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Filing # 126642684 E-Filed 05/12/2021 10:38:15 AM
IN THE CIRCUIT COURT OF THE 11TH
JUDICIAL CIRCUIT IN AND FOR MIAMI-
DADE COUNTY, FLORIDA
JOHN HUGHES, III, as Receiver of
FLICKER CONSTRUCTION, INC.,
Plaintiff,
v. CASE NO.: 2019-003916-CA-01
ROMAN FLICKER and MID-CONTINENT
CASUALTY COMPANY,
Defendants.
/
PLAINTIFF’S RESPONSE IN OPPOSITION TO
DEFENDANT MID-CONTINENT CASUALTY COMPANY’S
(1) MOTION FOR RECONSIDERATION OF ORDER GRANTING PLAINTIFF’S
MOTION FOR PARTIAL SUMMARY JUDGMENT ON THE DUTY TO DEFEND, AND
(2) RENEWED CROSS-MOTION FOR SUMMARY JUDGMENT ON THE DUTY TO
INDEMNIFY
Respectfully submitted by:
BRANDON G. CATHEY
Florida Bar No.: 941891
BRENT G. STEINBERG
Florida Bar No.: 0085453
DANIEL L. GREENE
Florida Bar No.: 1003266
SWOPE, RODANTE P.A.
1234 E. 5th Ave.
Tampa, Florida 33605
Tel: (813) 273-0017
Fax: (813) 223-3678
Team2eservice@swopelaw.com
eservice@swopelaw.com
Attorneys for Plaintiff
TABLE OF CONTENTS
SUMMARY OF ARGUMENT ...................................................................................................... 1
RESPONSE TO MOTION FOR RECONSIDERATION REGARDING DUTY TO
DEFEND
I. The Court must apply the “eight corners” rule to determine whether MCC owed a
duty to defend. .....................................................................................................................4
II. The Workers’ Compensation Exclusion did not eliminate MCC’s duty to defend
because the complaint does not demonstrate Flicker Construction was required to
pay worker’s compensation benefits. ..................................................................................8
A. The complaint is silent about whether Mr. Perea and Flicker Construction were
in a “horizontal relationship” with one another. ........................................................10
B. The complaint is silent about whether Mr. Perea was ineligible for worker’s
compensation because of a valid exemption. ...............................................................12
C. The complaint is silent about whether Mr. Perea was a “volunteer” worker. ............13
D. Conclusion: the complaint does not unequivocally demonstrate that Flicker
Construction was obligated to provide worker’s compensation benefits. ...................13
III. The Employer’s Liability Exclusion did not eliminate MCC’s duty to defend
because the complaint does not demonstrate Mr. Perea was an “employee.” ...................14
IV. MCC v. Arpin & Sons, 824 F. App’x 644 (11th Cir. 2020) does not eliminate
MCC’s duty to defend........................................................................................................16
V. The record evidence demonstrates that MCC’s failure to defend caused Flicker
Construction damages. .......................................................................................................17
RESPONSE TO MOTION FOR SUMMARY JUDGMENT ON THE DUTY TO
INDEMNIFY
I. MCC’s Statement of Undisputed Facts is directly contradicted by record evidence
and omitted several material facts......................................................................................19
II. MCC’s motion must be denied because it has failed to demonstrate the absence of
any genuine issue of material fact. .....................................................................................23
III. MCC owes a duty to indemnify Flicker Construction for the damages suffered as a
result of the final judgments entered against it. .................................................................24
A. Because Flicker Construction was not the “contractor” on the project, Mr.
Perea was not Flicker Construction’s statutory employee. ...................................25
B. Although the jury may consider the fact that Flicker Construction was listed
as the general contractor on the building permit, that fact, standing alone,
does not make Flicker Construction the general contractor as a matter of
law. .........................................................................................................................30
C. Because Manuel Perea was not an actual employee or “statutory
employee” of Flicker Construction, neither the Worker’s Compensation
Exclusion nor the Employer’s Liability Exclusion applies. ..................................32
CONCLUSION ..............................................................................................................................33
CERTIFICATE OF SERVICE ......................................................................................................34
Plaintiff, JOHN HUGHES, III, as Receiver of FLICKER CONSTRUCTION, INC., hereby
responds in opposition to Defendant MID-CONTINENT CASUALTY COMPANY (“MCC”)’s
Motion for Reconsideration of Order Granting Plaintiff’s Motion for Partial Summary Judgment
on the Duty to Defend and Renewed Cross-Motion for Summary Judgment on the Duty to
Indemnify, dated April 7, 2021, and states:
SUMMARY OF ARGUMENT
This is now the third time MCC has moved for final summary judgment, having twice
previously been denied the relief it now seeks.
In June 2019, MCC filed a motion for final summary judgment, seeking a declaration that
it owed no duty to defend or indemnify its insured, Flicker Construction, from the injury claim
made by (now judgment creditor) Manuel Perea. After an hour-long hearing, the Court (Judge
Thornton) denied MCC’s motion on September 20, 2019. Contrary to MCC’s representations
otherwise, the issue of the duty to indemnify was not “unadjudicated.” Judge Thornton considered
argument regarding the duty to indemnify, found there were disputed issues of material fact and,
accordingly, denied MCC’s motion. See Exhibit 1, Transcript of Hearing of September 20, 2019,
p.26-27, 38-41.
In April 2020, MCC again filed a motion for final summary judgment, seeking a
declaration that MCC owed no duty to defend or indemnify. The Court (now Judge Rodriguez-
Fonts) held a 1.5-hour hearing on MCC’s motion and Plaintiff’s cross-motion for partial summary
judgment on the duty to defend, at which the Court heard extensive argument regarding MCC’s
duty to indemnify. See Exhibit 2, Transcript of Hearing of April 22, 2020, p.13, 63-80. On June
15, 2020, the Court issued a 9-page order granting Plaintiff’s motion for partial summary judgment
and denying MCC’s motion for summary judgment. See Exhibit 3, Order of June 15, 2020.
1
MCC now seeks reconsideration of that order and again moves this Court for final
summary judgment, seeking a declaration that MCC owed no duty to defend or indemnify Flicker
Construction. The Court properly denied MCC’s motion the first two times, and it should do so
again now.
MCC asks this Court to determine, as a matter of law, that it owed no duty to defend or
indemnify Flicker Construction, Inc. from the underlying tort claims and lawsuit brought by
Manuel Perea. MCC’s entire motion rests upon its claim that both the underlying complaint and
the undisputed facts unequivocally demonstrate that Flicker Construction, Inc. served as the
general contractor for the construction project at which Mr. Perea was injured and that, by
extension, Flicker Construction was the “statutory employer” of Mr. Perea. MCC’s motion must
be denied because neither the factual allegations in the complaint nor the actual facts demonstrate
that Flicker Construction was the general contractor.
As explained below, the underlying complaint does not allege that Mr. Perea was an actual
or “statutory” employee of Flicker Construction. See Exhibit A to MCC’s Motion. Indeed,
looking at only the four corners of the complaint, as this Court must, it is entirely possible that (1)
Flicker Construction and Mr. Perea were both subcontractors who were in a horizontal relationship
with one another; (2) Mr. Perea had a valid worker’s compensation exemption, making him
ineligible to recover worker’s compensation benefits; and/or (3) Mr. Perea was a “volunteer” or
“temporary worker” as defined in the MCC policy. Any one of those three circumstances would
mean that Mr. Perea was not a statutory employee.
As a result, neither the “Worker’s Compensation Exclusion” nor “Employer’s Liability
Exclusion” clearly and unequivocally eliminate coverage. See Jones v. Florida Ins. Guar. Ass’n,
Inc., 908 So. 2d 435, 443 (Fla. 2005) (holding an insurer must defend when the complaint alleges
2
facts that “fairly and potentially bring the suit within policy coverage,” and that any doubt
regarding the duty to defend must be resolved liberally in favor of the insured). That means that
MCC owed Flicker Construction a duty to defend it from Mr. Perea’s bodily injury claim – and
may be held liable for the damages caused by that failure to defend – regardless of whether the
MCC policy provides indemnity coverage.
