USCA11 Case: 21-11199 Date Filed: 09/10/2021 Page: 1 of 7
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT ________________________
No. 21-11199 Non-Argument Calendar ________________________
D.C. Docket No. 6:19-cv-02242-GAP-GJK
TRICON DEVELOPMENT OF BREVARD, INC.,
Plaintiff-Appellant,
versus
NAUTILUS INSURANCE COMPANY,
Defendant-Appellee. ________________________
Appeal from the United States District Court for the Middle District of Florida ________________________
(September 10, 2021)
Before JILL PRYOR, LUCK, and BRASHER, Circuit Judges.
PER CURIAM:
Tricon Development of Brevard, Inc., appeals a summary judgment in favor
of Nautilus Insurance Company on Tricon’s claim for breach of contract. Tricon USCA11 Case: 21-11199 Date Filed: 09/10/2021 Page: 2 of 7
argues that Nautilus breached its insurance policies by failing to reimburse Tricon
for additional costs caused by a subcontractor’s deficient work. Upon consideration,
we conclude that Tricon’s arguments lack merit and affirm the district court’s grant
of summary judgment.
I.
Tricon is a general contractor that constructs condominium units. A few years
ago, Tricon was hired to serve as the general contractor for a condominium project
in Florida. Tricon then hired a subcontractor to fabricate and install metal railings
for the project. The subcontractor was insured by Nautilus through two commercial
general liability insurance policies. The policies covered “those sums that the insured
becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property
damage’ to which this insurance applies.” The policies then defined “property
damage” as “[p]hysical injury to tangible property, including all resulting loss of use
of that property” or “[l]oss of use of tangible property that is not physically injured.”
The subcontractor obtained an endorsement to each of its policies that added
Tricon as an additional insured. The endorsements amended the “Who Is An
Insured” sections of the policies “to include as an additional insured any person or
organization for whom you are performing operations” but “only with respect to
liability for ‘bodily injury,’ ‘property damage’ or ‘personal or advertising injury’
2 USCA11 Case: 21-11199 Date Filed: 09/10/2021 Page: 3 of 7
caused, in whole or in part by” the subcontractor’s direct or vicarious acts or
omissions.
Although the subcontractor fabricated some of the railings, they had defects
and damage, were not installed properly, and did not meet the project’s
specifications. Tricon found another manufacturer to fabricate new railings to satisfy
the project’s requirements, and Tricon’s client also paid that manufacturer to remove
the subcontractor’s railings and install new ones. Tricon agreed to pay the cost of
removing the subcontractor’s railings and fabricating and installing the new ones,
and it filed an insurance claim to Nautilus to cover those costs. Nautilus denied the
claim, and Tricon filed a complaint alleging breach of contract under its two policies
in Florida state court. Nautilus removed the case to the United States District Court
for the Middle District of Florida and eventually moved for summary judgment on
Tricon’s claim. The district court granted Nautilus’s motion, and Tricon timely
appealed.
II.
We review a district court’s grant of summary judgment de novo, viewing all
the evidence—and drawing all reasonable factual inferences—in favor of the
nonmoving party. See Amy v. Carnival Corp., 961 F.3d 1303, 1308 (11th Cir. 2020).
“A grant of summary judgment is proper if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
3 USCA11 Case: 21-11199 Date Filed: 09/10/2021 Page: 4 of 7
law.” Id. (internal quotation marks omitted) (quoting Fed. R. Civ. P. 56(a)). “But it
is improper if a reasonable jury could find for the non-moving party.” Id. However,
“[w]e can affirm for any reason supported by the record, even if the district court did
not rely on that reason.” Wright v. City of St. Petersburg, Fla., 833 F.3d 1291, 1294
(11th Cir. 2016) (internal quotation marks omitted).
III.
On appeal, Tricon argues that (1) the subcontractor’s deficient fabrication and
installation of the railings constituted “property damage” covered by Nautilus’s
insurance policies; (2) the endorsements added to the policies made Tricon an
insured; and (3) no exclusions applied to Nautilus’s coverage of Tricon for the
deficient fabrication and installation of the railings.
The policies at issue in this appeal are post-1986 standard form commercial
general liability policies with products-completed operations hazard coverage,
which are governed by Florida law. We have held that such policies do not cover the
costs of replacing defective products. In Amerisure Mutual Insurance Company v.
Auchter Company, we examined a post-1986 standard form commercial general
liability policy with products-completed operations hazard coverage. That policy
“define[d] ‘property damage’ as ‘physical injury to tangible property, including all
resulting loss of use of that property . . . or . . . loss of use of tangible property that
is not physically injured.’” 673 F.3d 1294, 1298 (11th Cir. 2012) (cleaned up).
