Lexington Insurance Company v. GERSBECK et al, No. 4:2018cv10118 - Document 27 (S.D. Fla. 2018)

Court Description: OPINION ORDER GRANTING DECLARATORY JUDGMENT. Signed by Senior Judge James Lawrence King on 11/2/2018. See attached document for full details. (jw)

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Lexington Insurance Company v. GERSBECK et al Doc. 27 U N ITED STATES DISTRICT COU RT SOU TH ERN D ISTRICT OF FLO RIDA KEY W EST DIVISIO N IN ADM IRALW CASE N O.4218'CV'10118-JLK LEXINGTON IN SU RAN CE COM PANY, a Foreign Corporation, Petitioner, NICOLE GERSBECK ,an Individual, ISLAM ORA DA A SSET M AN AGEM ENT,IN C., a Florida corporation,DAVID CH AM GPA GN E, an Individual,and M &M VENTURES,IN C., a foreign corporation. Respondents. / OPIN ION AN D ORDER GRANTIN G DECLAM TO RY JU D GM EN T TH IS CAU SE cam e before the Court upon Petitioner, LEXING TON INSU RANCE COM PANY (ftluexington''),M otion to Re-open Case and for Entry of Final Judgm ent A gainst Respondents, ISLAM OM DA ASSET M ANA GEM ENT, INC. (''14. 111'') and DAVID CHAM PAGNE (dtchampagne'') (collectively, the dtRespondents'l. A Clerk'sdefaultwasentered againstIAM Iand Cham pagne ED.E. 181 and to date,IAM I and Champagne have failed to appear in this action and failed to file an answer or defensive m otion to Lexington's Petition for Declaratory Relief(D.E.11.Accordingly,thism atterisripefordisposition asto them . IN TRODU CTION This is an action for declaratory reliefwhere Lexington is seeking a judicial Dockets.Justia.com determ ination as to its rights and obligations under a certain Dive Boat Liability Policy bearing Policy N o.023462645 and Dive BoatM arine Certificate No.0140078, which w as issued to IAM I for the dive vesselGIA NT STRIDE and bearing effective dates of July 22, 2013 through July 22, 2014 (the dtpolic/'). In this action, Lexington nam ed several Respondents - IAM I,M r. Cham pagne,M &M Venturesl and N icole Gersbeck. Lexington now seeks the entry of Final Judgm ent against Respondents, IAM I and Cham pagne. Lexington argues, lhter alia, that final judgm ent is appropriate under Fed.R.Civ.P.55 (b)(2)because a Clerk's Default was already entered against IAM I and Champagne on September 12,2018 ED .E. 181. T()date,these Respondents have failed to enter an appearance and likewise failed torespond to any pleading,including the Petition forDeclaratory Relief(D.E. 11.Upon carefulreview ofthe record,and as setforth more fully below,this Court findsthatentry ofa finaljudgmentagainstIAM Iand Champagneis appropriate. PRO CED U RAL H ISTORY On July 20,2018,Lexington filed this declaratory judgm ent action seeking a ruling from this Courtthatitdoes nothave a duty to defend or indem nify its Nam ed Insured,IAM I,and D avid Cham pagne,as President ofIAM I,under the Policy in relation to an incidentthatoccurred on July 1,2014.SeeD.E.1,!!48-87. O n August 13,2018,IAM I and Cham pagne were served with a copy of the Sum m ons,Petition for Declaratory Reliefand the exhibits attached thereto.See D.E.17,Com p.Ex.A .,Return ofService. lLexington and M &M Venturesexecuted a Stipulation & Policy Release dated August30,2018,and onSeptember4,2018,theCourtan OrderdismissingM&M Ventureswith prejudicefrom thisaction (D, E.161 2 IAM I and Cham pagne failed to respond to Lexington's Petition for Declaratory Relief within twenty-one (21)days,or by September 4,2018,as was required by Rule 12 ofthe FederalRules ofCivilProcedure. On Septem ber 11,2018,Lexington m oved for entry of Clerk's D efault D .E.171,which wasgranted on September 12,2018 (D.E.181. Thereafter,on October 02,2018,Lexington tim ely m oved for entry of default finaljudgm ent pursuant to Fed.R. Civ.P. 55 (b)(2) against IAM I and Champagne D .E.241. To date,IAM