On the duty to indemnify, however, Plaintiff recognizes that there are disputed issues of
material fact as to whether Flicker Construction was the general contractor (and thus whether MCC
has a duty to indemnify). But, to be clear, under no view of the evidence can this Court determine
as a matter of law that Flicker Construction was the general contractor and thus statutory employer
of Perea.
A reasonable jury may conclude that Raphael Jimenez d/b/a Century Wide Construction,
Inc. served as the general contractor for the project – not Roman Flicker or his company, Flicker
Construction. It is undisputed that Mr. Perea was not an actual employee of Flicker Construction.
Moreover, there is competent substantial evidence that: (1) Flicker Construction had no contractual
obligations, performed no work, and was paid nothing for the restaurant buildout which gave rise
to the personal injury lawsuit; and (2) Flicker Construction did not sublet any contractual
obligations (and, in fact, had no contractual obligations to sublet). Thus, the jury may reasonably
conclude that Perea was not Flicker Construction’s “statutory employee.” See § 440.10(1)(b), Fla.
Stat. (2010); Wellington Specialty Ins. Co. v. Kendall Crane Serv., 434 Fed. Appx. 794, 796 (11th
Cir. 2011) (applying Florida law and holding that a company must sublet a contractual obligation
to another to qualify as a “statutory employer” as contemplated by the workers’ compensation
laws).
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If Mr. Perea was not an actual employee or “statutory employee” of Flicker Construction,
neither of the exclusions which MCC relies upon – the Workers’ Compensation Exclusion and
Employer’s Liability Exclusion – would apply. As a result, the jury may conclude that MCC owes
a duty to indemnify Flicker Construction for the $640,000 judgment entered against it and in favor
of Mr. Perea. See Exhibit 1 to Amended Complaint.
In sum, the four corners of the complaint did not eliminate coverage, and there remain
disputed issues of material fact regarding whether Flicker Construction served as the general
contractor on the project. Accordingly, the Court should hold (for the third time) that MCC owed
a duty to defend and that a jury question remains whether MCC owed a duty to indemnify. For
that reason, MCC’s motion must be denied.
RESPONSE TO MOTION FOR RECONSIDERATION
REGARDING DUTY TO DEFEND
On pages 3-11, MCC argues the Court should reconsider its June 2020 order and grant
MCC summary judgment on the issue of the duty to defend. MCC’s principal argument is that the
Court erred by declining to consider extrinsic evidence. As will be explained below, the Court
would commit reversible error if it considered extrinsic evidence when deciding this issue. When
determining whether a duty to defend was owed, Florida law requires the Court consider only the
four corners of the complaint and the four corners of the insurance policy. Thus, the Court should
deny MCC’s motion for reconsideration.
I. The Court must apply the “eight corners” rule to determine whether MCC owed a duty
to defend.
The duty to defend is separate from and broader than the duty to indemnify the insureds
for damages assessed against them. Baron Oil Co. v. Nationwide Mut. Fire Ins. Co., 470 So. 2d
810, 813 (Fla. 1st DCA 1985). “The general rule is that an insurance company’s duty to defend
4
an insured is determined solely from the allegations in the complaint against the insured, not by
the actual facts of the cause of action against the insured, the insured's version of the facts or the
insured's defenses.” Amerisure Ins. Co. v. Gold Coast Marine Distributors, Inc., 771 So. 2d 579,
580 (Fla. 4th DCA 2000). Some courts refer to this principle as the “eight corners rule” because
the insurer’s duty to defend is determined by only looking at the “eight corners” of the complaint
and the policy. Mid-Continent Cas. Co. v. Royal Crane, LLC, 169 So. 3d 174, 182 (Fla. 4th DCA
2015).
As MCC notes, there is one narrow exception to the “eight corners” rule: “if uncontroverted
evidence places the claim outside of coverage, and the claimant makes no attempt to plead [in the
complaint] the fact creating coverage or suggest the existence of evidence establishing coverage,”
then the insurer is relieved of its duty to defend. Nationwide Mut. Fire Ins. Co. v. Keen, 658 So.
2d 1101, 1103 (Fla. 4th DCA 1995). For instance, in Keen, it was undisputed that the insured was
operating a watercraft with a 40-hp engine – a “critical and objective fact” which everyone agreed
eliminated any coverage afforded by the policy. Id. at 1102. However, the injured third-party
claimant’s complaint did not allege anything about the horsepower of the insured’s watercraft. Id.
at 1103. Because it was undisputed that there was no coverage afforded under the policy for the
insured’s negligent operation of the watercraft, the liability insurer was relieved of its duty to
defend the insured from the pending personal injury action. Id.; see also Nateman v. Hartford Cas.
Ins. Co., 544 So. 2d 1026, 1028 (Fla. 3d DCA 1989) (relieving the insurer of its duty to defend a
tort action where there was “no room for doubt” that the defendant tortfeasor was not an insured
under the liability policy). Thus, in the rare instance that the uncontroverted extrinsic facts would
unequivocally defeat any possibility of coverage, the liability insurer may be relieved of its
obligation to defend an ongoing tort action. See Advanced Sys., Inc. v. Gotham Ins. Co., 272 So.
5
3d 523, 528 (Fla. 3d DCA 2019) (declining to consider extrinsic evidence when determining
whether a duty to defend was owed because such evidence was not “uncontroverted or manifestly
obvious to all so as to preclude coverage”); First Specialty Ins. Corp. v. 633 Partners, Ltd., 300
Fed. Appx. 777, 786 (11th Cir. 2008) (stating that extrinsic evidence has only been considered in
“exceptional cases in which courts have crafted an equitable remedy when it is manifestly obvious
to all involved that the actual facts placed the claims outside the scope of coverage”).
Setting that one narrow exception aside, whenever the complaint alleges facts that “fairly
and potentially bring the suit within policy coverage,” the liability insurer must defend the insured
from the allegations of the complaint – even if they are factually incorrect or legally meritless.
Jones v. Florida Ins. Guar. Ass'n, Inc., 908 So. 2d 435, 442-43 (Fla. 2005) (emphasis added). Any
doubt regarding the duty to defend must be resolved liberally in favor of the insured. Jones, 908
So. 2d at 444. Consequently, “[i]f the allegations of the complaint leave any doubt regarding the
duty to defend, the insurer is required to defend.” See Bear Wolf, Inc. v. Hartford Ins. Co. of Se.,
819 So. 2d 818, 820 (Fla. 4th DCA 2002); Baron Oil Co., 470 So. 2d at 814. Likewise, “an insurer
is obligated to defend a claim even if it is uncertain whether coverage exists under the policy.”
Royal Crane, LLC, 169 So. 3d at 181.
Exclusionary clauses are disfavored and are construed even more strictly against the insurer
than coverage clauses. Auto-Owner's Ins. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000). If an insurer
relies upon an exclusion to deny coverage for the defense of claims, “it has the burden of
demonstrating that the allegations of the complaint are cast solely and entirely within the policy
exclusion and are subject to no other reasonable interpretation.” Advanced Sys., Inc. v. Gotham
Ins. Co., 272 So. 3d 523, 527 (Fla. 3d DCA 2019) (citations omitted, emphasis added).
6
Here, MCC was required to defend Flicker Construction from any suit seeking “damages
because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.” Exhibit J to
MCC’s Motion, CG00011207, p.1. However, Flicker Construction’s commercial general liability
policy contains two exclusions which MCC contends apply to eliminate Flicker Construction’s
bodily injury liability coverage in this case: the “Workers’ Compensation Exclusion” and the
“Employer’s Liability Exclusion.”
