Travelers Property Casualty Company of America v. H.E. Sutton Forwarding Co., LLC

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

FORT MYERS DIVISION

TRAVELERS PROPERTY CASUALTY

COMPANY OF AMERICA,

Petitioner,

v. Case No: 2:21-cv-719-JES-KCD

H.E. SUTTON FORWARDING CO.,

LLC, D/B/A TEX SUTTON

EQUINE AIR TRANSPORTATION,

Respondent.

OPINION AND ORDER

This case comes before the Court on petitioner’s Second Motion

for Final Summary Judgment (Doc. #44) filed on June 16, 2023.

Respondent filed a Response in Opposition (Doc. #47) on July 17,

2023, to which Petitioner Replied (Doc. #51) on July 31, 2023.

With permission of the Court, Respondent filed a Sur-Reply in

Opposition (Doc. #54) on August 14, 2023. For the reasons set

forth below, the motion is granted.

This action arises in the context of an insurance coverage

dispute. Petitioner Travelers Property Casualty Company of America

(Petitioner or Travelers) seeks a declaration that it does not owe

a duty to defend or a duty to indemnify respondent H.E. Sutton

Forwarding Co., LLC, D/B/A Tex Sutton Equine Air Transportation

(Respondent or Tex Sutton) in a particular aircraft versus tractor

trailer accident case filed in state court. (Doc. #1; Doc. #1-

2.) Travelers moves for summary judgment for a second time,

arguing that there is no coverage for damages sought in the state

lawsuit due to an Aircraft Liability Exclusion, and that the

Exclusion is not “illusory.” (Doc. #44.)

I.

Motions for summary judgment should only be granted when the

pleadings, depositions, answers to interrogatories, and admissions

on file, together with the affidavits, show “there is no genuine

issue as to any material fact and that the moving party is entitled

to judgment as a matter of law.” Fed. R. Civ. P. 56(c); Celotex

Corp. v. Catrett, 477 U.S. 317, 322 (1986). “An issue of fact is

‘genuine’ if the record taken as a whole could lead a rational

trier of fact to find for the nonmoving party.” Baby Buddies,

Inc. v. Toys “R” Us, Inc., 611 F.3d 1308, 1314 (11th Cir. 2010).

A fact is “material” if it may affect the outcome of the suit under

governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

(1986). The moving party bears the initial burden of showing the

court, by reference to materials on file, that there are no genuine

issues of material fact that should be decided at trial. Hickson

Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256, 1260 (11th Cir.

2004) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)).

“When a moving party has discharged its burden, the non-moving

party must then ‘go beyond the pleadings,’ and by its own

affidavits, or by ‘depositions, answers to interrogatories, and

admissions on file,’ designate specific facts showing that there

is a genuine issue for trial.” Jeffery v. Sarasota White Sox,

Inc., 64 F.3d 590, 593–94 (11th Cir. 1995) (citing Celotex, 477

U.S. at 324). “A court must decide ‘whether the evidence presents

a sufficient disagreement to require submission to a jury or

whether it is so one-sided that one party must prevail as a matter

of law.’” Hickson, 357 F.3d at 1260 (quoting Anderson, 477 U.S.

at 251).

In ruling on a motion for summary judgment, the Court views

all evidence and draws all reasonable inferences in favor of the

non-moving party. Scott v. Harris, 550 U.S. 372, 380 (2007); Tana

v. Dantanna’s, 611 F.3d 767, 772 (11th Cir. 2010). However, “if

reasonable minds might differ on the inferences arising from

undisputed facts, then the court should deny summary judgment.”

St. Charles Foods, Inc. v. America’s Favorite Chicken Co., 198

F.3d 815, 819 (11th Cir. 1999) (quoting Warrior Tombigbee Transp.

Co. v. M/V Nan Fung, 695 F.2d 1294, 1296-97 (11th Cir. 1983))

(finding summary judgment “may be inappropriate even where the

parties agree on the basic facts, but disagree about the factual

inferences that should be drawn from these facts.”)).

Under Florida law1, the interpretation of an insurance policy

is a pure question of law to be decided at the summary judgment

stage. AIX Specialty Ins. Co. v. Members Only Mgmt., LLC, 793 F.

App'x 1001, 1002 (11th Cir. 2019); Coleman v. Fla. Ins. Guar.

Ass’n, Inc., 517 So. 2d 686, 690 (Fla. 1988). The Florida Supreme

Court has consistently held that "in construing insurance

policies, courts should read each policy as a whole, endeavoring

to give every provision its full meaning and operative effect."

