[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR TH E ELEV ENTH C IRCUIT
________________________ FILED
U.S. COURT OF APPEALS
ELEV ENT H CIR CUIT
No. 03-11106 JANUARY 27, 2004
________________________ THOMAS K. KAHN
CLERK
D. C. Docket No. 01-00795-CV-T-27-MAP
AJA X BU ILDI NG C ORP ORA TION ,
f.u.b.o. St. Paul Fire &
Marin e Insura nce Co mpany ,
Plaintiff- Appe llee,
versus
HAR TFO RD F IRE IN SUR ANC E CO MPA NY,
Defen dant-A ppellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(January 27, 2004)
Before TJOF LAT, H ULL and FAY, C ircuit Judges.
FAY, Circuit Judge:
Defen dant-A ppellant, H artford I nsuran ce Com pany (“H artford” ), appeals
the district court’s award of summary judgment in favor of Plaintiff-Appellee,
Ajax Building Corporation (“Ajax”), which had initiated suit for the use and
benefit of St. Paul Insurance Company (“St. Paul”). Ajax sued Hartford, seeking
to recover $225,000 St. Paul had paid to Kelley Equipment, Inc. (“Kelley”) on
behalf of Ajax, due to a damaged crane, on the basis that Ajax and the crane were
insured under a builder’s risk policy issued by Hartford. Although Hartford
concedes that Ajax was an insured under both the builder’s risk policy and a
supplement to this policy, the Difference in Conditions (“DIC”) policy, Hartford
argues that the damaged crane is not covered under either policy. The district court
found that the DIC policy contained inconsistent and ambiguous provisions and
therefore entered summary judgment in favor of Ajax, concluding that the crane
was indeed covered under the DIC policy. However, after reviewing the DIC
policy, we find that it unambiguously excludes the crane from coverage, and
therefor e reverse the district c ourt’s gr ant of su mmary judgm ent and r emand with
directions to enter final judgment in favor of Hartford.
I.
This insurance dispute arose out of an incident during the construction of the
Pinellas County Jail Facility Expansion Project (“Project”). Clark Construction
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Group, Inc. (“Clark”), the general contractor, was required under the prime
contract to procur e a builde r’s risk ins urance p olicy nam ing all of its
subcontractors as additional insureds, and this policy was to insure against all risks
of loss, unless specifically excluded, with a policy limit equal to the completed
value of the jail facility. T he build er’s risk p olicy and the DIC supplem ent to this
policy issued by Hartford naming both Clark and Ajax as insureds is a result of
these contract terms.
Clark subcontracted with Ajax for the purpose of performing structural
concrete work on the P roject. Clark, in accordance with the subcon tract terms,
leased a crane from Kelley that Ajax was to use in its structural work on the
Project. While Ajax was performing crane operations, Kelley’s crane collapsed
and was damaged. As a result of this accident, Kelley sued Clark and Ajax in a
Florida state cour t for dam age to the crane. H artford d efended Clark in this state
action pu rsuant to coverag e under a contrac tor’s equ ipment lia bility policy , while
St. Pau l defend ed Ajax under a general lia bility policy Ajax h ad obtain ed in
conjunction with the work it was performing on the Project. Clark made demand
on St. Paul to pay for the dam aged crane under A jax’s general liability policy,
claiming that pursuant to its subcontract with Ajax, Ajax was obligated (1) to have
named Clark as an additio nal insur ed on th e genera l liability polic y issued b y St.
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Paul and (2) to indemnify, defend, and hold Clark harmless for property Ajax
damaged in the course of its work on the Project. Ajax made its own demand on
Hartford to pay the claim for the dam aged crane under Clark ’s builder’s risk
policy.1 Ultimate ly, the state co urt action resulted in a settlemen t, where St. Pau l,
on behalf of Ajax, and Hartford, on behalf of Clark, agreed to pay for the damaged
crane, with Hartford paying $75,000 under Clark’s contractor’s equipment policy
and St. P aul payin g $225 ,000 un der Aja x’s gene ral liability po licy.
Subsequent to this state court action, Ajax, on behalf of St. Paul, sued
Hartfo rd und er the bu ilder’s risk policy to r ecoup th e $225,000 S t. Paul ha d paid to
Kelley. In its com plaint, Ajax claim ed it was a nam ed insured u nder Har tford’s
builder’s risk polic y and tha t Hartfo rd had a contractu al obligatio n unde r this
policy to defend and indemnify Ajax against the crane loss liability. However, the
policy attached to Ajax’s complaint was not the original builder’s risk policy, but
rather was a composite of parts of the DIC policy and a contractor’s equipment
policy. The district court determined, and this is not challenged by the parties, that
the contractor’s equipment policy does not name Ajax as an insured.2 As to the
1
The document Ajax relied on to make its demand to Hartford was not in fact the original
builder’s risk policy, but rather was a composite of parts of the DIC policy and the contractor’s
equipment policy.
