MY. P.I.I., LLC v. Markel Am. Ins. Co.

MY. P.I.I., LLC, as owner of the M/Y PURE INSANITY, Plaintiff, v. MARKEL AMERICAN INSURANCE COMPANY, Defendant.

No. 20-CV-60038-WILLIAMS/VALLE

United States District Court, S.D. Florida

June 10, 2021

REPORT AND RECOMMENDATION TO DISTRICT JUDGE

ALICIA O. VALLE UNITED STATES MAGISTRATE JUDGE.

THIS MATTER is before the Court upon: (i) Defendant Markel American Insurance Company's Motion for Summary Judgment (ECF No. 27) (“Defendant's Motion for Summary Judgment”); and (ii) Plaintiff's Objection to Expert Evidence Relied Upon in Defendant's Motion for Summary Judgment and for Extension of Time (ECF No. 31) (“Plaintiff's Motion to Strike”) (together the “Motions”). United States District Judge Kathleen Williams has referred the Motions to the undersigned for a Report and Recommendation. (ECF No. 29); see also 28 U.S.C. § 636. The Court has reviewed the Motions, the record, all supporting and opposing filings, the exhibits attached thereto, and is otherwise fully advised. For the reasons set forth below, the undersigned recommends that: (i) Defendant's Motion for Summary Judgment be DENIED; and (ii) Plaintiff's Motion to Strike be GRANTED IN PART AND DENIED IN PART.

I. BACKGROUND

On January 8, 2020, Plaintiff MY. P.I.I., LLC (“Plaintiff”), the owner of M/Y Pure Insanity (“M/Y Pure Insanity” or the “Vessel”), filed the instant action against Defendant Markel American Insurance Company (“Defendant”), alleging a breach of contract under insurance policy number CG3814A18MZA for the period December 1, 2018 to December 1, 2019 (the “Policy”). See generally (ECF Nos. 1 1-1 at 3).

By way of background, Plaintiff's one-count Complaint alleges that on or about February 15, 2019, M/Y Pure Insanity was hauled out of the water at Lauderdale Marine Center (the “Marine Center”) for a required five-year annual ABS inspection. Id. ¶ 5. Plaintiff engaged H&R Marine Engineering (“H&R”) to complete this inspection. Id. ¶ 6. During the process of removing the port coupler for the inspection, the seal on the coupler breached and could not hold the pressure necessary to be removed from the sleeve on the propeller shaft. Id. ¶ 7. Thus, H&R subcontracted with K&G Marine, LLC (“K&G”) to alter, repair, and cut the port coupler to the sleeve. Id. ¶ 8. In March 2019, while making this alternation, K&G negligently penetrated the sleeve and cut into the propeller shaft. Id. ¶ 9. Defendant accepted coverage for the damage incurred in connection with damage to the Vessel's propeller shaft during the ABS inspection and paid Plaintiff for the covered losses.^[1] See (ECF No. 27 at 2).

Thereafter, Plaintiff submitted to Defendant a supplemental proof of loss (for approximately $249, 000) for an additional claim for UV damage to M/Y Pure Insanity. Id. at 3. According to Plaintiff, the M/Y Pure Insanity “remain[ed] on the hard in Lauderdale Marine Center, exposed to damaging UV light from the sun, ” while waiting to be repaired. (ECF Nos. 1 ¶ 10, 27 at 3). Defendant denied Plaintiff's supplemental claim for UV damage and disclaimed coverage. (ECF No. 27 at 3). Plaintiff then filed the instant case.

Defendant filed its Motion for Summary Judgment raising two arguments. See generally (ECF No. 27). First, Defendant argues that the Policy does not cover UV damage purportedly resulting from sun exposure because exposure to sunlight is not an “occurrence” or accident within the meaning of the Policy. See (ECF Nos. 27 at 8-11, 51 at 4-8). Defendant also argues that, even if the loss constitutes an “occurrence” that could be covered by the Policy, Plaintiff's claims are nonetheless excluded under the Policy's exclusion for “gradual and sudden loss.” (ECF Nos. 27 at 11-13, 51 at 8-10). According to Defendant, the UV damage to the Vessel was due to “normal wear and tear, ” in that the Vessel's original coating system had exceeded its service life. See (ECF Nos. 27 at 1, 3-4, 12-13, 51 at 8-10).

In opposing summary judgment on the merits, Plaintiff argues that “the M/Y Pure Insanity was placed on the hard due to a fortuitous accident causing damage to a shaft and coupler, [after which the Vessel] sustained continuous and repeated [sun] exposure to . . . the paint and fairing.”^[2](ECF No. 47 at 3). According to Plaintiff, repeated exposure to the same harmful condition (e.g., one to seven months exposed to heat and UV rays) is an “occurrence under the Policy, ” which defines “accident” as including “continuous and repeated exposure to substantially the same general harmful condition.” Id. at 3, 5-6. Plaintiff further asserts that the paint and fairing damage to the M/Y Pure Insanity was not the result of ordinary wear and tear, but rather resulted from the Vessel, which was normally stored under cover, being “stranded out of the water on asphalt, exposed to the elements.”^[3] Id. at 6.