4 USCA11 Case: 21-11199 Date Filed: 09/10/2021 Page: 5 of 7
Applying Florida law, we held that “there is no coverage if there is no damage
beyond the faulty workmanship, i.e., unless the faulty workmanship has damaged
some otherwise nondefective component of the project.” Id. at 1306 (citing U.S. Fire
Ins. Co. v. J.S.U.B., Inc., 979 So.2d 871, 889 (Fla. 2007)). We also held that “if a
subcontractor is hired to install a project component and, by virtue of his faulty
workmanship, installs a defective component, then the cost to repair and replace the
defective component is not ‘property damage.’” Id. (citing Auto-Owners Ins. Co. v.
Pozzi Window Co., 984 So.2d 1241, 1248 (Fla. 2008)). We further held that
“nondefective and properly installed raw materials can constitute a defective project
component when the contract specifications call for the use of different materials,
yet the cost to reinstall the correct materials is not ‘property damage’—even though
the remedy for such a nonconformity is to remove and replace that component of the
project.” Id. (citing Pozzi, 984 So.2d at 1248).
Here, Tricon alleges that the subcontractor’s railings were deficient due to
having defects and damage, not being installed properly, and not satisfying the
project’s specifications; it does not allege that the subcontractor’s faulty
workmanship damaged otherwise non-defective components of the project. The
Nautilus policies here define “property damage” in the same way that the policy in
Auchter did. Thus, the costs that Tricon incurred in removing the subcontractor’s
5 USCA11 Case: 21-11199 Date Filed: 09/10/2021 Page: 6 of 7
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USCA11 Case: 21-11199 Date Filed: 09/10/2021 Page: 1 of 7
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT ________________________
No. 21-11199 Non-Argument Calendar ________________________
D.C. Docket No. 6:19-cv-02242-GAP-GJK
TRICON DEVELOPMENT OF BREVARD, INC.,
Plaintiff-Appellant,
versus
NAUTILUS INSURANCE COMPANY,
Defendant-Appellee. ________________________
Appeal from the United States District Court for the Middle District of Florida ________________________
(September 10, 2021)
Before JILL PRYOR, LUCK, and BRASHER, Circuit Judges.
PER CURIAM:
Tricon Development of Brevard, Inc., appeals a summary judgment in favor
of Nautilus Insurance Company on Tricon’s claim for breach of contract. Tricon USCA11 Case: 21-11199 Date Filed: 09/10/2021 Page: 2 of 7
argues that Nautilus breached its insurance policies by failing to reimburse Tricon
for additional costs caused by a subcontractor’s deficient work. Upon consideration,
we conclude that Tricon’s arguments lack merit and affirm the district court’s grant
of summary judgment.
I.
Tricon is a general contractor that constructs condominium units. A few years
ago, Tricon was hired to serve as the general contractor for a condominium project
in Florida. Tricon then hired a subcontractor to fabricate and install metal railings
for the project. The subcontractor was insured by Nautilus through two commercial
general liability insurance policies. The policies covered “those sums that the insured
becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property
damage’ to which this insurance applies.” The policies then defined “property
damage” as “[p]hysical injury to tangible property, including all resulting loss of use
of that property” or “[l]oss of use of tangible property that is not physically injured.”
The subcontractor obtained an endorsement to each of its policies that added
Tricon as an additional insured. The endorsements amended the “Who Is An
Insured” sections of the policies “to include as an additional insured any person or
organization for whom you are performing operations” but “only with respect to
liability for ‘bodily injury,’ ‘property damage’ or ‘personal or advertising injury’
2 USCA11 Case: 21-11199 Date Filed: 09/10/2021 Page: 3 of 7
caused, in whole or in part by” the subcontractor’s direct or vicarious acts or
omissions.
Although the subcontractor fabricated some of the railings, they had defects
and damage, were not installed properly, and did not meet the project’s
specifications. Tricon found another manufacturer to fabricate new railings to satisfy
the project’s requirements, and Tricon’s client also paid that manufacturer to remove
the subcontractor’s railings and install new ones. Tricon agreed to pay the cost of
removing the subcontractor’s railings and fabricating and installing the new ones,
and it filed an insurance claim to Nautilus to cover those costs. Nautilus denied the
claim, and Tricon filed a complaint alleging breach of contract under its two policies
in Florida state court. Nautilus removed the case to the United States District Court
for the Middle District of Florida and eventually moved for summary judgment on
Tricon’s claim. The district court granted Nautilus’s motion, and Tricon timely
appealed.
II.
We review a district court’s grant of summary judgment de novo, viewing all
the evidence—and drawing all reasonable factual inferences—in favor of the
nonmoving party. See Amy v. Carnival Corp., 961 F.3d 1303, 1308 (11th Cir. 2020).
