Bahama Bay II Condo. Ass'n, Inc. v. United Nat'l Ins. Co.

374 F.Supp.3d 1274

BAHAMA BAY II CONDOMINIUM ASSOCIATION, INC, Plaintiff,

v.UNITED NATIONAL INSURANCE COMPANY, Defendant.

Case No: 6:17-cv-1800-Orl-41KRS

United States District Court, M.D. Florida, Orlando Division.

Signed April 11, 2019

Mary Catherine Lamoureux, Theodore A. Corless, Corless Barfield Trial Group, LLC, Tampa, FL, for Plaintiff.

Jason M. Chodos, Dana Beth Kuczynski, Litchfield Cavo, LLP, Ft Lauderdale, FL, Alina Alonso Rodriguez, Bowman and Brooke, LLP, Coral Gables, FL, for Defendant.

ORDER

CARLOS E. MENDOZA, UNITED STATES DISTRICT JUDGE

THIS CAUSE is before the Court on Defendant's Motion for Summary Judgment (Doc. 49), to which Plaintiff filed a Response (Doc. 53), and Defendant filed a Reply (Doc. 54). For the reasons stated herein, Defendant's Motion will be granted in part and denied in part.

I. BACKGROUND

Plaintiff brought this suit against Defendant, alleging breach of contract for failure to pay benefits due under the commercial property insurance policy ("the Policy"). Defendant issued the Policy to Plaintiff for the period of March 26, 2016, through March 26, 2017. (Insurance Policy, Doc. 49-2, at 2). Plaintiff's insured property consists of thirteen buildings inside a condominium complex named Bahama Bay II located in Kissimmee, Florida. (Id. at 5, 57).

On or about December 9, 2016, a sinkhole appeared near Building 43. (Vidal Dep., Doc. 49-4, at 17: 8–25; Structural Engineering and Inspections ("SEI") Rpt., Doc. 53-3, at 1). After the sinkhole appeared, Building 43 was vacated and the building was declared unsafe. (Deatherage Dep., Doc. 49-5, at 17: 9–11; 21: 5–25). Building 43 remains unoccupied, (Doc. 49-4 at 127: 1–5), and after seven months, Plaintiff's board excused Building 43 condominium owners from paying association dues, (id. at 125: 19–126: 6).

Plaintiff submitted a claim to Defendant for benefits under the Policy, (Wilkinson Dep., Doc. 53-2, at 12: 1–25, 16: 7–14). Defendant investigated the loss, (Doc. 38 ¶ 9; Answer, Doc. 41, ¶ 9), accepted coverage for Building 43 under the Policy's Catastrophic Ground Cover Collapse ("CGCC") provision, (Wilkinsin Aff., Doc. 49-1, ¶ 14; Feb. 1, 2017 Letter, Doc. 53-8, at 2), and issued a check to Plaintiff in the amount of $ 290,000 for "immediate repairs," (Doc. 49-1 ¶ 15; Doc. 53-8 at 2). Defendant denied coverage as to buildings 42, 44, 45; repairs to the foundation of all buildings; the retaining wall and outdoor fences; security fencing and guards; land, landscaping, and patios; uncollected association dues; condominium unit owner property; and matching damages.

The CGCC provision of the Policy states:

We will pay for direct physical loss or damage to Covered Property caused by or resulting from catastrophic ground cover collapse, meaning geological activity that results in all of the following:

(a) The abrupt collapse of the ground cover;

(b) A depression in the ground cover clearly visible to the naked eye;

(c) Structural damage to the building, including the foundation; and

(d) The insured structure being condemned and ordered to be vacated by the governmental agency authorized by law to issue such an order for that structure.

However, structural damage consisting merely of the settling or cracking of a foundation, structure or building does not constitute loss or damage resulting from a catastrophic ground cover collapse.

(Doc. 49-2 at 27).

After receiving the initial payment from Defendant, Plaintiff installed underpinning to help stabilize Building 43 as well as to pay attorneys, public adjusters, and for security at the building. (Doc. 49-4 at 151: 5–25). At the time Defendant accepted coverage, it also requested Plaintiff provide a Proof of Loss. (Doc. 53-8 at 2). Plaintiff sent Defendant a Proof of Loss, which Defendant rejected as incomplete. (Doc. 53-2 at 84: 1–16, 92: 3–93: 20; Proof of Loss, Doc. 53-12 at 2–6).

In August 2017, Plaintiff filed suit alleging that Defendant breached the insurance contract by failing to provide additional coverage. (See generally Compl., Doc. 2). Defendant filed an Answer, Affirmative Defenses, and Counter-claim. (See Doc. 5).

Plaintiff subsequently amended the complaint twice. (See Doc. Nos. 22, 38). The Second Amended Complaint (Doc. 38) is now the operative complaint. Defendant filed Answers and Affirmative Defenses, (Doc. Nos. 29, 41), in response to each Amended Complaint but Defendant never realleged its Counter-claim. Defendant now moves for summary judgment.