Iand Champagne have failed to appearin this action or file an answ er or present a defense by m otion to Lexington's Petition for Declaratory Relief(D.E.11. LEGAL STA NDA RD LegalStandardfor W' zlizrrzofD efaultJudzm ent Rule 55 of the Federal Rules of Civil Procedure yets forth a two-step procedure forobtaining a defaultjudgm ent. First,when a defendantfailsto plead or otherwise defend the law suit,the clerk of court is authorized to enter a clerk's default. See Fed.R.Civ.P.55 (a)(2018). Second,afterentry oftheclerk'sdefault, if the defendant is not an infant or incom petent person,the court naay enter a defaultjudgm entagainstthe defendantfor notappearing ordefending the lawsuit. See Fed.R.Civ.P.55(b)(2)(2018). Rule 55 characterizes an entry ofdefaultand a defaultjudgm ent as two separate events;therefore,prior to obtaining a default judgm ent under either Rule 55(b)(1) or Rule 55 (b)(2),there m ustbe an entry of defaultasprovided by Rule 55 (a). SeeFed.R.Civ.P.55 (2018). d'The effectofa defaultjudgmentis thatthe defendant adm itsthe plaintiffs well-pleaded allegations offact,isconcluded on those factsby thejudgm ent,and is barred from contesting on appeal the facts thus established.'' B uchanan Bowm an, 820 F. 2d 359, 361 (11th Cir. 1987) (internal quotation and citation omitted). After a default has been entered by the Clerk pursuant to Rule 55(a),the Courtm ustthen review the sufficiency ofthe com plaintbefore determ ining w hether the moving party is entitled to a defaultjudgm ent pursuant to Rule 55 (b). See Uhited States ;c Kahnt264 F.App'x 855,858 (11thCir.2006)(citing to M ' shlhlatsu Constr.Co.7.H ouston N atr /Bank,515 F.2d 1200,1206 (5th Cir.1975)). ddW hile a com plaint ...does notneed detailed factualallegations ...a plaintiffs obligation to provide the grounds of his entitlem ent to relief requires m ore than labels and conclusions,and a form ulaic recitation ofthe elem ents ofa cause ofaction willnot do.'' Bell A d. Corp. Twom bly 550 U .S. 544, 555 (2007) (internal citations omitted). lfthe adm itted facts are sufficient to establish liability,then the Court m ust ordinarily ascertain the appropriate am ountofdam agesand enterfinaljudgmentin that am ount.M ' shlknatsu Constr. Co.,Zètf,515 F.2d at 1206. H ow ever,in this action for declaratory relief, dam ages are not at issue, and so no further consideration ofdam ages is required. See SE C p: Sm yth,420 F.3d 1225,1232 n.13 (11th Cir.2005) (stating that tdltule 55(b)(2) speaks of evidentiary hearings in a perm issive tone. . W e have held that no such hearing is required where all essentialevidence isalready ofrecord.'')(citationsom itted). 4 Florida Lap'Regardlhg an Insurerk D utv to D efend or Indem m fv theInsured In Florida, an insurer's duty to defend the insured depends solely on the allegationsfiled in the complaint.TroplbalPark Inc.pc United StatesH delity and Guaranty Co.,357 SO.2d 253,256 (F1a.3(1DCA 1978). (tr lahe com plaintm ustallege facts which fairly bring the case within coverage. 1f,Ehoweverl,the complaint alleges factspartially w ithin and partially outside the scope ofcoverage,the insurer is obligated to defend the entire suit.''Id If after exam ining the allegations ofthe com plaintthere rem ains any doubtregarding the insurer's duty to defend,then the presumption is in favor ofthe insured. Lawr yrdz. s TitleIns.Corp.P:JD C (Am erica) Corp.,52 F.3d 1575, 1580'81 (11th Cir. 1995). There is no duty to defend the insured when tdthe allegations of the initial com plaint do not allege facts which w ould bring the case w ithin the coverage ofthe insurance policy.''Chicago T!./7 ', Ins. Co.vr.CVReI't Inc.,588 So.2d 1075,1075-76 (Fla.4th DCA 1991). An insurer has no duty to indem nify w hen it has no duty