Evanston Insurance Company v. Etcetera, Etc Inc. et al
Filing
60
OPINION AND ORDER granting 52 Motion for summary judgment in favor of plaintiff/counterclaim defendant and against defendant/counterclaim plaintiff as to Count I of the Counterclaim. The Clerk shall withhold entry of judgment pending resolution of the other portions of the case, but terminate the Counterclaim. The parties shall file an Amended Case Management Report pursuant to 59 Endorsed Order. Signed by Judge John E. Steele on 1/8/2020. (RKR)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
EVANSTON INSURANCE COMPANY,
Plaintiff/Counterclai
mant Defendant,
v.
Case No:
ETCETERA, ETC INC.,
ETCETERA,
LLC,
and
ETCETERA, INC.,
2:18-cv-103-FtM-29MRM
KLAS
GOLF
Defendants/Count
erclaim
Plaintiff.
OPINION AND ORDER
This matter comes before the Court on plaintiff-counterclaim
defendant Evanston Insurance Company’s (“Evanston”) Motion for
Summary Judgment (Doc. #52), filed on August 29, 2019.
Evanston
seeks summary judgment on the breach of contract counterclaim (Doc.
#9,
pp.
9-11)
filed
by
Defendants-counterclaim
plaintiffs
Etcetera, Etc Inc., Klas Etcetera, LLC, and Golf Etcetera, Inc.
(collectively
“Etcetera”).
Etcetera
filed
a
Response
in
Opposition (Doc. #54) on September 12, 2019, to which Evanston
filed a Reply (Doc. #57) on October 22, 2019, with the permission
of the Court.
(Doc. #56.)
This is an insurance dispute arising from property damage to
commercial property caused by Hurricane Irma.
Evanston filed a
declaratory
declarations,
judgment
including
action
that
(Doc.
under
#1)
the
seeking
insurance
certain
policy
“its
liability for the loss is limited to any covered damages caused by
Hurricane Irma.”
(Doc. #1, p. 7.)
Etcetera filed a counterclaim
for breach of contract alleging that Evanston was obligated to pay
the full loss amount, even if the full loss was not directly caused
by Hurricane Irma, but failed to do so.
Evanston
moves
for
summary
judgment
on
(Doc. #9 at 8-11.)
Etcetera’s
breach
of
contract counterclaim, asserting that the covered loss amount was
less than the policy’s deductible amount, and therefore it owes
Etcetera nothing under the insurance policy.
For the reasons set forth below, Evanston’s motion for summary
judgment is granted.
I.
The material background facts are not in dispute.
Effective
July 25, 2017, Evanston issued a “named perils” 1 surplus lines 2
insurance policy (the “Policy”) on a certain vacant building and
1
“An ‘all risks’ policy protects against all direct losses except
those explicitly excluded from the policy; conversely, a ‘named
perils’ policy only protects against perils explicitly named as
included in the policy.” Citizens Prop. Ins. Corp. v. Munoz, 158
So. 3d 671, 673 (Fla. 2d DCA 2014)(citation omitted).
2
“Surplus lines insurance is an alternative product that can be
purchased from insurers not authorized to do business in Florida
when the coverage sought is not available from authorized
insurers.” Essex Ins. Co. v. Integrated Drainage Sols., Inc., 124
So. 3d 947, 950 (Fla. 2d DCA 2013)(citation omitted.)
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land in Charlotte County, Florida 3 (the “Property”).
(Doc. #1-1).
The Policy (#2AA121873) provided commercial property coverage and
commercial general liability coverage.
(Id.)
On September 10-11, 2017, Hurricane Irma struck the area
causing damage to the Property.
Etcetera submitted a timely claim
to Evanston for damage to the Property caused by Hurricane Irma.
Charlotte County inspected the Property on October 25, 2017,
and found the building was in danger of collapse.
4-10.)
(Doc. #1-2, pp.
On November 9, 2017, Charlotte County issued a “Notice of
Unsafe Building” stating the building posed an immediate hazard to
life or public safety.
(Doc. #1-2).
Charlotte County informed
Etcetera they could either repair or demolish the building. (Id.).
The
Notice
further
informed
Etcetera
that
if
no
action
was
commenced or completed within 30 days, the County would demolish
the building.
(Id.).
