Opinion
CASE NO. 18-23990-CIV-GOODMAN [CONSENT CASE]
2019-11-08
SOMETHINGS FISHY ENTERPRISES, INC., Plaintiff, v. ATLANTIC CASUALTY INSURANCE COMPANY, Defendant.
Jose Pete Font, Yisroel Silverman, Font and Nelson, PLLC, Fort Lauderdale, FL, for Plaintiff. Dana Beth Kuczynski, Stephen Francis Beebe, Jason Michael Chodos, Litchfield Cavo LLP, Fort Lauderdale, FL, for Defendant.
Jose Pete Font, Yisroel Silverman, Font and Nelson, PLLC, Fort Lauderdale, FL, for Plaintiff.
Dana Beth Kuczynski, Stephen Francis Beebe, Jason Michael Chodos, Litchfield Cavo LLP, Fort Lauderdale, FL, for Defendant.
OMNIBUS ORDER ON CROSS-SUMMARY JUDGMENT MOTIONS
Jonathan Goodman, UNITED STATES MAGISTRATE JUDGE
This is a straightforward case about a fish store's claim for insurance proceeds for losses relating to Hurricane Irma under an insurance policy issued by Atlantic Casualty Insurance Company. Plaintiff, Somethings Fishy Enterprises, Inc., seeks a declaration that the insurance policy covers its physical property damage, the loss of its inventory (i.e., its dead fish) after the electricity went out, and for its loss of business following the storm. Defendant denies that there is coverage under the insurance policy because the policy excludes any loss resulting from a windstorm, flooding, or a power outage.
Atlantic Casualty filed a summary judgment motion, Plaintiff filed an opposition response, and Atlantic Casualty filed its reply. [ECF Nos. 45; 48; 54]. Plaintiff also filed a cross-summary judgment motion, Atlantic Casualty filed an opposition response, and Plaintiff filed its reply. [ECF Nos. 46; 47; 57]. For the reasons outlined below, the Court grants Atlantic Casualty's summary judgment motion and denies Plaintiff's summary judgment motion.
I. Factual Background and Procedural History
A. Undisputed Material Facts
Atlantic Casualty issued a first-party commercial lines insurance policy (Policy No. M039000551) to Plaintiff Something Fishy for the April 20, 2017 to April 20, 2018 policy period (the "Policy"). [ECF No. 45, ¶ 1]. The Policy provides commercial property insurance coverage for certain business personal property located at 11730 Biscayne Blvd. #103, North Miami, Florida 33181 (the "Property"), subject to the Policy's $50,000 limit of insurance and its other terms, conditions, exclusions, limitations, and other provisions of the Policy. Id. at ¶ 2. The Policy also provides loss of business income coverage at the Property, subject to the Policy's $25,000 limit of insurance and its other terms, conditions, exclusions, limitations, and other provisions. Id.
On September 10, 2017, the Property sustained damage following Hurricane Irma. Id. at ¶ 10. Atlantic Casualty received notice from Somethings Fishy on September 13, 2017 of physical damage and power outage to the Property resulting from Hurricane Irma. [ECF No. 45-2, ¶ 7]. Somethings Fishy hired a public adjuster, Denys Valenzuela, to assist with presenting a claim to Atlantic Casualty. Mr. Valenzuela stated during his deposition that Mr. Rahaman, owner of Somethings Fishy, called him and told him he had damage to the store from Hurricane Irma. [ECF No. 45-5, p. 14]. Mr. Rahaman also stated during his deposition that the damage to the store and resulting power outage was a result of Hurricane Irma. [ECF No. 45-6, p. 31].
As a result of the loss, Plaintiff claims that it incurred the cost to replace a refrigerator, along with the following costs:
Frozen Food: $2,100 Live Invertebrate Food: $1,000 Marine Fish: $7,000 Intevertebrate: $3,500 Coral: $6,000 Freshwater Fish $3,500 Freshwater Plant $500 Fish Tank and Stand $4,500 Generator $899 Gas for Generator $400 Generator Accessories $300 Loss of Wages $3,500 Revenue (for the week) $8,000 Total: $41,199
[ECF Nos. 45-1, ¶ 20; 45-9, p. 2].