“A grant of summary judgment is proper if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
3 USCA11 Case: 21-11199 Date Filed: 09/10/2021 Page: 4 of 7
law.” Id. (internal quotation marks omitted) (quoting Fed. R. Civ. P. 56(a)). “But it
is improper if a reasonable jury could find for the non-moving party.” Id. However,
“[w]e can affirm for any reason supported by the record, even if the district court did
not rely on that reason.” Wright v. City of St. Petersburg, Fla., 833 F.3d 1291, 1294
(11th Cir. 2016) (internal quotation marks omitted).
III.
On appeal, Tricon argues that (1) the subcontractor’s deficient fabrication and
installation of the railings constituted “property damage” covered by Nautilus’s
insurance policies; (2) the endorsements added to the policies made Tricon an
insured; and (3) no exclusions applied to Nautilus’s coverage of Tricon for the
deficient fabrication and installation of the railings.
The policies at issue in this appeal are post-1986 standard form commercial
general liability policies with products-completed operations hazard coverage,
which are governed by Florida law. We have held that such policies do not cover the
costs of replacing defective products. In Amerisure Mutual Insurance Company v.
Auchter Company, we examined a post-1986 standard form commercial general
liability policy with products-completed operations hazard coverage. That policy
“define[d] ‘property damage’ as ‘physical injury to tangible property, including all
resulting loss of use of that property . . . or . . . loss of use of tangible property that
is not physically injured.’” 673 F.3d 1294, 1298 (11th Cir. 2012) (cleaned up).
4 USCA11 Case: 21-11199 Date Filed: 09/10/2021 Page: 5 of 7
Applying Florida law, we held that “there is no coverage if there is no damage
beyond the faulty workmanship, i.e., unless the faulty workmanship has damaged
some otherwise nondefective component of the project.” Id. at 1306 (citing U.S. Fire
Ins. Co. v. J.S.U.B., Inc., 979 So.2d 871, 889 (Fla. 2007)). We also held that “if a
subcontractor is hired to install a project component and, by virtue of his faulty
workmanship, installs a defective component, then the cost to repair and replace the
defective component is not ‘property damage.’” Id. (citing Auto-Owners Ins. Co. v.
Pozzi Window Co., 984 So.2d 1241, 1248 (Fla. 2008)). We further held that
“nondefective and properly installed raw materials can constitute a defective project
component when the contract specifications call for the use of different materials,
yet the cost to reinstall the correct materials is not ‘property damage’—even though
the remedy for such a nonconformity is to remove and replace that component of the
project.” Id. (citing Pozzi, 984 So.2d at 1248).
Here, Tricon alleges that the subcontractor’s railings were deficient due to
having defects and damage, not being installed properly, and not satisfying the
project’s specifications; it does not allege that the subcontractor’s faulty
workmanship damaged otherwise non-defective components of the project. The
Nautilus policies here define “property damage” in the same way that the policy in
Auchter did. Thus, the costs that Tricon incurred in removing the subcontractor’s
5 USCA11 Case: 21-11199 Date Filed: 09/10/2021 Page: 6 of 7
railings and the fabrication and installation of new railings do not constitute
“property damage” under the policies—just as they did not in Auchter.
Tricon responds to Auchter by arguing that the costs that it incurred were due
to the “loss of use of tangible property that is not physically injured” because the
railings and condominiums in which they were installed “experienced no physical
damage.” It then remarks that although Auchter “noted that [this part of the ‘property
damage’ definition] was present in the policy,” it “never said another word about it.”
Tricon then states that we “decided the case by only applying” the first part of the
definition, namely physical injury to tangible property.
But that argument misunderstands our decision in Auchter. There, we held—
after “interpret[ing] the policy as a whole [and] ‘endeavoring to give every provision
its full meaning and operative effect’”—that there was no coverage for the defective
installation at issue. Under this Circuit’s prior-panel-precedent rule, “a prior panel’s
holding is binding on all subsequent panels unless and until it is overruled or
undermined to the point of abrogation by the Supreme Court or by this court sitting
en banc.” In re Lambrix, 776 F.3d 789, 794 (11th Cir. 2015). We therefore must treat
our holding in Auchter as correct. And for it to be correct, the entire definition of
“property damage” in the post-1986 standard form commercial general liability
policy must fail to cover the kinds of costs that Tricon incurred from its
6 USCA11 Case: 21-11199 Date Filed: 09/10/2021 Page: 7 of 7
subcontractor’s deficient work. We therefore conclude that the costs incurred by
Tricon are not covered by Nautilus’s policies.
IV.
For the reasons stated above, we AFFIRM the district court’s grant of
summary judgment in favor of Nautilus.