Bednarz v. Castle Key Indemnity Company et al
Filing
81
ORDER granting in part and denying in part 35 Plaintiff's Motion for Final Summary Judgment, or Alternatively Partial Summary Judgment, on Claims against Defendant, Castle Key; and granting in part and denying in part 31 Defendants' Motion for Summary Judgment or Partial Summary Judgment. Signed by Judge Mary S. Scriven on 9/15/2014. (KM)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
THERESA BEDNARZ,
Plaintiff,
v.
Case No: 8:12-cv-2827-T-35EAJ
CASTLE KEY INDEMNITY COMPANY
and ALLSTATE FIRE & CASUALTY
INSURANCE COMPANY,
Defendants.
ORDER
THIS CAUSE comes before the Court for consideration of: (1) Defendants’ Motion
for Summary Judgment or Partial Summary Judgment (Dkt. 31) and Plaintiff’s Response
in Opposition thereto (Dkt. 47); and (2) Plaintiff’s Motion for Final Summary Judgment, or
Alternatively Partial Summary Judgment, on Claims against Defendant, Castle Key
(Dkt. 35) and Defendant’s Response in Opposition thereto (Dkt. 41). In connection with
the motions, the parties filed a Stipulation of Agreed Material Facts (Dkt. 60), and Plaintiff
filed a notice of supplemental of authority (Dkt. 61) and an additional statement regarding
the Stipulation of Agreed Material Facts (Dkt. 62). Upon consideration of all relevant
filings, case law, and being otherwise fully advised, the Court orders that the motions are
DENIED IN PART AND GRANTED IN PART.
I.
BACKGROUND
Defendant Castle Key Indemnity Company (“Castle Key”) issued a policy of
insurance to Plaintiff Theresa Bednarz (“Plaintiff”) and Almerick Dolan (“Dolan”) for their
home and contents, effective June 10, 2011 to June 12, 2012.
The Castle Key
homeowners policy named the Plaintiff and Dolan as the insureds and listed Wells Fargo
Bank and its successors/assigns as the mortgagee.
Defendant Allstate Fire and
Casualty Insurance Company (“Allstate”) issued a policy of insurance to Plaintiff and
Dolan for their vehicles, effective December 10, 2011 to June 10, 2012. On March 9,
2012, a fire damaged Plaintiff’s and Dolan’s home, its contents, and a vehicle. (Dkt. 60)
After Castle Key and Allstate denied Plaintiff’s claims, Plaintiff filed the instant action
alleging that Defendants breached their obligations under the respective policies.
(Dkt. 1)
On the morning of the fire, Dolan was at home. (Dkt. 35-2, p. 44) Plaintiff had
left for work and their children were at daycare and school. (Dkt. 35-1, pp. 47-49, 5354) At approximately 7:55 a.m., a neighbor, Shawn Bernier, was sitting on her back
porch and heard a fire alarm at Plaintiff’s house. She also saw white smoke coming out
of the house. Bernier walked to the house and banged on the front door. Dolan came
to the door, pulled the blind back, mouthed “I’m okay,” and waved at her. Bernier
returned home, went to her back porch, and saw that the smoke had turned black. She
called 911. The Hillsborough County Fire Department arrived and extinguished the fire.
(Dkt. 34-1, p. 3-9; Dkt. 34-4)
When Plaintiff returned to the house, Dolan was in an ambulance and looked
dazed, as if he did not know who she was. (Dkt. 35-1, p. 53) Dolan was transported
by ambulance to Tampa General Hospital and was admitted to the psychiatric unit until
mid-April 2012. (Dkt. 35-1, p. 19) He was ultimately diagnosed with schizophrenia.
(Dkt. 35-2, p. 37) On April 18, 2012, Dolan was arrested on first-degree arson charges.
2
(Dkt. 34-6) On December 12, 2012, he was adjudicated not guilty by reason of insanity.
(Dkt. 35-3)
In his deposition, Dolan testified that he knew that he set the fire, but he did not
remember how the fire started.
(Dkt. 35-2, pp. 40, 47-49, 65-67, 71) He recalled
kicking a gas can into the house from the porch, but he could not recall pouring gas in
the house. (Dkt. 35-2, pp. 47-49) He testified that he was pretty sure that he used
matches to start the fire, but he did not recall getting the matches or lighting the fire.
(Dkt. 35-2, pp. 66-67)
Fire Inspector Daniel Edwards determined that the fire was an incendiary fire.
(Dkt. 34-8) In addition, Castle Key’s adjuster ordered a report on the origin and cause
of the fire, which was completed by Senior Fire Investigator Frank Hutton, of Casalinova
Investigations, Inc. (Dkt. 34-9, p.1, 3; Dkt. 35-4, p. 34) Hutton concluded:
[I]t is my opinion that there were two separate and unrelated points of origin.
