# Southern-Owners Insurance Company v. MAC Contractors of Florida, LLC

> District Court, M.D. Florida · March 30, 2023

URL: https://www.frixlaw.com/law-library/cases/10112498

## Case

- **Court:** District Court, M.D. Florida
- **Decided:** March 30, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION

SOUTHERN-OWNERS INSURANCE
COMPANY,

Plaintiff,

v. Case No: 2:18-cv-21-JES-MRM

MAC CONTRACTORS OF FLORIDA,
LLC, PAUL S. DOPPELT,
Trustee of Paul S. Doppelt
Revocable Trust dated
12/08/90, and DEBORAH A.
DOPPELT, Trustee of Deborah
A. Doppelt Revocable Trust
dated 12/08/90,

Defendants.

OPINION AND ORDER
This matter comes before the Court on defendant MAC
Contractors of Florida, LLC’s Motion for Summary Judgment (Doc.
#134) and plaintiff Southern-Owners Insurance Company’s Fourth
Motion for Summary Judgment (Doc. #135). Plaintiff and defendant
each filed a Response in Opposition (Docs. #140, #141) to the
other’s motion, and both also filed Replies (Docs. #142, #143).
Defendant also filed a Notice of Supplemental Authority (Doc.
#148). The Court heard oral argument on March 21, 2023. (Doc.
#154.)
I.
There are two operative pleadings in this case. In the Second
Amended Complaint For Declaratory Judgment (Doc. #84), Southern-

Owners Insurance Company (Southern-Owners) seeks declarations that
it has no duty to defend and no duty to indemnify defendants in
1
connection with a since-resolved state court lawsuit. Defendants
filed an Amended Counterclaim [for Declaratory Relief] (Doc. #132)
which asserts that Southern-Owners breached two insurance policies
by not providing a defense in a certain state court case and not
indemnifying defendants.
Two prior motions for summary judgment filed by Southern-
Owners have been granted by the Court and reversed by the Eleventh
Circuit Court of Appeals. See S.-Owners Ins. Co. v. MAC
Contractors of Fla., LLC, 768 F. App’x 970 (11th Cir. 2019) and
S.-Owners Ins. Co. v. MAC Contractors of Fla., LLC, 819 F. App’x
877 (11th Cir. 2020). The second appellate decision sets forth
the basic background facts:
On December 19, 2014, KJIMS [MAC Contractors]
entered into a contract with Paul and Deborah
Doppelt, as trustees of their respective
trusts, to serve as the general contractor for
the construction of a custom residence in
Marco Island, Florida. An exhibit to the

