADINGS, IS THAT THE CORRECT? --
THAT WAS RAISED BY THE RESPONDENTS BELOW. IN FACT THE RECORD REFLECTS THAT WITH THE FIRST RESERVATION OF RIGHTS WHEN ESSEX, IT FAILED TO INCLUDE THE COMBINATION GENERAL ENDORSEMENT IN THE POLICY, HOWEVER, THE POLICY THAT WENT FROM THE AGENT TO MR. FARJI INDEED HAD THE COMBINATION GENERAL ENDORSEMENT.
AND THAT'S CLEAR FROM THIS RECORD?
I BELIEVE IT IS, YOUR HONOR. BUT MOST IMPORTANT ON THAT ISSUE IS THE COURT CANNOT LOSE SIGHT OF THE FACT THAT THIS INSURED TESTIFIED AND IT IS REFLECTED IN THIS RECORD ABENEFITENEDLY, HE REQUIRED CERTIFICATES OF INSURANCE FROM ALL OF HIS SUBS BEFORE THEY SET FOOT ON THIS PROJECT AND THIS JOB. WHY? BECAUSE HE WAS AWARE OF THAT CONDITION IN THE POLICY AND THAT EXCEPTION TO THE EXCLUSION IN ORDER TO GET COVERAGE WHEN HE ACTED --
ARE YOU SAYING THEN THAT YES THIS LIGHTHOUSE DID REQUIRE WHAT IS, IS REQUIRED OF THE POLICY BY THE POLICY AND ACTUALLY THAT HAPPENED AND THAT'S IN THE RECORD.
IT DID NOT HAPPEN WITH THIS ONE SUB, MS. ZOTA AND BEACHY -- LICHEE IS THE ONLY PERSON HE DID NOT GET A CIRCUIT OF COMPLIANCE FROM AND THAT IS IN THE RECORD CLEARLY.
YOUR TIME IS FLEETING. EXPLAIN TO US IF YOU WOULD YOUR POSITION ON THE INSQLRD PARTYING BE AN 12567 -- INJURED PARTY BEING ON STATUTORY EMPLOYEE.
THAT WAS RAISED IN THE LOWER COURT IT WAS RISE RAISED AS A CIRCUMSTANCE FOR WORKERS' COMP IMMUNITY FROM SUIT. NUMBER TWO, --
CAN I ASK YOU A QUESTION JUST ABOUT THAT, AND I DON'T WANT TO IT SEEMS TO ME ESX WAS THE DEFENSE COUNSEL. THEY APPOINTED COUNSEL, DIDN'T THEY? SO THE INSURANCE COMPANY IS RAISING THEY ARE AN EMPLOYEE, WHICH THEN DESTROYS COVERAGE FOR THIS INSURER. THAT SURSURE SOUNDS LIKE A CONFLICT OR SMELLS LIKE A CONFLICT.
WITH ALL DUE RESPECT, JUSTICE LEWIS. THAT'S NOT THE CASE. THE TRIPARTIDE RELATIONSHIP OF FLORIDA IS VERY CLEAR. THE DUTIES OF MR. BOWMAN, APPOINTED DEFENSE COUNSEL ARE TO HIS DEFENDANT.
WAS HE HIRED BY ESSEX?
HE IS CERTAINLY HIRED BY ESSEX.
PLEASE GO AHEAD AND ANSWER JUSTICE LEWIS --
THAT'S QUITE ALL RIGHT. THE, THE EMPLOYEES EXCLUSION HAS BEEN RAISED BECAUSE THE TESTIMONY BELOW IS LIGHTHOUSE HIRED MS. ZOTA THROUGH THE PERLULEECHA, THE TRUMP OILS ARE US TO PAINT THIS MURL ON THE JOB. SHE WAS THERE UNDER CONTRACT CONTRACT BY LIGHTHOUSE INTERCOASTAL DIRECTLY. THEY AERTED -- ASSERTED SHE WAS A SUBCONTRACTOR.
WHAT IS YOUR POSITION? IS IT A QUESTION OF FACT?
I BELIEVE THAT IT WOULD HAVE TO FALL ON A QUESTION OF FACT ANALYSIS, YOUR HONOR, BECAUSE THERE HAS BEEN AN ASSERTION THAT SHE WAS AN INDEPENDENT CONTRACTER AND NOT AN EMPLOYEE FOR THE WORKERS' COMP IMMUNITY, AND THAT PROVISION OF THE POLICY TO APPLY.
BUT IF SHE'S AN INDEPENDENT CONTRACTOR, THEN STILLINIZE THE -- UNDER THE EXCLUSION, SHE WOULD HAVE TO HAVE HER OWN INSURANCE OR HAVE A POLICY THAT WAS EQUAL TO THE POLICY THAT LIGHTHOUSE HAD?
YES. NORMALLY WHAT WOULD HAPPEN IS THE SUBCONTRACTSER TOLD BEFORE YOU GET ON THE JOB YOU MUST HAVE INSURANCE THAT'S SIMILAR TO WHAT WE HAVE IN PLACE AND SHOW ME A CERTIFICATE THAT SHOWS US AS A CERTIFICATE HOLDER ON THAT POLICY.
WHAT KIND OF INSURANCE IS REQUIRED? LIABILITY INSURANCE.
CGL LIABILITY.
WHAT IF THE CONTRACTOR HAS NO EMPLOYEES. APPARENTLY THIS PERSON WAS JUST A PAINTER.
THEY WOULD HAVE TO AND CAN GO OUT AND PURCHASE THAT INSURANCE ON MANY TIMES SPOT BUILDER RISK POLICIES DO APPLY TO THOSE AND IN FACTB IN THIS CASE A SPOT BUILDERS RISK POLICY WAS PURCHASED BY LIGHTHOUSE AS A CONTRACTOR. YOU CAN'T OVERLOOK THAT IN THE RECORD AS WELL FOR THIS HOUSE. OFTEN TIMES THOSE INDEPENDENTS WILL BE ABT TO GET THAT COVERAGE GET ON THE JOB OR SOMETIMES THEY ARE PUT UNDER WHAT IS CALL ADWRAP UP POLICY OR OTHER TYPES OF POLICY WHERES THEY MAY BE INCLUDED ON THE COVERAGE.
