Opinion
CASE NO. 3:22cv17072-MCR-HTC
2023-08-09
Shirly WEINSTEIN, Erez Weinstein, Plaintiffs, v. GREAT LAKES INSURANCE SE, Defendant.
Aristides Juan Diaz, The Professional Law Group, Hollywood, FL, for Plaintiffs. David Brian Levin, Baker Donelson Bearman et al., PC, Fort Lauderdale, FL, for Defendant.
Aristides Juan Diaz, The Professional Law Group, Hollywood, FL, for Plaintiffs. David Brian Levin, Baker Donelson Bearman et al., PC, Fort Lauderdale, FL, for Defendant. ORDER M. CASEY RODGERS, UNITED STATES DISTRICT JUDGE
Plaintiffs Shirly and Erez Weinstein brought suit for breach of contract against Defendant Great Lakes Insurance SE ("Great Lakes") in the First Judicial Circuit Court in and for Okaloosa County, Florida, seeking insurance coverage for property damage. Great Lakes timely removed the case to this Court on grounds of diversity jurisdiction. See U.S.C. §§ 1332(a), 1441, 1446. Great Lakes moves for summary judgment on grounds that there is no covered loss under the terms of the policy. ECF No. 13. Having fully reviewed the parties' briefing and the record, the Court agrees and grants the motion. I. Background
The Complaint and Notice of Removal allege that Plaintiffs reside and are domiciled in Florida; Great Lakes is European corporation organized pursuant to the corporate laws of the European Union, with its registered office and principal place of business in Munich, Germany; and the amount in controversy exceeds $75,000. See 28 U.S.C. § 1332(a)(1), (2) (the court has original jurisdiction where the amount in controversy exceeds $75,000, and the parties are citizens of different states, or the dispute is between citizens of a state and citizens of a foreign state).
For the limited purpose of this summary judgment proceeding, the Court views "the evidence and all reasonable inferences drawn from it in the light most favorable to the nonmoving party," which in this case is the Plaintiffs. Martin v. Brevard County Pub. Sch., 543 F.3d 1261, 1265 (11th Cir. 2008) (internal marks omitted).
The Weinsteins own residential property in Destin, Florida, at 9 Cobia Street (the "Property"), which they use for short-term rentals. The Property is a single story wood structure constructed on top of supporting wood pilings driven into the sand, with a concrete slab poured around the pilings, functioning as a patio in the back and a carport in the front. The Weinsteins insured the Property through a homeowner's policy with Great Lakes, Policy No. GLS00009395 ("the Policy"), which was in effect from December 1, 2019, to December 1, 2020. In relevant part, the Policy insures the Property against physical loss due to various stated perils, including "collapse" as defined in the Policy, and excludes coverage for damage caused by "wet rot" or "[f]lood, surface water, waves, tidal water," among others. Id. at 20, 23.
On January 27, 2020, the Weinsteins submitted a notice of loss. By affidavit, Erez Weinstein states that on January 19, 2020, the treated wood piles or columns supporting the Property "collapsed suddenly, causing substantial damage." Weinstein attributed the "collapse" to rot caused by high moisture accumulated at the base of the pilings and "hidden from view under the concrete slab." ECF No. 16-1 at 1. He states that he and his wife were taken by surprise because they were unaware of the rot and decay that was "concealed below the surface of [the] concrete slab" surrounding the wood pilings. Id.
No context is provided to explain why Mr. Weinstein believes the damage occurred on January 19, 2020; it appears he did not discover it until January 27. He stated by affidavit, "I reported the claim as soon as I learned of the damage" ECF No. 16-1 at 2, but does not state how he pinpointed the date of the alleged collapse.