First area of origin is at the floor area in the main living by the sliding doors
and a heavily fire damaged couch. The second area of fire origin is also
near sliding doors in the family sitting room. Also it is my opinion, based
on the elimination and absence of all other heat sources in the area of origin,
and characteristics of this fire loss that the first material ignited was a
flammable liquid (gasoline), and the ignition source of this fire in both
locations was an open flame due to an intentional human act.
(Dkt. 34-9, p. 9 (emphasis in original))
Plaintiff notified Castle Key of her claim on the day of the fire. She later provided
two recorded statements and other documents, attended an Examination Under Oath
(“EUO”), and allowed Castle Key to physically inspect the home. (Dkt. 35-4, pp. 32, 3435, 38, 43, 45, 47, 49-50; Dkt. 35-1, p. 31). By letter dated August 9, 2012, Castle Key
denied the claim based on Dolan’s failure to attend his own EUO on three separate
3
occasions. (Dkt. 35-5; Dkt. 34-10) By letter dated August 14, 2012, Allstate denied
Plaintiff’s claim under a similar provision in the automobile policy. (Dkt. 34-10, p. 6-7)
By letter dated September 7, 2012, Plaintiff’s attorney inquired as to whether
Castle Key would forward the dwelling coverage limits to the mortgagee listed on the
policy. (Dkt. 35-6) By letter dated September 14, 2012, Castle Key answered that it
would not forward the coverage limits to the mortgagee because the loss was excluded
from coverage as an “intentional or criminal act” by an insured. (Dkt. 35-7)
On December 17, 2012, Plaintiff filed the instant action for breach of contract
against Castle Key (Count 1) and Allstate (Count 2), based on Defendants’ failure to pay
benefits to her or to other loss-payees, mortgagees, and third-party beneficiaries under
the policy, including Wells Fargo.
(Dkt. 1)
In response, Defendants raised five
affirmative defenses: (1) Dolan failed to provide a recorded statement, attend an EUO,
or otherwise cooperate in the investigation; (2) Plaintiff and Dolan failed to file a sworn
proof of loss form within 60 days of the loss; (3) Plaintiff and Dolan failed to execute the
requested authorization forms relating to the mortgage records; (4) the intentional acts
exclusions barred coverage; and (5) Plaintiff and Dolan concealed or misrepresented
material facts or circumstances. (Dkt. 15)
Castle Key and Allstate have filed a joint partial motion for summary judgment,
arguing that the intentional acts exclusions bar coverage under both policies, based on
Dolan’s involvement in the fire. Defendants do not seek summary judgment on their
remaining affirmative defenses. (Dkt. 31)
Plaintiff has filed a partial motion for summary judgment as to Castle Key only.
Plaintiff argues that the intentional acts exclusions do not apply, and even if they do,
4
Castle Key is required to pay the mortgagee, Wells Fargo, in an amount equal to the
dwelling coverage limits. Plaintiff also argues that Castle Key may not rely on failure to
cooperate as a defense to coverage because she substantially complied with the
investigation and Castle Key has failed to demonstrate that it suffered any prejudice.
(Dkt. 35)
II.
STANDARD OF REVIEW
Summary judgment is appropriate when the movant can show that there is no
genuine issue of material fact and that the movant is entitled to judgment as a matter of
law. Fennell v. Gilstrap, 559 F.3d 1212, 1216 (11th Cir. 2009) (citing Welding Servs.,
Inc. v. Forman, 509 F.3d 1351, 1356 (11th Cir. 2007)). Which facts are material depends
on the substantive law applicable to the case. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986). The moving party bears the burden of showing that no genuine issue
of material fact exists. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991).
Evidence is reviewed in the light most favorable to the non-moving party. Fennell,
559 F.3d at 1216 (citing Welding Servs., Inc., 509 F.3d at 1356).
A moving party
discharges its burden on a motion for summary judgment by showing or pointing out to
the Court that there is an absence of evidence to support the non-moving party's case.
Denney v. City of Albany, 247 F.3d 1172, 1181 (11th Cir. 2001) (citation omitted).
