Ensuing-loss exceptions are not applicable where the ensuing loss was directly related to an original excluded risk.
In Liberty Mutual Fire Ins. Co. v. Martinez, 2015 Fla. App. LEXIS 1918, Liberty Mutual appeals a final summary judgment entered in favor of its insureds, Nigel and Melissa Martinez. Liberty issued an all-risk insurance policy to the Martinezes insuring their residence and other structures located on their property. During a tropical storm, Nigel Martinez partially emptied his family’s in-ground swimming pool because it was overflowing. The following day, he discovered that the pool had lifted out of the ground. As would be later agreed upon by experts, subsurface water accumulated underneath the pool during the storm, which exerted hydrostatic pressure on the partially emptied pool. This pressure caused the pool shell to lift out of the ground, damaging the shell as well as the pool deck, rock garden, and waterfall. Thereafter, the Martinezes filed a claim with Liberty, which was denied on the ground that the Water Exclusion provision in the policy excluded damage caused by hydrostatic pressure from coverage. That provision provides: We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss. (C.) Water Damage (1) Flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind; (3) Water below the surface of the ground, including water, which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure. In response, the Martinezes filed suit for breach of contract and argued, that their damage was covered under the ensuing-loss provision in the policy. That provision provides: 2. We do not insure for loss to property described in Coverages A and B caused by any of the following. However, any ensuing loss to property described in Coverages A and B not excluded or excepted in this policy is covered. a. Weather conditions. However, this exclusion only applies if weather conditions contribute in any way with a cause or event excluded in paragraph 1. above to produce the loss; Both sides moved for summary judgment. The trial court found that the direct cause of the Martinezes’ damage was the pool shell coming out of the ground, rather than the hydrostatic pressure. Accordingly, the court found that the damages were ensuing losses covered by the policy, denying Liberty’s motion for summary judgment, and granting the Martinezes’ motion for summary judgment. Liberty Mutual appealed to the Fifth District Court of Appeal of Florida. The issue on appeal was whether the Water Exclusion provision excludes the Martinezes’ losses from coverage. The Court agreed with Liberty that under the policy’s plain language, the damage to the Martinezes’ pool deck, rock garden, and waterfall was not an ensuing loss. Rather, the policy expressly excluded the Martinezes’ loss as it specifically excluded losses that occurred directly or indirectly from subsurface water pressure. In the Court’s view, the damage to the deck, rock garden, and waterfall resulted, directly or indirectly, from subsurface water pressure. Accordingly, the court need not look to the ensuing-loss provision. Therefore, the Court held the insurance policy excluded the loss and reversed the summary final judgment and remand the case for entry of judgment in favor of...read more
Insurer obligated to pay attorney fees pursuant to Florida’s Offer of Judgment Statute, where the policy provides for all court costs charged, to an insured, in a covered lawsuit.
In Geico Gen. Ins. Co. v. Hollingsworth, 2015 Fla. App. LEXIS 1187, Geico General Insurance Company appeals a final judgment ordering it to pay certain attorney’s fees for which its insured, Mohamed Kassam, was primarily liable. This case originally stems from an automobile accident involving the appellees, Kassam and Kevin Hollingsworth. Kassam was insured by Geico under an automobile insurance policy. At some point during the litigation, Hollingsworth served a proposal for settlement upon Kassam, proposing to settle the case for $9,999.99. Kassam rejected the proposal. After a jury trial, the trial court entered judgment for Hollingsworth in the amount of $16,603.24. Because the judgment exceeded the amount of the proposal for settlement by more than twenty-five percent, Hollingsworth moved for attorney’s fees under Florida Rule of Civil Procedure 1.442 and section 768.79, Florida Statutes (“the Offer of Judgment Statute”). The court granted Hollingsworth’s request, and entered an attorney fee judgment against Kassam in the amount of $113,175.00. Hollingsworth then moved to add Geico as a party defendant to the attorney fee judgment and eventually obtained a writ of garnishment against Geico. The trial court found that Geico was liable for the attorney’s fees under the “Additional Payments” section of the Policy. That section provides, in pertinent part: ADDITIONAL PAYMENTS WE WILL MAKE UNDER THE LIABILITY COVERAGES include all court costs charged to an insured in a covered lawsuit. Geico appealed to the Fifth District Court of Appeal of Florida. The District Court found that that the attorney fee judgment was explicitly covered by the Policy. When interpreting an insurance policy, courts are bound by the plain meaning of the policy’s text. When language in a policy is ambiguous, courts must resolve the ambiguity in favor of the insured by “adopting the reasonable interpretation of the policy’s language that provides coverage.” The Court stated Geico could have provided a definition of “court costs” that explicitly excluded attorney’s fees sought under the Offer of Judgment...read more
An insurer’s decision to deny coverage for claims that are not promptly made, will be upheld unless there is strong, affirmative evidence that the delay resulted in no prejudice.
