Florida Court Rules on Question of Insurance Coverage for Negligence and Wrongful Death Claim: Maryland Casualty Company v. Smartcop, Inc.
The alleged failure of software used to monitor police vehicles, which formed the basis of a wrongful death lawsuit against the software developer, is not covered by the developer’s liability insurance policy, according to the U.S. District Court for the Southern District of Florida in Maryland Casualty Company v. Smartcop, Inc., et al. The estate of a sheriff’s deputy killed in a police vehicle sued the software developer, and the developer’s insurance company filed a declaratory judgment action to establish its obligations to its insured. The court granted the insurance company’s motion for summary judgment on Friday, September 21, 2012, ruling that the underlying lawsuit was excluded from coverage under the policy.
Maryland Casualty Company sued Smartcop, which did business as Consolidated Technology Solutions (CTS), and Lazaro Guerrero, who represented the Estate of Melissa Powers, to determine its duty to defend or indemnify CTS in a state lawsuit filed by Guerrero. The state lawsuit arose from the death of Powers, a Monroe County sheriff’s deputy, in a car accident in Key Largo on the night of June 22, 2010.
According to the Orlando Sentinel, Powers was driving in emergency mode at about 106 miles per hour when she swerved to pass another vehicle. She reportedly lost control of her patrol car and hit a parked truck. Monroe County subsequently changed its policies regarding when its officers may drive in emergency mode. CTS had provided software to the county sheriff’s department to monitor its vehicles in 2002. Guerrero filed a lawsuit against various parties, including CTS, alleging that Powers’ death resulted from CTS’s negligent failure to maintain or update the software.
Maryland Casualty defended CTS in the state lawsuit under a complete reservation of rights, meaning that it reserved the right to challenge its obligation to cover the claim under the terms of the policy at any time. It filed its complaint for declaratory judgment in federal court in December 2011, alleging that several clauses and endorsements in CTS’s policy excluded Guerrero's lawsuit from coverage. These included exclusions for “professional liability” involving software or computer services, liability for communication satellite failures, and a general exclusion for “professional services.” The company moved for summary judgment in August 2012.
The court found that, although Guerrero characterized the state lawsuit as a products liability claim, that case centered around CTS’s obligations under a software license agreement and a software maintenance agreement with the sheriff’s department. Under these agreements, CTS was obligated to update the software and provide technical support to the sheriff’s department. Guerrero’s lawsuit did not allege that the software was inherently defective, but that CTS did not maintain it properly. The court therefore concluded that Guerrero’s claim was for CTS’s allegedly negligent failure to abide by the terms of those agreements, and that this type of claim was excluded from coverage by the Computer Software Exclusion in CTS’s policy.
The personal injury attorneys at Cohn & Smith represent the rights of people in South Florida who have been injured by dangerous or defective consumer products. Contact us today online, at (954) 431-8100, or at (305) 624-9186 to schedule a free and confidential consultation with one of our lawyers.
Order Granting Plaintiff's Motion for Summary Judgment (PDF file), Maryland Casualty Company v. Smartcop, Inc., et al, U.S. District Court, Southern District of Florida, September 21, 2012
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