Eleventh Circuit Reaffirms Exception to the ‘Four Corners’ Rule for Determining an Insurer’s Duty to Defend

Cozen O'Connor

Cozen O'Connor

As a general rule, an insurer’s duty to defend arises under Florida law when the allegations of the complaint against the insured “fairly and potentially bring the suit within policy coverage.” Jones v. Fla. Ins. Guar. Ass’n, Inc., 908 So. 2d 435, 442-43 (Fla. 2005). This general rule is often referred to as the “four corners” or “eight corners” rule because the inquiry is limited to the allegations of the complaint against the insured and the terms of the policy. It is well settled that under Florida law, “[w]hen the actual facts are inconsistent with the allegations in the complaint, the allegations in the complaint control in determining the insurer’s duty to defend.” Id. at 443. There is, however, “a limited exception to the four corners rule” that permits courts to “consider extrinsic facts if those facts are undisputed, and, had they been pled in the complaint, they clearly would have placed the claims outside the scope of coverage.” BBG Design Build, LLC v. S. Owners Ins. Co., No. 19-14508, 2020 WL 4218108, at *3 (11th Cir. July 23, 2020) (quoting Stephens v. Mid-Continent Cas. Co., 749 F.3d 1318, 1323 (11th Cir. 2014)). In BBG Design Build, the U.S. Court of Appeals for the Eleventh Circuit approved of the district court’s consideration of extrinsic evidence where the underlying plaintiff attempted to “plead into coverage despite the uncontroverted facts.” Id. at *4.

Allegations of the Underlying Complaint

BBG Design Build was the general contractor on a renovation project at a domestic violence resource center in Florida. Patricia Armor, an employee at the resource center, sustained bodily injury from contact with construction debris. She sued BBG Design Build alleging that the company was negligent in managing the construction site. The original complaint alleged that “[s]ignificant amounts of construction debris,” including “dust and airborne fiberglass,” were “placed into the air without proper controls or protections, which caused Armor respiratory illness.” Id. at *3. The plaintiff then filed an amended complaint, the operative pleading, which neither defined “construction debris,” nor described the plaintiff’s “bodily injury.” The Eleventh Circuit acknowledged that if it confined its analysis to the allegations in the amended complaint, the insurer would have a duty to defend. Id. at *2.

Omission of Crucial, Undisputed Facts to Plead into Coverage

Prior to filing suit against BBG Design Build, the underlying plaintiff sent BBG Design Build’s commercial general liability insurer a pre-suit demand package. The demand asserted that the plaintiff was injured after being exposed to hazardous fumes and dust resulting from the renovation project. The demand package also included medical records that indicated the plaintiff was exposed to fiberglass at a construction site at work and diagnosed the plaintiff with bronchitis due to fiberglass exposure. Based on this information, the insurer “had knowledge that Armor was claiming bodily injury which would not have occurred in whole or part but for the alleged release or escape of pollutants. These facts were uncontroverted and remain so.” Id. at *3.

The court recognized that while the amended complaint “attempts to plead into coverage by not describing the ‘construction debris’ or her ‘bodily injury,’ it was undisputed that Armor’s alleged injuries included bronchitis resulting from fiberglass exposure, as made clear by Armor’s demand letter, initial complaint, and medical records.” Id. These injuries are within the scope of the policy’s pollution exclusion, which precludes coverage for bodily injury “which would not have occurred in whole or part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of ‘pollutants’ at any time.” Id. at *4. The policy defined “pollutants as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.” Id.

The plaintiff’s amended complaint “omitted a ‘crucial, undisputed fact in a patent attempt to ‘plead into coverage.’” Id. at *3 (quoting Wilson ex rel. Estate of Wilson v. Gen Tavern Corp., 469 F. Supp. 2d 1214, 1220 (S.D. Fla. 2006)). Despite the plaintiff’s vague allegations in her amended complaint, given that the pollution exclusion was unambiguous and precluded coverage for the uncontroverted injuries, the Eleventh Circuit held that the insurer did not breach its duty to defend BBG Design Build in the underlying lawsuit. Id. at *4.

Accordingly, courts can and should consider extrinsic evidence in deciding an insurer’s duty to defend when the underlying plaintiff files a vague, boilerplate complaint and the true facts are not in dispute.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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