II. LEGAL STANDARD

Summary judgment is appropriate when the moving party demonstrates "that 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). A dispute is genuine "if the evidence is such that 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). A fact is material if it may "affect the outcome of the suit under the governing law." Id. "The moving party bears the initial burden of showing the court, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial." Allen v. Bd. of Pub. Educ. , 495 F.3d 1306, 1313–14 (11th Cir. 2007). Stated differently, the moving party discharges its burden by showing "that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett , 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

However, once the moving party has discharged its burden, the nonmoving party must "go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial." Id. at 324, 106 S.Ct. 2548 (quotation omitted). The nonmoving party may not rely solely on "conclusory allegations without specific supporting facts." Evers v. Gen. Motors Corp. , 770 F.2d 984, 986 (11th Cir. 1985). Nevertheless, "[i]f there is a conflict between the parties' allegations or evidence, the [nonmoving] party's evidence is presumed to be true and all reasonable inferences must be drawn in the [nonmoving] party's favor." Allen , 495 F.3d at 1314.

III. ANALYSIS

As a preliminary matter, because Defendant never realleged its Counter-claim in its subsequent Answers, it has been abandoned. See Steadfast Ins. Co. v. Sec. Eng'rs, Inc. , 2015 U.S. Dist. LEXIS 7203, *2-4, 2015 WL 300412, *1 (N.D. Ala. January 22, 2015) ("Because [plaintiff] filed an amended complaint and [defendant] did not reassert its counterclaims in its answer to the amended complaint, [defendant] abandoned the counterclaims asserted in its original answer.") (citing the Pa. Nat'l Mut. Cas. Ins. Co. v. Snider , 996 F.Supp.2d 1173, 1180 n.8 (M.D. Ala. February 11, 2014) ). Thus, insofar as Defendant's Motion seeks summary judgment on its Counter-claim, it will be denied.

A. Buildings 42, 44, 45

As stated above, Defendant denied coverage for Buildings 42, 44, and 45 altogether. Plaintiff asserts that this denial is a breach of the Policy. "Under Florida law, insurance contracts are construed according to their plain meaning." James River Ins. Co. v. Ground Down Eng'g, Inc. , 540 F.3d 1270, 1274 (11th Cir. 2008) (quoting Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co. , 913 So.2d 528, 537 (Fla. 2005) ). "[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. , 913 So.2d at 532 (quotation omitted). "If the relevant policy language is susceptible to more than one reasonable interpretation, one providing coverage and the another limiting coverage, the insurance policy is considered ambiguous."

Auto-Owners Ins. Co. v. Anderson , 756 So.2d 29, 34 (Fla. 2000). If a policy is ambiguous, it "should be construed liberally in favor of the insured and strictly against the insurer." State Farm Fire & Cas. Co. v. CTC Dev. Corp. , 720 So.2d 1072, 1076 (Fla. 1998) (citing Nat'l Merch. Co., Inc. v. United Serv. Auto. Ass'n , 400 So.2d 526, 530 (Fla. 1st DCA 1981) ).

Whether Defendant breached the insurance agreement for failing to issue coverage for Buildings 42, 44, and 45 hinges on whether the insurance policy is considered a "blanket" policy, or a "scheduled" policy. In this context, a blanket policy is a policy which puts an overall "blanket" limit of insurance on all property owned by the insured. See 5 NEW APPLEMAN ON INSURANCE LAW LIBRARY EDITION § 41.02[2] (2018). As applicable here, if the Policy is a blanket policy, Defendant would owe Plaintiff for all damage occurring to the covered property—buildings 42, 44, 45—resulting from one covered cause of loss up to the policy limit. On the other hand, a scheduled policy typically schedules separately each piece of covered property into distinct insurance contracts. Here, if the Policy is scheduled, each piece of covered property must qualify for coverage independently of one other, as the policy is not one, but thirteen separate policies—one for each scheduled building. Florida Ins. Guar. Ass'n v. B.T. of Sunrise Condo. Ass'n, Inc. , 46 So.3d 1039, 1042 (Fla. 4th DCA 2010) (finding "each separately scheduled building is covered by a separate contract of insurance with its own recoverable amount"). Meaning, each building must separately meet the requirements for CGCC in order to qualify for coverage under the policy. See COUCH ON INSURANCE at § 175:90.

The most obvious example of a blanket policy would be a policy that does not differentiate between multiple sites or pieces of property, and which only contains a single premium, deductible, and limit of insurance. See 5 NEW APPLEMAN ON INSURANCE LAW LIBRARY EDITION § 41.02[2] (2018). For a scheduled policy, the classic example would be a policy with separately delineated sites or properties, as well as separate deductibles and limits of insurance. These policies "typically...