SFR Servs., LLC v. Hartford Ins. Co. of the Midwest

609 F.Supp.3d 1287

SFR SERVICES, LLC, a/a/o Michael Edell and Louise Edell, Plaintiff,

v.The HARTFORD INSURANCE COMPANY OF THE MIDWEST, Defendant.

CASE NO. 21-CV-81330-RAR

United States District Court, S.D. Florida.

Signed June 29, 2022

Gregory Saldamando, The Strems Law Firm, P.A., Coral Gables, FL, Joshua Aaron Whisler, Hollywood, FL, Rameez Dossani, The Whishler Law Firm, P.A., Hollywood, FL, Andres Robles Cruz, Robles Cruz Attorney at Law, PLLC, Orlando, FL, Veronica Mae Rabinowitz, Trembly Law Firm, Miami, FL, for Plaintiff.

Abigail Lamb Manopla, Hollywood, FL, Danielle Robinson, Irene Thaler, Dawn Marshall, Michael Adam Packer, Marshall Dennehey Warner Coleman & Goggin, P.C., Fort Lauderdale, FL, for Defendant.

ORDER DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

RODOLFO A. RUIZ II, UNITED STATES DISTRICT JUDGE

THIS CAUSE comes before the Court upon Defendant's Motion for Summary Judgment [ECF No. 36] ("Motion"), filed on April 19, 2022.¹ Defendant asserts it is entitled to summary judgment on Plaintiff's claims arising from Defendant's denial of a first-party property insurance claim. The Court having considered the Motion, the related briefs, the record, and applicable case law, it is hereby

ORDERED AND ADJUDGED that Defendant's Motion [ECF No. 36] is DENIED as set forth herein.

BACKGROUND

This case arises from a homeowner insurance policy between Defendant and Michael and Louise Edell ("Insureds").² Def. Statement ¶ 1. The policy contains a provision stating that Defendant has "no duty to provide coverage under this policy if the failure to comply with the following duties is prejudicial to [Defendant]." Id. ¶ 11. These duties include a requirement that the Insureds provide Defendant with "prompt notice" in the event of loss or damage to the property. Id. Plaintiff alleges that on September 10, 2017, during the term of the policy, the Insureds’ roof suffered damage due to Hurricane Irma. Id. ¶ 2. Following the hurricane, the Insureds had their roof tiles inspected but detected no damage or leaking. Id. ¶ 3. Between September 2017 and March 2020, the Insureds had roof repairs performed on multiple occasions. Id. ¶ 4. Plaintiff first notified Defendant as to the damage by filing a claim on August 3, 2020. Id. ¶ 7 (misnumbered as ¶ 6). Defendant engaged a field contractor to inspect the Insureds’ roof on September 28, 2020. Id. ¶ 8. The inspector concluded that there was no damage related to the hurricane, and Defendant denied the Insureds’ claim on October 10, 2020. Id. ¶¶ 8–9.

LEGAL STANDARD

Summary judgment is rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. See FED. R. CIV. P. 56(a), (c). An issue of fact is "material" if it might affect the outcome of the case under governing law. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). It is "genuine" if the evidence could lead a reasonable factfinder to find for the non-moving party. See id. ; Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). At summary judgment, the moving party bears the burden of proving the absence of a genuine issue of material fact, and all factual inferences are drawn in favor of the non-moving party. See Allen v. Tyson Foods Inc. , 121 F.3d 642, 646 (11th Cir. 1997).

If there are any factual issues, summary judgment must be denied, and the case proceeds to trial. See Whelan v. Royal Caribbean Cruises Ltd. , No. 12-22481, 2013 WL 5583970, at *2 (S.D. Fla. Aug. 14, 2013). Furthermore, when the parties "agree on the basic facts, but disagree about the inferences that should be drawn from these facts," summary judgment "may be inappropriate." Id. (citation omitted).

Insurance policy interpretation is a question of law for the Court, and absent ambiguity, the Court gives full effect to the terms of the policy through their plain meaning. Canal Indem. Co. v. Margaretville of NSB, Inc. , 562 F. App'x 959, 961–62 (11th Cir. 2014).

ANALYSIS

Defendant argues it is entitled to summary judgment because the Insureds failed to provide prompt notice of their claim as a matter of law. Defendant asserts that given the Insureds’ failure to provide prompt notice, prejudice to Defendant is presumed, and Plaintiff cannot rebut the presumption of prejudice. Although this argument has broad support in precedent, the Court must disagree with Defendant owing to recent evolution in Florida case law.