I'M ONLY SMILING ON THIS ONE BECAUSE SHE WOULDN'T BE ABLE TO -- SHE WOULDN'T GET COVERAGE -- I MEAN IF SHE'S SUING LIGHTHOUSE FOR THEIR LIABILITY, HOW WOULD HER, HER HAVING COVERAGE HELP HER OR OR ESSEX? WELL, IT WOULD BE EXCLUDE SAID BECAUSE SHE CAN'T SUE HERSELF UNDER WORKERS' COMP IMMUNITY. YOU'RE CORRECT. YOU'RE CORRECT. THE ONLY THING THAT HAPPENS IS LIGHTHOUSE BECOMES AN ADDITIONAL INSURED UNDER HER POLICY FOR ITS EXPOSURE WHEN THEY OBTAIN CERTIFICATES OF INSURANCE FOR THEIR NEGLIGENCE CAUSE TO OTHERS ON THE JOB. SO IF THEY COMMIT A NEGLIGENT ACT AND HARM OTHERS, THEN THE COVERAGE APPLY!!IES AND THAT'S THE PURPOSE BEHIND THE CGL COVERAGE. I SEE MY TIME IS UP. I THANK YOU THE COURT VERY MUCH. WE BELIEVE YOU SHOULD ANSWER THE FIRST TWO QUESTIONS IN THE NEGATIVE, THE SECOND TWO IN THE AFFIRMATIVE AND THE LAST IN THE NEGATIVE ON REMAND TO THE 11th. THANK YOU.
MAY IT PLEASE THE COURT. MICHAEL BILL MIRE APPEARING ON BEHALF OF THE FLORIDA SURPLUS LINES OFFICE. IT'S OUR --
PULL YOUR MICROPHONE UP A LITTLE BIT.
IT'S OUR POSITION THAT THE LEGISLATURE INTENDED TO INCLUDE SURPLUS LINES INSURANCE FROM ALL OF CHAPTER 627 ON THE STATUTORY AMENDMENT THAT WAS DISCUSSED EARLIER IN 1988. CAME OUT OOPHORYOUR NATIONAL CORPORATION OF --
BUT THERE'S ALSO A LINE OF STATUTORY CONSTRUCTION THAT WOULD SAY THAT THE LEGISLATURE ACTS WITH AWARENESS WITH THE WAY THAT WE HAVE CONSTRUED THAT AND IF THEY WANTED TO CHANGE THAT IN SOME WAY, THEY WOULD'VE DONE SOMETHING DIFFERENT, THOUGH, ISN'T THERE.
WHAT THEY DID IS THEY HAD A BILL IN FRONT OF THEM THAT SPECIFICALLY SAID THIS CHAPTER DOES NOT APPLY TO AND THEY ADDED THE LANGUAGE SURPLUS LINES, SURPLUS LINES INSURANCE PLACEDDINATE THE -- UNDER THE PROVISION 326963, 967. THEY CLEARLY USED THE WORD CHAPTER. THEY GET SHOWN IN 1982 WHEN THEY ALSO AMENDED 627.021, THEY ADDED PARAGRAPH 4, WHERE THEY EXCLUDED HEALTH INSURANCE FROM PART 1 OF CHAPTER 627. SO THEY -- IT'S BEEN CLEAR AT LEAST IN THE 80s AND BEYOND THAT THE LEGISLATURE HAS UNDERSTOOD THE DIFFERENCE BETWEEN CHAPTER AND PART. AND THEY --
WHY DID THEY IN OTHER PLACES THEN EXCLUDE SURPLUS LINES AGAIN? JUST, JUST REDUNDANCY? THROUGHOUT, THROUGHOUT THE, THE, THE INSURANCE CODE'S VERY, VERY, VERY LENGTHY AND WE GOT DIFFERENT PARTS AND SO WHY -- THERE ARE OTHER PLACES ARE, THERE NOT, WHERE SURPLUS LINES HAVE BEEN EXCHROODED FROM WHATEVER, SO THIS IS JUST REDUNDANCIES IN THE STATUTORY SCHEME WHERE THE LEGISLATURE ALSO SAYS THAT AFTER THIS PARTICULAR STATUTE?
THERE IS ONE SECTION IN 627 WHERE THEY SPECIFICALLY EXCLUDE SURPLUS LINES IN 627 AND I BELIEVE THAT'S JUST REDUNDANCY.
WHAT ABOUT YOUR COLLEAGUE'S PARENT CONCESSION THAT THERE ARE PARTS OF 627 THAT NECESSARILY DO APPLY TO SURPLUS LINES CARRIERS?
IT SEEMS TO CONTRADICT WHAT YOU SAY IS THE PLAIN LANGUAGE THAT NONE OF CHAPTER 627 APPLIES.
THERE ARE TWO SECTIONS IN 627 THAT APPEAR TO CONFLICT WITH THAT, WHERE THEY, THEY SPECIFICALLY, THE CLOSED CLAIM STATUTE SPECIFICLY TALKS ABOUT SURPLUS LINES INSURERS AND THAT APPEARS TO BE A CONFLICT WITH THE PLAIN LANGUAGE OF 627021.
ISN'T THAT SPECIFIC EVIDENCE THAT THE LEGISLATURE INTENDED TO SAY ONLY THIS PART, NOT THE ENTIRE CHAPTER, AND CERTAINLY DOESN'T SEEM TO BE UNDER OVERRIDING EVIDENCE TO OVERRULE THE MUNARRO CASE.