2
Hartford maintains that the subcontract agreement between Ajax and Clark did not
require Clark to name Ajax as an insured under its contractor’s equipment policy. Hartford
does admit that Clark was obligated under the prime contract to name Ajax as an insured under
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original builder’s risk policy, the district court found, and this is also not
challeng ed by the parties, tha t althoug h Ajax is consid ered an in sured u nder this
policy, the policy does not cover the crane equipment damaged. However, the
district court did conclude that Hartford owed Ajax insurance coverage for the
damag ed crane under th e supple ment to th e builder ’s risk po licy, the D IC polic y.
In reaching this conclusion, the district found that certain provisions of the DIC
policy were inconsistent and ambiguous. Accordingly, the district court construed
these ambiguous provisions against the drafter, Hartford, and found the DIC policy
provided coverage for the crane. It is only this finding as to the scope of coverage
within th e DIC policy tha t is challeng ed in this C ourt.
II.
We rev iew a gr ant of su mmary judgm ent de novo. Bosarge v. United States,
5 F.3d 1414, 14 16 (11th Cir. 1993). S ince the issues raised here were decided as a
matter of law bas ed upo n written docum ent, the dis trict court’s order is s ubject to
its property policies, the builder’s risk policy and the DIC policy, and Ajax is indeed a named
insured under both these policies. Nevertheless, Hartford contends that these property policies
do not cover the damaged crane. Ajax argued to the district court that under the rationale of
Dyson & Co. v. Flood Engineers, Architects, Planners, Inc., 523 So. 2d 756 (Fla. 1st DCA
1988), regardless of whether Ajax is a named insured under the contractor’s equipment policy or
whether the builder’s risk policy and DIC policy cover the crane, Ajax is still entitled to the
benefits of all insurance procured by Clark due to the prime contract requiring Clark to provide
insurance of “all risks.” However, because the district court found coverage for the crane under
the express terms of the DIC policy, it did not decide this issue, and since the parties do not raise
the issue on appeal, we also decline to address it.
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comple te and ind epende nt review by this C ourt. Id. In reviewing the grant of
summary judgment, this Court applies the same standard as used in the district
court. Wilson v. North cutt, 987 F.2d 719, 721 (11th Cir. 1993).
III.
Hartford argues that under the “Coverage” provisions of the DIC policy, the
damaged crane is expressly excluded. The DIC policy provides for coverage as
follows (emphasis added):
A. COVERAGE
1. We will pay for ALL RISK OF DIRECT
PHY SICA L “Los s” to Co vered P roperty ...
caused by any of the Covered Causes of
Loss... Covered Prop erty is defined as:
a. Structu res ... fixtur es, equip ment,
machinery and similar property which
will become a permanent part of the
structure ...
d. Property of others used or to be
used in, or incidental to the
construction op erations, for which
you may be responsible or shall, prior
to any “loss” for which you make a
claim, have assumed responsibility.
2. Property Not Covered
Covered Property does not include:
a. Machinery, tools, equipment, or
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other property which will not
become a permanent part of the
structure(s) described in the
Declarations or Schedule unless the
replacem ent cost o f such p roperty is
included in the contract price and
reported to us;
It is undisputed that the damaged crane initially falls under the “Covered P roperty”
provision, as it certainly is considered “property of others used or to be used in, or
incidental to the construction operations.” Nevertheless, Hartford claims that the
crane is excluded from coverage under the “Property Not Covered” provision
because it is “equipment, or other property which will not become a permanent part
of the structure.” The district court, however, found the following:
To the extent that these clauses are ambiguous or
inconsistent, under Florida law, any ambiguity or
inconsis tency mu st be con strued ag ainst Ha rtford an d in
favor of coverage. Moreover, the exclusionary clauses
must be construed more strictly than the coverage clauses
in the DIC policy.
The district court thus concluded that the DIC policy provides coverage for the
damag ed crane .