When a moving party has discharged its burden, the non-moving party must then
designate specific facts (by its own affidavits, depositions, answers to interrogatories, or
admissions on file) that demonstrate there is a genuine issue for trial. Porter v. Ray, 461
F.3d 1315, 1320-1321 (11th Cir. 2006) (citation omitted). The party opposing a motion
for summary judgment must rely on more than conclusory statements or allegations
5
unsupported by facts. Evers v. Gen. Motors Corp., 770 F.2d 984, 986 (11th Cir. 1985)
(“conclusory allegations without specific supporting facts have no probative value.”). “If
a party fails to properly support an assertion of fact or fails to properly address another
party's assertion of fact . . . the court may grant summary judgment if the motion and
supporting materials . . . show that the movant is entitled to it.” Fed. R. Civ. P. 56(e).
III.
DISCUSSION
As noted by the parties, “[t]he interpretation of an insurance contract is a question
of law.” Kattoum v. N.H. Indem. Co., 968 So. 2d 602, 604 (Fla. 2d DCA 2007). It is
undisputed that Florida law governs the interpretation of the policies in this case.
(Dkt. 31, p. 12; Dkt. 35, p. 12)
“Florida law provides that insurance contracts are
construed in accordance with the plain language of the policies as bargained for by the
parties.”
Auto–Owners Ins. Co. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000).
Accordingly, the scope and extent of coverage is determined by the language and terms
of the policy and the policy terms are given their plain and ordinary meaning. “It is a
cardinal principle of insurance law that where the provisions of an insurance policy are
clear and unambiguous, the terms of the policy will be accorded their plain meaning and
enforced as written.” Ernie Haire Ford, Inc. v. Univ. Underwriters Ins. Co., 541 F. Supp.
2d 1295, 1298 (M.D. Fla. 2008); see also Northland Cas. Co. v. HBE Corp., 160 F. Supp.
2d 1348, 1358 (M.D. Fla. 2001). However, if the relevant policy language is susceptible
of more than one reasonable interpretation, the policy is considered ambiguous and
strictly construed against the drafter of the policy.
Anderson, 756 So. 2d at 34.
“[E]xclusionary clauses are construed even more strictly against the insurer than
coverage clauses.” Id. While the insured has the burden of proving that a claim against
6
it is covered by the insurance policy, the insurer has the burden of proving an exclusion
to coverage. LeFarge Corp. v. Travelers Indem. Co., 118 F.3d 1511, 1516 (11th Cir.
1997).
A. Castle Key Homeowners Policy
Section I of the Castle Key homeowners policy provides three types of property
coverage relevant to this action: Dwelling Protection (“Coverage A”), Other Structures
Protection (“Coverage B”), and Personal Property Protection (“Coverage C”). In relevant
part, the policy contains the following coverage provisions:
Losses We Cover Under Coverage A And B:
We will cover sudden and accidental direct physical loss to
property described in Coverage A – Dwelling Protection and
Coverage B – Other Structures Protection except as limited or
excluded in this policy.
...
Losses We Cover Under Coverage C:
We will cover sudden and accidental direct physical loss to the
property described in Coverage C – Personal Property
Protection, except as limited or excluded in this policy, caused
by:
1. Fire or lightning.
(Dkt. 1-1, pp. 49, 54)
The parties do not dispute that the March 9, 2012 fire and associated damage
constituted a “sudden and accidental direct physical loss” under the foregoing
coverage provisions. As discussed below, the parties do dispute whether: (1) the
intentional acts exclusions bar coverage; (2) even if the intentional acts exclusions
bar coverage, whether Castle Key must pay the Coverage A policy limits to Wells
Fargo, as mortgagee; and (3) whether Plaintiff’s and Dolan’s failure to cooperate
results in forfeiture of coverage. These issues are addressed in turn.
7
1.
Intentional acts exclusions
In Castle Key’s fourth affirmative defense (Dkt. 15, ¶ 26), Castle Key maintains
that coverage for the losses is specifically excluded by the policy’s intentional acts
exclusions. Specifically, the policy provides:
Losses We Do Not Cover Under Coverage A And B:
We do not cover loss to the property described in Coverage A - Dwelling
Protection or Coverage B – Other Structures Protection consisting of or
caused by:
...
9. Intentional or criminal acts of, or at the direction of any insured
person, if the loss that occurs:
a) may be reasonably expected to result from such acts; or
b) is the intended result of such acts.
This exclusion applies regardless of whether or not the insured person
is actually charged with, or convicted of a crime.
(Dkt. 1-1, p. 50)
Losses We Do Not Cover Under Coverage C:
We do not cover loss to the property described in Coverage C – Personal
Property Protection caused by or consisting of:
...
9. Intentional or criminal acts of or at the direction of any insured
person, if the loss that occurs:
a) may be reasonably expected to result from such acts; or
b) is the intended result of such acts.
This exclusion applies regardless of whether or not the insured person
is actually charged with or convicted of a crime.
