Health Insurance

A Recent Florida Court Decision on Subrogation

Nancy and Anthony Podorski hired On Target, Inc., a leak detection service, to locate a leak under the floor of their home. The On Target technician who responded presented Mr. Podorski with a two-page form titled “Customer Information Card and authorization to proceed with the work.” The Customer Information Card authorized On Target to find the leak, provided general information about the nature and extent of the services provided by On Target, and the indemnification provision at issue in this case:

 

In the process of locating your leak, furniture may need to be moved; carpet may need to be cut and rolled back; tiles or linoleum may need to be lifted and/or other non-tech tasks performed including excavations. If requested and attempted, On Target Technicians will use due care to accomplish these chores, HOWEVER On Target Inc and On Target Technicians shall not be responsible for any damage whatsoever, actual or perceived, which may result from any locating procedures. If the first locate is incorrect, the Technician will return for a relocate. Property owner, tenant and/or guardian hereby agrees to hold harmless On Target Inc and On Target Technicians absolutely in this regard and to defend same in any action which may develop pursuant to any of these activities.

(Bolding in original.)

Mr. Podorski signed the Customer Information Card to authorize the work, and left. The On Target technician found the leak, made a hole through a single floor tile (in the foyer) and into the slab, and performed a temporary repair. A plumber repaired the pipe permanently. The Podorskis could not find a matching tile to replace the tile the On Target technician damaged in locating and temporarily fixing the leak, so they filed a claim with their homeowner’s insurance carrier, Allstate. Allstate approved the replacement of all the tile in the Podorski’s home, costing $17,290. Allstate then demanded reimbursement from On Target, and On Target denied liability.

Allstate, as subrogee of Mr. and Mrs. Podorski, filed an action against On Target for breach of contract. On Target filed a third-party complaint against Mr. Podorski for indemnification. After the circuit court denied Mr. Podorski’s motion to dismiss On Target’s complaint against him, Allstate filed a notice dismissing its action against On Target.

On Target then sought recovery of the attorney fees and costs incurred in defending Allstate’s subrogation action from Mr. Podorski, pursuant to the indemnification provision in the Customer Information Card. The trial court refused to award On Target its attorney’s fees and costs, finding that “the vague and ambiguous language on the Customer Information Card renders any intended indemnification unenforceable.” The court relied on the Florida Supreme Court’s decision in Cox Cable Corp. v. Gulf Power Co., 591 So. 2d 627 (Fla. 1992).

Florida’s Second District Court of Appeal reversed the lower court’s decision. In Cox, the Florida Supreme Court held, “that indemnity contracts which attempt to indemnify a party against its own wrongful conduct will be enforced ‘only if they express an intent to indemnify against the indemnitee’s own wrongful acts in clear and unequivocal terms.” On Target, 2009 WL 3489396 at * 3 citing Cox, 591 So. 2d at 629. The Second District explained that Cox and the other cases Allstate relied upon applied only when a party wants to be indemnified for a loss caused by its own wrongful acts. The Court noted that in this case, there was no finding or clear allegation that On Target acted in a wrongful manner. Allstate’s complaint against On Target alleged breach of contract for breaking the tile without Mr. Podorski’s express authorization, not negligence. Further, Allstate dismissed the complaint, so there was never a determination of whether On Target acted wrongfully.

Even assuming that the On Target Technician acted wrongfully, the indemnification provision at issue in the Customer Service Card was distinguishable from the provision at issue in Cox because it was much more specific. The final sentence included the phrase “in this regard” and identified On Target and its technicians as the indemnitees. “Thus the owner agrees to hold harmless On Target and its technicians only to the extent that “any locating procedures” undertaken by them cause damage to the owner’s property.” On Target, 2009 WL 3489396 at * 5. This provision clearly put Mr. Podorski on notice that the locating procedure may cause limited damage to the property for which On Target could not be held liable. The indemnification provision applied only to the scope of the work, not all possible wrongful acts like the provision at issue in Cox.

 

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