DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AGAINST THIRD-PARTY INSURERS

ABORTION INDUSTRY IN MELBOURNE, FLORIDA
LAWSUITS
RANEY V AWARE WOMAN
DOCKET / CHRONOLOGICAL FILE
DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AGAINST THIRD-PARTY INSURERS

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
NO. 97-1197-CV-ORL-19

AWARE WOMAN CENTER FOR CHOICE, INC., A Florida Corporation, PATRICIA BAIRD-WINDLE, and EDWARD WINDLE,
Third Party Plaintiffs,

-versus-

SPHERE DRAKE INSURANCE COMPANY PLC, aka ODYSSEY RE LTD LONDON, and
WESTCO CLAIMS MANAGEMENT SERVICES, INC., Foreign business entities,
Third Party Defendants.

AWCC INSURED MOTION FOR PARTIAL SUMMARY JUDGMENT ON OBLIGATION OF INSURERS TO COVER AND INDEMNIFY, AND PRIMA FACIE SHOWING OF INSURER BAD FAITH - DISPOSITIVE MOTION AS TO LAW OF CASE ON LIABILITY OF INSURERS

AWCC, Patricia Baird-Windle, and Edward Windle [hereafter "INSUREDS"] respectfully move this Court under Rule 56 for partial summary judgment against their INSURERS ODYSSEY RE, SPHERE DRAKE, and claims denial agent-insurer WESTCO declaring them

(1) obligated to indemnify these INSUREDS for all litigation expenses and costs involved in defense of the underlying action, and prosecution of this coverage/indemnification action, and

(2) obligated to cover the three claims for damages if ever there should be any liability above the deductible, and

(3) answerable at a separate hearing or trial for bad faith and exemplary damages, and any other disputed sums, based upon the Third Party Complaint and Exhibits as verified, said trial to be scheduled on three consecutive days if needed, _______ through _______ , 1998.

RESPECTIVELY SUBMITTED:

ROY LUCAS <signed>
DC #153957
c/o PO Box 1433
Melbourne, FL 32902-1433
TEL: 407-725-2413
FAX: 407-725-3847

SUSAN ENGLAND
FL #0186018
2805 Lakeview Dr
Fern Park, FL 32730
TEL: 407-339-4600
FAX: 407-331-3006

ATTORNEYS FOR AWCC INSURED

CERTIFICATE OF SERVICE AND LOCAL RULE 3.01 COMPLIANCE

This AWCC Motion for Partial Summary Judgment, supporting Memorandum, and Appendix have all been served by first class mail this 14th day of September, 1998, following Local Rule 3.01 consultations, to counsel for Mr Raney, Christopher Sapp, Esq., PO Box 1012, Lehigh Acres, FL 33970, and counsel for the INSURERS, Lawrence M. Siff, Esq., O'Connor & Meyers, PA, 2801 Ponce de Leon Blvd, 9th fl, (Coral Gables), Miami, FL 33134.

BY: ROY LUCAS <signed>

CONTENTS OF MEMORANDUM

Parties on the Motion
The Facts

I. AS A MATTER OF LAW, SPHERE/ODYSSEY/WESTCO ARE OBLIGATED TO INDEMNIFY ON THESE CLAIMS UNDER COMMERCIAL GENERAL LIABILITY INSURANCE PRINCIPLES

CGL - Commercial General Liability Insurance
Applicable Law
Insurance Law Rules of Construction
Duty to Defend - No Exclusion for Assault & Battery or Intentional Acts
Duty to Defend - Federal Civil Rights and Statutory Claims of Right
Relief Requested - Indemnification and Coverage

II. AS A MATTER OF LAW, AWCC HAS MADE A SUFFICIENT PRIMA FACIE SHOWING OF BAD FAITH TO GO FORWARD TO TRIAL ON EXEMPLARY AND ADDITIONAL DAMAGES

Florida Law on Insurance Bad Faith
Bad Faith Factors in this Case
Elements and Standards of Compensation
Pre-Judgment Interest
Underlying Lawsuit
Third Party Complaint
Counsel Fees
Emotional Distress Damages
Other Damages
CONCLUSIONS

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
NO . 97-1197-CV-ORL-19

AWARE WOMAN CENTER FOR CHOICE, INC., A Florida Corporation, PATRICIA BAIRD-WINDLE, and EDWARD WINDLE,
Third Party Plaintiffs

-versus-

SPHERE DRAKE INSURANCE COMPANY PLC, aka SPHERE DRAKE HOLDINGS LTD (BERMUDA), aka ODYSSEY RE LTD LONDON (appearing), and WESTCO CLAIMS MANAGEMENT SERVICES, INC., Foreign business entities,
Third Party Defendants.

MEMORANDUM OF LAW IN SUPPORT OF AWCC MOTION FOR PARTIAL SUMMARY JUDGMENT ON OBLIGATION OF INSURERS TO COVER, INDEMNIFY, AND RESPOND TO PRIMA FACIE CASE ON BAD FAITH AND DAMAGES

PARTIES ON THE MOTION

AWCC, Patricia Baird-Windle, and Edward Windle are the INSUREDS. They have paid $8,956 in premiums to the half billion dollar annual Sphere Drake premium pool [Tab 15], but were abandoned and received no coverage in the underlying Raney/AWCC matter before this Court. AWCC and the Windles are in that lawsuit Defendant-Counterclaimants. They have been burdened with extraordinary (but reasonable) litigation costs and numerous necessary but substantial expenses for an entire year, while deserted by the offshore INSURERS.

