Opinion
Case No. 1:20-cv-22326-KMM
2021-07-13
Julio RAMIREZ, Plaintiff, v. SCOTTSDALE INSURANCE CO., Defendant.
Hunter David Patterson, Cole Scott Kissane, George J. Zeckler, Michael Paul Patrick, Nelson Crespo, The Strems Law Firm, P.A., Orlando, FL, Jose Pete Font, Sonya Paige Randolph, Font & Nelson, LLC, Fort Lauderdale, FL, for Plaintiff. Francesco J. Palanda, Ronald Lee Kammer, Edgard Kenneth Cespedes, Hinshaw & Culbertson, LLP, Coral Gables, FL, for Defendant.
Hunter David Patterson, Cole Scott Kissane, George J. Zeckler, Michael Paul Patrick, Nelson Crespo, The Strems Law Firm, P.A., Orlando, FL, Jose Pete Font, Sonya Paige Randolph, Font & Nelson, LLC, Fort Lauderdale, FL, for Plaintiff.
Francesco J. Palanda, Ronald Lee Kammer, Edgard Kenneth Cespedes, Hinshaw & Culbertson, LLP, Coral Gables, FL, for Defendant.
ORDER
K. MICHAEL MOORE, UNITED STATES DISTRICT JUDGE
THIS CAUSE came before the Court upon Defendant Scottsdale Insurance Co.’s ("Defendant" or "SIC") Motion for Summary Judgment. ("Mot.") (ECF No. 44). Plaintiff Julio Ramirez ("Plaintiff") filed a Response in Opposition to Defendant's Motion. ("Resp.") (ECF No. 45). Defendant filed a Reply. ("Reply") (ECF No. 46). The Motion is now ripe for review.
The undisputed facts are taken from Defendant's Statement of Undisputed Material Facts ("Def.’s 56.1") (ECF No. 43) and a review of the corresponding record citations and exhibits. In filing his Response, Plaintiff failed to follow the Southern District of Florida's Local Rules governing the required form for statements of material facts. See S.D. Fla. L.R. 56.1; Resp. at 1–6. Specifically, Plaintiff failed to "use, as the very first word in each paragraph-by-paragraph response, the word ‘disputed’ or undisputed.’ " See S.D. Fla. L.R. 56.1(b)(2)(B); Resp. at 1–6. Indeed, the words "disputed" and "undisputed" do not appear anywhere in Plaintiff's Statement of Undisputed Facts. See Resp. at 1–6. Rather, Plaintiff's Statement of Undisputed Facts appears to present his own set of facts using the same paragraph numbering scheme Defendant used, which is procedurally improper to the extent Plaintiff intended to refute Defendant's facts or file additional facts. See id. ; S.D. Fla. L.R. 56.1(b)(2)(D). And, Plaintiff cites to his exhibits in full, with no page numbers or pincites, presumably asking the Court to peruse all of his purported evidence with no specificity in terms of what the Court is asked to look for. See S.D. Fla. L.R. 56.1(b)(1)(B) ("[A] general citation to an exhibit without a page number or pincite ... is non-compliant."). Accordingly, the Court finds that Defendant's Statement of Undisputed Material Facts is deemed admitted and Plaintiff's Statement of Undisputed Facts is STRICKEN. See S.D. Fla. L.R. 56.1(c)–(d).
Defendant is a surplus lines insurer that issued Plaintiff Surplus Policy No. DFS1254683, DP 00 03 (12-02) Dwelling Policy, Special Form (the "Policy"), which was in effect from July 29, 2018 through June 29, 2019. Def.’s 56.1 ¶ 1. The Policy, under "PERILS INSURED AGAINST," subsection "A. Coverage A—Dwelling and Coverage B—Other Structures," insures "against risk of direct physical loss to property," however, it does not insure loss "[c]aused by ... [w]ear and tear, marring, deterioration." Id. ¶ 2. Unless otherwise excluded, the Policy covers losses:
[R]esulting from an accidental discharge or overflow of water or steam from within a ... [p]lumbing, heating, air conditioning or automatic fire protective sprinkler system or household appliance on the Described Location. This includes the cost to tear out and replace any part of a building, or other structure, on the Described Location, but only when necessary to repair the system or appliance. However, such tear out and replacement coverage only applies to other structures if the water or steam causes actual damage to a building on the Described Location.
Id.
Further, the Policy includes a water damage sublimit endorsement which limits coverage for water damage to $5,000.00 ("Water Damage Sublimit"). Id. ¶ 3. The Water Damage Sublimit provides:
The sublimit shown above [of $5,000.00] is the most we will pay for direct physical loss from the following:
1. Under PERILS INSURED AGAINST, subsection A. Coverage A—Dwelling and Coverage B—Other Structures: Any covered property that is damaged by water unless excluded elsewhere under this policy.
