RULE 14 THIRD PARTY COMPLAINT OF AWCC AGAINST DECLINING INSURERS

ABORTION INDUSTRY IN MELBOURNE, FLORIDA
LAWSUITS
RANEY V AWARE WOMAN
DOCKET / CHRONOLOGICAL FILE
RULE 14 THIRD PARTY COMPLAINT OF AWCC AGAINST DECLINING INSURERS

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION

AWARE WOMAN CENTER FOR CHOICE, INC.,
a Florida corporation,
EDWARD WINDLE, and
PATRICIA BAIRD-WINDLE,
citizens of Florida,
Third Party Plaintiffs,

-versus-

SPHERE DRAKE INSURANCE COMPANY PLC, and
WESTCO CLAIMS MANAGEMENT SERVICES, INC.,
foreign business entities,
Third Party Defendants.

CASE NO.: 97-1197-CV-ORL-19B

RULE 14 THIRD PARTY COMPLAINT OF AWCC AGAINST DECLINING INSURERS FOR TORTIOUS BREACH OF INSURANCE CONTRACT, DECLARATORY RELIEF, INDEMNIFICATION, AND EXEMPLARY DAMAGES.

Aware Woman Center for Choice, Inc., Edward Windle and Patricia Baird-Windle [hereafter collectively "AWCC"] make this third Partv complaint for declaration of insurance coverage indemnification, and exemplarv damages, and state:

I. JURISDICTION & VENUE

1. This court has diversity jurisdiction under 28 USC §1332 (a) (2) , and Florida law, FSA 624.155. The third parties are fully diverse. The matter in controversy exceeds seventy-five thousand dollars, exclusive of interest and costs.

2. Third Partv complainants ["AWCC"] are all residents and citizens of the State of Florida, Middle District.

3. Third party defendant insurer Sphere Drake Insurance Company PLC is a foreign business entity situated in London, England, U.K. [hereafter "Sphere"]. Sphere invites and accepts service of process through Wilson, Elser, Moskowitz, Edelman & Dicker, 420 Lexington Avenue, New York, N.Y. 10170, USA.

4. Third party defendant insurance claims denial agent for Sphere is Westco Claims Management Services, Inc. [hereafter "Westco"]. Westco is a non-Florida corporation which accepts service of process at its principal corporate place of business, 400 Parson's Pond Drive, P.O. Box 607, Franklin Lakes, New Jersey 07417-0607, USA.

5. The insurance policies in question provided coverage during the relevant time periods for AWCC in Melbourne, Florida, which is in the Middle District.

6. The underlying controversy, occurrences and unintended alleged physical and psychological injuries insured against took place in Melbourne at the premises of AWCC.

7. FRCP 14 explicitly covers this type of severable defendants' third party impleader and complaint against declining insurers. This practice simplifies ultimate resolution of the overall disputes among the parties and their insurers, before a Court already familiar with the matter.

II. THE FACTS

8. Third party complainant "AWCC", Aware Woman Center for Choice, Inc., is owned by Edward Windle and Patricia Baird Windle, both co-insured, and both residents and citizens of the Middle District.

9. AWCC is a duly licensed reproductive health care facility in Melbourne, Florida. AWCC is a defendant in the underlying lawsuit before this Court wherein one Meredith Raney claims to have suffered damages and injury from being escorted out of the AWCC vicinity by Melbourne police, for having violated a known state court injunction, after notice and warning from the City of Melbourne Police, who then escorted him away.

10. The claimed incident occurrences were unexpected and unintended from the standpoint of the insured AWCC, who could not possibly have predicted the occurrences nor the claimed physical and psychological injuries in advance.

11. No AWCC defendant was even present at the time of any of the three incidents, as shown by videotapes produced by Raney, and on file with the AWCC motion for summary judgment dismissing the Raney claims. These incident tapes were never sought by the insurers, nor did the insurers interview Raney or the Police, or otherwise investigate the claims. Westco, acting for Sphere, denied coverage outright according to a business practice of minimizing allowance and defense of claims with any novel circumstances, or shadow of a semantic basis for denial.