In Intracoastal Condo. Ass’n v. Lexington Ins. Co., 2015 U.S. App. LEXIS 293, the plaintiff condominium association filed a claim seeking $6,208,910 in damages against its insurer for damage sustained to its property by Hurricane Wilma. The plaintiff did not immediately file a claim with its insurer after Hurricane Wilma because the plaintiff believed the damage sustained to the property would not exceed the policy’s $100,0,000 deductible. However, the plaintiff discovered extensive damage four years and seven months after Hurricane Wilma and counsel for the plaintiff sent formal notice of its loss to the insurer. The insurer denied the claim for failure to provide prompt notice of the damage as required by the policy. The district court granted the defendant’s summary judgement finding that the plaintiff notice was not prompt as a matter of law. Finally, the district court concluded that the plaintiff had not rebutted the presumption of prejudice arising out of its late notice. The plaintiff appealed and the Court of Appeals affirmed the district court’s decision finding that there is no dispute of fact that the plaintiff failed to give timely notice of its loss. The Court rejected the plaintiff’s claim that their mistaken belief that the damages did not exceed the deductible, excused their failure to provide timely notice to the insurer. The Court explained that this breach of the duty of notice results in a rebuttable presumption of prejudice to the insurer. The only information the plaintiff proffered to rebut the presumption of prejudice is that both parties’ experts gave opinions as to the causation. The Court held this was not enough to create a genuine issue of material fact to preclude the summary judgment. The Court stated the ability to offer testimony as to causation alone does not satisfy the purpose of prompt notice and therefore cannot vitiate the prejudice suffered by the insurer due to delayed investigation and...read more
In Nucci v. Target Corp., 2015 Fla. App. LEXIS 153, plaintiff claimed that she slipped and fell on a foreign substance on the floor of a Target store. In the complaint the plaintiff alleged the she suffered bodily injury, experienced pain from the injury, incurred medical, hospital, and nursing expenses, suffered physical handicap, suffered emotional pain and suffering, lost earnings, lost the ability to earn money, lost or suffered a diminution of ability to enjoy her life, suffered aggravation of preexisting injuries, suffered permanent or continuing injuries, and will continue to suffer the losses and impairment in the future. Defendant moved to compel inspection of plaintiff’s Facebook profile. Plaintiff’s response to the motion explained that her Facebook page had been on a privacy setting that prevented the general public from having access to her account. Plaintiff claimed the request was overly broad and that she had a reasonable expectation of privacy regarding her Facebook information and that defendant’s access would invade that privacy right. At the trial courts hearing on the motion to compel, the defendant showed the court surveillance video in which the plaintiff could be seen walking with two purses on her shoulders and carrying two jugs of water. Defendant argued that because the plaintiff had put her physical condition at question, the relevancy of the Facebook photographs outweighed the plaintiff’s right to privacy. The trial court agreed and granted the defendants motion. The plaintiff sought certiorari relief to quash the trial court’s order compelling discovery of photos from her Facebook account. The Fourth District Court of Appeal of Florida held that the photographs sought were reasonably calculated to lead to the discovery of admissible evidence and Nucci’s privacy interest in them was minimal, if any. Because the discovery order did not amount to a departure from the essential requirements of law, the Court denied plaintiff petition. In a personal injury case where the plaintiff is seeking intangible damages, the fact-finder is required to examine the quality of the plaintiff’s life before and after the accident to determine the extent of the loss. From testimony alone, it is often difficult for the fact-finder to grasp what a plaintiff’s life was like prior to an accident. If a photograph is worth a thousand words, there is no better portrayal of what an individual’s life was like than those photographs the individual has chosen to share through social media before the occurrence of an accident causing injury. Such photographs are the equivalent of a “day in the life” slide show produced by the plaintiff before the existence of any motive to manipulate reality. The photographs sought here are thus powerfully relevant to the damage issues in the lawsuit. The relevance of the photographs is enhanced, because the post-accident surveillance videos of the plaintiff suggest that her injury claims are suspect and that she may not be an accurate reporter of her pre-accident life or of the quality of her life since then. The Court noted that the production order is not overly broad under the circumstances as it is limited to the two years prior to the incident up to the present, the photographs sought are easily accessed, and exist in electronic...read more
Undertaking Communication, Conduct, and Steps in Defense of an Underlying Action May Give Rise to a Coverage by Estoppel Claim.
