The Fifth Circuit determined the deceased was a statutory employee of the general contractor under Florida law, thereby barring coverage for the general contractor. Stephens v. Mid-Continent Casualty Co., 2014 WL 1623737 (11th Cir. April 24, 2014).

   The decedent fell from a ladder while working to install a modular home. Critically injured, he died on the way to the hospital. The decedent was an employee of Team Fritz, a subcontractor hired to set the modular home on its foundation. 

   The general contractor, Anchorage Homes LLC, had a liability policy with Mid-Continent. Damages relating to injuries to any of Anchorage's employees were excluded under the policy. Mid-Continent denied coverage contending that under Florida law, Team Fritz's employees were "statutory employees" of Anchorage. The law provided that the employees of a subcontractor were deemed to be employees of the contractor.

   Anchorage was sued by the decedent's family. The case settled for $4.35 million. Anchorage assigned its rights to coverage to the decedent's family. The family then sued Mid-Continent. The district court granted Mid-Continent's motion for summary judgment. The court held that the employee exclusion clause applied both to actual and statutory employees of Anchorage.

   The Fifth Circuit affirmed. There was no duty to indemnify, and, accordingly, no duty to defend. The court first determined that Team Fritz was Anchorage's subcontractor. Among other evidence, Anchorage entered into a written contract, the "Owner/Contractor Agreement," with the modular home owners. Team Fritz was hired to set the modular home according to the terms of the Owner/Contractor Agreement. Consequently, there was overwhelming evidence establishing that Anchorage was the general contractor on the project and was in a vertical contractor-subcontractor relationship with Team Fritz.

  The key to resolving the coverage issues was the Florida workman's compensation statute, making the employees of the subcontractor the employees of the contractor. Based upon this law, it was logical for the court to find the employee exclusion applied. Interestingly, Hawaii does not have similar provisions in its workers' compensation statutes, so this decision would likely not be relevant were a similar issue arise in Hawaii.