Auto-Owners Ins. Co. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000).

See also Wash. Nat'l Ins. Corp. v. Ruderman, 117 So. 3d 943, 948

(Fla. 2013). Where “a policy provision is clear and unambiguous,

it should be enforced according to its terms.” Taurus Holdings,

Inc. v. U.S. Fid. & Guar. Co., 913 So. 2d 528, 532 (Fla. 2005).

II.

A. Factual Background

The Court’s Opinion and Order on Travelers’ first motion for

summary judgment (Doc. #31) sets forth the basic background facts2:

1 This is a diversity action and the parties do not dispute

that the challenged contract was issued and delivered in Florida,

so Florida law controls. Westchester Gen. Hosp., Inc. v. Evanston

Ins. Co., 48 F.4th 1298, 1302 (11th Cir. 2022); Tech. Coating

Applicators, Inc. v. U.S. Fid. & Guar. Co., 157 F.3d 843, 844 (11th

Cir. 1998). See also State Farm Mut. Auto. Ins. Co. v. Roach, 945

So. 2d 1160, 1163 (Fla. 2006).

2 The background facts which were set forth in the Opinion

and Order on Petitioner’s first motion for summary judgment are

On March 12, 2020, Antonio de Jesus Zepeda (Mr. Zepeda)

was injured when operating a tractor trailer in the

course of his employment with Brook Ledge Horse

Transportation. (Doc. #24, ¶ 1; Doc. #1-2.) Mr. Zepeda

was picking up horses and equipment for his employer

from an aircraft at Blue Grass Airport in Lexington,

Kentucky. (Doc. #1-2, ¶¶ 12-14.) The aircraft – a

Boeing 727-200 known as “Air Horse One” – was owned by

Kalitta Charters, II, LLC (Kalitta) and chartered by Tex

Sutton. (Doc. #24, ¶ 2; Doc. #24-1.) After picking up

his load, Mr. Zepeda began exiting the premises and, due

to an obscured view, collided with the aircraft’s wing

and sustained injuries. (Doc. #1-2, ¶¶ 17-19.)

On August 31, 2020, Mr. Zepeda and Victoria Zepeda (the

Underlying Plaintiffs) filed a personal injury action,

Antonio DeJesus Zepeda v. H.E. Sutton Forwarding Co.,

LLC, et al., Case No. 20-CI-02602, Fayette Circuit Court

Division, Commonwealth of Kentucky (the Underlying

Action). (Doc. #24, ¶ 3; Doc. #1-2.) In the Underlying

Action, the Underlying Plaintiffs seek damages from Tex

Sutton for negligence; negligent hiring, retention,

entrustment, supervision and training; negligent

infliction of emotional distress; and gross negligence,

willful or wanton misconduct, malice and recovery of

punitive or exemplary damages.

Relevant to this lawsuit is an Excess Follow-Form and

Umbrella Policy (Excess Policy) issued by Travelers to

Clark Aviation Corporation (“Clark”) for a period of May

21, 2019 through May 21, 2020. (Doc. #24, ¶ 4; Doc. #24-

2.) The Excess Policy includes two separate coverage

parts, Coverage A – Excess Follow-Form Liability and

Coverage B – Umbrella Liability. (Doc. #24-2, pp. 11-

13.)

. . .

The underlying insurance to the Excess Policy is Policy

No. 3589-79-35 ECE (Underlying Policy), which was issued

by Federal Insurance Company (Chubb) to Clark. (Id. p.

64.) On February 25, 2021, Tex Sutton requested coverage

under the Underlying Policy and the Excess Policy for

either undisputed or read in the light most favorable to Respondent

as the nonmoving party.

the damages sought in the Underlying Action. (Doc. #1,

¶ 17; Doc. #8, ¶ 17.) Chubb agreed to defend Tex Sutton

under a reservation of rights. (Doc. #24, ¶ 14, Doc.

#28, ¶ 8.) Travelers, also reserving its rights,

recognized that Tex Sutton was a covered insured for

purposes of Coverage A because Tex Sutton was a covered

insured under the Underlying Policy, but advised Tex

Sutton that coverage was barred based on the aircraft

exclusions. (Doc. #1, ¶ 11; Doc. #8, ¶ 11; Doc. #1-4,

p. 9.)

(Id., pp. 3-7.)

B. Procedural Background

On September 28, 2021, Travelers filed a Petition For

Declaratory Relief with the Court pursuant to 28 U.S.C. § 2201.