As will be explained below, the allegations of the underlying complaint are not cast “solely
and entirely” within either policy exclusion because the complaint left open the possibility that (1)
Flicker Construction and Mr. Perea were in a “horizontal” relationship with one another; (2) Mr.
Perea had a valid worker’s compensation exemption (which would have made him ineligible for
workers’ compensation benefits); (3) Mr. Perea was a “volunteer” worker as defined in the policy;
and/or (4) Mr. Perea was a “temporary worker” as defined in the policy. Accordingly, MCC owed
Flicker Construction a duty to defend. Advanced Sys., 272 So. 3d at 527.
Likewise, the Court must decline MCC’s invitation to expand the narrow exception in Keen
to look beyond the four corners of the underlying complaint and consider extrinsic evidence when
evaluating whether MCC owed an obligation to defend. For starters, the narrow exception has
only been applied when the insurer filed a declaratory judgment action while the underlying tort
litigation was pending – something that MCC declined to do here. More importantly, the exception
only applies where a “critical and objective fact” which indisputably eliminates coverage was
omitted from the underlying complaint. Here, however, the underlying complaint did not omit a
“critical and objective fact” which would indisputably eliminate coverage. As is explained below,
even if the complaint stated that Flicker Construction was the qualifying contractor on the project
7
(and it did not), that fact, standing alone, would not mean that Flicker Construction’s MCC policy
provided no coverage.
Similarly, Flicker Construction’s potential liability was not dependent on its status as a
general contractor. See, e.g., Carrasquillo v. Holiday Carpet Serv., Inc., 615 So. 2d 862, 863 (Fla.
3d DCA 1993) (holding that the general contractor was not vicariously liable to injured third-
person for negligent acts of subcontractor because general contractor did not owe a nondelegable
duty and lacked control over the subcontractor who negligently installed the carpet causing injury);
Walter Taft Bradshaw & Associates, P.A. v. Bedsole, 374 So. 2d 644, 646 (Fla. 4th DCA 1979)
(holding that a general contractor is not vicariously or derivatively liable if its independent
contractor’s negligence “solely and proximately causes” the injury to its employee). Therefore,
there was no need for the complaint to allege (explicitly or implicitly) that Flicker Construction
was serving as the project’s general contractor.
Accordingly, this Court must look only to the four corners of the underlying complaint and
four corners of the MCC policy to determine whether the complaint alleges facts that “fairly and
potentially bring the suit within policy coverage,” or whether the allegations are cast “solely and
entirely” within either the Worker’s Compensation or Employer’s Liability Exclusions.
II. The Workers’ Compensation Exclusion did not eliminate MCC’s duty to defend because
the complaint does not demonstrate Flicker Construction was required to pay worker’s
compensation benefits.
Flicker Construction’s liability policy contains the standard “Worker’s Compensation
Exclusion,” which eliminates coverage for “any obligation of the insured under any workers’
compensation, disability benefits or unemployment compensation or any similar law.” This
exclusion “bars coverage of claims arising from bodily injuries for which [the insured tortfeasor]
8
is required to pay benefits under workers’ compensation law.” Morales v. Zenith Ins. Co., 152 So.
3d 557, 561 (Fla. 2014).
As MCC notes, a Worker’s Compensation Exclusion has been held to apply whenever the
injured claimant is eligible for workers’ compensation benefits under Chapter 440, without regard
to whether the insured tortfeasor actually secured the payment of the workers’ compensation as
required by statute. See Indian Harbor Ins. Co. v. Williams, 998 So. 2d 677, 679 (Fla. 4th DCA
2009) (holding that the Workers’ Compensation Exclusion eliminated liability coverage for
employees’ claim against employer, even though the employer violated its statutory duty to
maintain workers’ compensation insurance). As the Florida Supreme Court recently explained,
It is the fact that the employee’s claim comes within the scope of the workers’
compensation statute rather than the actual fact that he or she has recovered or is
receiving workers' compensation for his or her harm, which is the basis for
exclusion [under a workers' compensation exclusion].... [A]nyone who is eligible
for compensation is excluded.
Morales, 152 So. 3d at 563 (quoting 8 Couch on Ins. § 115:89 (3d ed. 2013) with approval).
Thus, to determine whether the Workers’ Compensation Exclusion eliminated MCC’s duty
to defend Flicker Construction, this Court must decide whether the complaint from the underlying
tort lawsuit unequivocally demonstrates that Flicker Construction was required to provide
workers’ compensation benefits to Mr. Perea for his bodily injury claim. See Morales, 152 So. 3d
at 561 (noting that the exclusion would not preclude coverage if the injured claimant has a right to
bring a tort action despite the provisions of the workers’ compensation statute).
If the only reasonable interpretation of the complaint is that Flicker Construction was
required to provide workers’ compensation for Mr. Perea’s claim, then the Workers’
Compensation Exclusion eliminates coverage. See Morales, 152 So. 3d at 563; Indian Harbor Ins.
Co., 998 So. 2d at 679. However, if the allegations in the complaint leave any doubt regarding
9
whether Flicker Construction was required to secure workers’ compensation for Mr. Perea, then
MCC had a duty to defend. See Bear Wolf, Inc., 819 So. 2d at 820; Baron Oil Co., 470 So. 2d at
814.
As explained below, the underlying complaint does not contain enough information to
determine whether Flicker Construction was required to secure workers’ compensation for Mr.
Perea. The complaint only states that Mr. Perea “was either directly or indirectly retained by
FLICKER to perform bathroom tile installation.” Exhibit A to MCC’s motion, p.1 (emphasis
added). Without more detail about Mr. Perea’s and Flicker Construction’s relationship, it is
impossible to determine whether Mr. Perea was an actual or statutory “employee” 1 of Flicker
Construction or its subcontractor and, by extension, whether Flicker Construction was obligated
to provide Mr. Perea with workers’ compensation. See § 440.10(1)(a), Fla. Stat. (requiring
“employers” to provide workers’ compensation to their “employees”) 2 and (1)(b) (requiring
contractors to provide “employees” of subcontractors to whom they have sublet work – also known
as the “statutory employees” – with workers’ compensation). 3
A. The complaint is silent about whether Mr. Perea and Flicker Construction were in
a “horizontal relationship” with one another.
1
§ 440.02(15), Fla. Stat. (2010) (defining “employee”).
2
Section 440.10(1)(a), Florida Statutes (2010), provides that all “employers,” as defined in section
440.02(16)(a)
shall be liable for, and shall secure, the payment to his or her employees . . . of the
compensation payable under ss. 440.13, 440.15, and 440.16. Any contractor or
subcontractor who engages in any public or private construction in the state shall
secure and maintain compensation for his or her employees under this chapter as
provided in s. 440.38.
3
Fla. Stat. § 440.10(1)(b) (2010) provides:
In case a contractor sublets any part or parts of his or her contract work to a
subcontractor or subcontractors, all of the employees of such contractor and
subcontractor or subcontractors engaged on such contract work shall be deemed to
be employed in one and the same business or establishment, and the contractor shall
be liable for, and shall secure, the payment of compensation to all such employees,
except to employees of a subcontractor who has secured such payment.
10
As a preliminary matter, the allegations of the complaint leave open the possibility that
Flicker Construction and Mr. Perea were each subcontractors in a “horizontal relationship” with
one another. As one court recently explained:
[A] vertical relationship is created when a contractor sublets part of the work to a
subcontractor, who then further sublets work to another subcontractor.... In
contrast, a horizontal relationship exists between subcontractors engaged on the
same construction project but under different subcontracts outside the vertical chain
of a contractor to subcontractor to sub-subcontractor.
Wert v. Camacho, 200 So. 3d 787, 791 (Fla. 2d DCA 2016). If Flicker Construction was a
subcontractor in a horizontal relationship with Mr. Perea, Flicker Construction would not have
been required to provide Mr. Perea with workers’ compensation benefits. See § 440.10(e), Fla.
