Incorrect Information Provided on Insurance Application Defeats Claim for Coverage
The Eleventh Circuit affirmed the district court's finding of no duty to defend or indemnify because of an answer on the insured's application for insurance. Snell v. United Specialty Ins. Co., 2024 U.S. App. 12733 (11th Cir. May 28, 2024).
Snell was hired by a family, the Westons, to turn an above ground trampoline into a ground level trampoline. This involved various tasks like tree pruning and removal, installation of shrubs, trees, and sod, and setting up a sprinkler irrigation system. The trampoline aspect of the project involved site work to make a place for the trampoline and assembly and installation of the trampoline. The site work included excavation of a pit, installation of a drain and drainage sand, excavation of a trench to install a drainage pipe, installation of the drainage pipe and of a drain pump, construction of concrete block retainer walls and installation of a wood cap on the retainer walls. Then, Snell unboxed the trampoline, assembled it, and lowered it into the pit.
A few years later, a visitor to the Weston home sued the Westons for injuries to his daughter suffered on the trampoline. The complaint alleged the daughter was injured when she "fell off of the trampoline and struck her face on the wooden board" surrounding the tramline. The complaint was later amended to add Snell as a defendant.
Snell notified United Specialty Insurance Company (United), his insurer. United denied a defense. United relied on an endorsement to the policy which limited the broad coverage otherwise provided to "Specified Operations, Premises, or Projects." The specified "Operations" listed read, "Insured performs landscaping." United reasoned that, because the underlying complaint alleged that the accident stemmed from Snell's assembly and installation of a trampoline, the injury did not "arise from Snell's performance of landscaping." Further, the application for insurance specifically asked, "do you do any recreational or playground equipment construction or erection?" In response, Snell checked the 'No" box.
Snell sued United, seeking a declaration on the duty to defend and the duty to indemnify. He also sued for bad faith. The district court granted summary judgment in favor of United. The court noted that the policy did not define the word "landscaping," and concluded that the common meaning of the word did not include trampoline installation. Snell appealed.
The Eleventh Circuit agreed with the district court's analysis on which party had the burden. Snell argued United had the burden to show there was no duty to defend because the Specified Operations provision was essentially an exclusion. The Eleventh Circuit agreed with the district court that the provision was a limitation of coverage – not an exclusion – and Snell, as the party seeking coverage, bore the burden of proving coverage existed.
The district court also correctly found there was no duty to defend. Taking the application as part of the policy, Snell expressly disclaimed doing any of the sort of work he did, including the site work necessary to install the trampoline that he now claims was "landscaping," out of which the underlying injury arose.
Further, the duty to indemnify issue was ripe. Snell's insurance application foreclosed any duty to indemnify for the same reason it found no duty to defend. Where, as here, it could be shown that there was no dispute of material fact on the duty to indemnify, summary judgment was appropriate.
Finally, the district court correctly determined that having found that Untied had a lawful basis for denying Snell's claim and his breach of contract claim failed, his claim for bad faith also failed.
