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finding that a Florida RICO claim was covered under a "negligent acts, errors, or omissions" policy because there was also a companion malicious prosecution count. Under Florida law, the malice intent required for the latter could be inferred by demonstrating "gross negligence." And under Florida law, if one ground for liability alleged in a complaint is within the insurance coverage, the insurer is obligated to defend the entire suit
Summary of this case from Catlin Specialty Ins. Co. v. CBL & Assocs. Props., Inc.Opinion
CASE NO: 8:12-cv-829-T-26EAJ
10-18-2012
PHILADELPHIA INDEMNITY INSURANCE COMPANY, Plaintiff, v. STEPHEN H. HAMIC; HAMIC, JONES, HAMIC & STURWOLD, P.A.; WILLIAM L. NICHOLAS and MOLLY WESCOMB, Defendants. STEPHEN H. HAMIC and HAMIC, JONES, HAMIC & STURWOLD, P.A., Third-Party Plaintiff, v. FEDERAL INSURANCE COMPANY, Third-Party Defendant.
ORDER
UPON DUE CONSIDERATION of Plaintiff Philadelphia Indemnity Insurance Company's Motion to Reconsider or to Amend the Order on Summary Judgment (Dkt. 52), and Defendants Stephen H. Hamic and Hamic, Jones, Hamic & Sturwold, P.A.'s Response (Dkt. 56), the Court hereby resolves the issue of whether the Plaintiff owes a duty to defend the insureds with respect to the claim of civil conspiracy.
This Court previously determined that Philadelphia Indemnity Insurance Company (Philadelphia) owes a duty to defend the claim of malicious prosecution. Although the insurer must defend the entire suit, Philadelphia asserts that there must be an additional resolution with respect to the civil conspiracy claim. The Firm, as opposed to Hamic, was never sued for malicious prosecution, and Hamic was not sued for malicious prosecution until the complaint was subsequently amended. Both the Firm and Hamic were initially sued for civil conspiracy. Consequently, the Court will decide whether Philadelphia owes a duty to defend the civil conspiracy claim.
See docket 51, Order dated September 4, 2012.
As noted in the prior order, the complaint alleges that both Hamic and the Firm "conspired" to commit malicious prosecution, extortion and abuse of process. Philadelphia argues that conspiracy, as an intentional tort, is not covered by the professional liability policy at issue. The cases relied on by Philadelphia involve the interpretation of commercial general liability policies insuring against "accidents." An intentional tort may be covered in policies other than those for general liability, which are not based on accidents. See Hartford Fire Ins. Co. v. Spreen, 343 So. 2d 649, 652 (Fla.Dist.Ct.App. 1977) (finding coverage under personal catastrophe policy, but not homeowner's policy, for assault and battery which was not specifically listed as intentional tort covered and where policy did not contain exclusion for damages intentionally caused by insured). A professional liability policy covers errors and omissions and the one in this case does not contain an intentional acts exclusion and provides coverage for some intentional torts though not specifically malicious prosecution or conspiracies.
See docket 15-2, para. 17.
The tort of civil conspiracy consists of the following: (1) an agreement between two or more parties; (2) to perform an unlawful act or to perform a lawful act by unlawful means; (3) the doing of some overt act in pursuance of the conspiracy; and (4) damage to plaintiff as a result of the acts done under the conspiracy. Bray & Gillespie Mgmt. LLC v. Lexington Ins. Co., 527 F.Supp. 2d 1355, 1370 (M.D. Fla. 2007) (citing Florida Fern Growers Ass'n, Inc. v. Concerned Citizens of Putnam Cnty., 616 So. 2d 562, 565 (Fla.Dist.Ct.App. 1993)). In the civil context of conspiracy, the unlawful act is a tort, not a crime, which in this case is malicious prosecution. The "gist of a civil action for conspiracy is not the conspiracy itself, but the civil wrong which is done pursuant to the conspiracy and which results in damage to the plaintiff." Palm Beach Cty. Health Care Dist. v. Professional Med. Educ., Inc., 13 So. 3d 1090, 1096 (Fla.Dist.Ct.App. 2009) (quoting Liappas v. Augoustis, 47 So. 2d 582 (Fla. 1950)). Conversely, "[a]n act which does not constitute a basis for an action against one person cannot be made the basis of a civil action for conspiracy." Buckner v. Lower Fla. Keys Hosp. Dist., 403 So. 2d 1025, 1027 (Fla.Dist.Ct.App. 1981) (citing Liappas, 47 So. 2d at 582). Thus, an underlying tort must exist before a cause of action for civil conspiracy exists.
The element of "intent" to achieve an illegal goal is found in the criminal context. See Ginsberg v. Lennar Fla. Holdings, Inc., 645 So. 2d 490, 502 (Fla.Dist.Ct.App. 1994), which was cited by Philadelphia.
Because malicious prosecution falls within the coverage of the policy at issue under the facts as alleged in this case, there is also coverage for the conspiracy to commit malicious prosecution. The tort of civil conspiracy does not require a finding of specific intent to harm the plaintiff or to extract an intended result. Essentially the intent to commit the tort does not also mandate an intent to do the harm that resulted, which was an arrest. Based on these principles, Philadelphia owes a duty to defend the insureds on the claim of conspiracy. The duty to indemnify cannot be resolved until the underlying case is concluded on the facts as developed at trial or otherwise.
See Capano Mgmt. Co. v. Transcon. Ins. Co., 78 F.Supp. 2d 320, 331-32 (D. Del. 1999) (holding that a duty to defend the underlying wrong triggers a corresponding duty to defend the civil conspiracy to commit that wrong); Northern Sec. Ins. Comp. v. Connors, 20 A. 3d 912, 916-17 (N.H. 2011) (holding that coverage of false imprisonment extends to conspiracy to commit false imprisonment without an application of an intentional acts exclusion).
See Clemmons v. State Risk Mgmt. Trust Fund, 870 So. 2d 881 (Fla.Dist.Ct.App. 2004) (holding that a finding of liability for conspiracy does not necessarily imply that the tortfeasors "intended to harm" the insured "because conspiracy does not require a finding of specific intent, but requires only the additional element that the accused conspired to commit the underlying offense.").
See Lime Tree Village Community Club Ass'n, Inc. v. State Farm Gen. Ins. Co., 980 F.2d 1402, 1407 (11th Cir. 1993) (holding that while "conspired" may "imply intentional conduct in so far as these are volitional acts, these counts do not directly allege Limetree intended the result.").
See also Castro v. Allstate Ins. Co., 724 So. 2d 133 (Fla.Dist.Ct.App. 1998) (finding duty to defend for reckless act of putting radio up to colleague's ear which resulted in severe injury to ear, because the allegations of the complaint showed reckless disregard, not intentional act, caused injuries).
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It is therefore ORDERED AND ADJUDGED that Plaintiff Philadelphia Indemnity Insurance Company's Motion to Reconsider or to Amend the Order on Summary Judgment (Dkt. 52) is granted to the extent the Order of September 4, 2012, is hereby amended to include the further rulings as set forth in this order concerning the denial of Plaintiff's Motion for Final Summary Judgment at docket 44.
DONE AND ORDERED at Tampa, Florida, on October 18, 2012.
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RICHARD A. LAZZARA
UNITED STATES DISTRICT JUDGE
COPIES FURNISHED TO:
Counsel of Record