ODYSSEY RE LTD LONDON is the successor entity to SPHERE DRAKE INSURANCE CO. PLC, offshore of Bermuda. ODYSSEY has agreed through counsel to accept service of the Third Party Complaint. The complaint was in fact served by certified mail sent August 10, 1998, according to policy terms.

WESTCO CLAIMS MGT SERVICES, INC., is the New Jersey-based claims service entity for successor ODYSSEY RE, and for SPHERE DRAKE PLC, aka SPHERE DRAKE HOLDINGS LTD (BERMUDA).

WESTCO in fact is the entity that denied coverage, defense, and indemnification when requested by these Florida AWCC INSUREDS [P.Ex. 1 to Third Party Complaint]. WESTCO did so acting for ODYSSEY RE and its business entity ancestors. This denial was over nine months ago, on January 13, 1998. [P.Ex.1].

Underlying Plaintiff, has no direct interest in this Motion, particularly if the pending AWCC Motion for SUMMARY Judgment dismissing all of his claims should be granted.

THE FACTS

The essential facts are set out fully in the Rule 14 Third Party Complaint. These facts are verified by INSURED party Edward Windle. He has personal knowledge as a co-insured and business manager for AWCC. Mr Windle has been the individual whose work included finding liability coverage each year for AWCC. He paid the premiums, which the evidence will show are exceptionally high, especially considering the subsequent abandonment without coverage or defense.

The foregoing FACTS, end EXHIBITS 1-8 to the now verified Third Party Complaint, are incorporated herein by reference. They make a complete record for this Motion, the Third Party Complaint, and a definitive decision on the INSURERS' legal responsibility to honor the Comprehensive General Liability insurance policy for which AWCC INSUREDS paid.

This entire case originated basically, when one MEREDITH RANEY and his counsel, Christopher Sapp, Esq., sued these INSUREDS, AWCC and both Windles, in this federal court. The Windles are corporate officers. Raney sued for various accidental occurrences and damages, certainly unforeseeable from the AWCC viewpoint. (P.Ex.4, pp 16-22 is the Raney Complaint). Raney claimed vaguely unspecified damages and suffering from three separate "occurrences.- He had been cautiously escorted away from the INSURED AWCC premises each of three times by on-duty City of Melbourne, FL, employed uniformed police officers. Mr Raney was then peaceably arrested for violating the state court injunction previously upheld by the U.S. Supreme Court in Madsen v WHC, 512 US 753 (1994). Raney had not been specifically named in the injunction. He had admitted notice, however, and prior convictions thereunder, affirmed on appeal. Raney had attended the injunction hearings in state court. He had been a regular harasser of the clinic since October 1989. At that time ho began systematically videotaping patients and physicians, sometimes following individuals, probing nurses' garbage, and copying & looking up license plates to make unwanted contact or calls. He has produced some of those tapes.

RANEY claimed in this underlying lawsuit, without any basis, discovery has shown, that the INSUREDS were employers of the obviously municipal-employed Melbourne City police. On-duty police officers had arrested Raney in each of the three incident "occurrence" cases. U. S. Marshals were witnesses. They were present to protect the clinic from threats as well. Mr Raney admitted at his deposition to having no evidence whatsoever of AWCC-City police agency. (Deposition of Meredith Raney, 7/13/1998, p 148). The police were no more working for AWCC than the U.S. Marshals. Also, AWCC accidentally learned while investigating that RANEY had quietly sued the City earlier for the same three occurrences, in state court, but did not disclose that pending case to the Court in this federal proceeding. AWCC found those court papers during & search through Raney's history of contempt prosecutions. (Raney's state court complaint is P.Ex.8, pp 47-50).

AWCC at the outset of this unusual case had adequate full Commercial General Liability insurance for any sort of general liability problem, i.e., a frivolous claim by one of the full time anti-abortion harassers who lurk across the street. One can foresee falls or pretended bodily injury or psychological distress claims. The INSUREDS accordingly requested defense and coverage from the INSURERS for all reasonable and necessary litigation obligations.

The INSUREDS, however, were rebuffed and abandoned by WESTCO and SPHERE DRAKE, now ODYSSEY RE. [See denials in Exhibits to AWCC Rule 14 Third Party Complaint, P.Ex.1, pp 1-3].

The INSURERS used a small print, ambiguous "Assault and Battery Exclusion." [P. Ex. 1-2 ] . INSURERS denied any "bodily injury" claim, according to their private definition of the term. [Id.]. INSURERS denied any "occurrences" had taken place. INSURERS deemed the incidents intentional assault and battery.

Lastly, the INSURERS denied that AWCC had any policy or coverage at all for two-thirds of the case, the two Raney-posited incidents of 1/28/95 and 4/26/95. (P.Ex. 1-2). AWCC has paid nearly $9,000 for this non-coverage, and has many copies of the supposedly non-existent policies. These are the source of the exhibits herein. ODYSSEY RE has still not acknowledged even the existence of that one polio, only the second year.