to defend the insured. See Spencer p: Assurance Co.ofAm erica,39 F.3d 1146 (11thCir.1994). D ISCU SSION U pon careful review and consideration of the Petition for Declaratory Relief (D.E.11,M otion to Re'open Case and for Entry ofDefault FinalJudgment D .E. 241,and other relevant filings,this Court finds that the Petition for Declaratory Reliefshows a 'fcase ofactualcontroversy''within this Court'sjurisdiction. See28 U SC j2201.Lexington has established that IAM I and Champagne were properly served,and a Clerk's Defaultw as entered against them when they failed to answer 5 orotherwiserespond to thePetition forDeclaratory Relief.SeeD.E.24,!:7-9. Furtherm ore,the Petition for Declaratory Relief adequately states a claim upon w hich relief m ay be granted. The Petition for Declaratory Relief provides sufficient factualallegations and evidence show ing that IAM I and Cham pagne did not apply for and purchase crew coverage for an additionalprem ium and therefore no such coverage exists under the Policy. M oreover,it has pled sufficient factual allegations dem onstrating that there is no coverage for the claim s asserted by N icole Gerbeck in an action filed against IAM I, Cham pagne and M & M in the Southern D istrict of Florida, Key W est Division, styled M bole Gersbeck s; et al, Case N o.: 4:16-CV ' Islam orada Asset M anagem ent, Inc., #4 /a K ey .DJ'z,, 10026-JLK (thetdunderlying action.''). In particular, the following well-pleaded allegations in the Petition for Declaratory ReliefD .E.11are adm itted by theinsuredsandestablish that: . Lexington underw rote a PADI D ive Boat Liability M aster Policy bearing num ber 023462645 and issued Certificate num ber 201400078 to N am ed Additionallnsureds,IAM I and M &M ,for the dive vessel GIAN T STRIDE . The subjectPolicy bore effective dates ofJuly 22,2013 through July 22,2014 (herein dtthe Polic/'). SeeD.E.1,! 26. ThePolicvk R elevantProvlàlbns . The Policy provides as follows: AG REEM EN T In consideration of the prem ium paym ent and com pliance w ith policy provisions,W e willprovide the insurance on the term s of this policy, subject to the conditions, limitations, exclusions, definitions, and 6 warranties contained herein or endorsed hereon. The coverage provided by rlk polky Jk also F anted sublàct to the statem ents m ade by the Nam ed Insures or Jk agen% on the applkation szkned by the N am ed Insured and m adepartofthlbpohby DEFIN ITION S ddYou''and ttYour''refer to the N am ed lnsured on the Certz cate oflnsurance. SE CTION B 'LIABILITY INSU R AN CE 1. COVERA GE PROVIDED Subject to the exclusions below, W e will pay for Bodily Injury or Property Dam age for w hich the Insured Person becom es legally liable topay through theownership,maintenanceoruseoftheVessel,up to the llm itstated J: ?JSection B oftheD eclaration Page .... 2. EXCLU SION S N evertheless,W e w illnotpay any am ount: A.For any claim s for Bodily lnjury or Death occurring anywhere other than actually aboard the insured Vessel or the insured Vessel's dive platform or boarding ladder.In no event does this policy extend to or provide coverage for any claim s for PersonalInjury or Death for any personts) actually in the water,or while under the supervision of a Divem aster,D ive lnstructor or Assistant D ive lnstructor,or engaged in w ater sports of any nature,, including but not lim ited to w aterskiing, aquaplaning, parasailing, scuba diving, snorkeling or operatingajetskiorsimilarcraft.z B.Aw arded to any person except w hen Crew Coverage is purchased underany Federalor State Com pensation law or act. C.For any dam ages resultlhg e/zzl Bodlly Injury or Death to Captalh and/or Crewm emberG)unlessfF/tzrequesttolhcluded Captmh and/or CrewmemberG) on Your polzcy and same Jk ar eed .r Us and the number of Captmh and/or Crewmembero are noted on the Declaratlbn Page, Sectlbn A Crew ZJk/V7J' G or by separate 2Endorsement#003CREW COVERAGE ENDORSEM ENT (in water)provides,in part,thatïdforand in consitleration ofan additionalpremium ,section B,part2,exclusionsparagraph A isam ended to include thefollowing: This exclusion doesnotapply to crewm em bez' swhilein the watex and Perform ing crew duties.'' 