Great Lakes assigned a claims adjuster to investigate. Around the same time, the Weinsteins retained Winfree Engineering to investigate the cause and origin of the damage. The claims adjuster and Winfree Engineering both inspected the property on January 29, 2020, and prepared separate reports. In the claims adjuster report dated February 5, 2020, it was noted that the claim had been reported as damage "due to columns collapsing," and the adjuster "confirmed [that] the pilings at the back half of the Property have deteriorated and caused a section of the house to shift about a quarter inch." ECF No. 13-1 at 122. The adjuster noted it was "apparent that rainwater travels under the concrete slab during heavy rain periods and thus, over a long period of time, has deteriorated the piling bottoms." Id. at 123. Inside, the adjuster noted cracks in the tile on the back half of the dwelling, a crack in the wall, a sliding door that did not close all the way, a crack in the granite countertop, and uneven cabinets. No damage was observed in the front half of the house, and the report states that the pile deterioration was a long-term condition, not sudden or accidental.
Great Lake uses a third-party claim adjuster and administrator, Johnson & Johnson, and Johns Eastern is the independent adjuster assigned to inspect the property.
The claims adjuster observed this first hand because it was raining heavily at the time of the inspection.
The report of B.A. Winfree, P.E., of Winfree Engineering ("Winfree Report) dated February 7, 2020, described the location as exposed to the severe conditions of storm surge, high winds and salt corrosion and noted that the elevation of the concrete pad is lower than the surrounding grade, causing rainwater to flood onto the concrete pad. "The water then runs around the voids around the wood piles and into the sand around the piles." ECF No. 13-1 at 126. Winfree observed three piles that had "collapsed due to rot under the slab" caused by "high moisture." Id. In his opinion, the rot destroyed the load bearing capacity of the wood piles, the pile failure caused this "recent sudden movement of the supported floor above," and this "collapse" caused a 1.75" floor deflection above, as well as cracks in the flooring. Id. Winfree explained, "[a]s the piles failed they shared the load with the adjacent structural elements until suddenly the load sharing system shifted." Id. Winfree concluded that the residence was "not safe and requires immediate repair," which at a minimum would require a temporary shoring system to be installed.
Photographs attached to the Winfree Report show that the piles are standing upright, and three are shown with shims in place for added support. ECF No. 13-1 at 129-131; 16-2 at 5-7.
The Winfree Report further noted that the sand did not have adequate compaction under the concrete slab, resulting in voids under it causing a loss of load bearing capacity, and ultimately recommended replacement of the piles and foundation, re-grading, repair of the structure, and elevation of the concrete slab. ECF No. 13-1 at 126.
Mr. Weinstein stated that "shortly after Mr. Winfree's inspection," he and his wife installed a temporary shoring system to mitigate against further damages until final repairs could be completed. ECF No. 16-1 at 2. The Weinsteins also made cosmetic and additional temporary repairs in 2021 and 2022 to enable them to start renting the Property again. Permanent repairs are still needed.
Great Lakes denied the claim on February 28, 2020, explaining in the denial letter that the claim involved water damage to the residence as a "direct result of flood, surface and/or storm tidal surge," which is excluded. ECF No. 13-1 at 135. The letter stated that the water caused the wood pilings to deteriorate and in turn caused the above flooring and countertop to buckle, but the water damage was not covered. The letter further stated that coverage is precluded for damage existing prior to the policy period, whether or not that damage was apparent when the policy period began.
On March 6, 2020, the Weinsteins obtained a damages estimate from Noble Public Adjusting Group in the amount of $112,447.40. The claims adjuster promptly contacted Noble Public Adjusting to discuss the denial letter, and stated: "I see that you have the loss as due to collapse. However, the dwelling was not in a state of collapse." ECF No. 13-1 at 138. The adjuster's email quoted the policy's Additional Coverage provision defining defines "collapse" for purposes of coverage:
a. With respect to this Additional Coverage:
ECF No. 13-1 at 18, 138. The adjuster stated, "[u]nfortunately, this claim remains denied." ECF No. 13-1 at 138. No response was received from Noble Public Adjusting.(1) Collapse means an abrupt falling down or caving in of a building or any part of a building with the result that the building or part of the building cannot be occupied for its current intended purpose.