2. Coverage provided under the following paragraphs of PERILS INSURED AGAINST subsection B. Coverage C—Personal Property:
a. Paragraph 12. Accidental Discharge Or Overflow Of Water Or Steam;
b. Paragraph 13. Sudden or Accidental Tearing Apart, Cracking, Burning Or Bulging; or
c. Paragraph 14. Freezing.
This sublimit does not increase the limit of liability for Coverages A., B., C., D., or E. stated in the Declarations and the limits under F. Other Coverage in the Coverage Form.
Id. ¶ 3.
Plaintiff alleges that on or about February 1, 2019, his property suffered a plumbing loss causing damage to the interior of the property. Id. ¶ 4. Plaintiff notified SIC of his claim for damages to the property on February 25, 2019, and SIC assigned a claim number. Id. ¶¶ 5–6.
An independent adjuster with Professional Adjusting Services, Inc. inspected the subject loss on June 19, 2019 and was advised that there was a drain line leak in the kitchen. Id. ¶ 7. A second inspection was conducted by American Leak Detection, on behalf of SIC, who determined that there was a break in the drain line under a slab in the kitchen. Id. ¶ 8. On or about March 4, 2020, Plaintiff was notified that "coverage was being partially afforded for his loss, and that the $5,000.00 [Water Damage Sublimit] was being applied." Id. ¶ 9. SIC issued payment in the amount of $4,085.00 to 911 Dry Solutions, Inc. pursuant to a partial assignment of benefits signed by Plaintiff for water mitigation services rendered in relation to the subject loss on March 3, 2020, and payment in the amount of $915.00 to Plaintiff on March 5, 2020, "fully exhausting the $5,000[.00] limit of liability under the Policy's [Water Damage Sublimit]." Id. ¶¶ 10–11. Prior to commencing this lawsuit, Plaintiff presented SIC with an estimate of $292,844.47 for damages to the Property, including access to the alleged failed drain line. Id. ¶ 12.
Defendant's Statement of Undisputed Material Facts and the Declaration of Cindy Sarver ("Sarver Decl.") (ECF No. 43-1), upon which the Statement relies, state that the inspection was completed on June 19, 2010, which the Court assumes is a typographical error given that the property damage occurred in February 2019 and this action was commenced in May 2020.
On May 6, 2020, Plaintiff filed a Complaint against Defendant in the Eleventh Judicial Circuit in and for Miami-Dade County, Florida, alleging a single count of breach of contract for unpaid damages—specifically, "coverage for direct physical loss to the [ ] Property from a plumbing loss which caused water damage to the interior of the property which is a covered peril under the Policy" and "coverage for the necessary costs to tear out and replace the parts of the [ ] Property, on the ‘residence premises,’ which are necessary to repair the plumbing system which failed resulting in the Subject Loss." ("Compl.") (ECF No. 1-2) ¶¶ 13–21. On June 4, 2020, Defendant removed the action to this Court, invoking the Court's diversity jurisdiction. ("Not. of Removal") (ECF No. 1). Now, SIC moves for summary judgment on Plaintiff's claim. See generally Mot.
II. LEGAL STANDARD
Summary judgment is appropriate where there is "no genuine issue as to any material fact [such] that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting Fed. R. Civ. P. 56 ). A genuine issue of material fact exists when "a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "For factual issues to be considered genuine, they must have a real basis in the record." Mann v. Taser Int'l, Inc. , 588 F.3d 1291, 1303 (11th Cir. 2009) (citation omitted). Speculation cannot create a genuine issue of material fact sufficient to defeat a well-supported motion for summary judgment. Cordoba v. Dillard's, Inc. , 419 F.3d 1169, 1181 (11th Cir. 2005).
The moving party has the initial burden of showing the absence of a genuine issue as to any material fact. Clark v. Coats & Clark, Inc. , 929 F.2d 604, 608 (11th Cir. 1991). In assessing whether the moving party has met this burden, a court must view the movant's evidence and all factual inferences arising from it in the light most favorable to the non-moving party. Denney v. City of Albany , 247 F.3d 1172, 1181 (11th Cir. 2001).