Under Florida law, "notice is a condition precedent to coverage, and an insured's failure to provide ‘timely notice of loss in contravention of a policy provision is a legal basis for the denial of recovery under the policy.’ " Aseff v. Catlin Specialty Ins. Co. , 115 F. Supp. 3d 1364, 1369 (S.D. Fla. 2015) (quoting Ideal Mut. Ins. Co. v. Waldrep , 400 So. 2d 782, 785 (Fla. 3d DCA 1981) ); see also Lehrfield v. Liberty Mut. Fire Ins. Co. , 396 F. Supp. 3d 1178, 1182 (S.D. Fla. 2019). The Eleventh Circuit has explained that "the purpose of policy provisions requiring prompt notice ‘is to enable the insurer to evaluate its rights and liabilities, to afford it an opportunity to make a timely investigation, and to prevent fraud and imposition upon it.’ " PDQ Coolidge Formad, LLC v. Landmark Am. Ins. Co. , 566 F. App'x 845, 847 (11th Cir. 2014) (quoting Laster v. U.S. Fid. & Guar. Co. , 293 So. 2d 83, 86 (Fla. 3d DCA 1974) ).

"The question of whether an insured's untimely reporting of loss is sufficient to result in the denial of recovery under the policy implicates a two-step analysis." Yacht Club on the Intracoastal Condo. Ass'n, Inc. v. Lexington Ins. Co. , 599 F. App'x 875, 879 (11th Cir. 2015) (quoting LoBello v. State Farm Fla. Ins. Co. , 152 So. 3d 595, 599 (Fla. 2d DCA 2014) ). First, the Court must determine "whether the insured provided timely notice." Id. Second, "if notice was untimely, prejudice to the insurer is presumed, but that presumption may be rebutted." Id. The Court will address each step in turn.

I. Notice

Although there is "no bright-line rule under Florida law setting forth a particular period of time beyond which notice cannot be considered prompt," Florida courts interpret the term prompt to mean "that notice should be given with reasonable dispatch and within a reasonable time in view of all of the facts and circumstances of the particular case." Yacht Club , 599 F. App'x at 879 (cleaned up). In other words, "notice is necessary when there has been an occurrence that should lead a reasonable and prudent man to believe that a claim for damages would arise." Id. Whether "an insured's delayed notice to an insurer did not constitute prompt notice under the policy" is appropriate to resolve on summary judgment "when the factual record d[oes] not support an argument that the delay was reasonable." PDQ Coolidge Formad, LLC , 566 F. App'x at 848 ; see also Yacht Club , 599 F. App'x at 879 ("While the question as to what is a reasonable time, depending as it does upon the surrounding circumstances, is ordinarily for decision by the trier of facts, yet when facts are undisputed and different inferences cannot reasonably be drawn therefrom, the question is for the court.").

The parties do not dispute that (1) Hurricane Irma occurred on September 10, 2017; (2) the Insureds were aware of the hurricane and checked for damage immediately thereafter; (3) the Insureds had roof repairs performed on multiple occasions after the hurricane; and (4) the Insureds first notified Defendant nearly three years later. See Def. Statement ¶¶ 2–5; Pl. Statement ¶¶ 2–5. Plaintiff makes much of the fact that the proper standard for measuring prompt notice is not from the date of the alleged damage but rather from when the Insureds reasonably should have known a loss had occurred. Resp. at 3. On this point, Plaintiff is correct. See Yacht Club , 599 F. App'x at 879. But Plaintiff then proceeds to base its argument on an equally faulty interpretation of the standard—namely, that the Insureds had no actual knowledge of the alleged hurricane damage until August 2020, just before Plaintiff filed the claim. Resp. at 4. An argument as to actual knowledge does not comport with the "reasonably should have known" standard. The record reveals that the Insureds were aware of a leak in their roof on at least two occasions after Hurricane Irma, including in March 2020 when they contracted for repairs. See Dep. Tr. of Louise Edell [ECF No. 36-2] at 23, 36. The record also reveals that the Insureds did not report the damage to Defendant because they believed the cost necessary for the repairs did not meet their deductible.³ Id. at 66. Having experienced the hurricane and becoming aware of subsequent damage to their roof, the Insureds reasonably should have known well before Plaintiff filed the claim that the hurricane may have caused that damage.

The Court agrees with Defendant that Plaintiff's notice, given at least five months after the Insureds reasonably should have known of the damage and almost three years after the event allegedly causing the loss, was not prompt and therefore was late as a matter of law. Audalus v. Scottsdale Ins. Co. , No. 20-62559, slip op. at 7 (S.D. Fla. Sept. 8, 2021) ("[R]eporting [a] loss two years after [a] hurricane does not—as a matter of law—constitute prompt notice [where] Plaintiffs were aware of the hurricane and repaired the property before reporting the loss."); PDQ Coolidge Formad, LLC , 566 F. App'x at 849 (six-month delay is not prompt as a matter of law); Waldrep , 400 So. 2d at 786 (six weeks); Deese v. Hartford Acc. & Indem. Co. , 205 So. 2d 328, 329 (Fla. 1st DCA 1967) (four weeks); Morton v. Indemnity Ins. Co. , 137 So. 2d 618, 620 (Fla. 2d DCA 1962) (6.5 months); see also Yacht Club , 599 F. App'x at 882 ("Moreover, [insured] undertook certain repairs before filing a claim with ...