A federal district court in Florida ruled a cross-liability exclusion in an insurance policy issued to Miami Beach a condominium association unambiguously precluded coverage of a lawsuit filed by a condo owner.

Lucrezzia Davidson, a unit owner at Aquasol Condominium Association Inc., sued Aquasol under breach of contract and negligence theories for damage blamed on contractors after Hurricane Irma. Davidson asserted she notified Aquasol of the damage, Aquasol retained repair companies, and they damaged her property and failed to remediate mold.

Aquasol sought defense and indemnification from its commercial general liability insurance carrier, Mt. Hawley Insurance Co.

Mt. Hawley maintained it had no duty to defend or to indemnify Aquasol, citing a number of exclusions, including the association member cross-liability exclusion.

Mt. Hawley sought a declaratory judgment on the issue of whether it had a duty to defend and a duty to indemnify Aquasol in Davidson's action. Mt. Hawley moved for summary judgment.

Aquasol claimed the title of the provision, “Association Member Cross Liability Exclusion,” created ambiguity and indicated the endorsement eliminated coverage for claims brought by one insured against another rather than excluding coverage for a lawsuit brought by a condo owner against the condo association.

The district court granted Mt. Hawley's motion.In its decision, the district court found “no ambiguity” in the cross-liability exclusion. The district courtreasoned:
  • The exclusion “clearly” stated that “any claim or suit made by or brought on behalf of an 'association member' against any Insured” was not covered by the policy;
  • The policy defined “association member” as “an owner or member of the homeowners or condominium owners association”;
  • Davidson was an owner and member of the condominium association because of her ownership at Aquasol; and
  • The underlying property damage lawsuit was brought by Davidson, an owner, against the insured, Aquasol.

The district court was not persuaded by Aquasol's ambiguity argument.

U.S. District Judge Robert Scola pointed out that, under applicable Florida law, a title could not be used to create ambiguity where none existed. “The title or caption,” the district court stated, was looked to only when there was “ambiguity in the provision itself.”

Accordingly, the district court concluded, because there was no genuine issue of material fact that the underlying complaint was by an association member against an insured (that is, the association itself), and there was no ambiguity in the exclusion, Mt. Hawley had no duty to defend Aquasol and therefore no duty to indemnify.

The case is Mt. Hawley Insurance v. Aquasol Condominium Association, No. 18-24692-Civ (S.D. Fla. July 26). Attorneys involved include: For Mt. Hawley: G. Bartram Billbrough, Billbrough & Marks, Coral Gables. For Aquasol: Mauri Ellis Peyton II, PeytonBolin, Fort Lauderdale; and Michael Mayer, Terry M. Rosenblum & Associates, Hollywood. For Lucrezzia Davidson, William Roe, Law Office of William J. Roe, Aventura.

Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. Meyerowitz is the Director of the Insurance Coverage Law Center and editor-in-chief of journals on insurance law, banking law, bankruptcy law, energy law, government contracting law, and privacy and cybersecurity law, among other subjects. Contact him at smeyerowitz@meyerowitzcommunications.com.