FLORIDA FEDERAL CASES

  • Declaratory Judgment, Abstention, Parallel Proceedings, Coblentz Agreement, Indemnity. – Applying the Amerisfactors, the Middle District of Florida abstained from and dismissed indemnitor’s declaratory judgment action to determine indemnity provision’s (1) scope, (2) duty to defend against third-party contractor’s claims, and (3) wrongful refusal to defend as it applied to indemnitee’s Coblentz agreement with contractor because the state court action was pending for four years, involved the same parties and issues, involved Florida law, and sought remedies the state court could provide. In a declaratory action, Bright House, as potential indemnitor to Pinellas County under a  bridge Right of Way Permit, alleged that Pinellas County’s bridge contractor had asserted claims against Pinellas County regarding the bridge’s construction. Without consulting Bright House, Pinellas County and the contractor entered into a Coblentz agreement: a negotiated settlement in which the defendant, Pinellas County, consents to judgment and assigns to the contractor, as injured party, any cause of action against the defendant’s insurer. To recover under a Coblentz agreement, a party must bring a subsequent action against the insurer to prove (1) coverage, (2) a wrongful refusal to defend, and (3) that the agreement was reasonable and made in good faith. Despite a pending state action between the parties regarding Bright House’s obligations under the Permit’s indemnity provision, Bright House argued that “duty to defend” had not been “teed up” in the state suit and thus was best brought as a separate action for declaratory judgment in federal court. In determining whether to abstain, the court first examined whether the proceedings were parallel­—i.e., whether the parties and subject matter were substantially the same. The court found that “duty to defend” had been raised in the state suit, noting that Bright House and Pinellas County had filed cross motions for summary judgment in the state action on the indemnification clause’s scope and duties. Furthermore, Bright House’s federal complaint merely mentioned the Coblentz agreement but actually sought declaration on the Permit’s indemnification clause. After concluding the proceedings were parallel, the court examined the Ameris factors to determine whether to exercise jurisdiction over the declaratory judgment action, noting that the factors are neither absolute nor exclusive. Pursuant to these factors, the court concluded that abstention was proper because the case had been pending for four years in state court, involved Florida law, involved a municipality of Florida, and sought remedies the state court could provide. Accordingly, the court granted Pinellas County’s motion to dismiss to the extent the court abstained from hearing the matter. Bright House Networks, LLC v. Pinellas County, No. 8:14-cv-1237-T-33TBM, 2014 WL 4794786 (M.D. Fla. Sept. 25, 2014).

FLORIDA STATE CASES

  • Attorney Fees, Fee Provisions – A party claiming that another was bound by a contract cannot then argue that party was not bound in order avoid a claim for attorney’s fees under the contract. Technogroup filed suit for breach of contract and fraud, claiming that it had entered into a contract for the lease and maintenance of a copier with Joel Mason and MCG Financial. Although the contract showed that it was to be billed to another business, Technogroup’s complaint alleged that the contract had been signed by Joel Mason, on behalf of his corporation, MCG Financial Services. Technogroup also sought attorney’s fees pursuant to a provision in the contract. At trial, Technogroup admitted to the contract and put on evidence showing that Mason had signed the contract for MCG and not for another party, to which Mason admitted. However, Mason and MCG prevailed on the grounds that they had paid a collection agency all due sums and had received a release. Mason and MCG then moved for attorney’s fees under the contract. To avoid paying these fees, Technogroup, now represented by a new attorney, argued that Mason and MCG were not parties to the contract. The trial court accepted the new attorney’s argument that she was not bound by the pleadings and arguments made by prior counsel. On appeal over the payment of the fees, the Fourth District Court of Appeal reversed, finding that Technogroup was estopped from making such an argument after asserting the exact opposite position at trial. The court further noted that, even absent estoppel, the trial court’s conclusion that Mason and MCG were not parties to the contract was contrary to the evidence and stipulations established at trial. Accordingly, the court reversed the order denying fees and remanded the case to the trial court to determine the amount due. MCG Financial Services, LLC v. Technogroup, Inc., 39 Fla. L. Weekly D2046a (Fla. 4th DCA Sept. 24, 2014).
  • Worker’s Compensation for Subcontractor’s Employees, Worker’s Compensation Immunity - Once an employer acquires and maintains workers’ compensation insurance for the benefit of its employees, or ensures that a subcontractor does so for subcontractor’s employees, the employer is immune to an employee’s personal injury suit. The employer need only secure—not  pay—the benefits to receive this immunity. VMS contracted with Florida Department of Transportation to maintain certain roadways and bridges. VMS complied with its obligation under the contract to secure workers’ compensation insurance. VMS subcontracted some of the work with ABC. Similarly, ABC complied with the subcontract’s obligation to provide workers’ compensation insurance. ABC hired a worker who then hired several day laborers, one of whom suffered injury while working. The worker was taken to a hospital where it was reported that the worker was injured while working at home. The worker never filed a workers’ compensation claim, choosing instead to bring a negligence action against ABC and VMS. The trial court granted the summary judgment to the worker, who argued that VMS was estopped from asserting immunity because it had not notified its workers’ compensation carrier of the injury. On appeal, the Third District Court of Appeals reversed. The Third District held that VMS was immune to this suit pursuant to Florida Statute §440.11, finding that VMS complied with Florida Statute §440.10, which requires an employer to secure coverage for its employees or ensure that the subcontractor does so for the subcontractor’s employees. Neither need actually pay the benefits to immunize the contractor from suit. It was undisputed that VMS and ABC had secured coverage, and VMS was therefore immune to personal injury liability. VMS, Inc. v. Alfonso, No. 3D13-1044, 2014 WL 4723565 (Fla. 3d DCA Sept. 24, 2014).