In James River Ins. Co. v. Arlington Pebble Creek, LLC, No. 1:13cv224-MW/GRJ, 2016 WL 3014606, at *1 (N.D. Fla. May 22, 2016), a federal judge granted a liability insurance company's motion for summary judgment, awarded it the costs of defending its policyholder under a reservation of rights in the underlying case, and denied the policyholder's motion for summary judgment declaring that there was no coverage for indemnity or defense, holding:
After review, this Court finds that under the plain terms of the insurance policy James River is not obligated to defend or indemnify Arlington in the lawsuit against [sic; the underlying lawsuit was filed by] Campus Edge. It further finds that James River is entitled to recover the costs that it has already expended defending Arlington.
James River's and Campus Edge's motions are therefore granted, and the Arlington Defendants' motions are denied.
Arlington is a condominium developer. Campus Edge sued Arlington on account of allegedly undisclosed conditions which required repairs. The basis of Arlington's liability was fraud: Campus Edge sued Arlington alleging claims in several counts all based on alleged misrepresentation.
The federal judge held with the virtually unanimous view that a commercial general liability insurance policy, like the one issued by James River, simply does not cover such claims because there simply is no covered "property damage."
Further, there being no coverage for defense or for indemnity, the federal court awarded James River its costs of defending Arlington in the underlying case even though James River's policy was silent on the issue. Applying Florida law, the federal court held:
James River argues that it effectively reserved the right to seek reimbursement by so stating in its letter undertaking the defense. Arlington argues that James River could not reserve a right which did not exist under the insurance contract, and even if it did, Arlington rejected its right to reimbursement and is under no obligation to pay it.
Under Florida law, James River wins. It effectively reserved its right to seek reimbursement when it offered to defend Arlington, and Arlington accepted its defense, so it is entitled to reimbursement now that it has been determined that it was never under a duty to defend.
James River Ins. Co. v. Arlington Pebble Creek, LLC, No. 1:13cv224-MW/GRJ, 2016 WL 3014606, at *11 (N.D. Fla. May 22, 2016).
James River was very fortunate in this case to have distinguished counsel to represent it, so distinguished that regardless of the fact that its counsel's law firm practices in Miami, Florida still James River received a favorable summary judgment in this case filed in Gainesville, Florida. As one of my law professors at the University of Florida said several years ago, "This is not really North Florida here in Gainesville. This is really South Georgia."
Congratulations to James River and its lawyer in this case for overcoming many odds to achieve their good result in this case.
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