Public Risk Mgmt. of Fla. v. One Beacon Ins. Co.

Public Risk Mgmt. of Fla. v. One Beacon Ins. Co.

Opinion

 [*867]  PER CURIAM:

Public Risk Management of Florida appeals the district court's decision to dismiss its complaint with prejudice. Public Risk contends that its complaint stated two claims for relief, one based on breach of contract and one based on equitable estoppel.

This case is a dispute about insurance coverage in an underlying lawsuit. Public Risk is an intergovernmental risk management association that insures various local governmental entities in Florida.¹ See Fla. Stat. § 768.28(16). Public Risk insures itself through a reinsurance policy purchased from OneBeacon Insurance Company. Public Risk  [**2] has filed a claim with OneBeacon seeking coverage for the legal fees that Public Risk incurred defending one of its members, the City of Wintergarden, in an underlying lawsuit. OneBeacon refuses to pay on that claim because it believes that Public Risk had no duty to defend the City from that suit. We will begin by outlining the facts of that underlying lawsuit because they are necessary to understand the dispute before us.

In 2009 the City reached an agreement with the Florida Department of Transportation (FDOT) to remove the utilities located along State Road 50 so that the FDOT could widen and improve the road. Under the agreement, the City would remove all of the City-owned utilities, and the FDOT would — before the City's removal began — remove all of the non-City-owned utilities. The City solicited bids on the job and awarded the contract to Dewitt Excavating, Inc. The contract called for Dewitt to complete  [**3] the job in 240 days and included a liquidated damages clause that required Dewitt to pay the City $5,000 for each extra day it took to finish the project. The contract softened that deadline by allowing for "equitable extensions" in the event that outside forces delayed, disrupted, or complicated Dewitt's work. Dewitt entered its bid and agreed to the contract based largely on two representations by the City: (1) the project drawings that the City provided to all the bidding contractors, which identified the location of the utilities that Dewitt would have to move; and (2) "Addendum No. 1" to the City's request for bid proposals, which informed the bidders that the FDOT would remove the non-City-owned utilities by January 23, 2010. Dewitt used that information to estimate how much time and money it would take to finish the project, as well as to plan where to dig.

Once the work began, Dewitt ran into significant delays. The biggest problem was that there were far more utilities along the road than the City had indicated. The FDOT failed to move the non-City-owned utilities that it had agreed to handle under its agreement with the City, and Dewitt found many unknown or unidentified utilities  [**4] that did not appear on the project drawings. Dewitt damaged some of those utilities when it dug into what it thought was empty ground. On top of that, the City made numerous revisions to its plan that required Dewitt to perform extra work and incur extra costs that had not been part of its original bid. Although the City initially granted several of Dewitt's early requests for equitable extensions, it refused to grant further extensions as the deadline neared and threatened to seek both liquidated and actual  [*868]  damages if Dewitt did not meet the deadline. Dewitt tried to finish on time, but the logistical problems were too much to overcome and the project ran past the deadline. After the work was complete, the City refused to pay Dewitt for pending change orders and other amounts under the contract, asserting that Dewitt was liable for liquidated and actual delay damages.

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