(Doc. #1.) Respondent filed their Answer (Doc. #8) on January 25,

2022. Travelers moved for summary judgment on April 28, 2022,

arguing that no coverage for damages sought in the Underlying

Action is available to Tex Sutton under the Excess Policy and that

Travelers is entitled to judgment as a matter of law. (Doc. #24.)

Upon consideration of Travelers’ motion for summary judgment, this

Court found that denial of the motion was appropriate. (Doc. #31.)

The Court agreed with Travelers that Tex Sutton qualified as a

covered insured under Coverage A of the Excess Policy and that the

“Aircraft Liability Exclusion” applied to the Underlying Action.

(Id., pp. 9-12.) The Court, however, found there was merit to Tex

Sutton’s argument — that Travelers’ interpretation of the Aircraft

Liability Exclusion “would render the coverage illusory” since it

would eliminate virtually all coverage as Tex Sutton’s business

involves the use of an aircraft. (Id., p. 12.) The Court noted

that

The intent of Coverage A is to provide excess liability

coverage to the insured provided that the “underlying

insurance” would apply to such damages. (Doc. #24-2, p.

11.) The Underlying Policy is not part of the record, so

the Court cannot determine, as a matter of law, whether

the policy is or is not illusory. For example, if the

intent of the Underlying Policy is to cover Tex Sutton’s

liabilities arising out of the use of an aircraft, the

Aircraft Liability Exclusion would completely negate any

claim for excess coverage, rendering the policy

“complete nonsense.” Purrelli v. State Farm Fire & Cas.

Co., 698 So. 2d 618, 620 (Fla. 2d DCA 1997) (citation

omitted) (policy which purported to cover certain

intentional torts, but excluded intended acts,

illusory).

(Id., p. 14.) In sum, the Court found that while the Policy may

ultimately not be illusory, Travelers failed to carry its summary

judgment burden of showing there are no genuine issues which may

be resolved as a matter of law. (Id.)

On September 21, 2022, Travelers filed a Motion for

Reconsideration, or Alternatively, Leave to File Second Motion For

Summary Judgment. (Doc. #32.) Travelers sought reconsideration of

the Court’s Opinion and Order denying summary judgment asserting

that the “intent” of the Underlying Policy was irrelevant to the

resolution of Tex Sutton’s illusory coverage argument, and that

the Aircraft Liability Exclusion does not “completely contradict”

the insuring provision of the Excess Policy such that it would

render the policy illusory. (Id., pp. 5-7.) In the alternative,

Travelers requested leave to file a second motion for summary

judgment to address the illusory coverage argument raised by Tex

Sutton. (Id., p. 10.) The Court denied Travelers’ motion for

reconsideration (Doc. #43, p. 11), but in the interest of judicial

economy, granted its request for leave to file a second motion for

summary judgment.

Petitioner moves a second time for summary judgment arguing

that it is entitled to a declaration that it owes no duty to defend

or indemnify Tex Sutton under Coverage A of the Excess Policy

because the “Aircraft Liability Exclusion” does not render

coverage “illusory.” (Doc. #44, pp. 2-3.) Respondent Tex Sutton

argues that Travelers has failed to carry its summary judgment

burden of showing there are no genuine issues of fact which may be

resolved as a matter of law regarding whether the coverage at issue

is illusory. (Doc. #47, p. 1.)

III.

As noted above, Travelers’ Excess Policy includes two

separate coverage parts, Coverage A — Excess Follow-Form Liability

and Coverage B3 – Umbrella Liability.

3 In its previous Opinion and Order on Travelers’ first motion

for summary judgment, the Court found Tex Sutton failed to address

Travelers’ argument that Coverage B did not apply to Tex Sutton

because Tex Sutton was not listed as a “Named Insured” for purposes

of Coverage B, and in doing so, waived any argument to the

contrary. (Doc. #31, p. 5 n. 2.) While Travelers reiterates the

same argument as to Coverage B in its second motion for summary

judgment, Tex Sutton again offers no countervailing argument.

Thus, the Court omits any discussion of Coverage B.

Coverage A of the Travelers Excess Policy provides:

SECTION I - COVERAGES

A. COVERAGE A - EXCESS FOLLOW-FORM LIABILITY

1. We will pay on behalf of the insured those

sums, in excess of the “applicable underlying

limit”, that the insured becomes legally

obligated to pay as damages to which Coverage

A of this insurance applies, provided that the

“underlying insurance” would apply to such

damages but for the exhaustion of its

applicable limits of insurance. If a sublimit

is specified in any “underlying insurance”,

Coverage A of this insurance applies to

damages that are in excess of that sublimit

only if such sublimit is shown for that

“underlying insurance” in the Schedule Of

Underlying Insurance.