(Dkt. 1-1, pp. 55-56)
Both Plaintiff and Castle Key have moved for summary judgment on the applicability
of these exclusions.
8
a.
Ambiguity
Before addressing the parties’ arguments regarding whether an “intentional
act” occurred, the Court must address Plaintiff’s argument that the exclusions are
ambiguous. Plaintiff maintains that Section II of the policy contains a similar intentional
acts exclusion pertaining to Family Liability Protection (“Coverage X”), as follows:
Losses We Do Not Cover Under Coverage X:
1. We do not cover any bodily injury or property damage intended by, or
which may reasonably be expected to result from the intentional or criminal
acts or omissions of, any insured person. This exclusion applies even if:
a) such insured person lacks the mental capacity to govern his or her
conduct[.]
(Dkt. 1-1, p. 67)
Unlike the Coverage A, B, and C intentional acts exclusions, the Coverage X exclusion
specifies that coverage is excluded even if the insured lacks mental capacity to govern
his conduct. Plaintiff argues that Castle Key’s omission of this additional language in the
Coverage A, B, and C exclusions demonstrates that Castle Key did not intend for those
exclusions to apply if the insured lacked mental capacity to govern his conduct.
The Court rejects this argument. The intentional acts exclusions in Coverages A,
B, and C are not ambiguous because the plain language of the exclusions is not
susceptible to more than one reasonable interpretation.
Indeed, Plaintiff offers no
countervailing interpretation of these provisions. Moreover, even if the Court were to
consult the Coverage X exclusion, the additional language in that exclusion does not
create an ambiguity: subsection (a) merely elaborates on the meaning of the intentional
acts exclusion by specifying that a lack of mental capacity does not preclude an intentional
act. As Plaintiff recognizes, this was likely in response to the Florida Supreme Court
9
decision in Prasad v. Allstate, discussed below, which held that an insane insured may
commit an intentional act. That Castle Key chose to clarify an exclusion in one section
of its policy does not permit this Court to rewrite an exclusion in another section of the
policy. See Intervest Const. of Jax, Inc. v. Gen. Fid. Ins. Co., 133 So. 3d 494, 497 (Fla.
2014) (“[c]ourts may not rewrite contracts, add meaning that is not present, or otherwise
reach results contrary to the intentions of the parties.”).
b.
Applicability
In her motion for summary judgment, Plaintiff’s primary argument is that Castle
Key has not met its burden under Florida law to demonstrate that the intentional acts
exclusions apply. In particular, Plaintiff maintains that Castle Key is unable to prove:
(1) that Dolan set the fire; or (2) that he did so intentionally. In its cross-motion for
summary judgment, Castle Key argues that it is undisputed that Dolan intentionally set
the fire.
The Court rejects Plaintiff’s first argument. Dolan specifically testified during his
deposition as follows:
Q.: So let’s go back to – I mean, you know, you set the fire, right?
A.: Yeah.
(Dkt. 35-2, p. 40)
Plaintiff identifies no specific facts in evidence calling Dolan’s testimony into dispute.
See Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292, 1315 (11th Cir.
2011) (“[T]he non-moving party cannot satisfy its burden if the rebuttal evidence is merely
colorable, or is not significantly probative of a disputed fact.”) Plaintiff does argue that
Dolan’s deposition testimony is not competent because he was adjudicated not guilty by
10
reason of insanity; however, Plaintiff cites no evidence indicating that Dolan was
incompetent at the time of his deposition in May 2013.
With respect to Plaintiff’s second argument---that there is not sufficient evidence
that the fire was intentional---the Court finds that Dolan’s intent is a disputed issue of
material fact. Under Florida law, it is well-established that an injury inflicted by an insane
person may be intentional, for purposes of an intentional acts exclusion. Specifically, the
Florida Supreme Court has held that a person who escapes criminal liability by reason of
insanity may still “intend” an act for purposes of a civil insurance claim, if the person
“understands the physical nature and consequences of the act.” Prasad v. Allstate, 644
So. 2d 992, 994-95 (Fla. 1994). As the court explained:
In the law, there are many situations in which a person may intentionally
injure or kill another and not be subject to criminal punishment. For
example, an individual may kill in self-defense. The executioner may kill with
the sanction of the State. A soldier may injure or kill under rules of combat.
This conduct is intentional, but it is also excusable. Likewise, an individual
may be excluded from penalty if he is insane at the time he commits a
criminal act. As here, he may do the act with every intention of
consummating it, but when it is shown that he was mentally ill, he is excused
from the imposition of the usual sanctions. The absence of punishment,
however, does not retrospectively expunge the original intention.