7 endorsem ent. SECTION F - GEN ERAL CON DITIO NS Applicable to AllSectionsofthisPolicy CAPTAIN AND/OR CREW M EM BERIS) W ARRAN TY : W arranted by You thatany Captain and/orcrewm emberts),shallbe duly licensed or, as applicable,duly certified by the com petent governm ent authority.It is agreed thatthe numberofCaptain and/orCrewm em berts)shallnot exceed the num ber stated on the D eclaration Page. Coverage shall include claim s for Bodily lnjury and Death to a Captain and/or Crewm emberts),as well as those sum s payable to m aintenance and cure under general m aritim e law, excluding any claim for Bodily Injury and Death occurring while in the water or in connection with any w ater activity3, unless for the sole purpose of rescuing or safeguarding the insured Vessel from im m inent peril of for the sole purpose ofan em ergency life saving situation...... N ot withstandlhg any other pzrwàzbza of rlk polic.n the JJO J' Z of liabllity for c7ale , g of any zla/llre lbr Captmh and/or Crewmem berG) shall not exceed the am ount shown on the Certlscate of Insurance under Crew . D àJ7z';J$ and furthen such JJWJJ' ; Jk lhcluded p' J'fJ3 the JJWJJ';ofhàbllity shown lh Section B ofthe Certlscate oflnsurance,and thereJknoadditionfallcoverageJJWJJ'/. Ivl flD id N otApplvfor or PavA dditionalPrem ium for Crew Coverage @ O n July 23,2013,D avid Cham pagne,as President of IAM I,com pleted and executed the follow ing form s aspartofthe renew aland placem entofthe Policy: a. 2013'2014 PADI ENDORSED DIVE BOAT (M ARINE) INSUM N CE. RENEW AL APPLICATION),wherein Champagne expressly indicated t(No''in response to the question ddldloyou wantcoverage forpaid crew while they are in waterg .''SeeD.E.1,!28,Ex.D. The application and these statemaents of the insured are expressly incorporated into the 3Endorsement#003CREW COVERAGE ENDORSEMENT (in water)provides,in part,thatSection F - Generalconditions -captain and/orcrewmemberts)warranty,the following wording is deleted. '' Excludingany claim forbodily injury and death occurring whilein thewaterorin connection with any w ater activityv'' 8 Policy pursuantto the (W GREEM EN T''provision cited above. b. CREW EXCLU SION A CKN OW LEDG EM EN T w herein Cham pagne acknowledged that the Policy did not cover for dtliability resulting from injuries sustained by a crewm em ber including your captaintsl.''See D.E.1,:29,Ex.E. CREW EXCLU SION A CK N OW LED GM ENT IN W ATER form w herein Cham pagne acknow ledged that the D ive Boat Policy did not cover for ddliability resulting from injuries sustained by a crewm ember includingyourcaptainls)while in water.''SeeD.E.1,T 30,Ex.F. d. DIVE BOAT M ARINE PROPO SAL wherein Cham pagne accepted and executed the renew al proposal wherein Lexington specified that crew coveragewasnotbeing offered orpurchased.SeeD.E.1,!31,Ex.G. @ The Policy thereafter w as issued with effective dates of July 22,2013 through July 22,2014. SeeD.E.1,!31-32. Section B ofthe Certificate statesunder M axim um N um ber of Crew : $t0'' and states under Lim it of Insurance - Crew Liability:ddN ot Covered''and under Lim it of lnsurance - Crew in the W ater:tdN ot Covered.'' SeeD .E.1,1(32. SubiectIncident @ On July 1,2014,Gersbeck w as em ployed and w orking for IAM I and Cham pagne as a dive instructor and crewm em ber when she com pleted tw o dives in the water that resulted in decom pression sickness. As a result,Gersbeck was left with perm anentand debilitatinginjuries. SeeD.E.1.!!13-19. 