1
The state court lawsuit was resolved pursuant to a
settlement agreement for $70,000 and was dismissed in September
2019.
contract outlined various specifications for
the residence.
Problems arose between KJIMS and the Doppelts
after construction began, and KJIMS eventually
left the job site before completing the
project and before the issuance of a
certificate of occupancy. After serving KJIMS
with a notice of defects, see Fla. Stat. §
558.004, the Doppelts sued KJIMS in state
court in August 2016. In the operative amended
complaint, they alleged, among other things,
that KJIMS and its subcontractors had left the
residence “replete with construction
defects.”
In the Doppelts' notice of defects, which the
amended complaint incorporated by reference,
the claimed “defects” included the following:
“[r]epair loose, broken or chipped pavers in
driveway and walkways and install edge
restraints”; “[r]epair underside of lap siding
– inconsistent paint finish at bottom of
boards”; “[r]epair chatter marks on T&G
ceilings”; “repair damage to all exterior
doors” and “[r]epair all pocket doors”;
“[r]eplace damaged top stair tread”; “[r]emedy
damage to hardwood floors, includ[ing] damage
resulting from use of blue tape and dirt”;
“[r]epair metal roof dents, scratches and
hems”; “[c]lean wall and ceiling paint on
cabinets”; “[r]emove paint spots on baseboards
throughout the house”; “[r]emedy scratches in
granite”; and “[p]atch and paint all holes in
ceilings and walls and twin holes in exterior
hardi plank.” The Doppelts sought to recover
damages for “having to repair and remediate
all defective work performed by KJIMS,” among
other things.
At all relevant times, KJIMS was insured by a
commercial general liability (“CGL”)
insurance policy issued by Southern-Owners. []
KJIMS tendered the Doppelts' lawsuit to
Southern-Owners, which initially agreed to
defend KJIMS but later withdrew the defense
and filed this lawsuit in November 2017
seeking a declaration that it owed no duty to
defend or indemnify KJIMS.
S.-Owners Ins. Co., 819 F. App’x at 878. The Eleventh Circuit
then summarized the first set of summary judgment motions and their
results:
On cross-motions, the district court granted
summary judgment to Southern-Owners. The court
concluded that Southern-Owners owed KJIMS no
duty to defend against the Doppelts' lawsuit
based on a policy exclusion for “Damage to
Your Work.” We vacated that decision on
appeal, concluding that the underlying
complaint could fairly be construed to allege
damages that fell outside the exclusion. See
Southern-Owners Ins. Co. v. MAC Contractors of
Fla., LLC, 768 F. App'x 970, 973–74 (11th Cir.
2019). In remanding, we noted that the court
had not addressed whether the Doppelts alleged
“property damage” within the meaning of the
CGL policy, though we declined to address that
issue for the first time on appeal. Id.
On remand, the district court again granted
summary judgment to Southern-Owners, this time
concluding that the underlying complaint did
not allege “property damage” within the
meaning of the CGL policy. The court reasoned
that the underlying complaint did not allege
any damage beyond the faulty workmanship or
defective work, which did not qualify as
“property damage” under Florida law.
Id. at 878–79. The Eleventh Circuit found this to be error,
stating:
. . . we conclude that the underlying
operative complaint can fairly be construed to
allege “property damage” within the meaning of
the CGL policy and Florida law. Accordingly,
the district court erred in granting summary
judgment to Southern-Owners on this basis.
Id. at 882. The Eleventh Circuit continued:
In the alternative, Southern-Owners argues
that, even if “property damage” was alleged,
we should still affirm the judgment in its
favor based on several policy exclusions
which, in its view, clearly preclude coverage.
We have already concluded that one of these
exclusions — a completed-operations hazard
exclusion — did not eliminate the duty to
defend. Southern-Owners, 768 F. App'x at 973–
74.
With regard to exclusions j(6) and j(7) of the
policy, the other exclusions on which
Southern-Owners relies, these provisions
exclude coverage for “property damage” to the
following:
(6) That particular part of real property on
which any insured or any contractors or
subcontractors working directly or indirectly
on your behalf are performing operations, if
the “property damage” arises out of those
operations; or
(7) That particular part of any property that
must be restored, repaired or replaced because
“your work” was incorrectly performed on it.
Southern-Owners asserts that the phrase
“[t]hat particular part” refers to the “entire
project at issue (i.e. the Subject Property in