In Bishop v. Progressive Express Ins. Co., 2015 Fla. App. LEXIS 97, plaintiff filed a claim of insurance coverage by estoppel against an insurance company. The plaintiff claimed that the insurer made statements and undertook actions that led the plaintiff to believe she had insurance coverage for the underlying action. The insurer allegedly engaged in this conduct despite the insurer’s knowledge of facts that would have permitted it to deny coverage. The trial court entered summary judgment in favor of the insurer and the plaintiff appealed. The First District Court of Appeal of Florida reversed the summary judgment and remanded the case for the trier of fact to determine the ultimate weight to give the insurer’s conduct versus the reasonableness of the plaintiff’s reliance. The Court outlined that when an insurance company assumes the defense of an action, with knowledge, actual or presumed, of facts which would have permitted it to deny coverage, it may be estopped from subsequently raising the defense of non-coverage. This “coverage by estoppel” claim requires a representation of material fact, reasonable reliance, and a detrimental change in position (i.e., prejudice) as a result of the reliance. Prejudice and whether the promisee’s reliance was reasonable are generally questions for the trier of...read more
In Buitrago v. Feaster, 2014 Fla. App. LEXIS 20926, the plaintiff was injured in a four-car collision caused by the defendant. The jury found the defendant liable and awarded the plaintiff past medical expenses, future medical damages, lost wages, and past noneconomic damages. However, the jury did not award the plaintiff any future noneconomic damages. The plaintiff moved for a new trial, claiming that the evidence and verdict established that the plaintiff was legally entitled to future noneconomic damages. The plaintiff relied on Allstate Insurance Co. v. Manasse, 681 So. 2d 779 (Fla. 4th DCA 1996), for the proposition that the jury’s finding of a permanent injury automatically entitled her to recover future noneconomic damages as a matter of law. The trial court agreed and granted the plaintiff a new trial on the issue of future noneconomic damages and the defendants appealed. The Second District Court of Appeal of Florida found that the trial court based its ruling on the argument that the jury must award future noneconomic damages as a matter of law when it finds that the plaintiff suffers a permanent injury. However, the Florida Supreme Court expressly rejected this view of the law when it held in Allstate Insurance Co. v. Manasse, 707 So. 2d 1110 (Fla. 1998), that a verdict is not inadequate as a matter of law when the jury finds a plaintiff has suffered a permanent injury but does not award future intangible damages. The correct standard to apply in considering a motion for new trial based on an allegedly inadequate award of noneconomic damages is whether the verdict was against the manifest weight of the evidence. See Cloud v. Fallis, 110 So. 2d 669, 673 (Fla. 1959). The plaintiff failed to argue this standard to the trial court and the record made it clear that the trial court did not consider the weight of the evidence in granting the plaintiff a new trial on noneconomic damages. Therefore, the Second District Court of Appeal reversed the order granting the plaintiff a new trial on noneconomic...read more
Forth District Court of Appeals Certified Conflict with the Third District Court of Appeals on whether Florida’s Transitory Foreign Substance statute should apply retroactively requiring a plaintiff to establish knowledge of a dangerous condition.