Atlantic Casualty hired Dineley Claims Service to assist with its investigation of the claim. [ECF No. 45-1, ¶ 12]. Jared Irish of Dineley Claims Service inspected the property following the loss and surveyed the interior and exterior of the Property. Id. at ¶ 13. Mr. Irish also noted that the property was located approximately three blocks from Biscayne Bay. Id. Mr. Irish determined that all of the damage at the Property was the result of winds from Hurricane Irma and flooding. Mr. Irish observed flood lines throughout the Property. Id. Additionally, Mr. Irish determined that a failure of power, which affected the entire building where the Property is located, originated away from the Property and was caused by Hurricane Irma. Id.
Based on Mr. Irish's findings, Atlantic Casualty determined that Plaintiff's claim was not covered under the Policy and sent a denial of coverage letter to Plaintiff on October 12, 2017.
The Policy provides the following:
A. Coverage
We will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss.
[ECF No. 45-1, ¶ 3].
Additionally, the Policy's Business Income (Without Extra Expense) Coverage Form (CP 00 32 10 12) contains the following insuring agreement:
A. Coverage
1. Business Income ...
We will pay for the actual loss of Business Income you sustain due to the necessary "suspension" of your "operations" during the "period of restoration". The "suspension" must be caused by direct physical loss of or damage to property at premises which are described in the Declarations and for which a Business Income Limit Of Insurance is shown in the Declarations. The loss or damage must be caused by or result from a Covered Cause of Loss.
Id. at ¶ 4.
Further, the term "Special" is shown in the Policy's Declarations under the column labeled "Covered Causes of Loss." See id. at ¶ 5. The Policy's Causes of Loss – Special Form (CP 10 30 10 12) defines a Covered Cause of Loss as follows:
A. Covered Causes of Loss
When Special is shown in the Declarations, Covered Causes of Loss means direct physical loss unless the loss is excluded or limited in this policy.
Id. at ¶ 6.
The Causes of Loss – Special Form contains the following exclusions:
B. Exclusions
1. We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.
...
e. Utility Services
The failure of power, communication, water or other utility service supplied to the described premises, however caused, if the failure:
(1) Originates away from the described premises; or
(2) Originates at the described premises, but only if such failure involves equipment used to supply the utility service to the described premises from a source away from the described premises.
Failure of any utility service includes lack of sufficient capacity and reduction in supply.
Loss or damage caused by a surge of power is also excluded, if the surge would not have occurred but for an event causing a failure of power....
g. Water
(1) Flood, surface water, waves (including tidal wave and tsunami), tides, tidal water, overflow of any body of water, or spray from any of these, all whether or not driven by wind (including storm surge); ...
C. Limitations
The following limitations apply to all policy forms and endorsements, unless otherwise stated ...
2. We will not pay for loss of or damage to the following types of property unless caused by the "specified causes of loss" or building glass breakage.
a. Animals, and then only if they are killed or their destruction is made necessary...
A. The following is added to the Exclusions section and is therefore not a Covered Cause of Loss:
WINDSTORM OR HAIL
We will not pay for loss or damage:
1. Caused directly or indirectly by Windstorm or Hail, regardless of any other cause or event that contributes concurrently or in any sequence to the loss or damage; or
2. Caused by rain, snow, sand or dust, whether driven by wind or not, if that loss or damage would not have occurred but for the Windstorm or Hail.
...
D. In the Causes Of Loss – Special Form, Windstorm or Hail is deleted from the "specified causes of loss".
[ECF No. 45-1, pp. 4-6].
B. Procedural History
On January 9, 2018, Plaintiff filed its complaint in the Eleventh Judicial Circuit Court in Miami-Dade County. [ECF No. 1]. On the basis of diversity jurisdiction under 28 U.S.C. § 1332, Atlantic Casualty subsequently removed this action to this Court on September 26, 2018 after receiving discovery responses confirming that the amount in controversy meets the jurisdictional threshold of this Court. [See ECF No. 1]. On May 10, 2019, Plaintiff filed a motion to dismiss this action without prejudice. [ECF No. 32]. Atlantic Casualty opposed the dismissal and requested its fees and costs if a dismissal were allowed. [ECF No. 35]. Plaintiff later withdrew its motion to voluntarily dismiss that action without prejudice. [ECF No. 43]. The parties subsequently filed their cross-motions for summary judgment.
