Universal Ins. Co. of N. Am. v. Sunset 102 Off. Park Condo. Ass'n, Inc.

388 So.3d 181

UNIVERSAL INSURANCE COMPANY OF NORTH AMERICA, Appellant,

v.SUNSET 102 OFFICE PARK CONDOMINIUM ASSOCIATION, INC., Appellee.

No. 3D22-0248

District Court of Appeal of Florida, Third District.

Opinion Filed December 13, 2023

An Appeal from the Circuit Court for Miami-Dade County, Gina Beovides, Judge. Lower Tribunal No. 18-42359 Galloway, Johnson, Tompkins, Burr & Smith, PLC, and David T. Burr and Jaime K. Quezon (Tampa), for appellant.

Yelena Shneyderman, P.A., and Yelena Shneyderman (Hollywood), for appellee.

Before EMAS, MILLER and LOBREE, JJ.

EMAS, J.

INTRODUCTION

Universal Insurance Company of North America ("Universal"), the defendant below, appeals a final judgment entered by the trial court following a jury trial that culminated in a verdict in favor of its insured, Sunset 102 Office Park Condominium Association ("Sunset"). Universal also appeals the trial court’s order denying its motion for new trial.

The action below was filed by Sunset after filing an insurance claim with Universal for losses suffered as a result of Hurricane Irma. Universal determined the amount of the claim did not exceed Sunset’s deductible under the policy, and Sunset thereafter filed suit for breach of contract. The case proceeded to trial, with the jury returning a verdict in favor of Sunset, and the trial court (following a denial of Universal’s motion for a new trial) entered final judgment in favor of Sunset for $884,371.90.

For the reasons that follow, we affinn.

ANALYSIS AND DISCUSSION

Universal urges five grounds for reversal: (1) denial of a motion for leave to amend affirmative defenses; (2) erroneous jury instructions and verdict form; (3) denial of a motion for relief based on spoliation of evidence by Sunset; (4) exclusion of certain evidence at trial; and (5) denial of a motion for mistrial following inflammatory remarks by counsel for Sunset.

1. Denial of Motion for Leave to Amend Affirmative Defenses

[1, 2] Universal asserts the trial court abused its discretion by denying leave to amend its affirmative defenses to add a defense based on the policy’s "wet rot" exclusion. See Florida East Coast Ry. v. Shulman, 481 So. 2d 965 (Fla. 3d DCA 1986) (reviewing such a claim for abuse of discretion). It is an abuse of discretion to deny leave to amend " ‘unless it clearly appears that allowing the amendment would prejudice the opposing party, the privilege to amend has been abused, or amendment would be futile.’ " Kay’s Custom Drapes, Inc. v. Garrote, 920 So. 2d 1168, 1171 (Fla. 3d DCA 2006) (quoting State Farm Fire & Cas. Co. v. Fleet Fin. Corp., 724 So. 2d 1218, 1219 (Fla. 5th DCA 1998) (additional citation omitted).

Trial was scheduled to begin on Monday, June 14, 2021. Two business days before trial, Universal moved ore tenus to amend its answer and affirmative defenses to add an affirmative defense based on the "Fungi, Wet Rot, Dry Rot or Bacteria" exclusion in its policy.

The trial court held a lengthy hearing on the request. Sunset argued it was clearly prejudiced because it could not adequately prepare to meet this newly asserted defense on the eve of trial. Sunset argued this proposed "wet rot" defense represented a new policy exclusion that had not previously been raised by Universal. It was also established that Universal had been aware, for over a month, of the underlying basis for such a requested amendment, but raised the issue with the court only two days before trial. Although Universal contended there would be no prejudice or surprise to Sunset if the amendment were permitted, the trial court determined otherwise. The trial court found that this affirmative defense would "inject a new theory of defense" without allowing Sunset adequate time to consult with an expert and prepare for trial. The court concluded "this is the definition of undue prejudice based on the procedural posture of this case."

[3, 4] As this court observed in Building B1, LLC v. Component Repair Servs., Inc., 224 So. 3d 785, 789 (Fla. 3d DCA 2017):

While public policy generally favors application of rule 1.190 to permit amendment of pleadings, the rule’s "liberal amendment policy diminishes as a case progresses to trial." Morgan v. Bank of N.Y. Mellon, 200 So. 3d 792, 795 (Fla. 1st DCA 2016). Ultimately, the decision is vested in the broad discretion of the trial court, and the touchstone consideration of this analysis is prejudice to the opposing party.