One of Etcetera’s retained professional
engineers opined that the Property needed to be demolished.
#54-1, ¶ 7).
(Doc.
Etcetera decided to demolish the building.
By letter dated November 28, 2017, Evanston advised Etcetera
that Evanston’s own engineer determined that (a) the building could
be repaired, (b) there was no reason to demolish the building, and
3
Etcetera says the property is
¶ 46), while Evanston says it
#1, ¶10; #52, ¶ 1.) Since it
the same property, its precise
material.
located in Port Charlotte (Doc. #9,
is located in Punta Gorda. (Docs.
is clear both sides are discussing
location in Charlotte County is not
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(c) any decision to demolish the building would be a voluntary,
uncovered loss under the Policy.
(Doc. #1-3.)
By letter dated December 29, 2017, Evanston again informed
Etcetera that its investigation showed the building could be
repaired, and that an estimate for repair of the damage caused by
Hurricane Irma was less than the deductible amount under the
Policy.
(Doc. #1-4.)
Evanston noted that while there was some
covered loss due to the hurricane, the amount of that covered loss
($9,334.67) was below the windstorm deductible amount ($24,000).
(Doc. #1, ¶17; Doc. #104.)
submit
evidence
reflecting
Evanston informed Etcetera they could
a
different
disagreed with Evanston’s calculation.
On
January
2,
2018,
Etcetera,
damage
total
if
they
(Id.)
through
counsel,
notified
Evanston that, although there was some pre-existing damage to the
building, Hurricane Irma caused additional damage, which rendered
the property a “total loss” under Florida’s concurrent causation
doctrine.
(Doc. #1-5.)
Evanston was not convinced.
The building was demolished on February 14, 2018.
(Doc. #54,
¶ 6.)
II.
Evanston’s declaratory judgment action (Doc. #1), filed the
same day the building was demolished, in part seeks a declaration
that under the Policy “its liability for the loss is limited to
any covered damage caused by Hurricane Irma.”
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(Doc. #1, p. 7.)
Etcetera’s Counterclaim similarly asserts that the Policy is a
“named perils” policy “that covers direct physical losses to the
Property caused by Windstorm or Hail.”
(Doc. #9, ¶49.)
Etcetera
also claims, however, that Evanston is liable for the “direct
physical loss caused by Hurricane Irma and/or ensuing losses” to
the Property which are covered by and not excluded from the Policy.
(Doc. #9, ¶¶ 50-53) (emphasis added).
Etcetera demanded an appraisal pursuant to the Policy (Doc.
#24-1), and filed a motion to compel appraisal.
(Doc. #24.)
The
Court granted Etcetera’s motion and ordered an appraisal panel to
determine the amount of loss caused by Hurricane Irma and the
amount of loss from other causes.
(Doc. #31.)
The appraisal found
that the amount of loss due to Hurricane Irma was $19,868.00, while
the amount of loss due to all causes other than Hurricane Irma was
$1,580,610.32.
(Doc. #52-1.)
Thus, Hurricane Irma was the cause
of approximately 1.24% of the total loss ($19,868/$1,600,478).
The appraisal found the value of the building to be $1,563,151.32.
(Id.)
III.
Evanston argues summary judgment is warranted because the
appraisal determining the amount of the Hurricane Irma windstorm
damage
is
binding,
that
amount
is
less
than
the
applicable
deductible under the Policy, and Evanston therefore did not owe
any money to Etcetera and did not breach the Policy by its failure
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to pay.
(Id., pp. 6-7.)
Etcetera agrees that the loss amount as
determined by the appraisal is binding, and that the appraisal’s
loss amount is less than the Policy’s deductible amount.
argues,
however,
that
under
Florida’s
concurrent
Etcetera
causation
doctrine Evanston is nonetheless liable for the entirety of the
otherwise non-covered loss.
(Doc. #54).
Because this amount
exceeds the deductible amount under the Policy, Etcetera asserts
summary judgment must be denied.
A.
The Court begins with the language of the Policy.
The Policy
is a “named perils” policy under which Evanston agreed to “pay for
direct physical loss of or damage to Covered Property at the
premises described in the Declarations caused by or resulting from
any Covered Cause of Loss.”
(Doc. #1-1, p. 59 4.)