Id. at 995 (internal quotation marks omitted). Accordingly, the court held that, where a
psychotic insured repeatedly stabbed a family member, he was subject to the intentional
acts exclusion under the reasoning that “[w]hile one might ‘accidentally’ hit another with
a knife during a spasmodic fit, the act of repeatedly stabbing [the victim] under the
allegations of this case denotes [the insured’s] intentional assault.” Id.
Based on this authority, the relevant question in this case is whether Dolan
understood the physical nature and consequences of his actions. In contrast to Prasad,
there were no witnesses to Dolan’s actions. Thus, a determination as to whether Dolan
11
understood the physical nature and consequences of his actions depends in large part
on Dolan’s testimony that he does not remember the circumstances of the fire. This, in
turn, will require an assessment of Dolan’s credibility. And it is well-established that
“[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate
inferences from the facts are jury functions, not those of a judge.” Strickland v. Norfolk
S. Ry. Co., 692 F.3d 1151, 1154 (11th Cir. 2012).
Although there is a factual issue as to the application of the intentional acts
exclusions, this does not mandate summary judgment in Plaintiff’s favor, as she argues.
While it is Castle Key’s burden to prove the exclusion, there is sufficient evidence by
which a jury could find that Dolan acted with the requisite intent. Among other things,
that evidence includes Dolan’s testimony that he recalled kicking a gas can into the house,
Dolan’s interaction with his neighbor during the fire---indicating that he was alert and
responsive, and the opinions of Inspector Edwards and Inspector Hutton that the fire was
intentional and incendiary, with two separate and unrelated points of origin. 1
As a final point, Plaintiff claims that the applicability of the intentional acts
exclusions is called into question by the fact that Castle Key initially denied Plaintiff’s claim
based on Dolan’s failure to cooperate, not based on the intentional acts exclusions. (Dkt.
35-5; Dkt. 49-1, pp. 7-10; Dkt. 35-4, pp. 59-63) Nonetheless, Plaintiff has not alleged
1
Plaintiff has argued that the Inspectors’ reports contain inadmissible hearsay. (Dkt. 47, pp. 811) The Court finds that the reports may be considered at the summary judgment stage to the
extent they are based on first-hand factual observations and opinions, and to the extent they can
be reduced to admissible form at trial. United Techs. Corp. v. Mazer, 556 F.3d 1260, 1278 (11th
Cir. 2009); Macuba v. Deboer, 193 F.3d 1316, 1323 (11th Cir. 1999). Of note, Plaintiff has not
objected to the reports’ authenticity, or to Defendants’ identification of Edwards and Hutton as
expert witnesses for trial. (See Dkt. 65, pp. 12, 14)
12
estoppel or waiver claims in this case, so as to preclude Castle Key’s reliance on the
intentional acts exclusions. (See Dkt. 1)
Based on the foregoing, the Court denies Plaintiff’s and Castle Key’s crossmotions for summary judgment on the applicability of the intentional acts exclusions under
Coverages A, B, and C.
c.
Joint obligation clause
In Defendants’ motion for summary judgment, Castle Key maintains that, if Dolan’s
conduct was subject to an intentional acts exclusion, coverage would not only be barred
for Dolan, it would be barred for Plaintiff, pursuant to the policy’s “joint obligation” clause.
Although the Court has found that disputed issues of fact preclude summary judgment on
the intentional acts exclusions, the applicability of the joint obligation clause will be at
issue if a jury finds that Dolan acted with the requisite intent. Therefore, the Court will
address Castle Key’s argument on this provision in order to narrow the remaining legal
issues.
The policy’s joint obligation clause provides: “[t]he terms of this policy impose joint
obligations on the persons defined as an insured person.
This means that the
responsibilities, acts and failures to act of a person defined as an insured person will be
binding upon another person defined as an insured person.” (Dkt. 1-1, p. 46) The
parties do not dispute that, as named insureds, Dolan and Plaintiff are each an “insured
person” under the policy. (See Dkt. 1-1, pp. 4, 44) In response to Castle Key’s motion,
13
Plaintiff does not dispute that, if Dolan’s conduct fell within the intentional acts exclusion,
she would be barred from coverage as well. 2
The Court therefore grants Castle Key’s motion for summary judgment on the
applicability of the joint obligation clause, but only to the extent that, if an intentional acts
exclusion is found to apply based on Dolan’s conduct, the exclusion would likewise bar
coverage for Plaintiff.
d.
Additional living expenses
In addition to Coverages A, B, and C, the Castle Key policy provides for
payment of additional living expenses as follows:
Additional Protection
1. Additional Living Expense
a) We will pay the reasonable increase in living expenses necessary
to maintain your normal standard of living when a direct physical
loss we cover under Coverage A – Dwelling Protection, Coverage
B – Other Structures Protection or Coverage C – Personal
Property Protection makes your residence premises
uninhabitable.