Attempts to dialogue, discuss, and negotiate with the INSURERS produced only a one-way paper chase, month after month. (P.Ex. 2-1 through 2-4). The INSURERS would not commit a responsive word to paper without a lawsuit. The Third Party Complaint necessarily followed.

I. AS A MATTER OF LAW, SPHERE/ODYSSEY/WESTCO ARE OBLIGATED TO INDEMNIFY ON THESE CLAIMS UNDER COMMERCIAL GENERAL LIABILITY INSURANCE PRINCIPLES

CGL - COMMERCIAL GENERAL LIABILITY INSURANCE

CGL means Commercial General Liability, the kind of insurance for which businesses pay dearly to cover many species of genera/ liability occurrences, from A to Z. The CGL name suggests to an INSURED a "general," comprehensive," full coverage of all unexpected "liability" incidents and perils. Broad coverage was needed and sought by these INSUREDS. CGL was the policy offered. A reasonable INSURED would not pause to consider that "general" and "comprehensive" insurance might really be a euphemism for "partial" and "limited."

A vigorous, veteran harasser such as Mr Raney outside a clinic is just the kind of "accident-waiting-to-happen" that might come within such a CGL policy. Protesters foreseeably have a considerable repertoire of carelessness and unpredictability up their sleeves. Theirs is a "hit-and-run" existence taken from a book on "99 Ways" to harass a medical facility. Raney pranks and accidents include innumerable dirty tricks, frivolous lawsuits, discovery delays, slips & falls. Physical stress and emotional upset from a peaceful arrest are typical of the kind of unwanted, unpredictable "occurrence" to be insured against when harassers and stalkers of women are afoot across the street every single working day, as here.

The CGL policy, however, metamorphed when needed into a one-sided contract of adhesion, unseen by the INSURED, until paid for. It is tedious, verbose, contradictory, and full of arcane language. The insurance contract of adhesion is imposed by INSURERS as a fait accompli. Negotiation with Sphere Drake of Bermuda happens only in bi-polar delusions.

Even studious law students rarely study Insurance. An INSURED can only hope for no "occurrences," and for an understanding INSURER whose exclusions do not devour the entire insurance contract, leaving only empty promises of General Comprehensive Liability insurance protection. The Courts stand as the only protective guardians for insured premium-paying citizens such as AWCC.

APPLICABLE LAW

Florida statutory and case law on insurance control here under Erie. This is a litigous area. The applicable decisions are numerous, from this Court, tho Eleventh Circuit, and Florida appellate courts. Guidance may also be found in leading treatises, such as APPLEMAN [Tab 1]. Persuasive decisions from other Circuits or States with similar law and/or facts are also referenced. Many involved these very INSURERS, SPHERE DRAKE end WESTCO aka WESTERN WORLD. They are perennially in court disclaiming coverage. SPHERE DRAKE, ODYSSEY RE, AND WESTCO (WESTERN WORLD) have actually been sued so frequently for non-coverage and bad faith that their precedents alone cover virtually every aspect of this entire case. [Tabs 5, 6, 7, 9].

Indemnification for multiple aspects of damage and expense is very important to these INSUREDS from this small struggling clinic. Leading cases on the issues presented have been assembled in a bound APPENDIX to this Motion and Memorandum, for the convenience of this Court. The APPENDIX is a casebook on the array of questions presented by this common situation.

INSURANCE LAW RULES OF CONSTRUCTION

Several principal Eleventh Circuit decisions with closely analogous issues originated in this Middle District. Lime Tree v State Farm, 980 F2d 1402 (11th Cir 1993) [Tab 2] involved, as here, a comprehensive Business Liability Policy. A plaintiff claimed discrimination under a federal statute (FHAA there, FACE here). There was "bodily injury" coverage, end the same standard "occurrence" definition about damages "neither expected nor intended from the standpoint of the insured . . ." 980 F2d at 1402 [Tab 2]. The Eleventh Circuit mandated coverage and a duty to defend, stating:

"The insurer must defend when the complaint alleges facts which fairly and potentially bring the suit within policy coverage." [Tab 2, 980 F2d at 1405].

"The factual allegations set forth grounds, other than intentional acts and discrimination, upon which Lime Tree could be held liable." [Id].

The Raney Complaint [P.Ex. 4, pp 16-22], Raney deposition excerpts [P. Ex. 3, pp 8-15] , even the recently uncovered parallel Raney state court claim against the City, all have allegations that may be interpreted to claim some form of unintended physical and/or mental injury squarely within policy coverage. The INSUREDS paid stiff premiums, nearly $9,000, for that coverage, and have been denied it, abandoned for an entire year.

The present facts show an even stronger case for coverage than Lime Tree. There, an express exclusion excised "violation of any civil rights law . ..," [Tab 2, 980 F2d at 1404] . Nonetheless, coverage was required. The complaint did not "directly allege Lime Tree intended the result . . ." [Id at 1407]. Here, there is no applicable specific exclusion. Raney does not allege that the actual INSUREDS themselves specifically intended him physical or psychological harm. The INSUREDS were not even present or involved in the three arrest "occurrences," so remote is their connection. That was police and U.S. Marshall business. They were enforcing a state court injunction which Raney had repeatedly violated. Ironically, the Marshals were also there to enforce FACE against Mr Raney. Such is the Orwellian nature of Raney's complaint.