(2) A building or any part of a building that is in danger of falling down or caving in is not considered to be in a state of collapse.
(3) A part of a building that is standing is not considered to be in a state of collapse even if it has separated from another part of the building.
(4) A building or any part of a building that is standing is not considered to be in a state of collapse even if it shows evidence of cracking, bulging, sagging, bending, leaning, settling, shrinkage or expansion.
The Policy further provides that a collapse meeting these parameters is a covered loss only if caused by one of the listed perils or conditions, which include "[d]ecay that is hidden from view," unless that decay is known to the insured prior to the collapse. ECF No. 13-1 at 18.
During discovery, on October 28, 2022, Great Lakes sent an engineer to inspect the Property. Daniel Harris, P.E., of Haag Engineering Co., evaluated the condition and the cause of damage and provided both a report (the "Haag Report") and a sworn declaration. Like the claims adjuster and the Winfree Report, Harris reported "differences in elevation in the Property above the pilings resulting from rot and deterioration" of about two inches and determined that these the rotted piles caused the downward deflection. ECF No. 13-2 at 3, 10, 12. Harris observed at least three piles that showed long-term wood rot and were supported by shims that had been added as a temporary repair; one of those piles showed visible rot at the base. He reported that two other piles that were not shimmed also showed visible rot. In Harris's opinion, the wood rot was due to a long-term condition of continuous or repetitive rainwater exposure over the near 40-year life of the structure, which "resulted in redistribution of the load to other parts of the structure, with any sudden downward movement unlikely and no evidence of collapse of any of the piles in question much less of the Property." Id. at 3, 12. Harris determined that the interior conditions of uneven floors and doors or cracked tiles and possibly the countertop crack may have been caused by the long-term rot and deflection. Based on the photographs taken earlier and his inspection, Harris found that the condition of the Property's deterioration had not changed, "demonstrating the slow, long-term progression of the wood rot." Id. at 3-4. Harris observed that the residence was actively being used by tenants and that no "new shoring system was present (shims we observed were the same as were present in the Winfree Engineering Photos)." Id. at 13. The Haag Report concluded that the risk of a sudden catastrophic collapse is unlikely but the deterioration will slowly continue if the structure is not repaired.
This opinion conflicts with Winfree Engineering's finding that the piles had "collapsed." ECF No. 13-2 at 12.
Harris's statement that he observed no new shoring system contradicts Mr. Weinstein's affidavit. However, this question of fact is not material to the Court's decision. Moreover, Harris's statement is supported by the objective photographs attached to the Haag Report.
Following discovery, Great Lakes moved for summary judgment.
II. Discussion
Summary judgment is appropriate when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The movant bears the burden to demonstrate that there is no genuine dispute of fact and that the non-movant has failed to establish an essential element of the claim. See Allen v. Bd. of Pub. Educ., 495 F.3d 1306, 1313 (11th Cir. 2007); see also Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If this burden is satisfied, then the non-movant must go beyond the pleadings and "designate specific facts showing that there is a genuine issue for trial." Celotex, 477 U.S. at 324, 106 S.Ct. 2548. The Court views all evidence in the light most favorable to the non-movant and draws all reasonable inferences in favor of the non-movant "to the extent supportable by the record." Garczynski v. Bradshaw, 573 F.3d 1158, 1165 (11th Cir. 2009) (quoting Scott v. Harris, 550 U.S. 372, 381 n.8, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007)).
Florida law controls this insurance coverage dispute. The party claiming coverage has the burden to prove that the insured property suffered a loss during the policy period, and "[t]he burden then shifts to the insurer to prove that the cause of the loss was excluded from coverage under the policy's terms." Fla. Ins. Guar. Ass'n v. Reyes, 303 So. 3d 1248, 1252 (Fla. 2nd DCA 2020) (quoting Citizens Prop. Ins., Corp. v. Salkey, 260 So. 3d 371, 375 (Fla. 2d DCA 2018)). If an exclusion applies, then the insured bears the burden to "prove that an exception to that exclusion applies." See Fla. Windstorm Underwriting v. Gajwani, 934 So. 2d 501, 506 (Fla. 3d DCA 2005).