(Dkt. 1-1, p. 57)
Plaintiff moves for summary judgment on this provision, arguing that it is not subject
to an intentional acts exclusion.
The above provision specifies that additional living expenses will be paid only
when a covered physical loss occurs under Coverages A, B, or C. As discussed
above, there are disputed issues of material fact as to whether the intentional acts
2
Plaintiff does maintain that the joint obligation clause does not eliminate Castle Key’s liability to
Wells Fargo, as mortgagee, an issue addressed below.
14
exclusions bar coverage under Coverages A, B, or C. Plaintiff’s motion is therefore
denied as to additional living expenses.
Because Plaintiff has not established entitlement to additional living expenses as
a matter of law, the Court does not consider Plaintiff’s affidavit regarding the amount of
living expenses she has incurred. (See Dkt. 35-9) Castle Key’s motion to strike this
affidavit (Dkt. 41, p. 16) is therefore denied as moot.
e. Mortgagee clause
In her motion for summary judgment, Plaintiff also maintains that, even if the
intentional acts exclusion in Coverage A applies, Castle Key must pay Wells Fargo, as
mortgagee, an amount equal to the Coverage A limits of $278,871.00. (Dkt. 1-1, p. 6)
In relevant part, the policy provides:
16.
Mortgagee
A covered loss will be payable to the mortgagees named on the Policy
Declarations to the extent of their interest and in the order of
precedence. All provisions of Section I of this policy apply to these
mortgagees.
We will:
a) protect the mortgagee’s interest in a covered building structure in
the event of an increase in hazard, intentional or criminal acts of, or
directed by, an insured person, failure by any insured person to take
all reasonable steps to save and preserve property after a loss, a
change in ownership, or foreclosure if the mortgagee has no knowledge
of these conditions[.]
...
The mortgagee will:
a) furnish proof of loss within 60 days after notice of the loss if an
insured person fails to do so.
(Dkt. 1-1, p. 66)
15
In response to the motion, Castle Key acknowledges that the mortgagee’s interests
are protected under the policy, notwithstanding the intentional acts exclusion.
Dkt. 41, p. 13).
(See
Castle Key also does not contest Plaintiff’s standing to raise this
argument. Cf. Schlehuber v. Norfolk & Dedham Mut. Fire Ins. Co., 281 So. 2d 373, 375
(Fla. 3d DCA 1973); Kelly v. Balboa Ins. Co., 897 F. Supp. 2d 1262, 1266 (M.D. Fla.
2012). However, Castle Key does argue that it does not owe the entire coverage limits
to Wells Fargo.
As authority for her argument that Castle Key must pay the policy limits of
$278,871.00, Plaintiff cites section 627.702 of the Florida Statutes, which provides that
“[i]n the event of the total loss of any building [or] structure,” an insurer’s liability “shall be
in the amount of money for which such property was so insured.”
Fla. Stat.
§ 627.702(1)(a). Yet, as Defendant argues, Plaintiff wholly fails to address whether her
house was subject to a “total loss,” sufficient to trigger this provision.
Accordingly, the Court turns to the policy language, which provides that a loss will
be payable to the mortgagee “to the extent of their interest.” (Dkt. 1-1, p. 66) Based on
this provision, Castle Key maintains that it is liable only for the amount owed under the
mortgage.
Pamela Bennett, a Castle Key claims representative, testified in her
deposition that it was Castle Key’s intent to fully pay the mortgage amount upon receipt
of an appropriate proof of loss form. (Dkt. 35-4, pp. 9, 68). Bennett also testified that
neither Plaintiff nor Wells Fargo ever submitted a proof of loss, and Plaintiff also failed to
execute an authorization form permitting Castle Key to communicate with Wells Fargo.
(Dkt. 35-4, pp. 68-69; see also Dkt. 57-6)
16
Plaintiff has not addressed these points in her motion.
The Court therefore
denies Plaintiff’s motion for summary judgment on the applicability of the mortgagee
clause.
2. Failure to cooperate
Finally, Plaintiff moves for summary judgment on Castle Key’s first, second, and
third affirmative defenses, all of which allege that Plaintiff and/or Dolan failed to fulfill their
obligations under the policy. 3 In particular, Castle Key alleged that: (1) Dolan failed to
provide a recorded statement, attend an EUO, and otherwise cooperate with the
investigation; (2) Plaintiff and Dolan failed to submit the requisite proof of loss form within
60 days of the loss; and (3) Plaintiff and Dolan failed to execute the requested
authorization forms regarding their mortgage. (See Dkt. 1, ¶¶ 23-25)
Section I of the Castle Key policy provides as follows:
3. What You Must Do After A Loss
In the event of a loss to any property that may be covered by this policy,
you must:
...
f) as often as we reasonably require:
...