I DON'T THINK YOU HAVE TO OVERALL. THAT CASE WAS SPECIFIC TO THE MARINE EXCLUSION THAT WAS PASSED AT THE SAME TIME THE, THE PREDECESSOR OF THE STATUTORY REVISION REWROTE THE LAWS OF FLORIDA INTO THE FLORIDA STATUTES. SINCE THEN, IN 1988, IS WHEN THE LEGISLATURE ADDED THE SURPLUS LINES EXCLUSION. I THINK THAT IS A, THAT'S A SEPARATE ISSUE. IF THE LEGISLATURE HAD INTENDED FOR OTHER PARTS OF 627 TO BE INCLUDED, THEY COULD'VE SPECIFICALLY SAID SO AS THEY MIGHT'VE -- AS THEY APPEARED TO HAVE DONE IN THE CLOSED CLAIM STATUTE. THEY DID NOT DO THAT. IF YOU WERE TO ALLOW 627 TO APPLY TO SURPLUS LINES, YOU WOULD SUBJECT THE SURPLUS LINES INDUSTRY TO FORM REGULATION, WHICH THEY HAVE NEVER BEEN SUBJECTED TO. THE OFFICE OF INSURANCE REGULATION DOES NOT --
THE ONLY REASON WE'RE EVEN DISCUSSING THIS ISSUE IS BECAUSE OF THE ATTORNEYS' FEES PROVISION IN 627.428 S. THAT RIGHT?
YES, THE ISSUE --
THAT'S THE ONLY --
IS 428.
THE ONLY SECTION THAT WOULD POSSIBLY APPLY TO THIS CASE?
THERE ARE TWO SECTIONS -- IT'S 627.428 AND THERE'S ANOTHER SECTION OF 627 THAT THE COURT ASKS YOU --
THE 428. THE ATTORNEYS' FEES PROVISION, RIGHT?
I BELIEVE THE DISTRICT COURT ASKED YOU --
THE DELIVERY. THE ISSUE ON --
DELIVERY.
627.421.
WITH YOUR ASSISTANCE, YOU HAVE EXHAUSTED BL -- OUR ASISTENCE, YOU HAVE EXHAUSTED ALL OF YOUR TIME. THANK YOU VERY MUCH.
GOOD MORNING. MAY IT PLEASE THE COURT. MICHAEL KAPLAN ON BEHALF OF THE LIGHTHOUSE INTERCOASTAL EXECUTIVE BUILDERS AND JACK FARJI.
NOW LET ME ASK YOU A COUPLE QUESTIONS FROM IT.
OKAY.
LET'S ASSUME WE AGREE THE STATUTES ARE APPLICABLE AND REQUIRE SOME DELIVERY. THE REMEDY SITUATION, IT SEEMS TO ME IS THAT WE HAVE A REAL PROBLEM WITH THAT BECAUSE IF IT'S NOT DELIVERED, THERE'S ANY DISPUTE AT ALL ON THIS CASE THAT THIS IS WHAT THE POLICY IS OR THAT THEY SOMEHOW FINAGLED A DIFFERENT POLICY.
NO, I THINK THE POLICY --
IT IS WHAT IT IS.
IT IS WHAT IT IS.
WELL THEN HELP ME UNDERSTAND WHY IT IS YOU CAN'T ENFORCE THE POLICY AS IT IS OR READ THE POLICY AND THIS IS THE POLICY THAT APPLIES? NUMBER ONE, THAT'S THE FIRST QUESTION.
OKAY. I BELIEVE WHAT THE COURT NEEDS TO DO IS, IS A BALANCE OF EQUITY. WE HAVE A SITUATION HERE WHERE THE INSURED NEVER RECEIVED THEIR POLICY. THEY ARE NOT PUT ON NOTICE OF ANY EXCLUSIONS THAT MAY APPLY.
WELL, THAT'S ASSUMING THAT IT HAS TO BE DELIVERED TO THE INSURED AND THAT THE AGENT, THE PRODUCING AGENT IS NOT SUFFICIENT.
CORRECT.
OKAY.
CORRECT.
AND IT'S YOUR POSITION THEN THAT IF THE POLICY IS NOT DELIVERED TO THE INSURED, THEN THERE CAN BE NO EXCLUSIONS TO THE POLICY?
YES. THAT IS OUR POSITION. TLGD BE UNJUST, AND I BELIEVE THAT WAS THAT THAT WAS THE COURT'S PRIOR HOLDING THAT AN? JUSTICE MAY OCCUR, A FRAUD OR INJUSTICE MAY OCCUR --
BUT THERE IS ALSO --.
THERE WOULD BE NO REMEDY.
BUT THOSE CASES SAY YOU CAN'T HAVE COVERAGE WHERE NONE EXISTS.
THAT'S THE AIU CASE, I UNDERSTAND -- I'M AWARE OF THAT AND I THINK THE AIU CASE, THE DISTINCTION IS THAT IN THAT CASE, THE INSURED WAS AWARE OF THE EXCLUSIONS IN THE POLICY.
I HAVE A REAL PROBLEM WITH YOUR POSITION. I MEAN, I HAVE TO SAY, AND FIRST I HAVE A PROBLEM THAT I DON'T SEE HOW THE, THE DISTRICT COURT GOT TO THE INTERPRETATION, FRANKLY. I MEAN IT SEEMS CLEARLY THAT IT SAYS THE AGENT MAY NOT DELEGATE THE DUTIES AT ISSUE, AND THEY USE ISSUE AND DELIVER IN EVERY KIND OF STATUTORY CONSTRUCTION TELLS ME THAT THAT APPLIES TO ISSUE NOT DELIVER. OBVIOUSLY THOUGH, THE INSURED SHOULD GET A POLICY, BUT IT IS INAGENT, THERE IS NO QUESTION BUT THAT THE AGENT GOT TWO COPIES OF THE POLICY. NOW IF YOU SAY SIMPLY THAT IF THERE ARE EXCLUSIONS IN THERE THAT IF IT'S NOT DELIVERED THEY'LL TAKE ADVANTAGE OF THE EXCLUSION, THAT LEAVES OUT THE FACT OF SOMEONE BEING ABLE TO ESTABLISH THAT YOUR CLIENT KNEW BASED ON ALL THE OTHER POLICIES HE OR SHE HAD RECEIVED HE -- THAT THERE RUR EXCLUSIONS SO I DON'T SEE HOW THERE IS JUST A PER SE RULE IN ANY OF OUR CASES THAT ALLOW AUTOMATICALLY COVERAGE AND NO DEFENSE TO COVERAGE SIMPLY BY THE FACT OF NONDELIVERY. THERE WOULD HAVE TO BE SOMETHING ELSE THAT YOU WOULD HAVE TO ESTABLISH.