Another leading Orlando to Eleventh Circuit case, Allstate v. Steinemer, 723 F2d 873 (11th Cir 1984) [Tab 3] , is further persuasive precedent. "Bodily injury" from e misguided BB shot was held covered by the shooter's father's personal general liability "homeowner's" insurance. (This suggests that Mr Raney's homeowner's policy may cover his decade of torts against AWCC). Although the BB shot had some measure of general intent, "the harm actually done was radically different from that intended." [Tab 3, 723 F2d at 875]. Coverage was mandated by the Eleventh Circuit because specific intent to do major harm was absent. Those insureds had paid good money for the insurance, as here.

These INSUREDS did not shoot BB's at Mr Raney. They could not have intended physical and psychological injury to Raney. He has not alleged otherwise. He disclaims any "assault" on him by the police, or any beating leading to "bodily injury," as laypersons understand it. [Depo, P.Ex 3]. A fortiori there was none intended by the absent INSUREDS. That highly creative exclusion is only an insurance company ploy to evade coverage with semantics, and to keep premiums in Bermuda.

The Eleventh Circuit adheres to and interprets Florida law in diversity insurance cases. Those principles are further elaborated in Trizec Properties F Biltmore, 767 F2d 810 (11th Cir 1985) [Tab 4], another Middle District CGL insurance case:

"All doubts as to whether a duty to defend exists are resolved against the insurer and in favor of the insured, 7C Appleman, Insurance Law and Practice, 99-100 (Berdal ed. 1979), and if the complaint alleges facts which create potential coverage ... the duty to defend is triggered." [Tab 4, 767 F2d at 812].

So it is here. The INSURERS owe to the INSUREDS the reasonable value of the defense provided in the wake of being abandoned into this minefield of federal litigation. They owe that and much more. Relevant excerpts from the APPLEMAN insurance law treatise are behind Tab 1, for the Court.

DUTY TO DEFEND - NO EXCLUSION FOR ASSAULT & BATTERY OR INTENTIONAL ACTS

SPHERE DRAKE (now ODYSSEY RE) and WESTCO (aka WESTERN WORLD) are not strangers to the issues of this litigation, not by any means. They are old professionals at denying coverage and keeping premiums in Bermuda. Abandoned INSUREDS, however, must struggle on two battlegrounds - the underlying cases, and the additional lawsuit burdens of getting the coverage they paid for. INSUREDS suffer under this dual burden and deserve a measure of damages, with bad faith compensation to deter defendant-insurers from such systematic reckless misconduct as occurred in this case.

Two SPHERE DRAKE casebook examples are Sphere Drake v PBL, 30 F3d 21 (2d Cir 1994) [Tab 5], and Sphere Drake v Shoney's, 923 F Supp 1481 (MD Ala 1996) [Tab 6]. Sphere/PBL acknowledged a well settled insurance law duty to defend bodily injury claims of nightclub-bouncer evictions that result in injury. New York law controlled. There, as in Florida, interpretation of an insurance contract of adhesion favors the abandoned INSUREDS.

By comparison, AWCC and the Windles did not employ nightclub bouncers, or anyone, to oust Mr Raney. These INSUREDS are entitled even morose to a defense. SPHERE DRAKE should know this from its own case losses, although they are difficult to track because of frequent company name changes.

Sphere Drake/Shoney's, 923 F Supp 1485 (MD Ala 1996) [Tab 6], is a complex insurance case. It contains persuasive coverage analysis. Alabama insurance law also is similar to that in Florida, E.g.:

"If an insurance policy is ambiguous in its terms, the policy must be construed liberally in favor of the insured, and exceptions to coverage must be interpreted as narrowly as possible in order to provide maximum coverage to the insured." [Tab 6, 923 F Supp at 1487].

Some claims in Sphere Drake/Shoney's asserted (1) bodily injury from unwanted touching. Also claimed was (2) federally prohibited discrimination, [Id at 1487]. The Court required Sphere to defend vicarious liability Title VII claims, among others. [ID at 1492]. There, as with AWCC, agency was a possible disputed issue. Intent was not a necessary part of the Title VII claim, as it is not with FACE. Sphere Drake had to cover numerous claims in Shoney's where no precise exclusion applied. They wrote the policy, and have accepted tens of millions of dollars in premiums, every year.

Again, here, Mr Raney makes a vicarious liability federal statutory claim. These INSUREDS are covered. They cannot plausibly be accused of intending specific physical or mental injury to Mr Raney. They were not likely even in the City.

Indemnification for all reasonable defense costs & expenses is also ripe for decision by this Court. AWCC has been burdened with substantial legal expenses and obligations for nearly a full year. Ripeness occurs when the bills are due and the transcripts on order. That started in October, 1997.

Co-Third-Party-Defendant Insurer WESTCO denied AWCC's defense. Westco ignored Sphere Drake legal precedent and its own company history of losing such similar coverage disputes repeatedly in American federal and state courts. [Tabs 7 & 9].