2. Coverage A of this insurance is subject to

the same terms, conditions, agreements,

exclusions and definitions as the “underlying

insurance”, except with respect to any

provisions to the contrary contained in this

insurance [emphasis added].

(Doc. #24-2, p. 11.)

Coverage A is subject to the Aircraft Liability Exclusion:

With respect to COVERAGE A – EXCESS FOLLOW-

FORM LIABILITY, the following exclusion is

added to SECTION IV -EXCLUSIONS:

Aircraft

Damages arising out of the ownership,

maintenance, use or entrustment to others of

any aircraft owned or operated by or rented or

loaned to any insured. Use includes operation

and “loading or unloading”.

This exclusion applies even if the claims

against any insured allege negligence or other

wrongdoing in the supervision, hiring,

employment, training or monitoring of others

by that insured, if the “occurrence” which

caused the “bodily injury” or “property

damage” involved the ownership, maintenance,

use or entrustment to others of any aircraft

that is owned or operated by or rented or

loaned to any insured.

(Id., p. 42.)

The Underlying (Chubb) Policy that was issued by Federal

Insurance Company to Clark and endorses Tex Sutton, as a named

insured, provides general liability coverage as follows:

COVERAGES

Bodily Injury and Property Damage Liability Coverage

Subject to all of the terms and conditions

of this insurance, we will pay damages that

the insured becomes legally obligated to pay

by reason of liability:

• imposed by law; or

• assumed in an insured contract;

for bodily injury4 or property damage5 caused

by an occurrence6 to which this coverage

applies.

This coverage applies only to such bodily

injury or property damage that occurs during

4 “Bodily Injury” is defined as physical “injury; sickness;

or disease; sustained by a person, including death, humiliation,

mental anguish, mental injury, sickness or disease that caused

it.” (Doc. #44-2, p. 56.)

5 “Property Damage” means “physical injury to tangible

property, including the resulting loss of use of that property .

. . or “loss of use of tangible property that is not physically

injured.” (Doc. #44-2, pp. 61-62.)

6 “Occurrence” is defined as “an accident, including

continuous or repeated exposure to substantially the same general

harmful conditions.” (Doc. #44-2, p. 60.)

the policy period.

. . .

Advertising Injury and Personal Injury Liability

Coverage

Subject to all terms and conditions of this insurance,

we will pay damages that the insured becomes legally

obligated to pay by reason of liability:

• imposed by law; or

• assumed in an insured contract;

for advertising injury7 or personal injury to

which this coverage applies.

This coverage applies only to such advertising

injury or personal injury8 caused by an offense

7 “Advertising Injury” means “injury, other than bodily

injury, property damage, or personal injury, sustained by a person

or organization and caused by an offense of infringing, in that

particular part of your advertisement about your goods, products

or services, upon their: copyrighted advertisement; or registered

collective mark, registered service mark or other registered

trademarked name, slogan, symbol or title.” (Doc. #44-2, p.

56)(emphasis in original.)

8 “Personal Injury” means injury, other than bodily injury,

property, damage, or advertising injury, caused by an offense of:

A. false arrest, false detention or other false

imprisonment;

B. malicious prosecution;

C. wrongful entry into, wrongful eviction of a person

from or other violation of a person’s right of private

occupancy of a dwelling, premises or room that such

person occupies, if committed by or on behalf of its

landlord, lessor or owner;

D. electronic, oral, written or other publication of

material that:

1. libels or slanders a person or organization

(which does not include disparagement of

goods, products, property or services); or

that is first committed during the policy

period.

. . .

(Doc. #44-2, p. 34)(emphasis in original)(footnotes added.)

The Underlying Policy also contains the following exclusions:

BODILY INJURY/PROPERTY DAMAGE EXCLUSIONS9

Aircraft, Autos Or Watercraft

This insurance does not apply to bodily injury

or property damage arising out of the

ownership, maintenance, use (use includes

operation and loading and unloading) or

entrustment to other of any:

• aircraft;

. . .

owned or operated by or loaned or rented to

any insured.

(Id., pp. 91-92)(emphasis in original.)

2. violates a person’s right of privacy; or

E. discrimination, harassment or segregation based on a

person’s age, color, national origin, race, religion

or sex.

(Doc. #44-2, pp. 60-61)(emphasis in original.)

9 As amended by the “Exclusion — Non-Owned Aircraft”

endorsement. (Doc. #44-2, pp. 91-92.)

IV.