OKAY AND IT MAY BE MORE ON A CASE-BY-CASE RR BASIS. IT MAY BE SPECIFIC TO THE FACTS OF THIS CASE WHERE WE TALK ABOUT LIGHTHOUSE INTERCOASTAL'S POLICY --
THAT -- IT SEEMS TO ME THAT THE 11th CIRCUIT IS ASKING SPECIFIC EXCEPTIONS ABOUT STAT -- QUESTIONS ABOUT STATUTORY CONSIDERATION AND IF WE WOULD SAY THE APPROPRIATE REMEDY IS ON A CASE-BY-CASE BAIZE, WELL THEN IT GOES BACK TO DECIDING ON A CASE-BY-CASE BASIS WHETHER THERE IS PREJUDICE. WE CAN'T -- OR I DON'T THINK THE 11th CIRCUIT WOULD EXPECT US TO ASK THESE FACT SPECIFIC QUESTIONSANE CASE COMING FOR DETERMINATIONS OF LAW.
WE HAVE SEEN IT IN CASES BEFORE WHERE THE INSURED WAS NOT GIVEN THE EXCLUSIONS TO THE POLICY AND THE COURT THERE DID NOT EVEN THE INSURANCE CASE AND THE THE INSURANCE CASE, NEITHER OF THE CASES CONSIDERED CREATING COVERAGE OR CONSIDERED THE -- CASE.
LET ME GO BACK TO A QUESTION THAT YOU ANSWERED TO BOTH ME AND JUSTICE LEWIS. LET ME UNDERSTAND. WE ASKED IS THIS THE POLICY YOU CONTEMPLATED. YOU SAID YES BUT ARE YOU SAYING YOUR INSURED DIDN'T CONTEMPLATE THERE WOULD BE SPECIFIC EXCLUSIONS AND EXCEPTIONS? I MEAN, EVERY POLICY HAS EXCLUSIONS AND EXCEPTIONS. I MEAN, THIS IS A SOPHISTICATED BUSINESS PERSON. SO EXPLAIN THAT ONE.
JUSTICE PARENTY, MAYBE I MISCONSTRUED CHIEF JUSTICE LEWIS'S QUESTION, I MEAN, THERE WERE SOME, DISCUSSION WITH MR. McINTOSH CERTAIN PORTIONS OF IT WEREN'T ATTACHED TO THE CBLANT AND THERE WAS JUDGMENT ON THE PLEADINGS. THE POLICY, THE POLICY THAT CAME AND THE POLICY THEY HAVE ATTACHED IS THE POLICY WE UNDERSTAND NOW TO BE THE POLICY BUT WE WERE CERTAINLY NOT AWARE OF THE EXCLUSION TO THE POLICY PRIOR TO THE ACCIDENT AND THE COVERAGE THEY THOUGHT THEY WERE GETTING WAS AS AN OWNER TO THE PREMISE IS. THERAPY AN OWNER. THEY HAD CHANGE IN THEIR BUSINESS PRACTICES. THEY HADDA NEW CORPORATION WITH ITS OWN INSURANCE THAT WAS A LICENSED CONTRACTOR AND LIGHTHOUSE INTERCOASTAL TOOK ON A NEW ROLE SIMPLY AS AN OWNER.
SO ARE YOU -- ARE YOU ALLEGING THEN THAT THE AGENT, EAR BROKER, -- OR BROKER FOR LIGHTHOUSE, DID THEY TESTIFY OR, OR GIVE ANY KIND OF DEPOSITION THAT WHEN THEY RECEIVED THE POLICY, THESE EXCLUSIONS WERE NOT A PARPART OF IT?
I BELIEVE --
ARE YOU MAKING THAT KIND OF ALLEGATION.
NO. NO.
SO DON'T YOU GET BACK TO THE WHOLE QUESTION THAT THIS WAS THEIR AGENT. SO THE POLICY WAS DELIVERED TO THEM. THE AGENT SAYS THIS WAS THE POLICY THAT WE WERE EXPECTING. I'M, I'M STILL AT A LOSS AS TO WHAT IT IS YOU ARE TRYING TO SAY ABOUT THESE EXCLUSIONS.
WELL, WHAT WAS TRANSLATED FROM BRANDON TO McDUFF WAS THAT CERTIFICATES OF INSURANCE WERE OBTAINED. THAT WAS THE BUSINESS PRACTICE WAS TO HAVE SUBCONTRACTORS THAT WERE COMING ON TO THE PROPERTY HAVE CERTIFICATES OF INSURANCE. BUT THE ESSEX POLICY GOES BEYOND THAT. THAT ENDORSEMENT GOES BEYOND THAT. IT'S NOT JUST THAT THE SUBS HAVE CERTIFICATES THAT THEY HAVE INSURANCE. THEY'RE ALL SUPPOSED TO NAME LIGHTHOUSE INTERCOASTAL AS AN ADDITIONAL INSURED ON THEIR POLICIES.
JUSTICE WELLS HAS A QUESTION.
THE BASIC SITUATION HERE, ISN'T IT THAT FLORIDA LAW, CASES OUT OF THIS COURT HAVE HELD DELIVERY TO AN AGENT OF THE INSURED OR A BROKER IS SUFFICIENT FOR, FOR DELIVERY PURPOSES, CORRECT? THAT'S WHAT THE CASE LAW HAS BEEN?
CASE LAW AND I BELIEVE THE SEMINOLE CASES, THE JEFFERSON CASE, JEFFERSON STANDARD LIFE INSURANCE, BUT IN THAT CASE, THE COURT FOUND THAT THE SOLICITING AGENT WAS AUTHORIZED --
WE ALSO --
-- TO DELIVER THE POLICY.