Thomas v Western World, 343 So2d 1298 (Fla DCA 2d 1977) [Tab 7] has been a leading case nationally for twenty years. In Thomas an insured laundry employee threw weak acid on two boys who had been banging on the doors and harassing the laundry. The boys sued for "bodily injury", as Mr Raney has done here. Western World denied coverage, citing an "assault and battery" exclusion, again, as here. "[T]he carrier never investigated the claim " [Id at 1300]. The boys complained of injury from negligence. Western World opined there was intentional assault and battery - same response as here. Thomas is to be followed under Erie and holds:

"[T]he company exercised no faith at all. It simply wrongfully refused to comply with its contract to provide a defense on behalf of the insureds. *** An insurer which denies coverage does so at its own risk." [Tab 7, 343 So2d at 1304].

Thomas supports these INSUREDS. Western World should know it. The INSUREDS here were not even present to toss distilled water on Mr. Raney. Independent on-duty City Police under the eyes of a U.S. Marshall took Mr Raney away, peacefully. Thomas at least teaches there was no "assault and battery" exclusion for Western World to pull out of a hat. Under Florida law, a proper arrest can never be an assault. It is lawful and a form of community self- defense. See Lester v Tavares, 603 So2d 18 (Fla DCA 5th 1992 [Tab 8].

Western World v Harford, 784 F2d 558 (4th Cir 1986) [Tab 9], is another leading relevant federal appellate decision. Western World ultimately required the insurer to defend a city and police chief in a civil rights action based on a shooting. Western presumed, but was not allowed to be "given the license to unilaterally resolve issues of interpretation and construction to its benefit without recourse." [Id at 562]. Western tries to do that sometimes. Coverage was, however, required as a matter of law. The complaint there "leaves open the possibility that [the insured] acted negligently rather than intentionally" [Id at 562], whether artfully pleaded or not.

Here, the complaint is ambiguous, silent, and inconsistent on the subjects of INSURED intent and injury details. Mr Raney does not negate negligence on the part of the absent AWCC and Windles. Nor is there any suggestion of assault and battery by the INSUREDS, who most likely were not even in the same City. They were not shooting anything toward Mr. Raney. His own video film on file supports coverage. Neither AWCC employees nor the Windles are anywhere near the three "occurrences," only the burly U.S. Marshall. Mr Raney's FACE claim is a form of civil rights assertion, no matter how far off- base and in disregard of the FACE statute and case law it may be. Circuit decisions agree. E.g., Coblentz v American Security, 416 F2d 1059 (5th Cir 1989) [Tab 10].

Sphere Drake and Western World have involved themselves in numerous officially reported cases. These alone provide an impressive body of supporting precedent for these INSUREDS. {A computer case search on SPHERE/ODYSSEY RE/WESTCO/WESTERN WORLD in all federal and regional reports suggests this is the tip of an iceberg. Complaints made to the Florida Department of Insurance also number in excess of two hundred. }

DUTY TO DEFEND - FEDERAL CIVIL RIGHTS AND STATUTORY CLAIMS OF RIGHT

Meredith Raney's complaint is ironically based on an historic women's reproductive freedom civil rights act, FACE, 18 USC § 248. FACE was designed to expand 42 USC §§ 1983-1986 against certain private forms of harassment, intimidation, and violence against women. Mr Raney and other harassers are part of the legislative history of FACE. They are among the reasons for the statute, not intended beneficiaries. Cases involving an INSURER's obligation to defend even unmeritorious civil rights cases are accordingly very relevant. This is the case although Raney's claims themselves may be the ultimate in chutzpah, the big prevarication writ large, like the Salem Witch Prosecutors lighting the torches as an act of Christian love, to save souls.

The "bodily injury" side of civil rights claims is particularly well-examined in an insurance housing discrimination case, United States v Security Mgt, 96 F3d 260, 267-269 (7th Cir 1996) [Tab 11]. In a broad analysis "bodily injury coverage extends to 'mental anguish or mental injury.' The complaints do not expressly allege emotional harm, but . . . an express allegation of mental harm under these circumstances is not always necessary." [Id at 268] . Mr Raney's two court complaints and deposition are quite adequate for inferring a claim of mental anguish from bodily restraint, even if not precisely articulated in the pleadings. Of course he was upset about being escorted away from the "buffer zone," even though no bruises of "bodily injury" were evident. Mental scarring may seem real. Stress burdens the soul, even when self-inflicted.

Two further persuasive federal district court cases on housing discrimination, "bodily injury," and Comprehensive General Liability can wrap up this issue and analysis, State Farm v Westchester, 721 F Supp 1165 (CD Ca1 1989) [Tab 12], and Gardner v Romano, 688 F Supp 489 (ED Wis 1988) [Tab 13]. State Farm required CGL coverage of possible "bodily injury" by a prospective housing tenant denied occupancy by racial discrimination. The insurer made all of the same routine arguments reiterated unpersuasively here by Westco and Odyssey/Sphere. These were rejected point-by-point in State Farm, a concise but systematic opinion. [Tab 12]. The Gardner case was found to be directly on point in State Farm and followed there as persuasive. [Tab 13]. Both apply here.

Mr Raney claims a federal statutory remedy based on exclusion from an injunctive "buffer zone" that was designed to protect women from harassment and intimidation by him. Raney admitted in his deposition to mental distress over being escorted away three times. This triggers coverage for three alleged "occurrences" of mental stress "bodily injury" encompassed by this Comprehensive General Liability Insurance. AWCC paid substantial premiums for this illusory coverage.