A. Duty to Defend Principles

Since Travelers’ “duty to defend [under Florida law] is

separate and distinct from its duty to indemnify, and it is more

extensive” the Court begins its analysis here. Advanced Sys.,

Inc. v. Gotham Ins. Co., 272 So. 3d 523, 526–27 (Fla. 3d DCA 2019)

(citation omitted). As the Eleventh Circuit has recently

summarized:

Under Florida law, "an insurer's duty to defend its

insured against a legal action arises when the complaint

alleges facts that fairly and potentially bring the suit

within policy coverage." Jones v. Fla. Ins. Guar. Ass'n,

908 So. 2d 435, 442-43 (Fla. 2005). The duty to defend

is a broad one, broader than the duty to indemnify, and

"[t]he merits of the underlying suit are irrelevant."

Mid-Continent Cas. Co. v. Royal Crane, LLC, 169 So. 3d

174, 181 (Fla. 4th DCA 2015). We determine whether an

insurer has a duty to defend its insured based only on

"the eight corners of the complaint and the policy," id.

at 182, and only as the complaint's alleged facts are

"fairly read," Fun Spree Vacations, Inc., 659 So. 2d at

421. The "facts" we consider in evaluating the duty to

defend come solely from the complaint, regardless of the

actual facts of the case and regardless of any later

developed and contradictory factual record. Jones, 908

So. 2d at 442-43. "Any doubts regarding the duty to

defend must be resolved in favor of the insured," id. at

443, and "where a complaint alleges facts that are

partially within and partially outside the coverage of

an insured's policy, the insurer is not only obligated

to defend, but must defend that entire suit," Sunshine

Birds & Supplies, Inc. v. U.S. Fid. & Guar. Co., 696 So.

2d 907, 910 (Fla. 3d DCA 1997). But of course, because

the lawsuit must be for something covered by the

insurance policy, "the insurer has no duty to defend"

when "the pleadings show the applicability of a policy

exclusion." State Farm Fire & Cas. Co. v. Tippett, 864

So. 2d 31, 35 (Fla. 4th DCA 2003).

Travelers Indem. Co. of Conn. v. Richard Mckenzie & Sons, Inc., 10

F.4th 1255, 1261 (11th Cir. 2021). See also Westchester Gen. Hosp.,

Inc., 48 F.4th at 1302 (citing Keen v. Fla. Sheriffs' Self-Ins.

Fund, 962 So. 2d 1021, 1024 (4th Fla. DCA 2007)("However, an

insurer does not need to defend an insured if a policy exclusion

applies.”)).

B. Illusory Coverage Principles

An insurance policy can, without creating a conflict or

ambiguity, both provide coverage and exclude some things that might

otherwise fall within that coverage. Cynergy, LLC v. First Am.

Title Ins. Co., 706 F.3d 1321, 1327 (11th Cir. 2013). On the other

hand, an insurance policy's coverage becomes illusory if it “grants

coverage with one hand and then with the other completely takes

away the entirety of that same coverage. Completeness is key. When

limitations or exclusions completely contradict the insuring

provisions, insurance coverage becomes illusory.” Richard Mckenzie

& Sons, Inc., 10 F.4th at 1265-66 (citing Warwick Corp. v.

Turetsky, 227 So. 3d 621, 625 (Fla. 4th DCA 2017)(internal

quotations omitted)(emphasis in original)). Put another way, a

policy is illusory: (1) “only if a policy exclusion ‘swallow[s]

up’ an insuring provision”, or (2) when an exclusion “eliminates

all——or at least virtually all——coverage in a policy.” Zucker v.

U.S. Specialty Ins. Co., 856 F.3d 1343, 1352 (11th Cir. 2017);

Posada v. Aspen Specialty Ins. Co., No. 8:22-cv-1578-CEH-AAS, 2023

WL 2711538, 2023 U.S. Dist. LEXIS 55419, at *49 (M.D. Fla. Mar.

30, 2023).

If the policy is found to be illusory or ambiguous, it is

resolved "by ignoring the exclusion." Zucker, 856 F.3d at 1352

(citing Tire Kingdom, Inc. v. First S. Ins. Co., 573 So. 2d 885,

887 (Fla. 3d DCA 1990)). “But if the policy's coverage and

exclusion provisions do not negate one another, the coverage is

not illusory, and there is no ambiguity, so the plain language of

the exclusion controls.” See Richard Mckenzie & Sons, Inc., 10

F.4th at 1265 (citing Warwick Corp., 227 So. 3d at 625-26).