WE ALSO HELD THAT IN OUR RLI INSURANCE CASE. THAT'S BEEN A STANDARD OF FLORIDA LAW. AND SO THE ONLY WAY THAT YOU CAN GET AROUND THAT IS IF THERE IS A CLEAR STATUTORY DIRECTION THAT OVERTURNS THAT. LAW. AND SO I THINK THAT WHERE I'M, I DON'T SEE HOW THE STATUTE GETS THERE.
I THINK 626.922 GETS THERE.
BUT THAT IS ISSUANCE --
I, I --
ON DELIVERY.
I THINK IT GOES TO DELIVERY AS WELL BECAUSE THE LAST SENTENCE OF THAT SECTION THAT WE FOCUS ON IS THAT THE SURPLUS LINES AGENT HAS TO KEEP COPIES OF THE WRITTEN DELEGATION AND THEN THEY GIVE IT TO THE PRODUCING AGENT AND THE PRODUCING AGENT HADS TO KEEP COPIES OF CERTIFICATE OF INSURANCE THAT IT ISSUES OR DELIVERS AND IT HAS TO KEEP COPIES OF THE WRITTEN DELEGATION. THAT'S ALL IN THAT ONE SENTENCE IT TIES IN THE DELIVERY OF THAT PART THAT THE PRODUCING AGENT MUST MUN TAIN -- MAINTAIN WRIBS OF THE DELEGATION AND COPIES OF INSURANCE THAT IT ISSUES OR DELIVERS.
LET ME JUMP WAY AHEAD TO THE QUESTION 4 ON THE EMPLOYEE IS IT YOUR POSITION THAT IT'S A FACT QUESTION.
IT IS OUR POSITION THAT SHE IS NOT AN EMPLOYEE AT ALL AND THAT ESSEX IS CLAIMS ADMINISTRATOR WHOSE DEPOSITION WAS TAKEN TESTIFIED THAT SHE'S NAT AN EMPLOYEE ON THE FALLACY --
HOW -- THE LIGHTHOUSE IS NOT A STATUTORY EMPLOYER. SHE'S A SUB--
I THINK THAT WAS AN AFFIRMATIVE OFFENSE THAT COUNSEL RETAINED BY ESSEX WHO IS REPRESENTING LIGHTHOUSE INTERCOASTAL THROUGH IN THE MIX OF ALL THE OTHER AFFIRMATIVE OFFENSES THAT THEY PLED, BUT, THAT'S NEVER, THAT'S NEVER BEEN DETERMINED IN THE UNDERLYING CASE THAT SHE'S A STATUTORY EMPLOYEE. SHE'S NEVER MADE A WORKER'S COMPENSATION CLAIM. IT'S, SHE'S,.
THAT WOULD BE AN ISSUE OF LAW OR AN ISSUE OF FACT?
I THINK IT CAN BE DETERMINED EITHER WAY. ON THE FACT THAT WE HAVE TESTIMONY FROM ESSCPX SHE'S NOT A STATUTORY EMPLOYEE.
LET ME ASK A QUESTION BACK TO 626.922 ON YOUR DUTY TO ISSUE. DOES THAT STATUTE, ISN'T THAT DUTY TO ISSUE REFERING TO THE ISSUANCE OF THE POLICY NOT THE DELIVERY?
I THINK --
-- OF THE POLICY.
I BELIEVE IT GOES TO BOTH. THE FIRST SENT SENTENCE OF THE STATUTE SAYS THAT THE SURPLUS LINES MUST ISSUE AND DELIVER A POLICY TO THE INSURED. WHEN THAT STATUTE WAS AMENDED IN 1998 TSET FORTH A VERY SPECIFIC TRACKING SYSTEM OF REG YLTHING WHO IS DELIVERING THE POLICY AND WHO IS ISSUING IT. IT TALKS ABOUT THE SURPLUS LINES AGENT TO GET PERMISSION FROM THE INSURER TO ISSUE THE POLICY T. TALKS ABOUT THE SURPLUS LINES AGENT GIVE AGWRITTEN DELEGATION TO THE PRODUCING AGEANT AND THEN THE LAST SENTENCE THAT TIEATHIZE ISSUING PROCESS TOGETHER ALSO CONTAINS A DELIVERY REQUIREMENT THAT THE PRODUCING AGENT MAINTAIN WRITTEN COPIES OF THE WRITTEN DELEGATION AND ANY COPIES OF EVIDENCE OF INSURANCE THAT IT ISSUES OR DELIVERS T. TIES IN THE DELIVERY REQUIREMENT TO THE DELEGATION PROCESS THAT IS GOING ON IN THAT STATUTE. YOU'RE BEYOND YOUR TIME IF YOU ARE SAVING TIME FOR YOUR CO-COUNSEL.
YES. THANK YOU.
MAY IT PLEASE THE COURT. MATT WEISSING HERE. I HAVE THREE MAJOR POINTS I AM GOING TO DIRECT TO TODAY. NUMBER ONE, MERCEDES SWROETO WAS OUT THERE WAS -- ZOTA WAS OUT THERE AS A DIRECTOR PAINTER. THIS CONSTRUCTION ON THE CONSTRUCTION SITE ON THE BUILDING OF THE HOUSE HAD BASICALLY BEEN COMPLETED, THAT THE UNREBUTTED TESTIMONY IS THAT ALL THAT WAS GOING ON WAS DOWNSTAIRS THERE WAS SOME PUNCH WORK GOING ON. SOME, SOME SOME COSMETIC WORK GOING ON AND THAT SHE WAS BROUGHT IN BY THE OWNER --
THAT POINT IS THAT SHE IS NOT AN EMPLOYER -- EMPLOYEE.
TWO POINTS. NUMBER ONE IS WHO'S THE CONTRACTOR, WHO'S THE OWNER. THIS CASE LIGHTHOUSE INTERCOAST SL CLEARLY THE OWNER.
WE CAN'T ANSWER OR SHOULD NOT ANSWER THAT QUESTION IN THIS COURT.
I UNDERSTAND, YOUR HONOR.