If there is any doubt about understanding the "intentional exclusion," that can be resolved by applying Phoenix Ins. Co. v Helton, 298 So2d 177 (Fla DCA 1st 1974) [Tab 14], another leading Florida case. There, an insured slowly drove a car into a crowd to disperse soft-tissued people. The alleged resulting injuries were held "unintentional" for insurance defense and coverage purposes. These INSUREDS did not drive a car or remote control the police to disperse Mr. Raney from the AWCC vicinity. Even if they had, coverage would be required under the CGL policy.

It also goes without saying that these INSUREDS did not cow--it any violent criminal act against Raney, as in Allstate v Prasad, 39 F3d 1165 (11th Cir 1994) [stabbing excluded].

RELIEF REQUESTED - INDEMNIFICATION AND COVERAGE

From the foregoing facts, cases, and law, these INSUREDS respectfully urge this Court to declare coverage and indemnification responsibility under the CGL policies issued by SPHERE DRAKE, now ODYSSEY RE, and to order prompt reimbursement and indemnification of all reasonable litigation expenses, obligations, and fees, continuing on a regular basis until termination of the underlying litigation.

INSUREDS further request that these indemnifications expressly encompasses all reasonable and necessary litigation expenses in the Raney matter as well as this Rule 14 work.

II. AS A MATTER OF LAW, AWCC HAS MADE A SUFFICIENT PRIMA FACIE SHOWING OF BAD FAITH TO GO FORWARD TO TRIAL ON EXEMPLARY AND ADDITIONAL DAMAGES

This is a particularly egregious case of powerful INSURERS recklessly abandoning a besieged small health care clinic, in shark-infested waters, surrounded by anti-abortion zealots waiting in line to sue if Raney prevails in any way. SPHERE DRAKE is not some tiny insurance agency, but a massive international insurance group tucked away in the offshore secrecy of Bermuda. As Sphere's 1996 SEC 10K Report shows, Sphere sits comfortably in Hami1ton, Bermuda, atop more wealth than most U.N. member nations. [Tab 15]. Sphere premiums, paid by people like AWCC, for the pertinent years were: 1996 ($449,921,000) and 1995 ($564,296,000) , slightly over one billion ($1,014,217,000). Somewhere in that $1 billion was about $9,000 paid by these INSUREDS for Comprehensive General Liability protection from lawsuits and claims lacking in merit. Westco aka Western World, another insurance giant, administers Sphere claims, and is jointly and severally liable for its own amply sufficient errors and omissions in this case.

The Rule 14 Third Party Complaint, verified, details many of the several components of bad faith present here. [See esp. Third Party Complaint ¶¶ 11, 12, 15, 18-20, 23, 26-39, 43, 46]. One might add that Florida law on coverage [Tabs 1-14] appears overwhelmingly to support these AWCC INSUREDS. The INSURERS ignored the Florida case and statutory law altogether, not even consulting counsel until recently.

FLORIDA LAW ON INSURANCE BAD FAITH

Several statutes and a large body of case law in Florida elaborate on this kind of insurance had faith claim, for additional compensatory and exemplary damages. An early case in this district was United Guaranty v Alliance Mtg Co, 644 F Supp 339 (MD Fla 1986)(Black, J) [Tab 16]. Construing FSA § 624.155 [enacted 1982], the court said:

"[T]he plain language of the statute provides a remedy for insureds who are injured by their insurer's bad faith refusals .... "644 F Supp at 340.

Accord, Rowland v Safeco Ins. Co., 634 F Supp 613 (MD Fla 1986); Opperman v Nationwide, 515 So2d 263 (Fla DCA 5th 1987) [Tab 17].

FSA § 624.155, and the related FSA § 626.9541, enumerate many bad faith sins. The INSURERS here have gone deeply into that forbidden territory. A reckless, one-sided investigation against an INSURED was enough for the Eleventh Circuit to support a $2.1 million bad faith punitive jury award in T.D.S. v Shelby Mutual, 760 F2d 1520, 1529-1532 (11th Cir 1985) [Tab 18] (from this District, involving a smaller insurance company).

Here, Sphere Drake and Westco have not bothered investigating the facts or fully analyzing the complaint. Nor have they paid attention to the law, not even the cases they lost themselves, much less other persuasive decisions from Florida federal and state appellate courts. They even misplaced one of the insurance policies at issue. The situation is akin to Thomas v Western World:

"[Western World] exercised no faith at all. It simply wrongfully refused to comply with its contract to provide a defense . . . " 343 So2d 1298, 1304 (Fla DCA 2d 1977) [Tab 7].

While Thomas was before the 1982 bad faith statutes, the case is a landmark for defining insurance company malfeasance, which would be bad faith today. An early Orlando-originating insurance case not unlike the present is Burton v State Farm, 335 F2d 317 (5th Cir 1964) [Tab 19]. There an Insurer refused to defend, or pay, on a simple auto accident policy. The Widow Insured was hounded by litigation. The Court of Appeals scolded this indifferent Insurer:

"[T]he Insurer stood mute. It refused to defend, or presumably to budge or even so much as speak.' 335 F2d at 322.