its entirety),” so in its view, these
exclusions apply to any damage caused by
defective work performed by or on behalf of
KJIMS on the residence. KJIMS, for its part,
points to authority indicating that these
exclusions would not apply to property damage
that occurred during operations on the
property as a whole “but at a moment in time
when neither KJIMS nor its subcontractors
specifically worked on” the “particular part
of [the] property” that was damaged or must be
restored, repaired, or replaced. See Br. of
Appellee at 15–17. The district court did not
reach this issue, however, and we decline to
address it for the first time on appeal,
“preferring that the district court address it
in the first instance.” Beavers v. Am. Cast
Iron Pipe Co., 975 F.2d 792, 800 (11th Cir.
1992).
Id. at 882–83.
II.
At the beginning of the oral arguments, the parties agreed
that there is no longer a case or controversy with respect to the
duty to indemnify. The underlying state lawsuit has been settled,
and defendants have withdrawn their claim for indemnification of
the $70,000 settlement. All outstanding issues regarding
indemnification are therefore moot.
The remaining focus of the current set of cross-motions for
summary judgment is on the duty to defend. In the first appeal,
the Eleventh Circuit outlined the Florida duty to defend law:
For the duty to defend to arise, the
underlying allegations must “fairly bring the
case within the scope of coverage.” State Farm
Fire & Cas. Co. v. Tippett, 864 So. 2d 31, 35–
36 (Fla. 4th DCA 2003). “If the complaint
alleges facts partially within and partially
outside the scope of coverage, the insurer is
obligated to defend the entire suit.” Trizec
Props., Inc. v. Biltmore Constr. Co., Inc.,
767 F.2d 810, 811–12 (11th Cir. 1985). Any
doubt about whether the insurer owes a duty to
defend must be resolved against the insurer
and in favor of the insured. Id. at 812.
Furthermore, “[b]ecause they tend to limit or
avoid liability, exclusionary clauses are
construed more strictly than coverage
clauses.” Category 5 Mgmt. Grp., LLC v.
Companion Prop. & Cas. Ins. Co., 76 So. 3d 20,
23 (Fla. 1st DCA 2011). Nevertheless, if the
complaint clearly shows “the applicability of
a policy exclusion, the insurer has no duty to
defend.” Keen v. Fla. Sheriffs’ Self-Insurance
Fund, 962 So. 2d 1021, 1024 (Fla. 4th DCA
2007).
S.-Owners Ins. Co., 768 F. App'x at 971–72. In the second appeal,
the Eleventh Circuit noted the potential for coverage and the
resulting duty to defend:
Here, the language of the underlying
complaint, “at least marginally and by
reasonable implication, could be construed” to
create potential coverage under the policy.
Trizec Props., 767 F.2d at 813. The operative
amended complaint alleged that KJIMS used
subcontractors for work on the residence and
that the residence was “replete with
construction defects” and various damage. It
did not further allege which subcontractors
performed which work or how the damage
occurred. Given these ambiguities, the
complaint's allegations are broad enough to
allow KJIMS to prove that one subcontractor
negligently damaged nondefective work
performed by another subcontractor. See id. If
KJIMS could establish that at least some of
the damage arose in this way, there would be
“damage apart from the defective work itself”
and therefore “property damage.” See Carithers
[v. Mid-Continet Cas Co., 782 F.3d 1240, 1250–
51 (11th Cir. 2015)]. Because there is a
potential for coverage, the duty to defend was
triggered. See Trizec Props., 767 F.2d at 813.
S.-Owners Ins. Co., 819 F. App'x at 882. See also Westchester
Gen. Hosp., Inc. v. Evanston Ins. Co., 48 F.4th 1298, 1302 (11th
Cir. 2022); Travelers Indem. Co. of Connecticut v. Richard Mckenzie
& Sons, Inc., 10 F.4th 1255, 1261 (11th Cir. 2021).
III.
2
The insuring agreement of the Policy provides, in pertinent
part, that Southern-Owners “will pay those sums that the insured
becomes legally obligated to pay as damages because of . . .
‘property damage’ to which this insurance applies.” (Doc. #84-1,
pp. 46, 65, 132.) As discussed above, the Eleventh Circuit has
already decided that Southern-Owners had a duty to defend unless
one or more of the remaining exclusions preclude coverage.
Southern-Owners argues that three applicable Policy
3
exclusions cumulatively cover all the damages alleged in the
4
Underlying Complaint. “When an insurer relies on an exclusion to
deny coverage, it has the burden of demonstrating that the
allegations of the complaint are cast solely and entirely within
the policy exclusion and are subject to no other reasonable
interpretation. Exclusionary clauses are generally disfavored.”