The interpretation of an insurance contract under Florida law is a question of law for the court, decided after construing the policy in its entirety consistent with the expressed intent of the parties. Gulf Tampa Drydock Co. v. Great Atlantic Ins. Co., 757 F.2d 1172, 1174 (11th Cir. 1985). Courts construe the terms of an insurance policy "according to their plain language." Gov't Emps. Ins. Co. v. Macedo, 228 So. 3d 1111, 1113 (Fla. 2017). So when a provision is clear and unambiguous, it will be "enforced according to its terms," without "indulg[ing] in construction or interpretation of its plain meaning." Travelers Indem. Co. of Connecticut v. Richard Mckenzie & Sons, Inc., 10 F.4th 1255, 1264 (11th Cir. 2021) (quoting Detroit Diesel Corp. v. Atl. Mut. Ins. Co., 18 So. 3d 618, 620 (Fla. 4th DCA 2009)) (also cautioning against rewriting the contract or adding meaning that is not present). When ambiguity exists "after reading each policy as a whole and endeavoring to give every provision its full meaning and operative effect," the provision, or exclusion, must be "liberally construed in favor of coverage and strictly against the insurer." Macedo, 228 So. 3d at 1113 (quoting Wash. Nat'l Ins. Corp. v. Ruderman, 117 So. 3d 943, 948 (Fla. 2013)); see also Indian Harbor Ins. Co. v. Williams, 998 So. 2d 677, 678 (Fla. 4th DCA 2009) (construing exclusionary clauses "in a manner that affords the insured the broadest possible coverage").
A policy is truly ambiguous, however, only if a term is subject to more than one reasonable interpretation—one providing coverage and another limiting coverage. Penzer v. Transp. Ins. Co., 29 So. 3d 1000, 1005 (Fla. 2010). There is no argument in this case that an ambiguity in the policy language exists.
Great Lakes argues that the Weinsteins cannot show they suffered a covered loss because the Policy's definition of "collapse" is not met, and it is evident that the damage resulted from long-term excluded causes that preceded the Policy period (which began on December 1, 2019). The Weinsteins argue that questions of fact exist based on Mr. Weinstein's affidavit and the Winfree Report, which reference a sudden collapse due to rot that was hidden from view. Giving effect to the plain language of the Policy, the Court agrees with Great Lakes that the record, viewed in the light most favorable to the Weinsteins, cannot establish a covered loss.
As stated above, the Policy defines "collapse" through four paragraphs:
(1) Collapse means an abrupt falling down or caving in of a building or any part of a building with the result that the building or part of the building cannot be occupied for its current intended purpose.
(2) A building or any part of a building that is in danger of falling down or caving in is not considered to be in a state of collapse.
(3) A part of a building that is standing is not considered to be in a state of collapse even if it has separated from another part of the building.
(4) A building or any part of a building that is standing is not considered to be in a state of collapse even if it shows evidence of cracking, bulging,
sagging, bending, leaning, settling, shrinkage or expansion.ECF No. 13-1 at 18.