Burton found for the Widow strongly. Similarly, Jerue v INA, 646 So2d 780, 783 (Fla DCA 2d 1994) [Tab 20], involved a total denial of coverage on a near million dollar loss. The Insured filed suit, claiming insurance bad faith and unfair trade practices.

Jerue found for the Insured, emphasizing that "the trial court must consider all of the circumstances involved in the denial of coverage in evaluating an insurer's liability for bad faith." 646 So2d at 783 [Tab 20]. Jerue was followed in State Farm v LaForet, 658 So2d 55 (Fla 1995). Accord, McLeod v Cont. Ins., 591 So2d 621 (Fla 1992).

BAD FAITH FACTORS IN THIS CASE

The three factors weighed in Jerue v INA, supra, all three, are present here against Sphere Drake/Westco, and several more.

(1) Prompt resolution: These INSURERS have still not found the missing policy, almost one year after litigation began, and declined any reasoned dialogue until after suit was filed, never responding to numerous June 1998 queries.

(2) Law: The weight of legal authority discussed above is heavily against these INSURERS, including their own losses.

(3) Investigation: These INSURERS denied coverage by long distance from New Jersey, never interviewing a witness, taking a statement, examining the scene and videotapes, or reading a similar case, not even one of their own for precedent.

Additional elements of bad faith, also detailed in the verified Third Party Complaint, are:

(4) Material misrepresentation, FSA §626. 9541 (i)(2): Denying existence of one year of the policy, even when confronted with it repeatedly;

(5) Misrepresenting the facts as involving an "assault and battery," when any reasonable investigation would show none occurred, nor was claimed, FSA §626.9541 (i)(3)(b);

(6) Failing to respond in writing, to negotiate, or even dialogue after being confronted months ago with the errors in their denying coverage [June 26, 1998, P. Ex. 2-1 to Third Party Complaint], FSA §626.9541 (i)(3)(c). This forced a lawsuit; and

(7) Failing to provide a reasonable explanation when confronted with the weight of applicable law, including the nature and volume of coverage litigation against Sphere Drake and Western World, parent of Westco, FSA §626.9541 (i)(3)(f) .

These seven (7) factors are all documented as hard fact on paper, not dependent upon recollection or testimony. This is a sufficient showing to allow this Court to set a prompt hearing or short trial on the ultimate issues of actual compensatory and exemplary damages owed by Sphere Drake (now Odyssey Re) and Westco to these abandoned and damaged INSUREDS.

ELEMENTS AND STANDARDS OF COMPENSATION

The compensation sought by these INSUREDS might better be understood if case law is put forth to justify those demands to be made at trial or hearing. The INSURERS have eminent counsel as befits a major international Bermuda offshore entity. Cases and reason may prevail before a jury is selected for the task.

Pre-Judgment Interest: Since the underlying lawsuit was filed nearly one year ago, October 1, 1997, and the defense-coverage-indemnification duty attached then, these INSUREDS suggest that prejudgment interest be calculated from a middle point, such as April 1, 1998, to compensate in part for delay in payment of defense and indemnification.

Underlying Lawsuit: All reasonable litigation expenses and obligations are compensable. These should include defense of all three Raney claims, as well as the making of interrelated compulsory counterclaims which are intertwined with Raney's systematic patterns of conduct, and otherwise could be deemed abandoned. Work on the counterclaims is difficult to separate out, but has been most helpful in overall defense of the underlying case. Case law supports this allowance. E.g., FIGA v RVMP Corp., 681 F Supp 806 (SD Fla 1988).

Third Party Complaint: All reasonable litigation expenses and obligations involved in bringing Sphere and Westco to justice are plainly compensable.

Counsel Fees: This Court has considerable experience in setting reasonable counsel fees in complex, controversial litigation. These counsel request 30 days post-partial summary judgment to file affidavits and authorities. At least four counsel are necessarily involved, from three different cities.

Cases such as Maltzer v Provident Life, 843 F Supp 592 (MD Fla 1993), set the standard for fee analysis, with lead counsel having more than 20 years of high level federal litigation experience. As in Maltzer, a lodestar multiplier may be appropriate for the complexity of a new federal statute, and perceived danger of defending a case such as this, where anti-abortion harassers have a long history of violence, including the picketing of trial judge's homes, videotaped by Mr Raney. The plaintiff Raney appears to be without visible financial resources, and is "unpredictable," under psychiatric care, and supposedly taking a substantial 1500 mg of Lithium daily, as well documented in his deposition. This is a cause for concern, given statewide violence and harassment, and two physician homicides in Florida.

Emotional Distress Damages: Tortious breach of insurance contracts can cause severe mental stress, fear, and danger of bankruptcy for an Insured. This factor has entered into damages since World Ins. v Wright, 308 So2d 612 (Fla DCA 1st 1975) [Tab 21] . As to individual Insureds, this can be professionally documented and the subject of expert testimony. This issue, and others, were examined recently in DiDomenico v N.Y. Life, 837 F Supp 1203 (MD Fla 1993) [Tab 22].

Other Damages: The above and other damages are a foreseeable consequence of abandoning an Insured in difficult federal litigation which threatens the Insured's very survival. Sphere, Odyssey, and Westco may claim that AWCC might have defended or protected itself in some other, alternative manner. As stated in Shook v Allstate, 498 So2d 498 (Fla DCA 4th 1986) [Tab 23] , however:

"'By refusing to defend [the] claim, the carrier left [the Insured] to his own devices to protect himself in the best way possible.'" 498 So. 2d at 500.