I MEAN, THAT SHOULD GO BACK TO THE DISTRICT COURT TO MAKE THOSE DETERMINATIONS. MAYBE THERE'S COVERAGE. BUT THAT'S NOT WHY THE 11th CIRCUIT ASKED US TO LOOK AT THIS CASE.
WELL, THIS GOES TO CERTIFICATED QUESTION NUMBER THREE, WHETHER OR NOT THIS, THIS EXCLUSION EXISTS OR, OR IS ENFORCEABLE.
I THOUGHT IT WAS TO NUMBER FOUR, WHETHER ZOTA'S AN EMPLOYEE OF LIGHTHOUSE UNDER THE POLICY?
UNDER NUMBER FOUR, WHETHER OR NOT HES SHE'S AN EMPLOYEE OF LIGHTHOUSE, THE VICE PRESIDENT IN CHARGE OF CLAIMS FOR ESSEX INSURANCE COMPANY HAS TESTIFIED THAT SHE DOES NOT MEET THE DEFINITION OF EMPLOYEE --
WHY DID THEY CERTIFY THE QUESTION THEN IF THERE'S NO ISSUE? WHY DID THEY CERTIFY THIS QUESTION US TO -- TO US. THEY WOULD ANSWER IT THEMSELVES.
THEY CAN'T --
IS IT SOME?
I WOULD LIKE TO TALK TO THEM DIRECTLY.
IS THERE SOME AREA OF FLORIDA LAW THAT'S UNCLEAR ON THE ISSUE OF WHETHER SHE'S AN EMPLOYEE THAT WOULD REQUIRE THE 11th CIRCUIT TO CERTIFY THAT QUESTION? TO THE ONLY THING THEY MAY BE THINKING IS WHETHER OR NOT A WORK COMP STATUTORY EMPLOYEE EMPLOYER DEFINITION COULD BE SOMEHOW BOOT STRAP UNDER TO THIS POLICY IGNORING THE DEFINITION IN THIS POLICY WHICH EXCLUDES HER AS ABEMPLOYEE. THAT'S THE ONLY THING THAT IMAGINE THEY WERE THINKING OF.
IS THAT MATTER BEING LITIGATED IN THE CIRCUIT COURT? IN OTHER WORDS, SOMEONE WAS SAID THAT LIGHTHOUSE HAS RAISED AN ISSUE THAT SHE WAS A STATSTORY EMPLOYEE. WHICH WOULD BE A DEFENSE IT WOULDN'T HELP LIGHTHOUSE IN THIS CASE BUT -- THIS IS KIND OF A STRANGE SITUATION THAT YOU HAVE THE FEDERAL DISTRICT COURT COVERAGE QUESTION BUT THEN YOU HAVE THE STATE COURT NENSH CASE. SO THERE -- NEGLIGENCE CASE SO THERE SOMETHING GOING ON IN TERMS OF THAT DEFENSE IN THAT CASE?
IN THE CIRCUIT COURT BROWARD COUNTY IN FRONT OF THE JUDGE, THEY HAVE FIRE ADBOILER PLATE IN FRONT OF THE DEFENSE. THERE HAS BEEN ABSOLUTELY NO EVIDENCE OF WORKERS' COMPENSATION IN THIS CASE.
IT WOULD SEEM TO ME THAT THAT WOULD BE THE PLACE THAT THERE WOULD BE THE RAISE IF SHE HAS TO BE -- BECAUSE SHE EITHER GETS WORKERS' COMP OR SHE'S, YOU KNOW,.
EVEN IF SHE DOES, THAT DEFINITION DOES NOT MEET THE DEFINITION OF THIS POLICY. ESSEX IS TRY FOR AN DEFINITION. BEYOND THEIR EMPLOYY AND WE ARE ASKING THIS COURT WHICH IS THE LAW IN THIS STATE THAT THE WRITER, THE PERSON WHO, THE INSURANCE COMPANY THAT WRITES THE POLICY IS BOUND BY THE TERMS OF WHAT THEY'VE WRITTEN IN THEIR POLICY AND THE TERMS THAT THEY HAVE WRITTEN IN THEIR POLICY DOES NOT INCLUDE A STATUTORY EMPLOYEE THE PRESIDENT OF CLAIMS HAS ADMITTED THAT THEREBY IN THEIR POLICY SHE DOES NOT MEET THE DEFINITION OF AN EMPLOYEE AND THEREFORE THAT ANSWER BE ANSWER TO THAT QUESTION.
SO THE SECOND POINT WAS ON THE THIRD CERTIFIED QUESTION ABOUT WHETHER LIGHTHOUSE IS THE BUILDER, CONTRACTOR, DEVELOPER?
THAT'S WHERE I STARTED, YES, MA'AM.
OKAY, NOW THAT, THE, THE THAT YOU DON'T SEE AS ALSO BEING A FACT -- SPECIFIC ISSUE AS TO, YOU KNOW, MAYBE THERE'S SOMETIMES A BUILDER, OWNER, QUESTION WAS ARE YOU SAYING THAT WHAT THEIR FUNCTION WAS AT THE TIME OF THE ACCIDENT WAS DETERMINE OF CLAUSE?
WELL, IN THE, AT THE DISTRICT COURT LEVEL, ESSEX ATTEMPTED A VERY EXPANSIVE READING BY SAYING, BY GOING AWAY FROM THE TERMS SAYING IF YOU ARE A BUILDER, CONTRACTOR, DEVELOPER, AND THEY STARTED TO TRY TO ARGUE WELL, IF YOU'RE ACTING AS. IN THE STATE OF FLORIDA, WE HAVE A HIGHLY STRUCTURED CONSTRUCTION INDUSTRY. IN THE STATE OF FLORIDA, YOU EITHER ARE OR YOU ARE NOT AT CONTRACTOR. TO BE A CONTRACTOR IN THE STATE OF FLORIDA, YOU ARE LICENSES, YOU ARE TRAINED. YOU HAVE EXPERIENCE.