In its Opinion and Order on Petitioner’s first motion for

summary judgment, the Court found that Tex Sutton qualified as a

covered insured under Coverage A of the Excess Policy, and that

the Aircraft Liability Exclusion applies to the Underlying Action

(Doc. #31, pp. 9-11). Tex Sutton does not dispute that the

Aircraft Liability Exclusion applies. Instead, it claims that

this Exclusion is so broad that it renders coverage illusory

because Tex Sutton’s entire business involves one thing — the use

of an aircraft for the transportation of horses. Therefore, the

sole remaining issue before the Court is whether the coverage

provided by the Underlying Policy and Coverage A of the Excess

Policy is rendered “illusory” by the Aircraft Liability Exclusion,

thus invoking Travelers’ duty to defend or duty to indemnify.

V.

Travelers argues that while the Aircraft Liability Exclusion

applies in this case, the Exclusion does not render the Excess

Policy’s coverage illusory because it does not “swallow up” an

insuring provision nor does it “eliminate[] all——or at least

virtually all——coverage in a policy”; rather, the Excess Policy

(Coverage A) and the Underlying Policy provide potential coverage

for a variety of damages outside the scope of the Exclusion. (Doc.

#44, p. 2; Doc. #51, p. 3.) Plaintiff argues that under either

type of illusory coverage, Travelers’ motion for summary judgment

fails. The Court will address the parties’ arguments in turn

below.

A. Whether The Aircraft Liability Exclusion “Swallows Up” An

Insuring Provision

Travelers argues that application of the Excess Policy’s

Aircraft Liability Exclusion to the Underlying Policy does not

completely “swallow up” coverage because there is a myriad of other

claims within the broad insuring grant “for bodily injury or

property damage” that do not arise out of the “ownership,

maintenance or use” of an aircraft. (Doc. #51, p. 2.) Tex Sutton,

on the other hand, argues that the Aircraft Liability Exclusion’s

language – “damages arising out of the ownership, maintenance, use

or entrustment to others of any aircraft” – is so broad that it

“swallows up” the entire bodily injury coverage provision and

renders coverage illusory. (Doc. #47, pp. 12-13.) Tex Sutton’s

argument is based on its theory that since it is in the business

of transporting horses via aircraft, any claim for bodily injury

would necessarily “aris[e] out of” the use of aircraft, and thus

be barred under the Exclusion.

Tex Sutton’s argument fails, though, because the Aircraft

Liability Exclusion does not “swallow up” coverage. To render

coverage illusory, the exclusion must “completely contradict the

insuring provisions.” Interline Brands, Inc. v. Chartis Specialty

Ins. Co., 749 F.3d 962, 966 (11th Cir. 2014). If an exclusion does

not “completely swallow” the insuring provision, the policy is not

illusory, even if it is a significant exclusion. Warwick Corp.,227

So. 3d at 625.

While the Aircraft Liability Exclusion may exclude “damages

arising out of the ownership, maintenance, use or entrustment to

others of any aircraft . . . rented . . . to any insured” (including

“loading and unloading”) for coverage provided by the Underlying

Policy for damages because of “bodily injury” and “property damage”

caused by an “occurrence” (i.e., an accident), it does not swallow

every claim under the insuring provision. For example, as

Travelers notes, the Policy covers — and the Aircraft Liability

Exclusion does not negate coverage — for bodily injuries such as

slips and falls at Tex Sutton’s leased premises10, or property

damage due to Tex Sutton’s negligent maintenance of its leased

premises. (Doc. #44, pp. 12-13; Doc. #51, p. 4.) See, e.g., AIX

Specialty Ins. Co., 793 F. App’x at 1004 (a liquor liability

exclusion in a general liability policy issued to a night club was

a “significant exclusion” given the night club’s business, but did

not swallow up coverage); Goldberg v. Nat'l Union Fire Ins. Co.,

143 F. Supp. 3d 1283, 1301-02 (S.D. Fla. 2015)(a professional

services exclusion in a policy issued to a company offering banking

services was not illusory because it provided coverage for claims

not involving professional services); Md. Cas. Co. v. Smartcop,

Inc., No. 4:11-cv-10100-KMM, 2012 U.S. Dist. LEXIS 141757, at *20

(S.D. Fla. September 21, 2012)(a computer software exclusion in a

policy issued to a company whose primary responsibilities relate

to providing computer software to its customers was not illusory).

“[A]n insurance policy can both provide coverage and also exclude

some things that might otherwise fall within that coverage. That's

not a conflict. It's just an exclusion, and those are par for the

insurance course.” Richard McKenzie & Sons, Inc., 10 F.4th at 1265.