Stat. (2010) (“A subcontractor providing services in conjunction with a contractor on the same
project or contract work is not liable for the payment of compensation to the employees of another
subcontractor or the contractor on such contract work. . . .”). As the Eleventh Circuit explained,
[Section 440.10(e)] concerns the vertical relationship between a contractor and
subcontractor, not the horizontal relationship between two subcontractors. . . .
Indeed, the statute does not impose any obligation on a subcontractor to obtain
workers' compensation coverage for another subcontractor's employees, and
thus it would be nonsensical to call one subcontractor the statutory employer of the
other subcontractor's employees.
Wellington Specialty Ins. Co. v. Kendall Crane Serv., 434 Fed. Appx. 794, 797 (11th Cir. 2011)
(emphasis added). Thus, if Flicker Construction and Mr. Perea were subcontractors in a horizontal
relationship, then Flicker Construction would not be liable for the payment of workers’
compensation to Mr. Perea.
Although the complaint alleges that Flicker Construction “was in control of the
construction being performed” and that such construction “was being performed at the direction
and under the supervision” of Flicker Construction, the complaint does not state whether Flicker
Construction was serving as the project’s general contractor. The complaint is also silent about
11
Flicker Construction’s scope of work or even whether Flicker Construction had a contract with the
owner at all. Thus, looking at the allegations of the complaint, it was equally likely that Flicker
Construction was a subcontractor retained to serve as the general contractor’s foreman or project
manager, as opposed to serving as the general contractor itself.
The complaint does not even state whether Flicker Construction was ultimately responsible
for the bathroom tile installation for which Mr. Perea was being retained. Therefore, it is unclear
whether Flicker Construction was subletting its own work to Mr. Perea – such that there would be
a “vertical relationship” of contractual privity – or whether Flicker Construction’s “indirect
retention” of Mr. Perea through a third party meant they were in a horizontal relationship with one
another. Without knowing whether Flicker Construction and Mr. Perea were in a vertical or
horizontal relationship, it is impossible to determine whether Flicker Construction owed Mr. Perea
workers’ compensation. See § 440.10(e), Fla. Stat. (2010).
B. The complaint is silent about whether Mr. Perea was ineligible for worker’s
compensation because of a valid exemption.
Even if Mr. Perea was in a vertical relationship with Flicker Construction, that does not
necessarily mean that Mr. Perea was entitled to recover workers’ compensation for his injuries. If
Mr. Perea, like Mr. Flicker, was “an officer of a corporation that [was] engaged in the construction
industry who elect[ed] to be exempt from the provisions of” Chapter 440 and the exemption was
valid, he would not qualify as an “employee for any reason.” See § 440.02(15)(d)8, Fla. Stat.
(2010). Therefore, if Mr. Perea had a valid workers’ compensation exemption, he would not have
been eligible to recover workers’ compensation benefits for his injuries from the general contractor
or any subcontractor, including Flicker Construction. See § 440.077, Fla. Stat. (2010) (“An officer
of a corporation who is permitted to elect an exemption under this chapter and who elects to be
exempt from the provisions of this chapter may not recover benefits under this chapter.”);
12
Contractor's Mgmt. Services, Inc. v. Dixon, 734 So. 2d 435, 437 (Fla. 4th DCA 1999) (“Officers
and sole proprietors of subcontractor companies may elect to be excluded from the worker's
compensation statute's definition of ‘employee’ by filing written notice of the election with the
division. If they do so, they are not considered ‘employees’ under the Worker’s Compensation
Act and are not entitled to recover worker's compensation benefits in the event they are injured on
the job from either the subcontractor or the general contractor.”).
C. The complaint is silent about whether Mr. Perea was a “volunteer” worker.
Under the workers’ compensation statutes, one must receive remuneration to qualify as an
“employee.” See § 440.02(15)(a), Fla. Stat. (generally defining “employee” to mean “any person
who receives remuneration from an employer for the performance of any work or service while
engaged in any employment under any appointment or contract for hire or apprenticeship, express
or implied, oral or written, whether lawfully or unlawfully employed, and includes, but is not
limited to, aliens and minors”). The underlying complaint just says that Mr. Perea was “directly
or indirectly retained” by Flicker Construction, without specifying that Mr. Perea was being paid.
Although the word “retained” could mean that Mr. Perea would receive monetary remuneration,
it could also mean that Flicker Construction “retained” a volunteer to perform work for free. See
“Retain,” Black’s Law Dictionary (10th ed. 2014) (“to hire” or “to engage for the provision of
services”); “Retain,” Merriam-Webster Online Dictionary (2017), http://www.merriam-
webster.com (Aug. 13, 2017) (“to keep in one’s pay or service”).
Volunteers are specifically excluded from the definition of “employee” in the workers’
compensation statutes. See § 440.02(15)(d)6, Fla. Stat. (2010). Thus, without knowing whether
Mr. Perea was being paid for his work, it is impossible to determine whether he qualified as an
“employee.” See Wesco Ins. Co. v. Don Bell, Inc., 574 Fed. Appx. 872, 874 (11th Cir. 2014)
13
(applying Florida law and recognizing that the Workers’ Compensation Exclusion does eliminate
coverage for volunteers because they do not qualify as “employees” as defined by statute).
D. Conclusion: the complaint does not unequivocally demonstrate that Flicker
Construction was obligated to provide worker’s compensation benefits.
In sum, looking only to the factual allegations within the underlying complaint, as this
Court must, it is impossible to conclusively determine whether Mr. Perea qualified as an
“employee” entitled to benefits under section 440.10. If Mr. Perea was not an actual or statutory
“employee” of Flicker Construction, the company was not obligated to provide him with worker’s
compensation benefits. Accordingly, the allegations of the underlying complaint do not fall
“solely and entirely” within the Workers’ Compensation Exclusion, meaning that MCC owed a
duty to defend. See Morales, 152 So. 3d at 561 (holding that the Workers’ Compensation
Exclusion would apply to eliminate liability coverage only if the insured tortfeasor is required to
pay workers’ compensation benefits); Advanced Sys., 272 So. 3d at 527 (holding an insurer may
refuse to defend only if it can demonstrate that the “allegations of the complaint are cast solely and
entirely within the policy exclusion and are subject to no other reasonable interpretation”).
III. The Employer’s Liability Exclusion did not eliminate MCC’s duty to defend because the
complaint does not demonstrate Mr. Perea was an “employee.”
The second exclusion upon which MCC relies is the “Employer’s Liability Exclusion.”
This exclusion eliminates coverage for “an employee” who was injured in the course of his
“employment by the insured” or performance of “duties related to the conduct of the insured’s
business.” “Employee” is defined in the policy to include a “leased worker” 4 but not a “temporary
4
“Leased worker” means a person leased to you by a labor leasing firm under an agreement
between you and the labor leasing firm, to perform duties related to the conduct of your business.
“Leased worker” does not include a “temporary worker.” Ex.A.1 to MCC’s Motion, CG00011207
p.13.
14
worker.” 5 Taken together, MCC was required to defend Flicker Construction from any bodily
injury liability claim made by non-employees, including “temporary workers.” See Nat'l Indem.
Co. of S. v. Landscape Mgmt. Co., Inc., 963 So. 2d 361, 363 (Fla. 4th DCA 2007) (recognizing
that the insurer would owe a duty to defend if the injured claimant was a “temporary worker”
rather than an “employee” as defined in the policy).
Although the complaint in the underlying tort action alleged Manuel Perea “was either
directly or indirectly retained by FLICKER to perform bathroom tile installation,” it contains no
other allegations from which it can be determined whether Mr. Perea qualified as an “employee”
of Flicker Construction as defined in the policy. Indeed, as described above, it is unclear from the
complaint whether Flicker Construction was the general contractor at the project or even whether
it was responsible for the completion of the tile work.