LET'S GO BEYOND CONTRACTER AND BUILDER. LET'S GO TO DEVELOPER IS WHAT SHE'S ASKING ABOUT.
UNDER DEVELOPER WE HAVE VERY GOOD HELP FROM THE LEGISLATURE AND THAT COMES IN THE FORM OF A STATSTORY DEFINITION. WHICH IS A VERY GOOD PLACE TO BEGIN. AND THE STATUTORY DEFINITION UNDER 501.1375 IS A DEVELOPER EITHER MEANS A BUILDING CONTRACTOR, WHICH LIGHTHOUSE WAS NOT, WHO OFFERS NEW OR RESIDENTIAL UNITS FOR SALE OR ANY PERSON WHO OFFERS A NEW ONE OR TWO FAMILY DWELLING FOR SAIL EXCEPT FOR A PERSON WHO SELLS LESS THAN 10 UNITS PER YEAR STATEWIDE.
WHY WOULD WE NOT JUST USE A DICTIONARY DEFINITION OF DEVELOPER RATHER THAN GOING INTO STATUTORY.
WE CAN GO INTO THAT AS WELL.
BUT IF YOU LOOK AT DIFFERENT DICTIONARY DEFINITIONS, IT'S PRETTY BROAD FOR DEVELOPER.
YES, IT IS. SO THE QUESTION IS, WHERE YOU HAVE TWO OR MORE REASONABLE DEFINITIONS FOR A WORD THEN IT BECOMES AMBIGUOUS? WHERE IS AMBIGUOUS IT IS CONSTRUED STRICTLY AGAINST THE INSURANCE COMPANY.
WHAT IS THE STRICT CONSTRUCTION?
I'M SORRY?
WHAT IS THE STRICT CONSTRUCTION IN THIS CASE? WHAT IS THE DEFINITION THIS COURT SHOULD APPLY. THE STRICT -- YOU'RE SAYING ITS STATUTORY?
YOU CAN USE THE STATUTE. YOU CAN USE THE DEFINITION OUT OF OUT OF WEBSTER THIRD NEW INTERNATIONAL DICTIONARY, WHICH STATES THAT A DEVELOPER IS ONE WHO DEVELOPS REAL ESTATE OFTEN ONE THAT EM-- IMPROVES SUBSIDIZED LANDS AND BUILDS AND SELLS RESIDENTIAL STRUCTURES. LIGHTHOUSE. LIGHTHOUSE NEVER SUBDIVIDED LAND --
WRIGHT, I MEAN, WE UNDERSTAND. THEY TOOK OLD HOUSES, KNOCKED THEM DOWN OR HAD THEM KNOCKED DOWN, HAD OTHER PEOPLE BUILD THE McMANSIONS OR WHATEVER IT IS ON THEM. AND THAT'S WHERE WE ARE. AND IS THAT -- THAT'S PRETTY WELL STIPULATED, ISN'T IT.
ABSOLUTELY.
WELL, I DON'T UNDERSTAND THE BUSINESS DESCRIPTION, WHICH IS CONCEDED TO BE CORRECT SAYS OWNER OR LAND WHERE DWELLINGS ARE BEING BUILT. THIS WAS A VERY MINIMAL PREMIUM OF 1,000 $S. -- DOLLARS FOR THIS.
YES, MA'AM.
IT DOESN'T SEEM TO ME THAT THIS IS A CONTRACTOR'S LIABILITY POLICY, WOULD YOU AGREE WITH THAT.
ABSOLUTELY.
AND THEY WEREN'T ATTEMPTING TO GET A CONTRACTOR'S LIABILITY POLICY.
BECAUSE THEY WERE NOT A CONTRACTOR. THEY WERE NOT ATTEMPTING TO GET CONTRACTORSER'S LIABILITY. WE -- I STARTED THIS ARGUMENT BY POINTING OUT THAT MERCEDES ZOTA, THE CONSTRUCTION HAD BASICALLY BEEN COMPLETED. THE NEXT MONTH AFTER HER INJURY, THIS HOUSE WAS COMPLETED AND SOLD. IT WAS ALREADY THERE. PUNCH LIST THINGS GOING ON THE CONTRACTOR WAS OVERSEEING MEANWHILE THE HOMEOWNER AS THEY WILL DO IS BRINGING IN A DECORATOR AND SHE IS ON SITE IN THE HOMEOWNER TO DO DEATH TO PAINTING.
SO YOU THINK THE 11th CIRCUIT IS ASKING US TO DETERMINE THAT IT DEPENDS AS TO WHETHER LIGHTHOUSE WAS A BUILDER, CONTRACTOR, OR DEVELOPER AS TO WHEN IN THE COURSE OF BUILDING THE HOUSE THE BUILD AND YOU REALLY THINK AN INSURANCE COMPANY WOULD DEVELOP A POLICY THAT WHERE HAD DEPEND ON ONE MONTH THERE IS COVERINAGECLUDED AND THE NEXT MONTH THERE ISN'T? THAT DOESN'T MAKE -- DOES THAT MAKE SENSE TO YOU?
NO, IT DOESN'T, YOUR HONOR, AND THAT'S WHY I'M SAYING THIS WOULD EXCLUDE A BUILDER, CONTRACTOR, OR DEVELOPER. NONE OF WHICH LIGHTHOUSE INTERCOASTAL WAS. LIGHTHOUSE INTERCOASTAL WAS THE OWNER AND DID NOTHING MORE THAN AN ORDINARY RUNNER WOULD DO AFTER CONSTRUCTION IS COMPLETE AN ORDINARY OWNER WOULD BRING IN A DECK!!!!!!!! DECKERATOR TO DECORATE AND THAT'S WHAT THEY DID. THAT'S WHEN SHE GOT HURT.
BUT YOU AGREE THAT LIGHTHOUSE WAS IN THE BUSINESS OF NOT JUST OWNER PROPERTY BUT REFURBISHING IT, RECONSTRUCTING IT, AND THEN RESELLING IT?
THAT'S, THAT WAS THE PROCESS.
IT SEEMS TO BE MORE THAN JUST AN OWNER.