For this serious and unjustifiable abandonment, the delinquent INSURERS must compensate these damaged INSUREDS in a full and reasonable way.

CONCLUSIONS

For the reasons set out, this Court should grant the Motion for Partial Summary Judgment as to INSURER liability, and set a hearing on further matters of compensation and expenses.

RESPECTIVELY SUBMITTED:

ROY LUCAS <signed>
DC #153957
c/o PO Box 1433
Melbourne, FL 32902-1433
TEL: 407-725-2413
FAX: 407-725-3847

SUSAN ENGLAND
FL #0186018
2805 Lakeview Dr
Fern Park, FL 32730
TEL: 407-339-4600
FAX: 407-331-3006

ATTORNEYS FOR AWCC INSURED THIRD PARTY COMPLAINANTS

APPENDIX TO INSURED AWCC MEMORANDUM IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT

Tab 1, INSURANCE LAW TREATISE - EXCERPTS - 7A APPLEMAN, INSURANCE LAW & PRACTICE §4491 + ( 1979 ed) ...

Tab 2, LIME TREE v STATE FARM, 980 F2d 1402 (11th Cir 1993) (duty to defend - GBL policy - 'bodily' injury - not intentional)

Tab 3, ALLSTATE v STEINEMER, 723 F2d 873 (11th Cir 1984) (duty to defend - Homeowner's general liability policy - 'bodily injury' - harm not intended by Insured)

Tab 4, TRIZEC PROPERTIES v BILTMORE, 767 F2d 810 (11th Cir 1985) (duty to defend - if any interpretation of allegations within policy - broadly) ...

Tab 5, *SPHERE DRAKE v PBL, 30 F3d 21 (2d Cir 1994) (duty to defend - assault - bouncer).

Tab 6, *SPHERE DRAKE v SHONEY's, 923 F Supp 1481 (MD Ala 1996) (duty to defend - 'bodily injury' - no exclusion for intent)

Tab 7, *THOMAS v WESTERN WORLD, 343 So2d 1298 (Fla DCA 2d 1977) (duty to defend - bad faith denial of coverage - no exclusion for general intent)

Tab 8, LESTER v CITY OF TAVARES, 603 So2d 18 (Fla DCA 5th 1992) (lawful arrest not assault).

Tab 9, *WESTERN WORLD v HARFORD MUTUAL, 784 F2d 558 (4th Cir 1986) (duty to defend - civil rights)..

Tab 10, COBLENTZ v AMERICAN SECURITY, 416 F2d 1059 (5th Cir 1969) (duty to defend - assault exclusion - injury not intended by Insured)

Tab 11, UNITED STATES v SECURITY MGT CO., 96 F3d 260, 267-269 (7th Cir 1996) (excerpts - explanations of 'bodily injury' and 'occurrences' in discrim case)

Tab 12, STATE FARM v WESTCHESTER INVESTMENT CO., 721 F Supp 1165 (CD Cal 1989) ('bodily injury' - CGL policy duty to defend federal statutory claim)

Tab 13, GARDNER v ROMANO, 688 F Supp 489 (ED Wis 1988) (duty to defend - GCBL policy - federal statutory discrimination claim - occupancy)

Tab 14, PHOENIX INS CO v HILTON, 298 So2d 177 (Fla DCA 1st 1974) (no intentional exclusion - car driven slowly by Insured to disperse crowd)

Tab 15, SPHERE DRAKE 1 OK REPORT TO S.E.C. - EXCERPTS

Tab 16, UNITED GUARANTY v ALLIANCE MORTGAGE CO., 644 F Supp 339 (MD Fla 1986) (insurance bad faith - refusal to pay - Florida statutory action)

Tab 17, OPPERMAN v NATIONWIDE MUTUAL, 515 So2d 263 (Fla DCA 5th 1987) (insurance bad faith - Florida statutory remedy for Insured)

Tab 18, T.D.S. INC v SHELBY MUTUAL, 760 F2d 1520 (11th Cir 1985) (insurance bad faith - reckless, misdirected investigation - $2 million punitive)

Tab 19, BURTON v STATE FARM, 335 F2d 317 (5th Cir - Fla 1964) (duty to defend - obstinate insurer versus widow - attorneys' fees, costs)

Tab 20, JERUE v INSURANCE CO OF NORTH AMERICA, 646 So2d 780, 783 (Fla DCA 2d 1994) (insurance bad faith - unfair trade practices - poor investigation, inadequate explanation, weak legal basis for denial)

Tab 21, WORLD INSURANCE CO. v WRIGHT, 308 So2d 612 (Fla DCA 1st 1975) (insurance bad faith - documented emotional distress damages)

Tab 22, DiDOMENICO v N Y LIFE, 837 F Supp 1203 (MD Fla 1993) (insurance bad faith - nature and scope of damages recoverable)

Tab 23, SHOOK v ALLSTATE, 498 So2d 498 (Fla DCA 4th 1986) (insurance bad faith - abandonment of Insured - Insurer not released by settlement from further recovery on bad faith)