2
The Court will use the singular “Policy” since the relevant
language is the same in each of the two Commercial General
Liability (CGL) policies.
3
At oral argument counsel for Southern-Owners acknowledged
that there are no other unresolved exclusions which Southern-
Owners is asserting applies to this case.
4
The parties seem to quibble over what constitutes the state
court “underlying complaint” which is to be examined. The
undersigned has previously held that the pertinent “underlying
complaint” is the Amended Complaint, which includes the statutory
notice of defects. See Doc. #111, pp. 15-17. This remains the
Court’s view.
Hartford Acc. & Indem. Co. v. Beaver, 466 F.3d 1289, 1296 (11th
Cir. 2006) (quoting Northland Cas. Co. v. HBE Corp., 160 F. Supp.
2d 1348, 1359 (M.D. Fla. 2001) (internal citations omitted).

Southern-Owners acknowledges that it bears this burden of proof.
(Doc. #135, p. 11.)
Southern-Owners argues that any reasonable interpretation of
the allegations in the Underlying Complaint establish they are
“cast solely and entirety” within the cumulative scope of the three
Policy exclusions. (Id.) Southern-Owners asserts that to the
extent the Underlying Complaint involves a claim related to
completed operations, any work on the Subject Property entirely
meets the definition of “your work” in Exclusion l. Southern-
Owners further asserts that to the extent the Underlying Complaint
advances any claim related to damages occurring during ongoing
operations, such damages are excluded from coverage by Exclusions

j(6) and j(7). (Id., pp. 8-9.) Thus, according to Southern-Owners,
the cumulative effect of these exclusions is to preclude coverage
and the duty to defend.
KJIMS does not dispute that it is permissible to use multiple
exclusions to defeat a duty to defend if the cumulative effect
satisfies the appropriate legal standard. KJIMS argues, however,
that the evidence does not establish that the allegations in the
Underlying Complaint are “cast solely and entirety” within the
cumulative scope of the three exclusions.
A. Your Work Exclusion

Exclusion l states that insurance coverage does not apply to
“‘property damage’” to “‘your work’ arising out of it or any part
of it and included in the ‘products-completed operations hazard.’”
(Doc. #84-1, p. 51.) It is the law of the case that this exclusion
does not apply to property damage caused during ongoing operations.
S.-Owners Ins. Co., 768 F. App'x at 973 (“For its part, Southern-
Owners agrees with KJIMS that the Your Work exclusion does not
apply to property damage caused during ongoing operations.”) The
Eleventh Circuit held: “Construing the Your Work exclusion
narrowly and resolving all doubts in favor of KJIMS, we conclude
that the underlying allegations can fairly be construed to allege
damages during ongoing operations.” Id. at 973 (citations

omitted).
Nonetheless, in its current motion, Southern-Owners asserts
that any work which involves a damage claim relate to completed
operations on the Subject Property meets the definition of “your
work” in Exclusion l. Therefore, Southern-Owners argues, there is
no duty to defend that portion of the claim relating to defective
work by subcontractors such as roofs, windows, and doors. (Doc.
#135, pp. 11-12.). Southern-Owners relies heavily on J.B.D. Const.
Inc. v. Mid-Continent Cas. Co., 571 F. App’x 918 (11th Cir. 2014),
an unpublished decision which found there was a duty to defend.
(Doc. #135, pp. 11-13.)

Southern-Owners argues that the portion of the Court’s prior
determination that the ‘your work’ exclusion entirely precludes
coverage for completed operations remains valid. (Id., pp. 13-14.)
This seems unlikely. The Court has twice found that the “your
work” exclusion precluded coverage and a duty to defend, and the
Eleventh Circuit has twice vacated these decisions. In any event,
viewing the Underlying Complaint in the manner dictated by the
Eleventh Circuit, the Court finds that the allegations pertaining
to both ongoing operations and completed operations are not “cast
solely and entirety” within the “your work” exclusion in the
Policy. Southern-Owners’ request for summary judgment on this
ground is therefore denied.
B. “That Particular Part” Exclusions

There are two exclusions under the paragraph “j. Damage to
Property” which Southern-Owners asserts preclude a duty to defend.
5
These exclusions exclude coverage of certain “property damage ”:

5
“Property damage” means:
a. Physical injury to tangible property, including all
resulting loss of use of that property. All such loss of
use shall be deemed to occur at the time of the physical
injury that caused it; or
(6) That particular part of real property on
which any insured or any contractors or
subcontractors working directly or indirectly
on your behalf are performing operations, if
the “property damage” arises out of those
operations; or
(7) That particular part of any property that
must be restored, repaired or replaced because
“your work” was incorrectly performed on it.
(Doc. #84-1, p. 50.) Southern-Owners argues these exclusions apply
because the Underlying Complaint states that property damage began
while MAC Contractors was performing operations and the claimed
damages are only for the repair, removal, or replacement of MAC
Contractors’ work.
“[I]f a subcontractor is hired to install a project component
and, by virtue of his faulty workmanship, installs a defective
component, then the cost to repair and replace the defective
component is not ‘property damage.’” S.-Owners Ins. Co, 819 F.
App'x at 880 (citing Auto-Owners Ins. Co. v. Pozzi Window Co., 984
So. 2d 1241, 1306 (Fla. 2008)). On the other hand, “a claim for
the costs of repairing damage to other property caused by defective
work does qualify as a claim for ‘property damage.’” J.B.D.