12. Sphere Drake and Westco essentially abandoned AWCC in the underlying lawsuit, declined to defend, and left AWCC alone in a minefield of novel federal litigation over construction of a recent complex federal statute, FACE, 18 USC §248.

13. In fact, Raney's claims are insubstantial, and no such declaratory and damages claim in federal court has ever asserted FACE, 18 USC §248, from the perspective of a sham sidewalk counselor, escorted away on probable cause.

14. The removal of claimant Raney from the AWCC vicinity was in all three cases pursuant to peaceful lawful arrests with substantial probable cause. These arrests were simply the most recent of repeated violations by Raney over years of a valid state court injunction, enforced by the City Police on their own initiative, as required by Florida law.

15. Mr. Raney may well believe that these arrests caused or contributed to some physical and psychological injury, as he alleges, but they did not remotely amount to any assault or battery under the definitions in Florida law [See P.Ex. 7 & pp. 44-46 hereto]. Nor has Raney claimed assault and battery, in his related complaints nor in his depositions. The entire "A&B" defense is an invention of Sphere and Westco, attempting to avoid coverage by a strained interpretation of an arcane exclusion in their contract of adhesion insurance policy.

16. AWCC in the relevant time period paid substantial insurance premiums ($8,956.00) for supposedly comprehensive business liability insurance protection from such insubstantial premise liability claims as Raney's. (Clinic harasers such as Raney occasionally invite arrest or try to brush up against incoming vehicles, and fall down, only to get back up when they are ignored. ) AWCC purchased General Liability Insurance from London, England's "Sphere Drake Insurance Company PLC" [hereafter "Sphere"] for the purpose of covering the defense of such claims, including frivolous ones.

17. AWCC reasonably believed that General Liability guaranteed comprehensive coverage, not some highly limited, truncated form of illusory protection in a contract of adhesion with obscure fine print exclusions that take away reasonably anticipated coverage, after premiums have been paid.

18. Sphere Drake and Westco make a business practice, however, of negotiating unilaterally for comprehensive liability insurance. They proffer self-standardized lengthy complicated contracts of adhesion. They do not reveal the exact content and meaning of detailed terms of the adhesion policies until some weeks after payment of the premium, sometimes never. By then the hopefully Insured is out of pocket many thousands of dollars, as was the case here ($8,956.00), and would otherwise be without any insurance at all, if s/he balked at the abundant, sometimes mysterious fine print.

19. AWCC paid substantial premiums for what has proven to be illusory coverage in this underlying case. The terms were dictated from London by an insurance contract of adhesion never seen or available for review until weeks after payment. There was no bargaining process whatever, not even a simple inquiry to the Insured as possible needed scope of coverage.

20. On good information and belief, the CGL, Comprehensive General Liability insurance policies, evolve from year by year unilaterally, not to meet the needs of the Insured, but to block those needs with continually revised exclusions that eliminate recent "problem cases" of payouts and defense costs, to maximize profit and minimize useful coverage from the perspective of the needs of the consumer-insureds such as AWCC.

III. THE UNDERLYING LAWSUIT

21. On October 1, 1997, nearly one year ago, Meredith Trotter Raney, Jr., filed this federal case against the Insured AWCC, et al. His seven page complaint is P. Ex. 4 hereto.

22. AWCC timely notified Sphere Drake and Westco of the lawsuit and claims, provided the summons and complaint, and were available for discussion and investigation of coverage. Raney sought damages, claiming interference which "caused him suffering, [and] financial loss .... ¶416, p. 5 of Complaint, P.Ex. 4-5, p. 20. Nowhere did Raney claim any intentional assault and battery. His videotapes of the incidents show none.