Once the moving party satisfies its initial burden, the burden shifts to the non-moving party to present evidence showing a genuine issue of material fact that precludes summary judgment. Bailey v. Allgas, Inc. , 284 F.3d 1237, 1243 (11th Cir. 2002) ; see also Fed. R. Civ. P. 56(e). "If reasonable minds could differ on the inferences arising from undisputed facts, then a court should deny summary judgment." Miranda v. B & B Cash Grocery Store, Inc. , 975 F.2d 1518, 1534 (11th Cir. 1992). But if the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial, and summary judgment is proper. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
III. DISCUSSION
In its Motion, Defendant argues that Plaintiff's damages, including access to the drain line and reasonable repairs under subsection F. Other Coverages of the Policy, are limited to $5,000.00 pursuant to the Policy's Water Damage Sublimit. Mot. at 3. Specifically, Defendant argues that while the Policy does not provide coverage for damage caused by wear and tear, marring, or deterioration, it does provide coverage "for water damage resulting from an accidental discharge or overflow of water or steam from within a plumbing system." Id. And, water damage coverage includes the cost to tear out and replace any part of a building, or other structure necessary to repair the system or appliance from which the water escaped. Id. The Policy also provides for reasonable repairs in the event covered property is damaged. Id. at 3–4. However, Defendant argues that the Water Damage Sublimit "expressly states that it does not increase the limit of liability under coverages liability for Coverages A, B, C, D, or limits under F, Other Coverages." Id. at 4.
In his Response, Plaintiff first argues that subsection F. Other Coverages of the Policy (1) "is triggered when there is damage or loss ‘caused by a Peril Insured Against’ "; (2) "provides coverage separate and in addition to the coverage provided for repairing the dwelling under Coverage A"; and (3) "includes its own sublimit that applies to such coverage." Resp. at 8. Second, Plaintiff argues that the Water Damage Sublimit "only applies to direct physical loss to the property caused by the discharged water," not to the removal of water because "the presence of water is not in-and-of-itself direct physical damage to the property." Id. at 9. Third, Plaintiff argues that "the Policy's Tear-Out coverage is triggered when there is water damage not otherwise excluded," and such coverage is only subject to the Water Damage Sublimit when there is "sudden or accidental physical damage directly caused by the discharged water." Id. According to Plaintiff, "costs such as creating a trench in the floor to access and repair a pipe and then restoring the property by repairing the damage caused by creating the trench" are "incurred intentionally," and therefore do not constitute "sudden and accidental damage directly caused to the property by the discharge." Id. Fourth, Plaintiff argues that "the cost of repairing the plumbing system itself would not be subject to the sublimit since the failure had to occur before the water could discharge from the pipe and cause damage." Id. While the Policy does not define Peril Insured Against, "since the Policy is an all risk policy the plain meaning is that it applies to any peril not expressly excluded." Id. at 10. In sum, Plaintiff argues that "[a]n ambiguity arises from the question of whether the $5,000.00 limitation of liability clause, when read in conjunction with the entire policy, limited all damage occasioned by water arising from a covered risk to $5,000.00 or whether it applied to limit risks ‘otherwise excluded.’ " Id. at 10–11.
In Reply, Defendant argues that the Policy and relevant case law provides that water mitigation is subject to the Water Damage Sublimit as a matter of law. See Reply at 2; see also McAninch v. Scottsdale Insurance Co. , No. 1:20-cv-21453-JEM, ECF No. 41 at 5, (S.D. Fla. May 6, 2021) (finding the language of the Policy's Water Damage Sublimit "indicates on its face that it operates as a limitation, rather than an addition," to other coverage provided under the Policy). Next, Defendant argues that "tear out is damage caused by water, and as such is subject to the to the [Water Damage Sublimit]." Reply at 3; see also McAninch , ECF No. 41 at 4 (finding that "repairs to the sagging drainpipe, including ancillary repairs necessary to reach the drainpipe, are losses that ‘resulted from’ ‘covered property that is damaged by water.’ "). With regard to damage to the plumbing system, Defendant argues that Plaintiff never sought coverage for such damage, and even if he did, Plaintiff has filed no evidence of damage to the plumbing system or the cause. Reply at 4.
"Under basic insurance contract interpretation principles, where the policy language is clear and unambiguous, the Court must give effect to the plain language of the policy and any vendor's endorsement contained therein." Twin City Fire Ins. Co. v. Fireman's Fund Ins. Co. , 386 F. Supp. 2d 1272, 1276 (S.D. Fla. 2005). "Where the terms of a policy are susceptible of two reasonable constructions, the court should adopt the interpretation which will sustain coverage for the insured." United States v. Pepper's Steel & Alloys , 823 F. Supp. 1574, 1581 (S.D. Fla. 1993). And, "[i]f the language of an insurance policy is unclear, confusing, or ambiguous, the language should be construed against the insurer." Id. "But courts should not strain to find ambiguity. [I]f there is no genuine ambiguity, there is no reason to bypass the policy's plain meaning." Travelers Prop. Cas. Co. of Am. v. Salt ‘N Blue LLC , 731 F. App'x 920, 923 (11th Cir. 2018) (citing Sphinx Int'l, Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh , 412 F.3d 1224, 1228 (11th Cir. 2005) ). "A single policy provision should not be read in isolation and out of context, for the contract is to be construed according to its entire terms, as set forth in the policy and amplified by the policy application, endorsements, or riders." State Farm Mut. Auto. Ins. Co. v. Mashburn , 15 So. 3d 701, 704 (Fla. Dist. Ct. App. 2009). Additionally, "in construing insurance policies, courts should read each policy as a whole, endeavoring to give every provision its full meaning and operative effect." Auto-Owners Ins. Co. v. Anderson , 756 So. 2d 29, 34 (Fla. 2000).