II. Legal Standard
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Allen v. Tyson Foods, Inc. , 121 F.3d 642, 646 (11th Cir. 1997) (citation omitted). Thus, the Court may enter summary judgment "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
The moving party must "show the district court, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial." Clark v. Coats & Clark, Inc. , 929 F.2d 604, 608 (11th Cir. 1991). If the movant does so, then "the burden shift[s] to the non-moving party to demonstrate that there is indeed a material issue of fact that precludes summary judgment." Id. A genuine factual dispute exists "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Damon v. Fleming Supermarkets of Fla., Inc. , 196 F.3d 1354, 1358 (11th Cir. 1999). The opposing party must proffer more than "a mere scintilla of evidence" to show "that the jury could reasonably find for that party." Abbes v. Embraer Servs., Inc. , 195 F. App'x 898, 899-900 (11th Cir. 2006) (internal quotations omitted).
When deciding whether summary judgment is appropriate, the Court views all facts and resolves all doubts in favor of the nonmoving party. Feliciano v. City of Miami Beach , 707 F.3d 1244, 1247 (11th Cir. 2013).
III. Analysis
Atlantic Casualty argues that none of Plaintiff's damages fall within the coverage of the policy. [ECF No. 45]. Specifically, Atlantic Casualty argues that (1) the Windstorm Exclusion bars coverage for the claim as whole, (2) the Utility Services Exclusion precludes coverage for damage caused by the power outage, (3) the Water Exclusion bars coverage for the claim, and (4) the Animal Limitation precludes coverage for the lost marine life. Id.
Plaintiff responds by disputing that the cause of loss was not verified. [ECF No. 50]. Plaintiff argues that this Court should deny Atlantic Casualty's summary judgment motion and grant summary judgment in its favor because Atlantic Casualty does not utilize an expert's opinion to support its arguments. [ECF Nos. 46; 48]. The Court finds that Plaintiff's attempt to create a disputed material fact in order to prevent summary judgment to be unsuccessful. It is clear from the pleadings, discovery, and affidavits, that Plaintiff's claimed damages were the result of Hurricane Irma and thus are excluded.
Insurance contracts must be construed in accordance with the plain language of the policy. Swire Pac. Holdings, Inc. v. Zurich Ins. Co. , 845 So. 2d 161, 165 (Fla. 2003). "[I]f a policy provision is clear and unambiguous, it should be enforced according to its terms whether it is a basic policy provision or an exclusionary provision." Taurus Holdings, Inc. v. USF & G , 913 So. 2d 528, 532 (Fla. 2005) (internal citation omitted).
The policyholder bears the initial burden of proving that a loss occurred under the insuring agreement during the policy period. Banco Nacional De Nicaragua v. Argonaut Ins. Co. , 681 F.2d 1337, 1340 (11th Cir. 1982). Once the policyholder meets this burden of showing coverage under the insuring agreement, the insurer then has the burden to prove that an exclusion to coverage applies. E.S.Y., Inc. v. Scottsdale Ins. Co. , 139 F. Supp. 3d 1341, 1351 (S.D. Fla. 2015).
Here, the insuring agreement for building and property coverage provides that the Policy covers "direct physical loss ... caused by or resulting from any Covered Cause of Loss." [ECF No. 45-1, p. 2]. Similarly, the insuring agreement for business income coverage provides that a suspension of operations must be caused by loss or damage "caused by or result[ing] from a Covered Cause of Loss." Id. Covered Cause of Loss is then defined to mean direct physical loss unless the loss is excluded or limited.
The Policy includes various exclusions. Specifically, the Policy contains a Windstorm Exclusion. [ECF No. 45-1, pp. 4-5]. The Exclusion provides that the Policy will not cover loss or damage "[c]aused directly or indirectly by Windstorm or Hail, regardless of any other cause or event that contributes concurrently or in any sequence to the loss or damage; or [c]aused by rain ... whether driven by wind or not, if that loss or damage would not have occurred but for the Windstorm or Hail." Id. Further, the Exclusion provides that hurricane loss is "therefore not a Covered Cause of Loss." Id. at p. 5 (emphasis in original).