Plaintiff acknowledges that Florida courts have construed the term “employee” in the
Employer’s Liability Exclusion to include “statutory employees” as defined in Florida Statutes
section 440.10(1)(b) – employees of a subcontractor in a vertical relationship with the insured.
See Florida Ins. Guar. Ass'n, Inc. v. Revoredo, 698 So. 2d 890, 891 (Fla. 3d DCA 1997) (holding
that the Employer’s Liability Exclusion applied to eliminate coverage where the injured claimant
was a statutory employee of th
Preview
Filing # 126642684 E-Filed 05/12/2021 10:38:15 AM IN THE CIRCUIT COURT OF THE 11TH JUDICIAL CIRCUIT IN AND FOR MIAMI- DADE COUNTY, FLORIDA JOHN HUGHES, III, as Receiver of FLICKER CONSTRUCTION, INC., Plaintiff, v. CASE NO.: 2019-003916-CA-01 ROMAN FLICKER and MID-CONTINENT CASUALTY COMPANY, Defendants. / PLAINTIFF’S RESPONSE IN OPPOSITION TO DEFENDANT MID-CONTINENT CASUALTY COMPANY’S (1) MOTION FOR RECONSIDERATION OF ORDER GRANTING PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT ON THE DUTY TO DEFEND, AND (2) RENEWED CROSS-MOTION FOR SUMMARY JUDGMENT ON THE DUTY TO INDEMNIFY Respectfully submitted by: BRANDON G. CATHEY Florida Bar No.: 941891 BRENT G. STEINBERG Florida Bar No.: 0085453 DANIEL L. GREENE Florida Bar No.: 1003266 SWOPE, RODANTE P.A. 1234 E. 5th Ave. Tampa, Florida 33605 Tel: (813) 273-0017 Fax: (813) 223-3678 Team2eservice@swopelaw.com eservice@swopelaw.com Attorneys for Plaintiff TABLE OF CONTENTS SUMMARY OF ARGUMENT ...................................................................................................... 1 RESPONSE TO MOTION FOR RECONSIDERATION REGARDING DUTY TO DEFEND I. The Court must apply the “eight corners” rule to determine whether MCC owed a duty to defend. .....................................................................................................................4 II. The Workers’ Compensation Exclusion did not eliminate MCC’s duty to defend because the complaint does not demonstrate Flicker Construction was required to pay worker’s compensation benefits. ..................................................................................8 A. The complaint is silent about whether Mr. Perea and Flicker Construction were in a “horizontal relationship” with one another. ........................................................10 B. The complaint is silent about whether Mr. Perea was ineligible for worker’s compensation because of a valid exemption. ...............................................................12 C. The complaint is silent about whether Mr. Perea was a “volunteer” worker. ............13 D. Conclusion: the complaint does not unequivocally demonstrate that Flicker Construction was obligated to provide worker’s compensation benefits. ...................13 III. The Employer’s Liability Exclusion did not eliminate MCC’s duty to defend because the complaint does not demonstrate Mr. Perea was an “employee.” ...................14 IV. MCC v. Arpin & Sons, 824 F. App’x 644 (11th Cir. 2020) does not eliminate MCC’s duty to defend........................................................................................................16 V. The record evidence demonstrates that MCC’s failure to defend caused Flicker Construction damages. .......................................................................................................17 RESPONSE TO MOTION FOR SUMMARY JUDGMENT ON THE DUTY TO INDEMNIFY I. MCC’s Statement of Undisputed Facts is directly contradicted by record evidence and omitted several material facts......................................................................................19 II. MCC’s motion must be denied because it has failed to demonstrate the absence of any genuine issue of material fact. .....................................................................................23 III. MCC owes a duty to indemnify Flicker Construction for the damages suffered as a result of the final judgments entered against it. .................................................................24 A. Because Flicker Construction was not the “contractor” on the project, Mr. Perea was not Flicker Construction’s statutory employee. ...................................25 B. Although the jury may consider the fact that Flicker Construction was listed as the general contractor on the building permit, that fact, standing alone, does not make Flicker Construction the general contractor as a matter of law. .........................................................................................................................30 C. Because Manuel Perea was not an actual employee or “statutory employee” of Flicker Construction, neither the Worker’s Compensation Exclusion nor the Employer’s Liability Exclusion applies. ..................................32 CONCLUSION ..............................................................................................................................33 CERTIFICATE OF SERVICE ......................................................................................................34 Plaintiff, JOHN HUGHES, III, as Receiver of FLICKER CONSTRUCTION, INC., hereby responds in opposition to Defendant MID-CONTINENT CASUALTY COMPANY (“MCC”)’s Motion for Reconsideration of Order Granting Plaintiff’s Motion for Partial Summary Judgment on the Duty to Defend and Renewed Cross-Motion for Summary Judgment on the Duty to Indemnify, dated April 7, 2021, and states: SUMMARY OF ARGUMENT This is now the third time MCC has moved for final summary judgment, having twice previously been denied the relief it now seeks. In June 2019, MCC filed a motion for final summary judgment, seeking a declaration that it owed no duty to defend or indemnify its insured, Flicker Construction, from the injury claim made by (now judgment creditor) Manuel Perea. After an hour-long hearing, the Court (Judge Thornton) denied MCC’s motion on September 20, 2019. Contrary to MCC’s representations otherwise, the issue of the duty to indemnify was not “unadjudicated.” Judge Thornton considered argument regarding the duty to indemnify, found there were disputed issues of material fact and, accordingly, denied MCC’s motion. See Exhibit 1, Transcript of Hearing of September 20, 2019, p.26-27, 38-41. In April 2020, MCC again filed a motion for final summary judgment, seeking a declaration that MCC owed no duty to defend or indemnify. The Court (now Judge Rodriguez- Fonts) held a 1.5-hour hearing on MCC’s motion and Plaintiff’s cross-motion for partial summary judgment on the duty to defend, at which the Court heard extensive argument regarding MCC’s duty to indemnify. See Exhibit 2, Transcript of Hearing of April 22, 2020, p.13, 63-80. On June 15, 2020, the Court issued a 9-page order granting Plaintiff’s motion for partial summary judgment and denying MCC’s motion for summary judgment. See Exhibit 3, Order of June 15, 2020. 1 MCC now seeks reconsideration of that order and again moves this Court for final summary judgment, seeking a declaration that MCC owed no duty to defend or indemnify Flicker Construction. The Court properly denied MCC’s motion the first two times, and it should do so again now. MCC asks this Court to determine, as a matter of law, that it owed no duty to defend or indemnify Flicker Construction, Inc. from the underlying tort claims and lawsuit brought by Manuel Perea. MCC’s entire motion rests upon its claim that both the underlying complaint and the undisputed facts unequivocally demonstrate that Flicker Construction, Inc. served as the general contractor for the construction project at which Mr. Perea was injured and that, by extension, Flicker Construction was the “statutory employer” of Mr. Perea. MCC’s motion must be denied because neither the factual allegations in the complaint nor the actual facts demonstrate that Flicker Construction was the general contractor. As explained below, the underlying complaint does not allege that Mr. Perea was an actual or “statutory” employee of Flicker Construction. See Exhibit A to MCC’s Motion. Indeed, looking at only the four corners of the complaint, as this Court must, it is entirely possible that (1) Flicker Construction and Mr. Perea were both subcontractors who were in a horizontal relationship with one another; (2) Mr. Perea had a valid worker’s compensation exemption, making him ineligible to recover worker’s compensation benefits; and/or (3) Mr. Perea was a “volunteer” or “temporary worker” as defined in the MCC policy. Any one of those three circumstances would mean that Mr. Perea was not a statutory employee. As a result, neither the “Worker’s Compensation Exclusion” nor “Employer’s Liability Exclusion” clearly and unequivocally eliminate coverage. See Jones v. Florida Ins. Guar. Ass’n, Inc., 908 So. 2d 435, 443 (Fla. 2005) (holding an insurer must