[5] We find no abuse of discretion in the trial court’s denial of Universal’s request for leave to amend its affirmative defenses, given the eleventh-hour nature of the request, Sunset’s objection and the resulting prejudice to Sunset in its ability to prepare for or defend against this new theory of defense. See also Designers Tile Int’l Corp. v. Capitol C Corp., 499 So. 2d 4 (Fla. 3d DCA 1986); Santi v. Zack Co., 287 So. 2d 127 (Fla. 3d DCA 1973).¹

2. Spoliation

[6] Prior to trial, Universal filed a motion for relief based on alleged spoliation of evidence, asserting Sunset had intentionally destroyed evidence when it undertook repairs on two of the four insured buildings, preventing Universal from properly assessing the loss. Universal requested, as a sanction for this spoliation, an "adverse inference" jury instruction. The court held a hearing on the spoliation motion and thereafter denied it, finding Universal inspected the property four times, and denied coverage without ever requesting to reinspect, and thus, had not shown that Sunset violated any duties under the contract.

[7] "We review the decision to grant or deny an adverse inference jury instruction under an abuse of discretion." Pena v. Bi-Lo Holdings, LLC, 304 So. 3d 1254, 1257 (Fla. 3d DCA 2020). In Pena, this court reiterated the "three-part threshold inquiry" for a trial court to engage in when considering a motion for sanctions for spoliation of evidence: " ‘(1) whether the evidence existed at one time, (2) whether the spoliator had a duty to preserve the evidence, and (3) whether the evidence was critical to an opposing party being able to prove its prima facie case or a defense.’ " Id. (internal citation omitted).

In the instant case, the trial court found Universal failed to establish that Sunset violated its duty, under the terms of the insurance policy, to preserve the evidence. The policy provides that the insured must allow inspection of the property "as often as may be reasonably required." However, the evidence supports the court’s determination, because Universal was allowed to inspect the property four times and. did not request to conduct further examination of the two reroofed buildings—despite notice of Sunset’s intention to replace the roofs—until after installation of the new roofs was complete.

On appeal, Universal seeks to rely on Sunset’s expert, who testified he would not have allowed destructive testing (which Universal claims was necessary), but despite its knowledge in advance, Universal never requested testing prior to replacement of the roofs and did not file a motion to preserve the evidence. As for the later replacement of the remaining two buildings, Universal’s expert was present for that work, did not attempt to inspect the underlayment, and later testified that, regardless, his opinions remained the same.

Under these circumstances, we find no abuse of discretion in denying an adverse inference jury instruction. See id. at 1258 (rejecting "the contention that the judicial action in denying an adverse inference was ‘arbitrary, fanciful, or unreasonable [or that] … no reasonable man [or woman] would take the view adopted by the trial court.’ " (quoting Canakaris v. Canakaris, 382 So. 2d 1197, 1203 (Fla. 1980))).

3. Improper Comments and Questioning

[8] Finally, Universal contends that the trial court should have granted its motion for mistrial because counsel for Sunset made fraud allegations against Universal in front of the jury, prejudicing Universal and resulting in an unfair trial. We do not agree.

The alleged error occurred during Sunset’s questioning of Universal’s corporate representative. Curiously, Universal’s brief does not set forth the actual portions of the trial transcript at issue; nor does Universal’s brief even provide selected quotes of the statements that it claims resulted in a denial of a fair trial. Instead, Universal’s brief merely references the three page numbers of the trial transcript, and then characterizes the questioning contained in those three pages as "repeated, baseless accusations of fraud," asserting that through these questions Sunset implied that Universal "had conspired with its vendors and contractors to falsify estimates so they fell below policy deductibles to avoid paying claims." Here are the pertinent excerpts of questions posed by Sunset’s counsel to Universal’s witness:

Q. Now, when you all, Universal, insured these roofs in 2017, you knew you were insuring 15-year-old roofs, correct?

A. I don’t know exactly what the underwriting department may have known at the time it was insuring the roofs. It relied - it seems likely it relied upon at least the information supplied in the policy application. Beyond that, I have no specific information about the underwriting of the policy for Sunset 102.

Q. But it would have been a combination of whatever that underwriting you’re referencing is?

Counsel for Universal: Objection.

The Court: Sustained. Can I see the parties at sidebar?

At sidebar, the court reminded counsel for Sunset that he could only ask if the claims adjuster knew when the roofs were built. Questioning continued:

Q. So this was, by definition, a covered loss? That’s not an issue here, right?

A. That’s correct.

Q. And once it became a covered loss, then what Universal does it, it goes about adjusting or valuing those losses, correct?

A. Yes.

Q. And Universal should not adjust those losses so as to artificially remain under the deductibles for any of these buildings, correct?

Counsel for Universal: Objection, predicate.

The...