For the reasons set forth below, Defendant has met its burden of showing that no genuine issue of material fact exists as to the scope of coverage provided under the Policy, and the applicability of the Water Damage Sublimit.
As an initial matter, Plaintiff has failed to adduce any evidence to show that subsection F. Other Coverages provides Plaintiff anything more than coverage for water damage, subject to the Water Damage Sublimit. The Reasonable Repairs subpart therein—which Plaintiff relies on—provides coverage only where covered property is damaged or caused by a "Peril Insured Against." See (ECF No. 1-2) at 55. The "Perils Insured Against" section contains a number of exclusions for which the Policy does not insure, such as loss caused by "wear and tear, marring, deterioration." See id. at 58. However, unless otherwise excluded, the Policy does cover loss to property "resulting from an accidental discharge or overflow of water or steam from within a ... plumbing, heating, air conditioning or automatic fire protective sprinkler system or household appliance on the Described Location." See id. Even then, the Policy does "not cover loss to the system or appliance from which this water or steam escaped." See id.
Second, Plaintiff's proposition that removal of water is not, by itself, "direct physical loss to the property caused by the discharged water" is illogical. Plaintiff's argument essentially describes the removal of standing water solely as a preventative measure. While it certainly can be described as preventative to the extent that it seeks to mitigate against further harm, the accidental discharge and resulting existence of water in one's dwelling constitutes at least some physical loss to the property—if not, there would be no reason to remove it in the first instance. Plaintiff cites to no authority, nor is the Court aware of any, for the proposition that water removal should not be subject to an insurer's Water Damage Sublimit, such as the one at issue here.
Plaintiff's argument that the Policy's tear out and replacement coverage is not covered by the Water Damage Sublimit is similarly flawed. While Plaintiff argues that creating a trench in the floor to access and repair a pipe is an intentional act, the need to do so under these circumstances is the logical result of result of the "accidental discharge or overflow of water" from within the plumbing system, as contemplated in the Policy and subject to the Water Damage Sublimit. Again, Plaintiff cites to no authority, nor is the Court aware of any, for the proposition that tear out and replacement coverage to repair a damaged pipe should not be subject to an insurer's Water Damage Sublimit, such as the one at issue here.
Fourth, Plaintiff adduces no evidence to show how or why the plumbing system failed, such that coverage beyond the Water Damage Sublimit should be available to him. And, the Policy plainly provides that it does "not cover loss to the system or appliance from which [ ] water or steam escaped." (ECF No. 1-2) at 58.
Defendant has satisfied its initial burden of showing the absence of a genuine issue as to any material fact. See Clark , 929 F.2d at 608. And, Plaintiff has failed to present any actual evidence—beyond conclusory allegations in his Response—to show that a genuine issue of material fact precludes summary judgment. See Pickens v. Liberty Mut. Ins. Co. , 966 F. Supp. 2d 1265, 1273 (N.D. Ala. 2013) (granting summary judgment and finding that the plaintiff did "not have sufficient evidence to prove causation—and therefore coverage—at trial"); Clark , 929 F.2d at 608 ("To ... require[ ] a trial when it [is] clear from the materials in the record that [the plaintiff cannot] prove her claim [is] a waste of time and resources ....") Defendant has presented evidence of a clear and unambiguous Policy that applies a Water Damage Sublimit to water damage resulting from the type of loss Plaintiff suffered. See Travelers Prop. Cas. Co. of Am. , 731 F. App'x at 923 ("[I]f there is no genuine ambiguity, there is no reason to bypass the policy's plain meaning."). Based on the record before the Court, Defendant is entitled to summary judgment.
IV. CONCLUSION
Accordingly, UPON CONSIDERATION of the Motion, the pertinent portions of the record, and being otherwise fully advised in the premises, it is hereby ORDERED AND ADJUDGED that Defendant Scottsdale Insurance Company's Motion for Summary Judgment (ECF No. 44) is GRANTED. Pursuant to Rule 58 of the Federal Rules of Civil Procedure, final judgment shall be entered by separate order. The Clerk of Court is INSTRUCTED to CLOSE this case. All pending motions, if any, are DENIED AS MOOT.
DONE AND ORDERED in Chambers at Miami, Florida, this 13th day of July, 2021.