There are eleven
(11) “Covered Cause[s] of Loss”, which include “Windstorm or Hail.”
(Doc. #1-1, p. 89.)
It is undisputed that the Property is a
“Covered Property” and that Hurricane Irma was a “Windstorm” within
the meanings of the Policy.
Thus, under the Policy, Evanston
agreed to pay Etcetera for direct physical loss of or damage to
the Property caused by or resulting from Hurricane Irma.
4
The page reference is to the Court-generated number on the upper
right corner of the document, not the page number on the Policy
itself.
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The appraisal has conclusively determined the amount of the
covered
loss
$19,868.00.
to
the
Property
(Doc. #52-1.)
due
to
Hurricane
Irma
to
be
Both sides concede, as they must, that
the appraisal determination is binding:
The division of responsibility between the
appraisers and court is therefore clear. The
appraisers determine the amount of the loss,
which includes calculating the cost of repair
or replacement of property damaged, and
ascertaining how much of the damage was caused
by a covered peril .... [and] [t]he court
decides whether the policy provides coverage
for the peril which inflicted the damage, and
for the particular property at issue; in other
words, all coverage matters.
People's Tr. Ins. Co. v. Garcia, 263 So. 3d 231, 234 (Fla. 3d DCA
2019) (citation omitted).
Because Evanston admitted that there
was covered loss (although the amount was disputed), causation is
an amount-of-loss question for the appraisal panel.
Id. at 235.
See also People’s Trust Ins. Co. v. Tracey, 251 So. 3d 931, 933
(Fla. 4th DCA 2018).
It is also undisputed that none of the other
causes of loss to the Property were Covered Cause(s) of Loss under
the Policy.
Finally, there is no dispute that the Policy has a deductible
provision (Doc. #1-1, pp. 80-82), and that the deductible amount
in this case is greater than the appraisal award.
Accordingly, it
appears that Evanston owed no money to Etcetera under the Policy
for the loss to the Property caused by or resulting from Hurricane
Irma.
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B.
Defendants argue, however, that the Court’s analysis cannot
end here, but must apply the Florida concurrent causation doctrine.
(Doc. #54, pp. 4-7.)
Under this doctrine, Etcetera argues that a
jury could decide Evanston is liable for the 98.76% of the loss to
the Property not caused by Hurricane Irma or any other Cause[s] of
Covered Loss.
In Sebo v. Am. Home Assurance Co., Inc., 208 So. 3d 694 (Fla.
2016), the Florida Supreme Court adopted the concurrent causation
doctrine in the all-risk insurance policy context.
Mr. Sebo had
purchased a four-year old home in Naples, Florida and obtained an
$8 million all-risks policy on it.
Id. at 695.
Rainstorms soon
made it clear that there were major design and construction defects
to the house, and shortly thereafter Hurricane Wilma further
damaged the house.
Id. at 696.
The insurer paid $50,000 for mold
damage, but denied the remainder of the claim.
Id.
Because the
house could not be repaired, it was eventually demolished.
Id.
The Florida Supreme Court stated the issue and its task as
follows:
The issue presented is whether coverage exists
under Sebo's all-risk policy when multiple
perils combined to create a loss and at least
one of the perils is excluded by the terms of
the policy. To answer this question, this
Court must determine the proper theory of
recovery to apply, which is a pure question of
law.
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Sebo, 208 So. 3d at 696.
The Florida Supreme Court noted that
“the policy at issue in this case is an all-risk policy” and that
“in all-risk policies such as the one held by Sebo, construction
is governed by the language of the exclusionary provisions.”
at 696–97.
Id.
Therefore, the Court stated “[w]e are confronted with
determining the appropriate theory of recovery to apply when two
or more perils converge to cause a loss and at least one of the
perils is excluded from an insurance policy.”
Id. at 697.
The Florida Supreme Court concluded “that when independent
perils converge and no single cause can be considered the sole or
proximate cause, it is appropriate to apply the concurring cause
doctrine.”
Id.
Under the concurring cause doctrine, “coverage
may exist where an insured risk constitutes a concurrent cause of
the loss even when it is not the prime or efficient cause.”
Id.
at 698.
Evidence
at
the
Sebo
trial
established
that
rainstorms,
hurricanes, and leakage caused by major design and construction
defects combined to damage the residence. Id. at 696.