defend when the complaint alleges 2 facts that “fairly and potentially bring the suit within policy coverage,” and that any doubt regarding the duty to defend must be resolved liberally in favor of the insured). That means that MCC owed Flicker Construction a duty to defend it from Mr. Perea’s bodily injury claim – and may be held liable for the damages caused by that failure to defend – regardless of whether the MCC policy provides indemnity coverage. On the duty to indemnify, however, Plaintiff recognizes that there are disputed issues of material fact as to whether Flicker Construction was the general contractor (and thus whether MCC has a duty to indemnify). But, to be clear, under no view of the evidence can this Court determine as a matter of law that Flicker Construction was the general contractor and thus statutory employer of Perea. A reasonable jury may conclude that Raphael Jimenez d/b/a Century Wide Construction, Inc. served as the general contractor for the project – not Roman Flicker or his company, Flicker Construction. It is undisputed that Mr. Perea was not an actual employee of Flicker Construction. Moreover, there is competent substantial evidence that: (1) Flicker Construction had no contractual obligations, performed no work, and was paid nothing for the restaurant buildout which gave rise to the personal injury lawsuit; and (2) Flicker Construction did not sublet any contractual obligations (and, in fact, had no contractual obligations to sublet). Thus, the jury may reasonably conclude that Perea was not Flicker Construction’s “statutory employee.” See § 440.10(1)(b), Fla. Stat. (2010); Wellington Specialty Ins. Co. v. Kendall Crane Serv., 434 Fed. Appx. 794, 796 (11th Cir. 2011) (applying Florida law and holding that a company must sublet a contractual obligation to another to qualify as a “statutory employer” as contemplated by the workers’ compensation laws). 3 If Mr. Perea was not an actual employee or “statutory employee” of Flicker Construction, neither of the exclusions which MCC relies upon – the Workers’ Compensation Exclusion and Employer’s Liability Exclusion – would apply. As a result, the jury may conclude that MCC owes a duty to indemnify Flicker Construction for the $640,000 judgment entered against it and in favor of Mr. Perea. See Exhibit 1 to Amended Complaint. In sum, the four corners of the complaint did not eliminate coverage, and there remain disputed issues of material fact regarding whether Flicker Construction served as the general contractor on the project. Accordingly, the Court should hold (for the third time) that MCC owed a duty to defend and that a jury question remains whether MCC owed a duty to indemnify. For that reason, MCC’s motion must be denied. RESPONSE TO MOTION FOR RECONSIDERATION REGARDING DUTY TO DEFEND On pages 3-11, MCC argues the Court should reconsider its June 2020 order and grant MCC summary judgment on the issue of the duty to defend. MCC’s principal argument is that the Court erred by declining to consider extrinsic evidence. As will be explained below, the Court would commit reversible error if it considered extrinsic evidence when deciding this issue. When determining whether a duty to defend was owed, Florida law requires the Court consider only the four corners of the complaint and the four corners of the insurance policy. Thus, the Court should deny MCC’s motion for reconsideration. I. The Court must apply the “eight corners” rule to determine whether MCC owed a duty to defend. The duty to defend is separate from and broader than the duty to indemnify the insureds for damages assessed against them. Baron Oil Co. v. Nationwide Mut. Fire Ins. Co., 470 So. 2d 810, 813 (Fla. 1st DCA 1985). “The general rule is that an insurance company’s duty to defend 4 an insured is determined solely from the allegations in the complaint against the insured, not by the actual facts of the cause of action against the insured, the insured's version of the facts or the insured's defenses.” Amerisure Ins. Co. v. Gold Coast Marine Distributors, Inc., 771 So. 2d 579, 580 (Fla. 4th DCA 2000). Some courts refer to this principle as the “eight corners rule” because the insurer’s duty to defend is determined by only looking at the “eight corners” of the complaint and the policy. Mid-Continent Cas. Co. v. Royal Crane, LLC, 169 So. 3d 174, 182 (Fla. 4th DCA 2015). As MCC notes, there is one narrow exception to the “eight corners” rule: “if uncontroverted evidence places the claim outside of coverage, and the claimant makes no attempt to plead [in the complaint] the fact creating coverage or suggest the existence of evidence establishing coverage,” then the insurer is relieved of its duty to defend. Nationwide Mut. Fire Ins. Co. v. Keen, 658 So. 2d 1101, 1103 (Fla. 4th DCA 1995). For instance, in Keen, it was undisputed that the insured was operating a watercraft with a 40-hp engine – a “critical and objective fact” which everyone agreed eliminated any coverage afforded by the policy. Id. at 1102. However, the injured third-party claimant’s complaint did not allege anything about the horsepower of the insured’s watercraft. Id. at 1103. Because it was undisputed that there was no coverage afforded under the policy for the insured’s negligent operation of the watercraft, the liability insurer was relieved of its duty to defend the insured from the pending personal injury action. Id.; see also Nateman v. Hartford Cas. Ins. Co., 544 So. 2d 1026, 1028 (Fla. 3d DCA 1989) (relieving the insurer of its duty to defend a tort action where there was “no room for doubt” that the defendant tortfeasor was not an insured under the liability policy). Thus, in the rare instance that the uncontroverted extrinsic facts would unequivocally defeat any possibility of coverage, the liability insurer may be relieved of its obligation to defend an ongoing tort action. See Advanced Sys., Inc. v. Gotham Ins. Co., 272 So. 5 3d 523, 528 (Fla. 3d DCA 2019) (declining to consider extrinsic evidence when determining whether a duty to defend was owed because such evidence was not “uncontroverted or manifestly obvious to all so as to preclude coverage”); First Specialty Ins. Corp. v. 633 Partners, Ltd., 300 Fed. Appx. 777, 786 (11th Cir. 2008) (stating that extrinsic evidence has only been considered in “exceptional cases in which courts have crafted an equitable remedy when it is manifestly obvious to all involved that the actual facts placed the claims outside the scope of coverage”). Setting that one narrow exception aside, whenever the complaint alleges facts that “fairly and potentially bring the suit within policy coverage,” the liability insurer must defend the insured from the allegations of the complaint – even if they are factually incorrect or legally meritless. Jones v. Florida Ins. Guar. Ass'n, Inc., 908 So. 2d 435, 442-43 (Fla. 2005) (emphasis added). Any doubt regarding the duty to defend must be resolved liberally in favor of the insured. Jones, 908 So. 2d at 444. Consequently, “[i]f the allegations of the complaint leave any doubt regarding the duty to defend, the insurer is required to defend.” See Bear Wolf, Inc. v. Hartford Ins. Co. of Se., 819 So. 2d 818, 820 (Fla. 4th DCA 2002); Baron Oil Co., 470 So. 2d at 814. Likewise, “an insurer is obligated to defend a claim even if it is uncertain whether coverage exists under the policy.” Royal Crane, LLC, 169 So. 3d at 181. Exclusionary clauses are disfavored and are construed even more strictly against the insurer than coverage clauses. Auto-Owner's Ins. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000). If an insurer relies upon an exclusion to deny coverage for the defense of claims, “it has the burden of demonstrating that the allegations of the complaint are cast solely and entirely within the policy exclusion and are subject to no other reasonable interpretation.” Advanced Sys., Inc. v. Gotham Ins. Co., 272 So. 3d 523, 527 (Fla. 3d DCA 2019) (citations omitted, emphasis added). 