2) at our request, submit to examinations under oath, separately and
apart from any other person defined as you or insured person and
sign a transcript of the same.
...
3
Plaintiff also moves for summary judgment on the fifth affirmative defense, which Plaintiff
construes as a defense based on failure to cooperate. (See Dkt. 35, p. 20-21) However, this
defense is actually based on the fraud exclusion under the policy, which Plaintiff does not
acknowledge or specifically address in her motion. (See Dkt. 15, ¶ 27) Plaintiff’s motion is
therefore denied as to the fifth affirmative defense.
17
g) within 60 days after the loss, give us a signed, sworn proof of the loss.
This statement must include the following information:
...
1) the interest insured persons and others have in the property,
including any encumbrances[.]
(Dkt. 1-1, p. 60)
In the same section, the policy contains a “no-action” clause, as follows:
11. Suit Against Us
No suit or action may be brought against us unless there has been full compliance
with all policy terms.
(Dkt. 1-1, p. 65)
Under Florida law, proof-of-loss obligations and examinations under oath have
historically been considered conditions precedent to suit, when coupled with similar noaction clauses. See Goldman v. State Farm Fire Gen. Ins. Co., 660 So. 2d 300, 304
(Fla. 4th DCA 1995); Edwards v. State Farm Fla. Ins. Co., 64 So. 3d 730, 733 (Fla. 3d
DCA 2011); Starling v. Allstate Floridian Ins. Co., 956 So. 2d 511, 513-14 (Fla. 5th DCA
2007); Allstate Floridian Ins. Co. v. Farmer, 104 So. 3d 1242, 1246 (Fla. 5th DCA 2012);
cf. State Farm Mut. Auto. Ins. Co. v. Curran, 135 So. 3d 1071, 1080 (Fla. 2014) (in claim
for uninsured motorist benefits, holding that policy provision requiring a compulsory
medical examination was a condition subsequent). A material breach of a condition
precedent relieves an insurer of its obligations under the contract. Starling, 956 So. 2d
at 513. “If, however, the insured cooperates to some degree or provides an explanation
for its noncompliance, a fact question is presented for resolution by a jury.”
Id.
Additionally, a condition precedent may be avoided by showing that the insurer was not
prejudiced by the insured’s non-compliance with the condition.
Bankers Ins. Co. v.
Macias, 475 So. 2d 1216, 1218 (Fla. 1985). Whether an insured’s failure to cooperate
18
is substantially prejudicial is ordinarily a question of fact. Mid-Continent Cas. Co. v. Am.
Pride Bldg. Co., LLC, 601 F.3d 1143, 1149-50 (11th Cir. 2010) (quoting Ramos v. Nw.
Mut. Ins. Co., 336 So. 2d 71, 75 (Fla. 1976)). 4
Here, Plaintiff asserts both substantial compliance and lack of prejudice.
In
particular, Plaintiff argues that she promptly notified Castle Key of the claim, provided two
recorded statements and other documents, attended her EUO, and allowed Castle Key
to physically inspect the home.
Plaintiff also maintains that Castle Key was not
prejudiced by Dolan’s failure to attend his EUO because Dolan could not have provided
any useful information, due to his mental incapacity and inability to recall the events
leading up to the fire. Further, Plaintiff points out that Pamela Bennett, the Castle Key
claims representative, testified that Plaintiff’s failure to provide an authorization form was
not the reason the claim was denied. (See Dkt. 35-4, p. 61)
In response, Castle Key does not assert that it suffered any prejudice as a result
of Dolan’s failure to attend his EUO or provide a recorded statement. Because Plaintiff
has adequately discharged her burden as the party moving for summary judgment, and
because Castle Key fails to provide any meaningful response, the Court finds that
Plaintiff’s motion is due to be granted as to Castle Key’s first affirmative defense in its
entirety and as to the third affirmative defense to the extent it asserts failure to cooperate
based on Dolan’s failure to attend his EUO or provide a recorded statement (Dkt. 15,
4
There is a split among the Florida District Courts of Appeals as to whether the insured or the
insurer bears the burden of proving prejudice. See Biscayne Cove Condominium Ass'n v. QBE
Ins. Corp., 971 F. Supp. 2d 1121, 1137-38 (S.D. Fla. 2013) (surveying cases). For purposes of
this motion, even if Plaintiff has the burden, the outcome remains the same.