II. LEGAL STANDARDS

A party is entitled to summary judgment when the party can show that there is no genuine issue as to any material fact. Fed.R.Civ.P. 56(a). An issue is genuine if “a reasonable trier of fact could return judgment for the nonmoving party.” Miccosukee Tribe of Indians of Fla. v. United States, 516 F.3d 1235, 1243 (11th Cir. 2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A fact is material if it “might affect the outcome of the suit under the governing law.” Id. (quoting Anderson, 477 U.S. at 247-48).

The movant shoulders the initial burden of demonstrating the absence of a genuine issue of material fact. See Shiver v. Chertoff, 549 F.3d 1342, 1343 (11th Cir. 2008). Once the movant satisfies this burden, “the burden shift[s] to the nonmoving party to demonstrate that there is indeed a material issue of fact that precludes summary judgment.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). “Rule 56 requires the nonmoving party to go beyond the pleadings and by [his] 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.” Mid-Continent Cas. Co. v Arpin & Sons, LLC, 261 F.Supp.3d 1245, 1249-50 (S.D. Fla. 2017) (quotation marks omitted) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)). “Thus, the nonmoving party ‘may not rest upon the mere allegations or denials of [its] pleadings, but must set forth specific facts showing that there is a genuine issue for trial.'” Id. at 1250 (citing Anderson, 477 U.S. at 248).

In considering a motion for summary judgment, it is not the Court's duty or function to try or decide factual issues. Gross v. S. Ry. Co., 414 F.2d 292, 297 (5th Cir. 1969).^[4] Rather, “[i]ts only duty is to determine whether or not there is an issue of fact to be tried.” Id. Further, the Court must consider all inferences drawn from the underlying facts in the light most favorable to the party opposing the motion, and resolve all reasonable doubts against the moving party. See Davis v. Williams, 451 F.3d 759, 763 (11th Cir. 2006); Stanley Indus., Inc. v. W.M. Barr & Co., Inc., 784 F.Supp. 1570, 1572 (S.D. Fla. 1992) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970)). The Court is not, however, required to accept all of the nonmovant's factual characterizations and legal arguments. Beal v. Paramount Pictures Corp., 20 F.3d 454, 458-59 (11th Cir. 1994). If a genuine issue of fact exists for trial, summary judgment should not be granted. See Fed. R. Civ. P. 56(a). An issue of fact is genuine if the record taken as a whole could lead a reasonable jury to find for the nonmoving party. Burgos v. Chertoff, 274 Fed.Appx. 839, 841 (11th Cir. 2008) (citation omitted).

III. DISCUSSION

A. The Motion Should be Determined on the Merits and the Testimony of Mr. Phillips Is Unnecessary to the Summary Judgment Determination

Before turning to the merits of Defendant's Motion for Summary Judgment, the undersigned addresses two procedural matters. First, Defendant argues that Plaintiff's substantive response to Defendant's Motion for Summary Judgment was untimely. See (ECF No. 51 at 1-4). However, in the interest of justice and efficient case management, the undersigned finds that the issues should be determined on the merits after considering the full briefing on the Motions.^[5] In this regard, the undersigned recognizes that Plaintiff's delay in responding to Defendant's motion may have been compounded by the Court's deferred ruling on Plaintiff's objection to Defendant's reliance on evidence related to Mr. Phillips. Accordingly, the Court declines Defendant's invitation to find Plaintiff's Response to Defendant's Motion for Summary Judgment untimely.

Next, the Court addresses Plaintiff's Motion to Strike. See generally (ECF No. 31). At the heart of Plaintiff's motion is an email exchange that Defendant references in support of its Motion for Summary Judgment. (ECF No. 31 at 3). In this email exchange, Mr. Phillips (Plaintiff's surveyor) expresses his “opinion that the . . . disposition of the yacht's finish is not sudden and accidental and is related to service life.” (ECF No. 28-6 at 4). Plaintiff objects to Defendant's reliance on this evidence, arguing that Defendant did not timely disclose Mr. Phillips as “an expert” and cannot therefore use Mr. Phillips in support of summary judgment. See generally (ECF No. 31). Thus, Plaintiff requests that the Court strike Mr. Phillips' testimony as “an expert.” Id.^[6]

Defendant opposes striking Mr. Phillips' testimony and argues that Mr. Phillips is identified in both Defendant's Initial Disclosures and Plaintiff's Answers to Defendant's Interrogatories as a fact witness (not an expert witness) with knowledge of the UV damage. See (ECF Nos. 32 at 2-3, 32-1 at 5, 34-2 at 6). In addition, Defendant emphasizes that Plaintiff was aware of Mr. Phillips'...