6 Here, MCC was required to defend Flicker Construction from any suit seeking “damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.” Exhibit J to MCC’s Motion, CG00011207, p.1. However, Flicker Construction’s commercial general liability policy contains two exclusions which MCC contends apply to eliminate Flicker Construction’s bodily injury liability coverage in this case: the “Workers’ Compensation Exclusion” and the “Employer’s Liability Exclusion.” As will be explained below, the allegations of the underlying complaint are not cast “solely and entirely” within either policy exclusion because the complaint left open the possibility that (1) Flicker Construction and Mr. Perea were in a “horizontal” relationship with one another; (2) Mr. Perea had a valid worker’s compensation exemption (which would have made him ineligible for workers’ compensation benefits); (3) Mr. Perea was a “volunteer” worker as defined in the policy; and/or (4) Mr. Perea was a “temporary worker” as defined in the policy. Accordingly, MCC owed Flicker Construction a duty to defend. Advanced Sys., 272 So. 3d at 527. Likewise, the Court must decline MCC’s invitation to expand the narrow exception in Keen to look beyond the four corners of the underlying complaint and consider extrinsic evidence when evaluating whether MCC owed an obligation to defend. For starters, the narrow exception has only been applied when the insurer filed a declaratory judgment action while the underlying tort litigation was pending – something that MCC declined to do here. More importantly, the exception only applies where a “critical and objective fact” which indisputably eliminates coverage was omitted from the underlying complaint. Here, however, the underlying complaint did not omit a “critical and objective fact” which would indisputably eliminate coverage. As is explained below, even if the complaint stated that Flicker Construction was the qualifying contractor on the project 7 (and it did not), that fact, standing alone, would not mean that Flicker Construction’s MCC policy provided no coverage. Similarly, Flicker Construction’s potential liability was not dependent on its status as a general contractor. See, e.g., Carrasquillo v. Holiday Carpet Serv., Inc., 615 So. 2d 862, 863 (Fla. 3d DCA 1993) (holding that the general contractor was not vicariously liable to injured third- person for negligent acts of subcontractor because general contractor did not owe a nondelegable duty and lacked control over the subcontractor who negligently installed the carpet causing injury); Walter Taft Bradshaw & Associates, P.A. v. Bedsole, 374 So. 2d 644, 646 (Fla. 4th DCA 1979) (holding that a general contractor is not vicariously or derivatively liable if its independent contractor’s negligence “solely and proximately causes” the injury to its employee). Therefore, there was no need for the complaint to allege (explicitly or implicitly) that Flicker Construction was serving as the project’s general contractor. Accordingly, this Court must look only to the four corners of the underlying complaint and four corners of the MCC policy to determine whether the complaint alleges facts that “fairly and potentially bring the suit within policy coverage,” or whether the allegations are cast “solely and entirely” within either the Worker’s Compensation or Employer’s Liability Exclusions. II. The Workers’ Compensation Exclusion did not eliminate MCC’s duty to defend because the complaint does not demonstrate Flicker Construction was required to pay worker’s compensation benefits. Flicker Construction’s liability policy contains the standard “Worker’s Compensation Exclusion,” which eliminates coverage for “any obligation of the insured under any workers’ compensation, disability benefits or unemployment compensation or any similar law.” This exclusion “bars coverage of claims arising from bodily injuries for which [the insured tortfeasor] 8 is required to pay benefits under workers’ compensation law.” Morales v. Zenith Ins. Co., 152 So. 3d 557, 561 (Fla. 2014). As MCC notes, a Worker’s Compensation Exclusion has been held to apply whenever the injured claimant is eligible for workers’ compensation benefits under Chapter 440, without regard to whether the insured tortfeasor actually secured the payment of the workers’ compensation as required by statute. See Indian Harbor Ins. Co. v. Williams, 998 So. 2d 677, 679 (Fla. 4th DCA 2009) (holding that the Workers’ Compensation Exclusion eliminated liability coverage for employees’ claim against employer, even though the employer violated its statutory duty to maintain workers’ compensation insurance). As the Florida Supreme Court recently explained, It is the fact that the employee’s claim comes within the scope of the workers’ compensation statute rather than the actual fact that he or she has recovered or is receiving workers' compensation for his or her harm, which is the basis for exclusion [under a workers' compensation exclusion].... [A]nyone who is eligible for compensation is excluded. Morales, 152 So. 3d at 563 (quoting 8 Couch on Ins. § 115:89 (3d ed. 2013) with approval). Thus, to determine whether the Workers’ Compensation Exclusion eliminated MCC’s duty to defend Flicker Construction, this Court must decide whether the complaint from the underlying tort lawsuit unequivocally demonstrates that Flicker Construction was required to provide workers’ compensation benefits to Mr. Perea for his bodily injury claim. See Morales, 152 So. 3d at 561 (noting that the exclusion would not preclude coverage if the injured claimant has a right to bring a tort action despite the provisions of the workers’ compensation statute). If the only reasonable interpretation of the complaint is that Flicker Construction was required to provide workers’ compensation for Mr. Perea’s claim, then the Workers’ Compensation Exclusion eliminates coverage. See Morales, 152 So. 3d at 563; Indian Harbor Ins. Co., 998 So. 2d at 679. However, if the allegations in the complaint leave any doubt regarding 9 whether Flicker Construction was required to secure workers’ compensation for Mr. Perea, then MCC had a duty to defend. See Bear Wolf, Inc., 819 So. 2d at 820; Baron Oil Co., 470 So. 2d at 814. As explained below, the underlying complaint does not contain enough information to determine whether Flicker Construction was required to secure workers’ compensation for Mr. Perea. The complaint only states that Mr. Perea “was either directly or indirectly retained by FLICKER to perform bathroom tile installation.” Exhibit A to MCC’s motion, p.1 (emphasis added). Without more detail about Mr. Perea’s and Flicker Construction’s relationship, it is impossible to determine whether Mr. Perea was an actual or statutory “employee” 1 of Flicker Construction or its subcontractor and, by extension, whether Flicker Construction was obligated to provide Mr. Perea with workers’ compensation. See § 440.10(1)(a), Fla. Stat. (requiring “employers” to provide workers’ compensation to their “employees”) 2 and (1)(b) (requiring contractors to provide “employees” of subcontractors to whom they have sublet work – also known as the “statutory employees” – with workers’ compensation). 3 A. The complaint is silent about whether Mr. Perea and Flicker Construction were in a “horizontal relationship” with one another. 1 § 440.02(15), Fla. Stat. (2010) (defining “employee”). 2 Section 440.10(1)(a), Florida Statutes (2010), provides that all “employers,” as defined in section 440.02(16)(a) shall be liable for, and shall secure, the payment to his or her employees . . . of the compensation payable under ss. 440.13, 440.15, and 440.16. Any contractor or subcontractor who engages in any public or private construction in the state shall secure and maintain compensation for his or her employees under this chapter as provided in s. 440.38. 3 Fla. Stat. § 440.10(1)(b) (2010) provides: In case a contractor sublets any part or parts of his or her contract work to a subcontractor or subcontractors, all of the employees of such contractor and subcontractor or subcontractors engaged on such contract work shall be deemed to be employed in one and the same business or establishment, and the contractor shall be liable for, and shall secure, the payment of compensation to all such employees, except to employees of a subcontractor who has secured such payment. 