After Evanston denied insurance coverage, Mr. Alamo-Cruz and his wife sent a settlement demand to Evanston requesting $1 million – the liability limits of the Evanston policy – to settle their claims against Affordable Treemen and its president, Robin A. Croce.

Evanston disclaimed coverage under the Independent Contractors Exclusion.

Thereafter, the Alamo-Cruzes sued Affordable Treemen and Ms. Croce for negligence. The suit alleged among other things that Mr. Alamo-Cruz's relationship with Affordable Treemen was that of an independent contractor.

Evanston refused to defend either Affordable Treemen or Ms. Croce.

A jury awarded Mr. Alamo-Cruz $20,565,991 against Affordable Treemen and Ms. Croce, jointly and severally. The jury also awarded Ms. Alamo-Cruz a final judgment in the amount of $2,500,000 against Affordable Treemen and Ms. Croce, jointly and severally.

Ms. Croce assigned the Alamo-Cruzes "all rights, claims, actions, or causes of action" that she might have against Evanston relating to their lawsuit.

The Alamo-Cruzes then sued Evanston, seeking to enforce the assignment.

Evanston moved to dismiss, relying in large measure on the Independent Contractors Exclusion.

For their part, the Alamo-Cruzes contended that Evanston's motion lacked merit because the pleadings made clear that Mr. Alamo-Cruz only had a contractual relationship with Affordable Treemen – not with Ms. Croce. Stated differently, the Alamo-Cruzes contended that Mr. Alamo-Cruz was neither Ms. Croce's employee nor Ms. Croce's independent contractor.

They also suggested that the policy provided severable coverage (the "Separation of Insureds" provision), which required claims against each insured to be treated independently from each other. When read in conjunction with the Separation of Insureds provision, the Alamo-Cruzes argued, the Independent Contractors Exclusion only applied to the insured in privity with an independent contractor who was performing work under a contract with the insured and, therefore, it only excluded coverage to the insured who was the actual employer – Affordable Treeman. Accordingly, the Alamo-Cruzes concluded that Ms. Croce's coverage under the Evanston policy was not excluded because she was not an employer or party in contract with Mr. Alamo-Cruz.

The Evanston Policy

The Evanston policy provided:

This insurance does not apply to "bodily injury", "personal and advertising injury", or "medical payments" to any independent contractor, subcontractor, casual laborer or volunteer worker, or to any employee of any independent contractor, subcontractor, while performing work for you. 

It also provided:

Except with respect to the Limits of Insurance, and any rights or duties specifically assigned in this Coverage Part to the first Named Insured, this insurance applies:

a. As if each Named Insured were the only Named Insured; and

b. Separately to each insured against whom claim is made or 'suit' is brought. 

The U.S. Magistrate Judge recommended that Evanston's motion be granted with prejudice.

In its decision, the court found that the Independent Contractors Exclusion barred any applicable insurance coverage.

The court added that the policy's Separation of Insureds provision had "no bearing" on the Independent Contractors Exclusion. According to the court, the term "you" in the Independent Contractors Exclusion referred to the policy's named insureds, which included Ms. Croce. Thus, the court declared, the Independent Contractors Exclusion precluded coverage for an independent contractor who worked for either Affordable Treeman or Ms. Croce.

According to the court, the Separation of Insureds provision did not change any applicable coverage that might be available to Ms. Croce, but only clarified that the policy applied separately to each insured individual or entity.

The court concluded that the Independent Contractors Exclusion barred insurance coverage for Mr. Alamo-Cruz because, as asserted by the Alamo-Cruzes, Mr. Alamo-Cruz worked as an independent contractor for Affordable Treemen, and the Independent Contractors Exclusion explicitly precluded coverage for independent contractors who worked for Affordable Treemen or its officers or directors, i.e. Ms. Croce.

The case is Alamo-Cruz v. Evanston Ins. Co., No. 17-Civ-60671-WILLIAMS/TORRES (S.D. Fla. Dec. 20, 2017). Attorneys involved include: For Efrain Alamo-Cruz, Plaintiff: Scott A Arthur, LEAD ATTORNEY, Lee Delton Gunn, IV, Gunn Law Group, P.A., Tampa, FL. For Maria Alamo-Cruz, Plaintiff: Lee Delton Gunn, IV, LEAD ATTORNEY, Gunn Law Group, P.A., Tampa, FL. For Evanston Insurance Company F/K/A Alterra Excess & Surplus Insurance Copmany, Defendant: James Miller Kaplan, Kimberly Sarah Heifferman, Kaplan Zeena LLP, Miami, FL.