Suncoast's insurer, Travelers Property Casualty Company of America, adjusted a small portion of the Plaintiffs' claims, and initially defended the state court suit against Suncoast.

Ultimately, Travelers filed an action for declaratory relief against Suncoast, seeking to void the policy. Travelers, however, did not name the Plaintiffs as parties.

The U.S. District Court for the Southern District of Florida entered a default judgment, voiding the policy as to Suncoast's claims for the loss of the vessels.

Afterwards, Travelers stopped defending the state court action and closed the Plaintiffs' claims without further payment.

The state court entered final judgment in that case against Suncoast and in favor of the Plaintiffs.

The Plaintiffs then filed a lawsuit to recover the judgment from Travelers.

The Plaintiffs maintained that the coverage provisions of the Travelers policy encompassed their injuries, illnesses, medical expenses, repatriation expenses, Jones Act compensation, and other damages, and posited that the judgment in their favor against Suncoast afforded them standing to bring a direct action against Travelers.

In response, Travelers asked the district court to dismiss the Plaintiffs' complaint. It maintained, among other things, that its policy did not afford coverage to the Plaintiffs under Florida's nonjoinder statute and that the policy was voided by the default judgment entered against Suncoast in federal court.

The District Court's Decision

The district court denied Travelers' motion.

In its decision, the district court first rejected Travelers' contention that the Plaintiffs could not bring an action under Florida Statutes Section 627.4136 (providing for suit "under the terms of [a] liability contract") because its policy was a "policy of indemnity not liability."

The district court explained that the Travelers policy provided that it would "make good to [Suncoast] . . . all such loss and/or damage and/or expense as [Suncoast] shall as owners of the vessel named herein have become liable to pay and shall pay on account of liabilities, risks, events, and/or happenings" as set forth in the policy. Moreover, the district court continued, the policy then identified 14 categories of losses, injuries, expenses, damages, charges, and penalties covered by the policy, including 11 specifically introduced as "Liability for" the corresponding damage.

The district court ruled, therefore, that the policy was "one of protection against liability" and, therefore, that the Plaintiffs had properly pleaded their right to bring a direct action under Florida Statute Section 627.4136.

The district court next rejected Travelers' argument that the declaratory judgment it obtained against Suncoast in federal court, determining the policy was void ab initio, barred the Plaintiffs' claims. The district court pointed out that the Plaintiffs "were not parties in that case" and, therefore, were not bound by the declaratory judgment.

The district court concluded that if Travelers had wanted to defeat the Plaintiffs' rights under the policy by way of the declaratory judgment action, "it should have made them parties to that suit." The case is Bodden v. Travelers Property Casualty Co. of America, No. 18-25095-Civ-Scola (S.D. Fla. Sep. 6, 2019). Attorneys involved include: For EDDIE BODDEN, Feliz Terrero, Francisco Ortega, Susana Marcelino, Victor Lacayo Lopez, Julio Bringuez, Plaintiffs: Louis Anthony Vucci, Louis A. Vucci, P.A., Miami, FL; William Gregg Wolk, Eaton & Wolk PL, Miami, FL. For Travelers Property Casualty Company of America, Defendant: Michael Edward Conroy, LEAD ATTORNEY, McAlpin & Conroy PA, Miami, FL; Joanne Isabelle Nachio, McAlpin Conroy, P.A., Miami, FL.