10 As a preliminary matter, the allegations of the complaint leave open the possibility that Flicker Construction and Mr. Perea were each subcontractors in a “horizontal relationship” with one another. As one court recently explained: [A] vertical relationship is created when a contractor sublets part of the work to a subcontractor, who then further sublets work to another subcontractor.... In contrast, a horizontal relationship exists between subcontractors engaged on the same construction project but under different subcontracts outside the vertical chain of a contractor to subcontractor to sub-subcontractor. Wert v. Camacho, 200 So. 3d 787, 791 (Fla. 2d DCA 2016). If Flicker Construction was a subcontractor in a horizontal relationship with Mr. Perea, Flicker Construction would not have been required to provide Mr. Perea with workers’ compensation benefits. See § 440.10(e), Fla. Stat. (2010) (“A subcontractor providing services in conjunction with a contractor on the same project or contract work is not liable for the payment of compensation to the employees of another subcontractor or the contractor on such contract work. . . .”). As the Eleventh Circuit explained, [Section 440.10(e)] concerns the vertical relationship between a contractor and subcontractor, not the horizontal relationship between two subcontractors. . . . Indeed, the statute does not impose any obligation on a subcontractor to obtain workers' compensation coverage for another subcontractor's employees, and thus it would be nonsensical to call one subcontractor the statutory employer of the other subcontractor's employees. Wellington Specialty Ins. Co. v. Kendall Crane Serv., 434 Fed. Appx. 794, 797 (11th Cir. 2011) (emphasis added). Thus, if Flicker Construction and Mr. Perea were subcontractors in a horizontal relationship, then Flicker Construction would not be liable for the payment of workers’ compensation to Mr. Perea. Although the complaint alleges that Flicker Construction “was in control of the construction being performed” and that such construction “was being performed at the direction and under the supervision” of Flicker Construction, the complaint does not state whether Flicker Construction was serving as the project’s general contractor. The complaint is also silent about 11 Flicker Construction’s scope of work or even whether Flicker Construction had a contract with the owner at all. Thus, looking at the allegations of the complaint, it was equally likely that Flicker Construction was a subcontractor retained to serve as the general contractor’s foreman or project manager, as opposed to serving as the general contractor itself. The complaint does not even state whether Flicker Construction was ultimately responsible for the bathroom tile installation for which Mr. Perea was being retained. Therefore, it is unclear whether Flicker Construction was subletting its own work to Mr. Perea – such that there would be a “vertical relationship” of contractual privity – or whether Flicker Construction’s “indirect retention” of Mr. Perea through a third party meant they were in a horizontal relationship with one another. Without knowing whether Flicker Construction and Mr. Perea were in a vertical or horizontal relationship, it is impossible to determine whether Flicker Construction owed Mr. Perea workers’ compensation. See § 440.10(e), Fla. Stat. (2010). B. The complaint is silent about whether Mr. Perea was ineligible for worker’s compensation because of a valid exemption. Even if Mr. Perea was in a vertical relationship with Flicker Construction, that does not necessarily mean that Mr. Perea was entitled to recover workers’ compensation for his injuries. If Mr. Perea, like Mr. Flicker, was “an officer of a corporation that [was] engaged in the construction industry who elect[ed] to be exempt from the provisions of” Chapter 440 and the exemption was valid, he would not qualify as an “employee for any reason.” See § 440.02(15)(d)8, Fla. Stat. (2010). Therefore, if Mr. Perea had a valid workers’ compensation exemption, he would not have been eligible to recover workers’ compensation benefits for his injuries from the general contractor or any subcontractor, including Flicker Construction. See § 440.077, Fla. Stat. (2010) (“An officer of a corporation who is permitted to elect an exemption under this chapter and who elects to be exempt from the provisions of this chapter may not recover benefits under this chapter.”); 12 Contractor's Mgmt. Services, Inc. v. Dixon, 734 So. 2d 435, 437 (Fla. 4th DCA 1999) (“Officers and sole proprietors of subcontractor companies may elect to be excluded from the worker's compensation statute's definition of ‘employee’ by filing written notice of the election with the division. If they do so, they are not considered ‘employees’ under the Worker’s Compensation Act and are not entitled to recover worker's compensation benefits in the event they are injured on the job from either the subcontractor or the general contractor.”). C. The complaint is silent about whether Mr. Perea was a “volunteer” worker. Under the workers’ compensation statutes, one must receive remuneration to qualify as an “employee.” See § 440.02(15)(a), Fla. Stat. (generally defining “employee” to mean “any person who receives remuneration from an employer for the performance of any work or service while engaged in any employment under any appointment or contract for hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed, and includes, but is not limited to, aliens and minors”). The underlying complaint just says that Mr. Perea was “directly or indirectly retained” by Flicker Construction, without specifying that Mr. Perea was being paid. Although the word “retained” could mean that Mr. Perea would receive monetary remuneration, it could also mean that Flicker Construction “retained” a volunteer to perform work for free. See “Retain,” Black’s Law Dictionary (10th ed. 2014) (“to hire” or “to engage for the provision of services”); “Retain,” Merriam-Webster Online Dictionary (2017), http://www.merriam- webster.com (Aug. 13, 2017) (“to keep in one’s pay or service”). Volunteers are specifically excluded from the definition of “employee” in the workers’ compensation statutes. See § 440.02(15)(d)6, Fla. Stat. (2010). Thus, without knowing whether Mr. Perea was being paid for his work, it is impossible to determine whether he qualified as an “employee.” See Wesco Ins. Co. v. Don Bell, Inc., 574 Fed. Appx. 872, 874 (11th Cir. 2014) 13 (applying Florida law and recognizing that the Workers’ Compensation Exclusion does eliminate coverage for volunteers because they do not qualify as “employees” as defined by statute). D. Conclusion: the complaint does not unequivocally demonstrate that Flicker Construction was obligated to provide worker’s compensation benefits. In sum, looking only to the factual allegations within the underlying complaint, as this Court must, it is impossible to conclusively determine whether Mr. Perea qualified as an “employee” entitled to benefits under section 440.10. If Mr. Perea was not an actual or statutory “employee” of Flicker Construction, the company was not obligated to provide him with worker’s compensation benefits. Accordingly, the allegations of the underlying complaint do not fall “solely and entirely” within the Workers’ Compensation Exclusion, meaning that MCC owed a duty to defend. See Morales, 152 So. 3d at 561 (holding that the Workers’ Compensation Exclusion would apply to eliminate liability coverage only if the insured tortfeasor is required to pay workers’ compensation benefits); Advanced Sys., 272 So. 3d at 527 (holding an insurer may refuse to defend only if it can demonstrate that the “allegations of the complaint are cast solely and entirely within the policy exclusion and are subject to no other reasonable interpretation”). III. The Employer’s Liability Exclusion did not eliminate MCC’s duty to defend because the complaint does not demonstrate Mr. Perea was an “employee.” The second exclusion upon which MCC relies is the “Employer’s Liability Exclusion.” This exclusion eliminates coverage for “an employee” who was injured in the course of his “employment by the insured” or performance of “duties related to the conduct of the insured’s business.” “Employee” is defined in the policy to include a “leased worker” 4 but not a “temporary 4 “Leased worker” means a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business. “Leased worker” does not include a “temporary worker.” Ex.A.1 to MCC’s Motion, CG00011207 p.13. 14 worker.” 5 Taken together, MCC was required to defend Flicker Construction from any bodily injury liability claim made by non-employees, including “temporary workers.” See Nat'l Indem. Co. of S. v. Landscape Mgmt. Co., Inc., 963 So. 2d 361, 363 (Fla. 4th DCA 2007) (recognizing that the insurer would owe a duty to defend if the injured claimant was a “temporary worker” rather than an “employee” as defined in the policy). Although the complaint in the underlying tort action alleged Manuel Perea “was either directly or indirectly retained by FLICKER to perform bathroom tile installation,” it contains no other allegations from which it can be determined whether Mr. Perea qualified as an “employee” of Flicker Construction as defined in the policy. Indeed, as described above, it is unclear from the complaint whether Flicker Construction was the general contractor at the project or even whether it was responsible for the completion of the tile work. Plaintiff acknowledges that Florida courts have construed the term “employee” in the Employer’s Liability Exclusion to include “statutory employees” as defined in Florida Statutes section 440.10(1)(b) – employees of a subcontractor in a vertical relationship with the insured. See Florida Ins. Guar. Ass'n, Inc. v. Revoredo, 698 So. 2d 890, 891 (Fla. 3d DCA 1997) (holding that the Employer’s Liability Exclusion applied to eliminate coverage where the injured claimant was a statutory employee of th