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The Farmers Unit is not obligated to defend Florida's contractor



A federal appellate court confirmed Monday that a unit of Ohio Farmers Insurance Co. was not required to defend or insure a Florida contractor in a complex dispute with one of its subcontractors.

Diaz Fritz Group Inc., based in Temple Terrace, Florida, hired Howard Baker Inc. in May 2009 as a subcontractor. to perform basic work at University Community Hospital Carrollwood in Tampa, according to the judgment of the 11th U.S. Circuit Court of Appeals in Atlanta in The Diaz Fritz Group Inc. dba Diaz Fritz Isabel vs. Westfield Insurance Co.

Diaz Fritz agreed to pay Tampa-based HBI $ 290,000 to complete the project. But problems arose and, according to Diaz Fritz, the HBI through negligence caused some of the hospital's other property to flood, leading to significant damage.

After the hospital demanded that Diaz Fritz fix the situation within three days, the company contacted Westfield Insurance, but the insurer said the HBI was responsible for the flood. Westfield sent the claim to HBI's insurance company, Zurich American Insurance Co., but insurers could not agree on whether Zurich's policy required it to provide coverage to Diaz Fritz as an additional insured.

In the meantime, without seeking Westfield's approval , Diaz Fritz paid for the necessary repairs ̵

1; which amounted to about $ 506,000 – without admitting any wrongdoing. It then decided to withhold the $ 290,000 it had agreed to pay HBI for its work but was still on the hook for more than $ 200,000 of the amount it had paid to the hospital. HBI in state court, where a jury found HBI partially liable for $ 267.00 in damages. Compensating for the $ 290,000 that Diaz Fritz had withheld, the jury awarded HBI $ 23,400 in damages. ] the district court ruled in Westfield's favor and was upheld by an appellate court with three judges.

The district court ruled in Westfield's favor "after concluding that the clear and unambiguous policy language" covered "processes" & # 39; on damages due to property damage, said the judgment of the Court of Appeal. We agree and find Diaz Fritz's opposite arguments unconvincing, "said the panel, in that Westfield was not obliged to provide either a defense or indemnity.

Westfield lawyer Aram P. Megerian, a partner with Cole, Scott & Kissane The PA, in Tampa, said in a statement that he believed the court had reached the correct conclusion. Diaz Fritz's lawyers did not respond to a request for comment.

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