December 2002 memorandum

Gelfand & Arpe, P. A.

December 2002

MEMORANDUM TO CLIENTS

INSURANCE: NO COVERAGE FOR INTENTIONAL ACTS OF HARM

What happens if a director or officer hits and injures someone and then claims the injury was inflicted in self defense? Will the Association’s insurance policy cover a lawsuit for injuries? The policy may contain an exclusion for intentional acts resulting in harm.

In Cabezas v. Florida Farm Bureau Casualty Insurance Co., 27 Fla. L. Weekly D2186 (Fla. 3rd DCA, October 9, 2002), a Florida appellate court ruled that when an assailant intentionally struck a victim on the side of the head, the homeowner’s insurance policy provided no coverage for injuries suffered as a result of the blow to the head. Even if the assailant’s acts were the result of self defense, the court said the insurer had no duty to defend or indemnify the homeowners.

The situation before the court arose when an eighteen year old man, while driving his parents’ car, was involved in an automobile collision with Israel Cabezas, a seventy year old man. Cabezas did not stop after the accident. The younger man pursued Cabezas and forced him to the side of the road. While examining his car, the younger man allegedly heard someone behind him and saw hands in the air. Thinking he was about to be hit, the younger man punched Cabezas in the head. Cabezas sustained permanent head injuries. The assailant was charged with aggravated battery.

Cabezas sued the assailant and the assailant’s parents for damages resulting from the punch to his head. The assailant claimed he did not know who he was going to hit when he threw the punch. The parents’ homeowners’ insurer denied coverage for the injuries to Cabezas. The insurer argued the injury was intended; thus, the claim did not fall within the coverage of the insurance policy. The trial court agreed and found the insurer had no duty to defend or indemnify the assailant.

The appellate court explained it was irrelevant whether the assailant knew the person he intended to hit was Cabezas as opposed to someone else because the complaint alleged facts showing the conduct was intentional, not negligent. The insurance policy provided that "medical payments to others do not apply to bodily injury or property damage ... which is expected or intended by the insured." The court pointed out that a punch to the head is an act expected or intended to cause bodily injury. Even if the act was in self defense, the court determined the act was still excluded from coverage under the intentional acts exclusion of the policy.

This decision points out that injuries resulting from intentional acts may be excluded from coverage by insurance policies. Although Associations may carry liability insurance, directors should be aware that the insurer may not have to defend or indemnity them if they commit intentional acts resulting in harm to others.

EMPLOYMENT: PROBLEMS WHEN A BOSS FIRES AN EMPLOYEE

Being an employer is never as easy as it may seem. Two recent Florida appellate court decisions emphasized problems arising when employers fire employees.

The first decision dealt with an employee found sleeping on the job. In Filsaime v. Flying Food Group LLC, 27 Fla. L. Weekly D2182 (Fla. 3rd DCA, October 9, 2002), the court ruled that the single instance of an employee’s falling asleep on the job does not amount to misconduct disqualifying him for unemployment benefits. The Florida Unemployment Appeals Commission issued an order denying the employee unemployment benefits. The employee appealed the order denying him benefits. The appellate court disagreed with the Commission’s decision and ordered it to award unemployment benefits to the employee.

The second case proves that not all disputes are settled in court; some may end up in arbitration. In Henderson v. Idowu, 27 Fla. L. Weekly D2271 (Fla. 4th DCA, October 16, 2002), the court ruled that an employee’s claims against his supervisor for causing his employer to fire him were subject to arbitration. The court held that the employee signed an employment agreement which provided for arbitration of all claims arising from his employment and termination.

In Henderson, after losing his job, an employee sued his supervisor for creating a hostile work environment and maliciously causing Florida Medical Center to terminate his employment. The employee’s wife joined the lawsuit claiming loss of consortium, which is the loss of affection from a spouse. The employer maintained that the claims should be arbitrated. The employee disagreed, arguing the claims were not subject to arbitration because they involved tortious conduct, i.e. wrongful conduct, not contract disputes.

The appellate court determined that the claims should be arbitrated. The court pointed out the employee signed an "Employee Acknowledgment Form" which provided for arbitration of claims related in any way to the employee’s employment or termination of employment. The court found the claims were based upon the termination of the employee; thus, there was a nexus between the claims and the arbitration agreement. Additionally, the court found the wife’s loss of consortium claim was subject to arbitration, since her claim would fail if her husband’s claim failed.

The Henderson decision points out that not all disputes end up in court. If an Association signs a contract containing an arbitration provision, then the Association may be able to arbitrate disputes rather than litigate in court. If you have any questions about your contracts, please feel free to contact your counsel.

HAPPY HOLIDAYS!

In observance of national holidays, the firm’s office will be closed on Wednesday, December 25, 2002 and Wednesday, January 1, 2003. The firm’s office will also be closed on the afternoon of Wednesday, December 18, 2002. We wish all a healthy and peaceful New Year.

This information is provided for public information purposes only and is provided without obligation or fee. It is distributed to the firm's association clients to provide a general notice of recent legal changes. This information is not to be considered as legal advice. The changes in the law may not have been reviewed by Florida courts and may be subject to further challenge. Before taking any action you are urged to consult with counsel to ensure that your legal rights are protected.