The Weinsteins' argument focuses on the first paragraph of this definition. Relying on Mr. Weinstein's affidavit and the Winfree Report, they argue that three of the piles "collapsed" suddenly, causing a deflection and damage to the adjacent structure such that it cannot be used for its intended purpose. However, the affidavit and Winfree Report do not show an "abrupt falling down or caving in" within the plain meaning of the policy. Cf. S.O. Beach Corp. v. Great Am. Ins. Co. of New York, 791 F. App'x 106, 110 (11th Cir. 2019) (finding language defining collapse as "an abrupt falling down or caving in" was unambiguous and stating, "regardless of whether the cause of a collapse was gradual or abrupt, the collapse itself is covered only if it was abrupt."). Mr. Weinstein states that the wood piles "collapsed suddenly" on January 19, 2020, but he does not say he observed this occur and he does not provide any other basis for his personal knowledge to support a sudden collapse on that date. Absent a basis for his personal knowledge, the statement is insufficient to create a question of fact. See Wen Liu v. University of Miami Sch. of Med., 693 F. App'x 793, 795 (11th Cir. 2017) ("An affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated. Fed. R. Civ. P. 56(c)(4)"). The Winfree Report also fails to create a question of fact as to whether a sudden collapse occurred. The Report states only that three piles "collapsed" and that this pile failure "caused the recent sudden movement of the supported floor above." ECF No. 13-1 at 126. But considering the ordinary common sense meaning the terms, a "sudden movement" as stated in the Report in no way equates with an "abrupt falling down or caving in," as required by paragraph (1) of the policy, as outlined above.
Mr. Weinstein states he was not aware of the damage until January 27, 2020.
The ordinary definition of the term "collapse" is broad and includes "to fall or shrink together abruptly and completely," to "break down completely," to "cave in or fall in or give way," or to "fold down into a more compact shape." Webster Dictionary, https://www.merriam-webster.com/dictionary/collapse. The Report may have used the generic term "collapse" to describe that the piles "folded down into a more compact shape." Id.
Additionally, the claims adjuster and the Winfree Report both referred to collapsed piles, but the Policy terms require the collapse of "a building or part of a building." The evidence is clear from the photographs that neither the building nor any part of it has abruptly fallen down or caved in. Even assuming in the Weinsteins' favor that the piles are "part of the building" and abruptly collapsed or "caved in," and further assuming that this collapse from decay and rot of the piles prevented use of the property for its intended use for purposes of paragraph (1), this still is not enough to establish a covered loss because the Weinsteins ignore the remaining three paragraphs of the Policy definition. Paragraphs (2), (3) and (4) plainly state there is no coverage for "collapse" if "the building or any part of it" is still "standing." ECF No. 13-1 at 18. Those provisions make it clear that if the building or any part of it is still standing, the property is not in a state of collapse, even if the building is "in danger of falling down or caving in" or has separated from another part of the building, or there is "evidence of cracking, bulging, sagging, bending, leaning, settling, shrinkage or expansion." ECF No. 13-1 at 18. Given this language, a mere movement or 1.75" shift in elevation caused by piles that have partially caved in is insufficient to trigger coverage for a collapse. Because the building remains standing—and even the piles themselves remain upright—the evidence does not establish a state of collapse under the Policy terms. The Court is not at liberty to either ignore or rewrite the plain terms of the additional coverage for collapse. See Travelers Indem., 10 F.4th at 1264 (courts "may not rewrite contracts, add meaning that is not present, or otherwise reach results contrary to the intentions of the parties") (quoting Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So. 2d 528, 532 (Fla. 2005)).
The Court only assumes for the sake of argument that the Weinsteins could create a question of fact on this issue under paragraph (1) and does not find that they have. It is undisputed that the property has not been repaired but is being used for its purpose as a rental property. The Weinsteins argue that homeowners should not be discouraged from performing temporary repairs, but the disconnect in their argument is that, if the property is usable for its intended purpose after merely a temporary repair, then the insured cannot make the case that it is or was in a "state of collapse" for purposes of coverage under the terms of this Policy.
The Weinsteins do not argue that any other coverage applies. Because the Weinsteins have not established a covered loss, the Court finds it unnecessary to address the remaining arguments, and Great Lakes is entitled to summary judgment.
Accordingly, the Defendant's Motion for Summary Judgment, ECF No. 13, is GRANTED.
DONE AND ORDERED this 9th day of August 2023.