Florida Statute 768.0710 (2002) provided, that in slip and fall cases, actual or constructive notice of the transitory foreign object or substance is not a required element of proof. In 2010, the Florida legislature repealed section 768.0710 (2002) and replaced it with section 768.0755 (2010), adding the requirement that an injured person must prove that the business establishment had actual or constructive knowledge of the dangerous condition and should have taken action to remedy it. In Kenz v. Miami, 2013 Fla. App. LEXIS 6592, the Third District Court of Appeals ruled that section 768.0755 (2010) does not create a new element to a cause of action for negligence and merely codifies the means and method by which a plaintiff shows that the defendant-business establishment has breached its duty of care. Therefore, the Court concluded that the statute reflects a procedural change and should be applied retroactively to accidents that occurred prior to the statute’s effective date. In Pembroke Lakes Mall Ltd. v. McGruder, 2014 Fla. App. LEXIS 2578, the Forth District Court of Appeals ruled that section 768.0755 (2010) was far more than a simple procedural change, but rather is a substantive change creating a new element of proof in order for a plaintiff to establish negligence and therefore should not be applied retroactively. Accordingly, in the Third District Court of Appeals, which covers Miami-Dade and Monroe counties, trial courts must follow Kenz and apply Florida Statute 768.0755 (2010) retroactively requiring the plaintiff to prove that the business establishment had actual or constructive knowledge of the dangerous condition and should have taken action to remedy it . In the Fourth District Court of Appeals, which covers Broward and Palm Beach counties, trial courts must now follow McGruder and not apply Florida Statute 768.0755 (2010) retroactively to accidents that occurred prior to the statute’s effective...read more
The Eleventh Circuit rules that an insurance company may consider extrinsic evidence to determine its duty to defend.
In Composite Structures, Inc. v. Continental Insurance Company, 2014 U.S. App. LEXIS 5258, two seamen brought suit against Composite, who was insured by Continental, alleging injuries from exposure to carbon monoxide while aboard a boat sold, designed, and manufactured by Composite. The suit was filed almost three years after the two seamen were exposed to the carbon monoxide. Composite’s commercial general liability policy with Continental contained a pollution buy-back provision requiring conditions to be met for a pollution claim to be covered by the policy. The conditions included that the pollution events be identified as commencing at a specific time, the event be discovered within seventy-two hours of its commencement, and the event be reported to Continental within thirty days after the insured became aware of the incident. Continental denied coverage to Composite Structures on the basis that Composite Structures did not learn of the incident within seventy-two hours of its commencement and notice of the incident was not given to Continental within the thirty days after becoming known to Composite Structures. Composite Structures argued that Continental improperly looked beyond the allegations of the underlying complaint in order to determine these conditions were not satisfied. On March 20, 2014, the United States Court of Appeals for the Eleventh Circuit noted that under Florida law an insurer’s duty to defend is generally determined solely by the four corners of the complaint and that extrinsic evidence is not to be considered. However, the court noted that the Florida Supreme Court has recognized certain exceptions to this rule, including that insurers may look to extrinsic facts outside of the underlying complaint when the basis for denying coverage involves facts that would not normally be alleged in the complaint. Such an exception existed with respect to the pollution buy-back provision in this case because the underlying complaint was silent as to the dates upon which Composite Structures became aware of the incident and reported it to...read more
The Sixth Circuit Court of Appeals has ruled that an insurance carrier need not provide an insured with any of its investigation prior to the taking of an examination under oath.
In Lester v. Allstate Property and Casualty Insurance Company, 2014 U.S. App. LEXIS 3349, after a fire damaged her house in 2012, Amelia Lester filed a claim against Allstate, her insurance company. In investigating the fire, Allstate asked Lester and her husband to answer questions about the claim under oath. Lester responded that she and her husband would submit to examinations only if Allstate first showed them its investigative files. Allstate refused to turn over the files, explaining that doing so could jeopardize the integrity of its investigation. After two months of this back and forth exchange between Allstate and Lester, Allstate gave Lester ten days to schedule an examination. Allstate warned Lester that if she did not submit to the examination in accordance with the conditions of her policy, Allstate would deny the claim. Lester never responded to Allstate’s demand and instead sued Allstate seeking payment of her claim. On February 24, 2014, the United States Court of Appeals for the Sixth Circuit ruled that insurance companies have the right to question a policyholder under oath without providing its investigative files, stating that the purpose of these examinations is to allow insurance companies to sort out the fraudulent from the genuine and the exorbitant from the warranted when analyzing the abundance of claims being made day by...read more