Thus, even though the Aircraft Liability Exclusion may take “a

10 The complaint in the Underlying Action alleges that Tex

Sutton maintains a facility at Blue Grass Airport, which it leases

from the Lexington-Fayette Urban County Airport Board. (Doc. #1-

2, ¶ 10.)

nibble, or even a big bite, out of [coverage],” it does not swallow

Tex Sutton’s coverage whole. Id. at 1266.

B. Whether The Aircraft Liability Exclusion “Eliminates All—

—Or At Least Virtually All——Coverage In A Policy”

The parties also disagree as to whether this case falls under

the common law "illusory coverage" doctrine that the Eleventh

Circuit has indicated is part of Florida's insurance law. Interline

Brands, Inc. v. Chartis Specialty Ins. Co., 749 F.3d 962, 966-67

(11th Cir. 2014) (applying Florida law). “In order for an

exclusion to render a policy's coverage illusory it must eliminate

all—or at least virtually all—coverage in a policy.” Zucker, 856

F.3d at 1352, citing Inerline Brands, Inc., 749 F.3d at 966-67)

("According to Interline, the Exclusion's broad scope reduces the

coverage Chartis sold to Interline to a 'façade' . . . . Interline

overstates the extent to which the Exclusion limits coverage. Even

with the broad Exclusion, the policy still contains extensive

coverage."); Great Am. E & S Ins. Co. v. End Zone Pub & Grill of

Narragansett, Inc., 45 A.3d 571, 576 (R.I. 2012) ("We will deem an

exclusion to an insurance policy illusory only when it would

preclude coverage in almost any circumstance.") (quotation marks

omitted); McGregor v. Allamerica Ins. Co., 449 Mass. 400, 868

N.E.2d 1225, 1228 (Mass. 2007) ("As long as an insurance policy

provides coverage for some acts, it is not illusory simply because

it contains a broad exclusion."); Point of Rocks Ranch, LLC v. Sun

Valley Title Ins. Co., 143 Idaho 411, 146 P.3d 677, 680 (Idaho

2006) ("An insurance policy's coverage is illusory if it appears

that if any actual coverage does exist it is extremely minimal and

affords no realistic protection to any group or class of injured

persons.") (quotation marks omitted)).

The Aircraft Liability Exclusion negates a lot of coverage,

but not “all—or at least virtually all—coverage.” As set forth

above, the Underlying Policy provides for damages resulting from

bodily injury, property damage, advertising injury, and personal

injury. Tex Sutton not only operates a business, but also occupies

leased premises at the Blue Grass Airport. The Aircraft Liability

Exclusion would not necessarily exclude claims based on premises

liability, bodily injury or property damage sustained at Tex

Sutton’s offices, or injury resulting from trademark or tradename

infringement, or defamation. Accordingly, the Travelers Policy is

not illusory under Florida law. See Interline Brands, 749 F.3d at

967 (exclusion was not void for being against public policy where

"[e]ven with the broad [e]xclusion, the policy still contains

extensive coverage”).

Accordingly, the Aircraft Liability Exclusion does not render

the coverage under the Excess Policy illusory, and Travelers is

entitled to summary judgment as to the same.

VI.

In its Complaint for Declaratory Judgment, Travelers sought

judgment declaring its obligations to Tex Sutton under the Excess

Policy, specifically its obligation to defend Tex Sutton in the

Underlying Action and its obligation to indemnify Tex Sutton

against loss for the damages sustained by Mr. Zepeda on March 12,

2020. For the reasons discussed below, the Court finds Travelers

does not have a duty to defend or to indemnify Tex Sutton in the

Underlying Action.

A. Travelers’ Duty to Defend Tex Sutton In the Underlying

Action

Since the Aircraft Liability Exclusion does not render the

coverage provided by the Excess Policy illusory as a matter of

Florida law, “the plain language of the [E]xclusion controls”,

Richard Mckenzie & Sons, Inc., 10 F.4th at 1265 (citing Warwick

Corp., 227 So. 3d at 625-26), and is applicable to the Underlying

Action. Travelers thus has no duty to defend Tex Sutton in the

Underlying Action. See Richard Mckenzie & Sons, Inc., 10 F.4th at

1261 (citing Tippett, 864 So. 2d at 35) (The lawsuit must be for

something covered by the insurance policy, "the insurer has no

duty to defend" when "the pleadings show the applicability of a

policy exclusion.")).

B. Travelers’ Duty To Indemnify Tex Sutton Against Loss For

The Damages Sustained By Mr. Zepeda

"[T]he duty to defend is broad and based on the allegations

in the complaint, the duty to indemnify is determined by the facts

adduced at trial or during discovery." Pa. Lumbermens Mut. Ins.