IV. DENIAL OF COVERAGE

23. Westco denied coverage and defense on January 13, 1998. [Letter, P.Ex. 1 hereto]. Neither Westco nor Sphere conducted any investigation beyond their own unilateral and incomplete cursory review of the ambiguous complaint, which they did routinely without analysis or advice of legal counsel.

24. Abandoned, AWCC continued its own uninsured defense efforts, and retained specialized federal litigation counsel to seek summary judgment dismissing the underlying Raney claims, investigate thoroughly, press compulsory counterclaims, and conduct other reasonably necessary investigation, legal research, search into legislative history, explore coverage and bad faith issues, and do other reasonable and necessary work.

25. AWCC requested reconsideration of coverage, documents, and a copy of the Insurer's claim file and investigation records by letter of June 26, 1998. [P.Ex. 2-1, p.4].

26. Westco has thus far declined to respond further in writing and has only reiterated verbally the prior erroneous grounds for denying coverage and defense.

Absence of Investigation

27. Westco, as claims manager, agent, and accomplice of Sphere, denied coverage without even a cursory investigation of the factual circumstances, witnesses, evidence, background, or applicable federal and Florida case law and statutes.

28. Westco never interviewed any AWCC representative concerning the underlying occurrences, facts, or circumstances.

29. Westco never interviewed claimant Raney concerning his alleged injuries and suffering from the three occurrences, and made no attempt to view the three videotapes Raney had made of the occurrences.

30. Westco never interviewed any of the three police officers involved in escorting Raney from the scene of the three occurrences, and never even sought the three police reports of the incidents.

31. Westco never investigated even the most basic Florida cases and statutes before denying coverage and any defense, but abandoned AWCC without any input concerning the ultimate legality of their actions. Westco and Sphere have ignored the progress of the underlying lawsuit altogether, never involving their house counsel, if any, or other counsel in the matter, although Florida law is important to the coverage question and all that flows from it.

32. Sphere on its own did nothing to investigate or evaluate the claim and the need for coverage.

Misrepresentations As To Coverage

33. Westco denied coverage as to the underlying federal complaint Counts I and II on grounds of no-policy-in-effect for the relevant time period. [P.Ex. 1-2]. Westco refused coverage because "the incidents which occurred on January 28 and April 26, 1995, occurred prior to the inception of your Commercial General Liability policy .... " [P.Ex. 1-2]. That is demonstrably false.

34. The Westco letter itself belies their own denial. The "RE:" preface shows the policy was "Effective July 20, 1994 to July 20, 1995." [P.Ex. 1-1]. On most calendars, January and April of 1995 occur prior to July 1995, and this is appropriate for judicial notice.

35. Denial of coverage and defense for Counts I and II was reckless, if not intentionally wrong, and simply a transparent misrepresentation of facts Westco chose to ignore.

36. Even when Westco was corrected by AWCC's letter and memo [P.Ex. 2-2, p. 5], neither Westco nor Sphere made any response or change of position.

37. Pertinent pages of the applicable first year policy No. 34760 (premium $4,871.80) are appended hereto as P.Ex. 5-2, p. 24. Westco and Sphere are bound by these policies and cannot ignore their existence.

Unreasonableness & Arbitrariness of Denial

38. Westco further denied coverage [P.Ex. 1-2] without extended explanation on contradictory grounds that Raney did not complain of "bodily injury," yet his complaint was within an "assault and battery" exclusion. Westco ignored the "suffering" allegation completely and its interpretation to encompass physical and mental suffering, which would be plainly covered by the policy.

39. P.Ex. 2-3 is a detailed analysis of Raney's complaint and claims of "suffering" and "physical restraint" from the standpoint of the Insured AWCC. The complaint is ambigous as to nature and extent of injury, but Raney clearly makes no claim of "assault and battery." More particularly, these insureds AWCC were not a part of the arrests and could not personally have intended nor predicted nor been implicated in any "assault and battery," even if that had been alleged, which it was not. Nor can AWCC be implicated in any intentional cause of injury because AWCC and the Windles did not direct, participate in nor even know immediately about any arrest at all at the times of the occurrences.