Thus, Plaintiff has the initial burden to show the claimed damage is direct physical loss caused by a Covered Cause of Loss during the policy period. Atlantic Casualty does not dispute that Plaintiff suffered direct physical loss during the policy period. However, if the loss suffered by Plaintiff was caused by Hurricane Irma, it is not a Covered Cause of Loss under the Policy and would not meet the insuring agreement and would be excluded under the Policy.
Atlantic Casualty has presented discovery materials and affidavits that make clear that Plaintiff's loss (property damage and resulting business interruption) was the result of Hurricane Irma and is thus excluded. Atlantic Casualty received notice from Somethings Fishy on September 13, 2017 of physical damage and power outage to the Property resulting from Hurricane Irma (which made landfall in Southeastern Florida on September 10, 2017). [ECF No. 45-2, ¶ 7]. Plaintiff's own public adjuster stated during his deposition that Mr. Rahaman, owner of Somethings Fishy, called him and told him he had damage to the store from Hurricane Irma. [ECF No. 45-5, p. 14]. Mr. Rahaman also stated during his deposition that the damage to the store, the resulting power outage, and loss of business income was a result of Hurricane Irma. [ECF No. 45-6, p. 31].
Atlantic Casualty's adjuster noted wind damage and flooding from Hurricane Irma during his inspection of the property. [ECF No. 45-1, p. 6]. Atlantic Casualty also subpoenaed records from Florida Power & Light ("FP&L") Company reflecting that power went out on the morning of September 10, 2017, which impacted, at minimum, the entire building where the Property was located. [ECF Nos. 45-1, p. 6; 45-12]. Further, according to FP&L's records, the power failure originated away from the Property and was caused by Hurricane Irma. [ECF Nos. 45-1, p. 6; 45-12].
Plaintiff does not dispute these facts. Plaintiff does not provide any evidence supporting that the loss was the result of some other cause besides Hurricane Irma. Plaintiff merely states that Atlantic Casualty did not retain an expert witness to opine that the damage and resulting power outage was caused by a hurricane. However, an expert opinion is not required to make that determination when there is overwhelming evidence to the contrary.
Reasonable minds would not differ that the inference from the undisputed facts is that Plaintiff's loss was caused by Hurricane Irma. See Allen , 121 F.3d at 646 (internal citation omitted) ("If reasonable minds could differ on the inferences arising from undisputed facts, then a court should deny summary judgment.").
Further, Plaintiff does not argue that the Windstorm Exclusion is ambiguous or otherwise unenforceable. But similar exclusions have been enforced to bar coverage for a hurricane loss. See, e.g. , Fla. Windstorm Underwriting v. Gajwani , 934 So. 2d 501, 506 (Fla. 3d DCA 2005) (finding that similarly-worded windstorm exclusion in policy "clearly and unambiguously excludes coverage"); Certain Interested Underwriters at Lloyd's v. Chabad Lubavitch of Greater Ft. Lauderdale, Inc. , 65 So. 3d 67, 68-69 (Fla. 4th DCA 2011) (finding that identically-worded windstorm exclusion "unambiguously provides that if a loss or damage is caused by a windstorm, the loss is not covered, regardless of any other cause or event that contributes to the loss").
Accordingly, the Policy's Windstorm Exclusion applies to bar coverage for Plaintiff's claim in whole (direct physical loss to the Property and its contents, the lost marine life, and Plaintiff's interruption to business as a result of the hurricane). The Court need not consider if any additional exclusions apply under the Policy because the Windstorm Exclusion bars coverage as a whole. However, the Court finds that the following exclusions also apply: the Utility Services Exclusion, which bars any loss resulting from a power outage; the Water Exclusion, which bars coverage for loss caused by flooding; and the Limitation for loss of animals unless caused by a specified cause of loss (which does not include power outage or hurricane).
IV. Conclusion
For the reasons discussed above, the Court grants Atlantic Casualty's summary judgment motion and denies Plaintiff's summary judgment motion.
DONE and ORDERED in Chambers, at Miami, Florida, on November 8, 2019.