b. Loss of use of tangible property that is not physically
injured. All such loss shall be deemed to occur at the
time of the “occurrence” that caused it.
(Doc. #84-1, Exh. A, p. 65.)
Const., Inc. v. Mid-Continent Cas. Co., 571 F. App'x 918, 923 (11th
Cir. 2014) (citation omitted).
“Property damage occurs when the damage
happens, not when the damage is discovered or
discoverable.” Carithers v. Mid-Continent
Cas. Co., 782 F.3d 1240, 1247 (11th Cir. 2015)
(interpreting nearly identical policy
language). And where the underlying
allegations, even though silent as to the
timing of damages, can be reasonably construed
to allege property damage that occurred during
the policy period, “there is a potential for
coverage.” Trizec Props., 767 F.2d at 813.
S.-Owners Ins. Co., 768 F. App'x at 973.
The exclusions are “triggered only when the faulty work and
the damage are to the same part of the property.” Westfield Ins.
Co. v. Miller Architects & Builders, 949 F.3d 403, 405 (8th Cir.
2020). “The potential for coverage is triggered when an
‘occurrence’ results in ‘property damage.’ There is no requirement
that the damages ‘manifest’ themselves during the policy period.”
Trizec Props., Inc. v. Biltmore Const. Co., 767 F.2d 810, 813 (11th
Cir. 1985). “Here, although the underlying allegations are silent
as to the timing of the damages, the allegations can be reasonably
construed to allege damages that occurred during ongoing
operations.” S.-Owners Ins. Co., 768 F. App'x at 973.
Under paragraph j7, property damage to that “particular part of
any property that must be restored, repaired or replaced because
“your work” was incorrectly performed on it” is excluded from
coverage. Paragraph 7 does not apply to “property damage included
in the products-completed operations hazard”, (Doc. #84-1, pp. 50-
51), which excludes work that has not yet been completed or

abandoned (Id., pp. 64-65).
The defects listed in the Underlying Complaint run the gambit
from beams in the great room ceiling which are not aligned with
columns below on the balcony side and remedying damage to hardwood
floors to repairing metal roof dents, scratches, and hems. (Doc.
#132-7, Exh. A.) The Amended Complaint alleges that KJIMS
terminated subcontractors “that continued their scope of work at
the Property while demanding payment from Plaintiffs for Work not
completed, Work not performed in accord with specifications, plans
and/or for Work yet to be performed – a demand inconsistent with
the plain language of the Cost-Plus Contract.” (Doc. #132-8, p.
8, ¶ 37.) The allegations in the Amended Complaint include that

KJIMS “failed to achieve substantial completion”, and that KJIMS
effectively shut down construction for the 6 weeks preceding the
filing of the Complaint. (Id., ¶¶ 41-42.) The Amended Complaint
also alleges a failure to comply with “assurances of remediation
particularly with respect to the damage to wood floors and the
metal roof”. (Id., ¶ 54.) The implication is that the work was
otherwise complete but in need of repair. The Court cannot say
that these allegations are necessarily within the scope of the
allegations identified by Southern-Owners.
Accordingly, it is now
ORDERED :
1. MAC Contractors of Florida, LLC’s Motion for Summary
Judgment (Doc. #134) is GRANTED as to the duty to defend
and DENIED as moot as to the duty to indemnify.
2. Southern-Owners Insurance Company’s Fourth Motion for
Summary Judgment (Doc. #135) is DENIED as to the duty to
defend and DENIED as moot as to the duty to indemnify.
The declaratory relief sought in Doc. #84 is DENIED.
3. The Clerk of Court shall enter judgment accordingly
declaring that Southern-Owners Insurance Company had a
duty to defend MAC Contractors of Florida, LLC, d/b/a
KJIMS in the state court lawsuit filed against it by Paul
and Deborah Doppelt, as trustees.
4. The Clerk is further directed to terminate all pending
motions and deadlines, and to close the file.
DONE AND ORDERED at Fort Myers, Florida, this 30th day of
March 2023.

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JGHN E. STEELE
SHNIOR UNITED STATES DISTRICT JUDGE
Copies: Counsel of record

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10112498. Public record. Not legal advice.