40. As a matter of law, an uneventful peaceful arrest by a police officer cannot be an assault & battery in Florida, nor do these circumstances remotely approach the definition of "assault" under Florida law, FSA §784.011, P.Ex. 7, p. 44:

"An 'assault' is an intentional unlawful threat by word or act to do violence to the person of another, coupled with an apparent ability to do so, and doing some act which creates a well-founded fear in such other person that such violence is imminent."

41. Claimant Raney in his deposition also disclaimed any suggestion of assault and battery. [P.Ex. 3, pp. 8-15, esp. p. 14]. He acknowledged his claims of physical and mental suffering, and denied any assault and battery allegations.

42. The claim of injury causing "physical and mental suffering" was also independently made by Raney in his earlier state court lawsuit against the City of Melbourne over the same three arrests and removals from the vicinity of AWCC. [ P.Ex. 8-2, p. 48]. Nowhere in that separate and earlier action is any claim of assault and battery made. The insurance carrier for the City, more wisely, chose to defend in that virtually identical case.

43. The sum and substance of Mr. Raney's claim is physical and mental distress at being escorted away from the vicinity of AWCC's driveway where he wants to preach at incoming patients, whether they are interested or not. The assault & battery idea is wishful thinking by the insurance companies to avoid defending the underlying case, and living up to the terms of the policies for which they accepted substantial premiums.

V. DAMAGES TO AWCC

44. As a direct and proximate consequence of the acts & omissions of Sphere and Westco, these third party complainants AWCC, Edward Windle, and Patricia Baird-Windle have incurred and suffered real and substantial economic, personal, and other damages that sound in both tort and contract.

45. Said damages include but are not limited to substantial litigation-related expenses, investigation costs, reasonable attorneys' fees and obligations, physical and emotional distress, outrage at being abandoned and subjected to the stress and expense of defending a frivolous but time-consuming lawsuit, pre-judgment interest, and other damages proximately caused by the abandonment, as allowed by law and practice.

VI. BAD FAITH ALLEGATIONS

46. AWCC realleges the foregoing paragraphs and states that Westco and Sphere Drake, individually and in concert, acted in bad faith as a matter of law and fact in denying coverage, defense, and indemnity, in all of the respects heretofore enumerated. Written notice has been provided to these third party defendants and the Florida Department of Insurance as required by law, FSA 624. 155, and is appended to this third party complaint.

VII. CLAIMS FOR RELIEF

47. AWCC REITERATES AND INCORPORATES BY REFERENCE EACH AND EVERY OF THE FOREGOING ALLEGATIONS AND FURTHER STATES THE FOLLOWING AS CLAIMS ON WHICH RELIEF CAN BE GRANTED:

48. COUNT I: Sphere Drake and Westco breached the contracts of insurance with AWCC, and are liable to the full extent of the contracts of insurance for indemnification and defense of AWCC's choice.

49. COUNT II: Sphere Drake and Westco tortiously violated their fiduciary duties to AWCC in denying coverage and defense, and are fully liable for all ensuing damages, costs, litigation expenses and obligations, and pre-judgment interest.

50. COUNT III: The errors and omissions of Sphere Drake and Westco were in reckless disregard of the interests of the insured AWCC et al., and were willful, wanton, and in bad faith.

51. COUNT IV: The errors and omissions of Sphere Drake and Westco occurred pursuant to their general business practices of denying the maximum of CGL claims at the outset, and of not reasonably and adequately investigating CGL claims for coverage before denying them, all in violation of FSA 626.9541.

52. COUNT V: The CGL Policy and practices in question misrepresent the benefits, advantages, conditions, and terms of the insurance paid for, by not clearly warning of the practice of excluding specific categories of claims such as those in the underlying case, in violation of FSA 626.9541.