Co. v. Ind. Lumbermens Mut. Ins. Co., 43 So. 3d 182, 188 (Fla. 4th

DCA 2010). See also Pub. Risk Mgmt. of Fla. v. Munich Reinsurance

Am., Inc., 38 F.4th 1298, 1306 (11th Cir. 2022). Therefore, unlike

the duty to defend, the trial court must look beyond the

allegations in the underlying complaint to decide whether an

insurer has a duty to indemnify. The duty to indemnify arguably

may not become fully ripened until the merits of the underlying

litigation are resolved. Aetna Ins. Co. v. Borrell-Bigby Elec.

Co., 541 So.2d 139, 141 (Fla. 2d DCA 1989).

Courts in this circuit have overwhelmingly held that the

question of an insurer's duty to indemnify is not ripe until the

underlying lawsuit is resolved, or the insured's liability is

established, because unless and until that occurs there is no

judgment to indemnify. See, e.g., Nat'l Union Fire Ins. Co. of

Pittsburgh, Pa. v. Shaw Dev., LLC, 2:21-cv-658-SPC-NPM, 2021 U.S.

Dist. LEXIS 202973, 2021 WL 4913357, *1 (M.D. Fla. Oct. 21, 2021)

(duty to indemnify claim is unripe until state court case ends);

Cont’l Ins. Co. v. Nationwide Ins. Co. of Am., 6:20-cv-1439-WWB-

DCI, 2021 U.S. Dist. LEXIS 259064, 2021 WL 8894460, *5 (M.D. Fla.

Sept. 28, 2021) (entering a summary judgment finding that there is

a duty to defend, and dismissing duty to indemnify claim without

prejudice as premature until underlying litigation is resolved);

AIX Specialty Ins. Co. v. Everett, 543 F. Supp. 3d 1321, 1333 (M.D.

Fla. 2021) (declaratory judgment proceeding on duty to indemnify

is premature until resolution of underlying litigation).

However, an exception to the prematurity of the indemnity

issue arises when “the court can determine that the allegations in

the complaint could under no circumstances lead to a result which

would trigger the duty to indemnify.” Northland Cas. Co. v. HBE

Corp., 160 F. Supp. 2d 1348, 1360 (M.D. Fla. 2001) (emphasis

added). See Amerisure Ins. Co. v. Walker, 11-61480-CV, 2011 U.S.

Dist. LEXIS 132959, 2011 WL 5597325, *3 (S.D. Fla. Nov. 17, 2011)

(no duty to defend or indemnify where the injured party stated in

underlying complaint that he was an employee, triggering

employer's liability exclusion); see also Scottsdale Ins. Co. v.

GFM Operations, Inc., 789 F. Supp. 2d 1278, 1288-89 (S.D. Fla.

2011) (finding no duty to indemnify because employer's liability

exclusion applied where there was no evidence in the record that

injured party, who was operating a forklift, was on the premises

as a patron rather than as an employee).

Here, the parties do not dispute the facts giving rise to the

Underlying Action, namely, that Mr. Zepeda was injured while

operating a tractor trailer to pick up horses and equipment

unloaded from an aircraft chartered by Tex Sutton, when his truck

collided with the aircraft’s wing. As this Court has found, the

Aircraft Liability Exclusion applies to the Underlying Action and

based upon the undisputed allegations in the underlying complaint

there are “no circumstances” that “trigger [Travelers’] duty to

indemnify.” Northland Cas. Co., 160 F. Supp. 2d at 1360.

Accordingly, it is now

ORDERED:

1. Petitioner Travelers Property Casualty Company of

America’s Second Motion for Final Summary Judgment (Doc.

#44) is GRANTED.

2. Petitioner has no duty to defend Respondent H.E. Sutton

Forwarding Co., LLC, D/B/A Tex Sutton Equine Air

Transportation in the underlying action, Antonio DeJesus

Zepeda v. H.E. Sutton Forwarding Co., LLC, et al., Case

No. 20-CI-02602, Fayette Circuit Court Division,

Commonwealth of Kentucky.

3. Petitioner has not duty to indemnify Respondent for the

damages sustained by Mr. Zepeda on March 12, 2020.

4. The Clerk of the Court shall enter judgment in favor of

Petitioner, terminate any pending deadlines, and close the

file.

DONE and ORDERED at Fort Myers, Florida, this 24th day of

August, 2023.

klob

JOHN E. STEELE

SHMIOR UNITED STATES DISTRICT JUDGE

Copies:

Counsel of Record