9 @ Gersbeck filed suit against IA M I,Cham pagne and M &M 4 seeking to recover dam ages from IAM I,Champagne and M &M for the injuries she suffered whilein serviceofthesubjectvesselGIANT STRIDE.SeeD.E.1.!J!13-19. Because ofIAM I'S and Cham pagne's refusalto apply for and purchase crew coverage for an additionalprem ium ,Lexington alleges that there is no coverage for Lodily injury to crewm emberts)eitherin oroutofthe waterbecause nocoveragefor bodily injury to crewmemberts)was ever purchased by IAM l/cham pagne orissued by Lexington. SeeD . E.1 $!48'87. As such,Lexington seeks a declaration thatit has no duty to defend or indem nify any N am ed Additionallnsured on the Policy or to pay any sum s to any party for the claim s asserted by Gersbeck in the underlying action since no contract of insurance for crew coverage w as ever form ed betw een Lexington and itsinsureds.SeeD.E.I,!T48-63. Based upon the term s of the Policy,the executed declination form s (which were m ade part ofthe Policy),and the well'pleaded allegations ofthe Petition for Declaratory Reliefw hich have been adm itted by IAM I and Cham pagne,there is no coverage under the Policy for claim s relating to injuries suffered by any crewm em ber while perform ing crew duties either in or out of the w ater. The undisputed record evidence dem onstrates that IAM I never applied for and purchased such coverage;therefore crew coverage w as notissued by Lexington and does notexistunder the Policy. In the underlying action,to the extent that Gersbeck alleges that she was 4For ease ofreference the lawsuit filed by Gersbeck againstIAM I,Champagne and M &M in the Southern District of Florida, Key W est Division, styled Nicole Gersbeck v. lslam orada Asset M anagement, lnc.,d/b/a Key Dives, et al.,Case N o.:4:16-CV-10026-JLK shall be referred as the tt underlying action.'' 10 em ployed and w orking for IAM I and Cham pagne as a dive instructor and crew m em ber when she com pleted two dives the w ater that resulted in (Iecom pression sickness and caused her injuries,there is no coverage under the Policy for Gersbeck's claim s. Accordingly,based upon Florida 1aw and the w ell' pleaded allegations ofthe Petition for Declaratory Relief,this Court has determ ined that Lexington has no obligation to defend or indem nify IAM Iand Cham pagne or to pay for any ofthe bodily injury dam ages asserted by Gersbeck in the underlying action. CON CLU SION Accordingly,itis hereby ORDERED,ADJU DGED ,and D ECREED that: Lexington's M otion for Entry of Final Judgm ent (D.E. 241 against IAM I and David Cham pagne ishereby G RAN TED in favor ofLexington. This Court finds and declares that the Policy does not provide any coverage for claim s for injuries suffered by crewm embers while perform ing crew duties. Therefore,Lexington has no obligation to defend or indem nify IAM I and Cham pagne for claim s asserted by G ersbeck in the underlying action;or to pay for any bodily injury dam ages asserted or awarded to Gersbeck in the underlying action. Finaljudgmentishereby entered in favorofPetitioner,LEXINGTON IN SU RAN CE COM PAN Y, and against Respondents, ISLAM O RADA A SSET M AN AGEM ENT,IN C .and DAVID CHAM PA GN E. 4. Al1other pending m otions are hereby DEN IED as m oot. 0. r The Clerk is directed to CLO SE this case. 11 D ON E AN D ORDERED in Cham bers at the Jam es Law rence King Federal Justice Building and U nited States Courthouse in M iam i,Florida,on this 2ndday of N ovem ber 2018. % J cc; Al1counselofrecord 12 ES LAW REN CE KIN G N ITED STATES DISTRICT GE

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