Leakage
from design and construction defects was excluded under the allrisk
policy.
Id.
at
700.
Having
determined
“there
is
no
reasonable way to distinguish the proximate cause of [the] property
loss,” id., the Florida Supreme Court applied the concurrent cause
doctrine,
stating
“[w]here
weather
perils
combine
with
human
negligence to cause a loss, it seems logical and reasonable to
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find the loss covered by an all-risk policy even if one of the
causes is excluded from coverage.” Id. (alteration in original;
citation omitted).
Etcetera
relies
primarily
on
the
Affidavit
of
Gregorio
Batista (Doc. #54-2), a professional engineer licensed in Florida,
for its factual support of the application of the concurrent cause
doctrine in this case.
For this portion of the Opinion and Order,
the Court accepts the facts set forth in the Affidavit in the light
most favorable to Etcetera, the non-moving party.
When the Property was first insured by Evanston in 2018, it
was an old and deteriorated building, but not in danger of falling
down.
At the time of Hurricane Wilma, the building had suffered
from “pre-existing wear and tear, deterioration and decay” and
“appeared to have been near the end of its useful life and
Hurricane Irma was the proverbial coup de grace.”
3.)
(Doc. #54-2, p.
“Simply stated, the old and heavily deteriorated building
exhibited considerable signs of decay and deterioration.”
4.)
“These
other
causes
of
loss
include
wear
and
(Id. at
tear,
deterioration, decay, termite related damage, corrosion, sagging,
cracking, and other age-related reasons.”
(Id. at 7.)
Accepting the findings of the appraisal, Mr. Batista noted
that the Hurricane Irma damage to the roof was relatively small in
comparison to damage from other causes.
(Doc. #54-2, p. 4.)
Nonetheless, Mr. Batista opined that “the extent of the windstorm
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damage to the already deteriorated building was enough so that the
building should be torn down because any attempt to repair the
structure was not economically feasible.” (Id. at 3.) Mr. Batista
asserted that the old age, sagging, decay, and deterioration of
the roof decking, trusses, and masonry walls, combined with the
windstorm damage, necessitated the building be demolished because
the roof shingles could not be replaced without addressing all the
other non-windstorm damages.
(Id. at 4-9.)
Etcetera asserts that these facts bring the case within the
Florida concurrent cause doctrine.
While accepting Mr. Batista’s
facts, this case is clearly not within Sebo.
The concurrent cause
doctrine has only been applied in all-risks policy cases, such as
Sebo.
See Jones v. Federated Nat'l Ins. Co., 235 So. 3d 936 (Fla.
4th DCA 2018); Citizens Property Ins., Corp. v. Salkey, 260 So. 3d
371 (Fla. 2d DCA 2018).
The case the Florida Supreme Court adopted
in Sebo, Wallach v. Rosenberg, 527 So. 2d 1386 (Fla. 3d DCA 1988),
was also an all-risks policy.
The Policy issued by Evanston is
not an all-risks policy, but a named perils policy.
Plaintiff has
not cited any binding authority applying the Florida concurrent
cause doctrine to a named-perils policy, and the Court declines to
do so. 5
5
The Court agrees with Evanston that the Policy contains an anticoncurrent cause provision which bars the application of the
concurrent cause doctrine to any ordinance or law requiring the
building to be torn down. (Doc. #57, p. 2.) However, as Etcetera
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Accordingly, it is now
ORDERED:
1. Plaintiff Evanston Insurance Company’s Motion for Summary
Judgment
(Doc.
#52)
plaintiff/counterclaim
is
GRANTED
defendant
in
and
favor
against
of
the
defendant/counterclaim plaintiff as to Count I of the
Counterclaim.
The Clerk shall withhold entry of judgment
pending resolution of the other portions of the case, but
terminate the Counterclaim.
2. The parties shall file an Amended Case Management Report
within SEVEN (7) DAYS of this Opinion and Order pursuant
to the Endorsed Order (Doc. #59).
DONE and ORDERED at Fort Myers, Florida, this
8th
day of
January, 2019.
Copies:
Counsel of Record
points out (Doc. #54, p. 7), the Policy does not include anticoncurrent cause language for any of the concurrent causes at issue
in this case.
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