19
¶¶ 23, 25). See Dietz v. Smithkline Beecham Corp., 598 F.3d 812, 815 (11th Cir.2010)
(“[o]nce the movant adequately supports its motion, the burden shifts to the nonmoving
party to show that specific facts exist that raise a genuine issue for trial.”)
Castle Key does argue that it was substantially prejudiced by Plaintiff’s failure to
provide the requisite proof of loss form as well as an authorization form. Specifically,
Castle Key maintains that, had Plaintiff submitted a proof of loss form, the form would
have specified Wells Fargo’s mortgage interest in the property, allowing Castle Key to
make payment to Wells Fargo and avoid this lawsuit. Likewise, Castle Key maintains
that the authorization form would have allowed it to obtain the mortgage information
directly from Wells Fargo.
In her motion, Plaintiff does not argue that she substantially complied with the
proof-of-loss requirement, nor does she provide any explanation for her apparent failure
to comply. Rather, she suggests that any failure to cooperate may have been waived by
Castle Key’s payment of hotel expenses. (See Dkt. 35-1, p. 58) Plaintiff’s authority on
this point is inapposite, as it involved a settlement offer, which the court held constituted
an admission of liability and a waiver of the policy’s requirement that the insured provide
a formal proof of loss. See Llerena v. Lumbermens Mut. Cas. Co., 379 So. 2d 166, 167
(Fla. 3d DCA 1980); see also Am. Capital Assur. Corp. v. Courtney Meadows Apartment,
L.L.P., 36 So. 3d 704, 706 (Fla. 1st DCA 2010). In this case, Plaintiff identifies no
admission of liability by Castle Key.
Because Castle Key has adequately raised a material issue of fact as to prejudice,
Plaintiff’s motion is denied as to Castle Key’s second affirmative defense in its entirety,
20
and as to the third affirmative defense to the extent it is premised on failure to complete
an authorization form (Dkt. 15, ¶¶ 24, 25).
B. Allstate Automobile Policy
Similar to the Castle Key policy, the Allstate policy includes an intentional acts
exclusion and a joint obligation clause.
In Defendants’ joint motion, Allstate seeks
summary judgment on these provisions.
In relevant part, the Allstate policy provides:
Auto Comprehensive Insurance
Coverage HH
[W]e will pay for direct and accidental loss to the insured auto or a nonowned auto not caused by collision. Loss caused by . . . fire . . . is covered.
Exclusions - What is Not Covered.
These coverages do not apply to:
1. Property Damage caused by the:
a. intentional acts;
b. criminal acts, other than traffic violations defined as infractions under
Florida law, or;
c. omissions,
of an insured person, or done at the direction of an insured person
which are designed to produce loss or damage.
This exclusion applies even if:
a. an insured lacks the mental capacity to control or govern his or her
own conduct;
b. an insured person is temporarily insane or temporarily lacks the
mental capacity to control or govern his or her conduct or is
temporarily unable to form any intent to cause property damage;
c. such property damage is of a different kind or degree than
intended[.]
This exclusion applies regardless of whether an insured person is actually
charged with, or convicted of, a crime.
This exclusion precludes coverage for any insured persons under the
policy regardless of whether the person seeking coverage participated in
any way in the intentional or criminal acts or omissions[.]
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(Dkt. 33-1, pp. 52, 55)
The parties do not dispute that both Plaintiff and Dolan are “insured persons” under the
automobile policy.
For the reasons discussed in connection with the Castle Key homeowners policy,
the Court finds that there is a material issue of disputed fact as to the applicability of the
intentional acts exclusion.
As a result, Allstate’s motion for summary judgment is
DENIED as to the applicability of the intentional acts exclusion. To the extent that the
intentional acts exclusion is found to apply based on Dolan’s conduct, the exclusion’s joint
obligation clause would bar coverage for Plaintiff.
Allstate’s motion is therefore
GRANTED on that legal issue, subject to a finding of fact as to the intent of Dolan.
IV.
CONCLUSION
Upon consideration of the foregoing, it is hereby ORDERED as follows:
1. Defendants’ Motion for Summary Judgment or Partial Summary Judgment
(Dkt. 31) is DENIED IN PART AND GRANTED IN PART, as set forth herein.
2. Plaintiff’s Motion for Final Summary Judgment, or Alternatively Partial
Summary Judgment, on Claims against Defendant, Castle Key (Dkt. 35) is
DENIED IN PART AND GRANTED IN PART, as set forth herein.
DONE and ORDERED in Tampa, Florida, this 15th day of September, 2014.
Copies furnished to:
Counsel of Record
Any Unrepresented Person
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