Litchfield Cavo Prevails on Computer Software Exclusion in Coverage Dispute

On June 24, 2015, the Honorable Donald Middlebrooks of the United States District Court for the Southern District of Florida granted summary judgment in favor of Litchfield Cavo’s client, Maryland Casualty Company (MCC), finding that MCC had no duty to defend, and therefore no duty to indemnify its insured, a computer programmer, in a lawsuit alleging damages for a severe bodily injury claim.

The plaintiff in the underlying action was after released air pressure from a water valve while attempting to recalibrate flow meters at a reclaimed water system. The water valve monitoring software programmer recommended that the air pressure be released after the software showed inaccurate readings on several prior occasions. The plaintiff then sued the computer programmer for negligence.

In granting summary judgment, Judge Middlebrooks relied on MCC’s policy and its Computer Software Exclusion which barred coverage for “bodily injury arising out of the furnishing of computer software.” The Court interpreted “arising out of” broadly and cited to another case, Eastpointe Condo. Ass’n, Inc. v. Travelers, 379 Fed. Appx. 906 (11th Cir. 2010), which was argued by John Catizone, to hold that the phrase “arising out of” requires “but for” causation, and “but for” the installation of the computer software, the recommendation to release the air pressure would have never been given.

MCC was represented by John Catizone and Dustin Blumenthal of Litchfield Cavo LLP in this declaratory judgment action.