The district court was certainly correct in its statement of Florida law that
ambiguities or inconsistencies must be construed against the insurer and in favor of
coverag e. Gilmore v. St. Paul Fire & M arine Ins., 708 So. 2d 679 (Fla. 1st DCA
7
1998). However, simply because one provision gives a general grant of coverage
and another provision limits this coverage does not mean there is an ambiguity or
inconsis tency betw een the tw o. This is the very n ature of a n insura nce con tract;
exclusio ns in cov erage are express ly intende d to mo dify cov erage clau ses and to
limit their sc ope. Cont’l Corp. v. Aetna Cas. & Sur. Co., 892 F .2d 540 , 546 (7 th
Cir. 1989). The exclusion clause in this DIC policy is not hidden among other
language so as to create ambiguity or confusion. Both the coverage clause and the
exclusion clause are given equal dignity within the contract. We agree with the
district court that in Florida exclusionary clauses are construed more strictly than
coverage clauses, and if exclusions are ambiguous or susceptible of more than one
meanin g, they m ust be co nstrued in favor of cove rage. Psychia tric Asso c. v. St.
Paul & Fire Marine Ins. Co., 647 S o. 2d 13 4 (Fla. 1 st DCA 1990) ; Allstate Ins.
Co. v. Shofner, 573 S o. 2d 47 (Fla. 1st D CA 1 990). H owev er, there is s imply
nothing about th e exclusio nary clau se in this co ntract that is ambigu ous.
Consequently, the rule concerning ambiguities is not applicable. Indeed, the
exclusionary clause is express in its meaning: only one subset of “property of
others,” “p roperty w hich w ill not beco me a per manen t part of th e structur e,” is
excluded. Florida law cautions that courts must not add meaning to the terms of an
insuran ce policy to create an a mbigu ity wher e none e xists. City of Delray Beach,
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Fla. v. Agric. Ins. Co., 85 F.3d 1527, 1531 (11th Cir. 1996) (citing Excelsior Ins.
Co. v. Pomon a Park Bar & P ackage Store, 369 S o. 2d 93 8 (Fla. 1 979)).
When examining the nature of builder’s risk policies, which the DIC policy
is essentially a supplement to, it makes sense to provide coverage for equipment
and pro perty of o thers, bu t then to ex clude an y portion of such proper ty if it will
not become a perman ent part of the structure. The very purpo se of a “builder’s risk
policy” is to provide protection for the building under construction. Deutsch,
Kerrig an, & S tiles, Construction Industry Insurance Handbook § 9.6, at 151
(1991 ). See also , e.g., Data Specialties, Inc. v. Transcon. Ins. Co., 125 F.3d 909,
914 (5 th Cir. 19 97); Gust K. Newberg Constr. Co. v. E.H. Crump & Co., 818 F.2d
1363, 1364 (7th Cir. 1987). Just as there are standard forms of property insurance
used to insure existing buildings, builder’s risk policies are used to insure the
building while it is in the proc ess of be ing built. D eutsch, supra § 9.2, at 1 44-45 .
In addition to insuring the structure itself, these policies also typically include
building materials, machinery, and equipment on the premises that are awaiting
installation . Id. § 9.6, at 1 51. Th is kind o f machin ery and e quipm ent is clearly
different from a contractor’s machinery and equipment that is used in the
construction process, such as the damaged crane.3 The type of machinery and
3
Contractor’s machinery and equipment used in the construction process are typically
covered by a different kind of policy, sometimes called an “equipment floater policy.” Id. § 9.6,
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equipmen t intended to fall un der the definition of “covered p roperty” in a bu ilder’s
risk polic y is that w hich w ill becom e a perm anent pa rt of the str ucture – this
includes materials such as elevators, doors, windows, electrical equipment, and
water p umps. H owev er, since th ese mater ials are gen erally deliv ered to th e site
before they are required in order to avoid delays in construction, ownership of the
proper ty may no t yet belon g to the o wner o f the build ing. Id. § 9.6, at 1 50. It is
these materials that the DIC policy is referring to when it provides coverage for
“property of others.” Although Kelley’s damaged crane technically falls within the
category “property of others,” it is not the type of property to become a part of the
building and cov ered un der a bu ilder’s risk policy; consequently, it is exp ressly
excluded in the DIC policy by the provision requiring covered property to be that
which will become a permanent part of the structure.
IV.
In conclusion, we find that the district court erred in construing the DIC
policy against Hartford and in favor of coverage. Accordingly, we reverse the
district court’s grant of summary judgment and remand with directions to enter
final judgment in favor of Hartford.4
at 152.
4
The district court awarded attorney’s fees to Ajax under Florida Statutes, section
627.428 on the basis that judgment was entered in favor of Ajax, an insured. However, since we
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REVE RSED and RE MAN DED w ith instructions.
now reverse the judgment in favor of Ajax, the award of attorney’s fees is vacated.
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