WELL, THEY WERE THE OWNER AND THEN THEY WOULD -- THEY WOULD RETAIN A, A,.
THAT SEEMS TO BE DEVELOPING PROPERTY.
I'M SORRY?
TO ME THAT SEEMS TO BE DEVELOPING PROPERTY. YOU'RE TAKING SOME PROPERTY. YOU'RE IMPROVING THE PROPERTY, AND THEN YOU'RE RESELLING THE PROPERTY AT A GREATER PRICE THAN YOU BOUGHT IT. FOR THAT SEEMS TO BE EXACTLY WHAT A DEVELOPER DOES.
WELL, UNDER -- I HAVEN'T SEEN THAT AS A DEFINITION, JUDGE, AND QUITE HONESTLY, I HAVE, WE HAVE SEARCHED FOR WHAT THE STATUTORY DEFINITIONS ARE --
WELL, YOU GO BACK TO THE STATUTORY DEFINITION, BUT IT SEEMS TO ME THAT STATUTORY DEFINITION APPLIES TO THINGS THAT THE STATUTE REG QLLTS THAT THE ENTIRE WORLD WHEN YOU ARE TALKING ABOUT DEVELOPER I DON'T SEE WHY WE ARE STUCK BY A STATUTORY DEFINITION WHEN YOU ARE NOT ARGUING THAT ANY PART OF THAT STOCHUTE APPLIES IN THIS CASE.
THAT'S WHEN WE GO TO THE -- DEFINITION FROM THE DICTIONARY, WHICH IS ONE WHO IMPROVES AND SUBDIVIDES LAND RIGHT OF WEBSTER'S THIRD NEW DICTIONARY AND THEN WE GET TO THE WINT CASE WHERE THEY SAY WHERE THERE ARE TWO OR MORE REASONABLE DEFINITIONS ONE OF WHICH WOULD LEAD TO COVERAGE AND ONE OF WHICH DOES NOT LEAD TO COVERAGE, THEN THE, THE TERMINOLOGY SHOULD BE CONSTRUED TO LEAD TO ONE THAT INCLUDES COVERAGE. THAT'S WHAT WE ARE ASKING THE COURT TO DO.
WITH THAT, YOU HAVE EXHAUSTED ALL OF YOUR TIME AS WELL.
THANK YOU, YOUR HONOR.
BRIEF REBUTTAL.
BRIEF.
MAY IT PLEASE THE COURT. YES IN REBUTTAL IN ANSWER TO JUSTICE PARIENTE. ANSWER TO THIRD QUESTION I THINK THE AUTHORITATIVE ANSWER THE 11th CIRCUIT IS LOOKING FOR FOR THIS COURT IS THAT THOSE TERMS ARE NOT AMBIGUOUS AS A MATTER OF FLORIDA LAW AND THAT QUESTION IS DIRECTLY AND FAIRLY ANSWERED BY THIS COURT. IN ADDITION IF YOU WANT --
WAIT A MINUTE. THAT'S NOT THE DEFINITION OF AMBIGUITY IN OUR LAW. IT IS AS THEY STATED, IS IT NOT? THAT IF A TERM CAN HAVE MORE THAN ONE MEANING IT IS DETERMINED TO BE ANNAL BIG WS. WHAT YOU JUST SAID IS NOT FLORIDA LAW, IS IT?
NO, THE FLORIDA LAW IS THAT IF IT IS FOUND TO BE NOT SUBJECT TO MORE THAN ONE MEANING, IT IS UNAMBIGUOUS. OUR POSITION IN OUR BRIEF IS THAT IT IS NOT UNAMBIGUOUS. INDEED THE DEVELOPER QUESTION BY JUSTICE CANTERO REFLECTS THAT T. COMES TO MIND THAT IF IT LOOKS LIKE A DUCK, WALKS LIKE A DUCK, AND QUACKS LIKE A DUCK, IT IS A DUCK AND THAT IS WHAT WE HAVE IN THE RECORD BY LIGHTHOUSE SURPLUS. THEY BOUGHT THE CONSTRUCTION GS, THEY PAID FOR THE CONSTRUCTION COSTS, THEY HIRED THE SUBS, THEY WOULDN'T LET THEM ON SITE --
WHAT IF THIS HAPTHENED DAY AFTER IT WAS COMPLETED? WHAT IF SHE CAME TO DO SOME TOUCH-UP WORK? ARE YOU SAYING EVEN THEN THE EXCLUSION WOULD APPLY?
THE EXCLUSION WOULD APPLY UNLESS THEY MEET THE EXCEPTION TO THE EXCLUSION AND HAD INSURANCE COVERAGE --
REALLY AGAIN MAYBE THIS GOES BACK TO WHAT JUSTICE LIEUESS SAYS. IT SEEMS TO ME ITS ILUSERY COVERAGE THAT THEY DIDN'T --
IT'S NOT ILUSEY IF SHE CAME AND IN WASN'T WORKING, IF SHE CAME AS A VISITOR SLIPPED AND FELL OVER A THRESHOLD AS A VISITOR MIGHT BE VISITING THE HOME AS, AS A PURCHASER. THAT'S WHERE THE COVERAGE MIGHT --
THEY'RE A BUILDER, CONTRACTOR, DEVELOPER, THERE'S NO COVERAGE.
-- THAT'S RIGHT IF THEY ARE IN THE ACTIVITY OF BUILDING, CONTRACTOR, OR DEVELOPING.
SO IT TIES INTO WHAT THEY ARE DOING AT THE TIME.
IT DOES. IF DOES. WELL THAT SEEMS TAME A FACTUAL.
THE FACTUAL DETERMINATION IS THERE, BUT I THINK THIS COURT NEEDS TO FIND THAT THERE IS NO QUESTION OF AMBIGUITY OF LA.
WITH THAT, MR. McINTOSH YOU ARE FAR EXCEEDED YOUR TIME.
THANK YOU VERY MUCH FOR YOUR ENLIGHTENING ARGUMENTS. WE WILL TAKE YOUR CASE UNDER ADVISEMENT.