53. COUNT VI: The CGL policy in question misrepresents the benefits, conditions, and terms of the insurance paid for by not clearly warning of the policy of not investigating claims before initial denial, in violation of FSA 626.9541.

54. COUNT VII: The CGL policy in question by its very title and sweeping scope - Comprehensive General Liability - is misleading and misrepresents the limited coverage which Sphere Drake and Westco subsequently attempt to impose after premiums are paid, occurrences take place and claim~ are made, in violation of FSA 626.9541.

55. COUNT VIII: Sphere Drake and Westco violated FSA 626.9541 by making material misrepresentations in denying that any coverage or policy existed for Counts I and II of the underlying lawsuit, when in fact the earlier Sphere policy no. 34760 expressly encompassed the time period.

56. COUNT IX: Sphere Drake and Westco further violated FSA 626.9541 by not responding promptly or at all to the matters raised by the insured in its June 26, 1998, request for indemnification, but instead ignoring the request and verbally reiterating earlier, erroneous grounds of non-coverage.

57. COUNT X: Sphere Drake and Westco further acted in bad faith by refusing to negotiate with AWCC as to indemnification, but instead persisting in wrongful denial of coverage.

VI I I . RELIEF REQUESTED

WHEREFORE, third Party complainants AWCC, Edward Windle, and Patricia Baird-Windle respectfully urge this Court to Grant the following relief:

58. A declaratory judgment as a matter of law that Sphere Drake's Comprehensive General Liability policies relied upon by AWCC encompass defense of the claims of the underlying lawsuit;

59. An order requiring Sphere Drake to reimburse and indemnify AWCC for all reasonable costs, expenses, damages, interest, and attorneys' fees involved in every aspect of this action including those necessitated by the bringing of this third party complaint;

60. A declaratory judgment that Sphere Drake and Westco acted and omitted in bad faith by denying coverage and defense as part of their business practice and custom of systematically denying novel claims and those with any scintilla of basis for denial, submitted by insureds without insurance counsel, all with inadequate investigation and lack of consideration of applicable case law or statutory support;

61. An award of substantial punitive damages to deter Sphere Drake and Westco from their documented business practices of unreasonably denying and delaying coverage and indemnification for meritorious claims of insureds such as AWCC, said punitive award being at least 5% of the combined net worth of the two companies, Sphere Drake, and Westcor aka Western World Insurance Co.

62. AWCC requests trial by a jury of twelve on any questions of disputed damages and punitive damages.

RESPECTFULLY SUBMITTED:
Roy Lucas <signed>
DC #153957
c/o PO Box 1433
Melbourne, FL 32902
Tel: 1-407-725-2413
FAX: 1-407-725-3847

Susan England
FL #0186018
2805 Lakeview Drive
Fern Park, FL 32730-2007
Tel: 1-407-339-4600
FAX: 1-407-331-3006

ATTORNEYS FOR THIRD PARTY COMPLAINANTS.

CERTIFICATE OF SERVICE AND RULE 3.01 COMPLIANCE:

This Rule 14 Third Party Complaint has been served by regular mail upon counsel for Mr. Raney, namely Christopher Sapp, Esq., PO Box 1012, Lehigh Acres, FL 33970, following a Rule 3.01 personal consultation with him August 10, 1998.

This Rule 14 Third Party Complaint has been further served upon the third party defendants Sphere Drake and Westco by first class mail, return receipt requested sent to their officers for receipt of service, respectively, Wilson, Elser, Moskowitz, Edelman & Dicker, 420 Lexington Ave, New York, N.Y. 10170, and Officer for Service of Process, Westco Claims Management Services, Inc., 400 Parson's Pond Drive, PO Box 607, Franklin Lakes, N.J. 07417-0607, personally dispatched by the undersigned this 11th day of August, 1998:

By: Roy Lucas <signed>