Salazar v. American Security Insurance Company
Filing
44
ORDER denying 31 Motion for Partial Summary Judgment. Signed by Judge Elizabeth A. Kovachevich on 9/22/2014. (SN)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
RAFAEL SALAZAR,
Plaintiff,
vs.
CASE NO. 8:13-cv-02002-EAK-TBM
AMERICAN SECURITY INSURANCE
COMPANY,
Defendant.
/
ORDER ON DEFENDANT’S MOTION
FOR PARTIAL SUMMARY JUDGMENT
THIS CAUSE is before the Court on Defendant’s Motion for Partial Summary
Judgment and Incorporated Memorandum of Law against Plaintiff as to Count III of the
Amended Complaint. The Court, having considered the motion, response, and reply,
concludes that Defendant’s motion with respect to Count III is denied.
PROCEDURAL HISTORY
Plaintiff filed his Complaint (Doc. 2) on August 1, 2013. Count I of the
complaint alleged Breach of Contract, Count II requested Declaratory Judgment, and
Count III alleged Tortious Interference with a Contractual Relationship.
Defendant filed a Motion to Dismiss Counts I, II, and III of the Complaint on
August 9, 2013 (Doc. 4). In response, Plaintiff filed an Amended Complaint on August
21, 2013 (Doc. 10). Defendant then filed the Motion to Dismiss Counts II and III of the
First Amended Complaint on Motion to Strike Portion of Count I of the First Amended
Complaint and Incorporated Memorandum of Law on September 4, 2013 (Doc. 11).
Plaintiff filed his Response in Opposition to Defendant’s Motion to Dismiss Counts II
and III of the First Amended Complaint and Motion to Strike Portion of Count I of the
First Amended Complaint and Incorporated Memorandum of Law on September 18,
2013 (Doc. 13).
The Court granted Defendant’s Motion to Dismiss Count II of Plaintiffs
Amended Complaint and denied Defendant’s Motion to Strike Portions of Count I on
March 12, 2014 (Doc. 19). The Court also denied Defendant’s Motion to Dismiss Count
III (Doc. 19).
Defendant filed a Motion for Partial Summary Judgment and Incorporated
Memorandum of Law as to Count III of the Amended Complaint on June 27, 2014 (Doc.
31). Plaintiff filed the Response to Defendant’s Partial Motion for Summary Judgment
on July 11, 2014 (Doc. 36). Defendant filed the Reply in Support of Its Motion for
Partial Summary Judgment on July 25, 2014 (Doc. 40).
BACKGROUND
Plaintiff, RAFAEL SALAZAR, had a mortgage with Chase Home Finance LLC
(“Lender”) that required him to maintain hazard insurance, which he purchased from
Defendant, AMERICAN SECURITY INSURANCE COMPANY (Doc. 10). On
September 17, 2011, Plaintiffs property was damaged by sinkhole activity while the
policy was in full force and effect (Doc. 10).
Plaintiff reported the loss, and Defendant selected an engineering firm, Central
Florida Testing Laboratories, Inc. (“CFTL”) to investigate the cause of the loss (Doc. 31).
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The investigation confirmed that the loss was caused by sinkhole activity that was
covered under the policy (Doc. 31). On March 8,2012, CFTL prepared an estimate with
recommendations for subsurface repairs to remediate the sinkhole activity, which
included compaction grouting and exterior chemical grouting (Doc. 31).
After receiving the estimate, Plaintiff retained Bay Area Sinkhole Investigation &
Civil Engineering (“BASIC”) (Doc. 31). On March 21, 2012, Defendant sent a letter to
Plaintiff that asked for a signed contract to perform the subsurface sinkhole repairs with a
licensed contractor (Doc. 31). BASIC completed its peer review for the property and
recommended compaction grouting and chemical grouting on both the interior and the
exterior (Doc. 31). Following BASIC’s recommendations, Plaintiff entered into a
contract with Justin James, Professional Engineer, and Tracy Harris, Licensed General
Contractor, to performed the repairs on September 24, 2012 (Doc. 10-2).
Defendant rejected BASIC’s recommendations and invoked mandatory neutral
evaluation that was non-binding (Doc. 31). On February 28, 2013, the neutral report
recommended compaction grouting and exterior grouting (Doc. 32-10). As a result, the
parties disputed whether the subsurface repair work needed interior chemical grouting
(Doc. 36). On April 11, 2013, Defendant sent Plaintiff a letter that demanded a signed
contract from CFTL to receive payment for the repairs (Doc. 32-11).
STANDARD OF REVIEW
Federal Rule of Civil Procedure 56 provides that a “court shall grant summary
judgment if the movant shows that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The moving
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party bears the initial burden of stating the basis for its motion for summary judgment
and identifying those portions of the record “which it believes demonstrates the absence
of a genuine issue of material fact.” Celotex Corp. v. Catrett, A ll U.S. 317, 323-24
(1986). The moving party meets its burden if it demonstrates “an absence of evidence to
support the nonmoving party’s case.” Id. at 325. The burden then shifts to the
nonmoving party to identify specific facts that demonstrate a genuine issue of material
fact in order to avoid summary judgment. Id. at 324.
An issue of fact is “genuine” only if a reasonable jury, after considering the
evidence presented, could return a verdict for the nonmoving party. Anderson v. Liberty
Lobby, Inc., A ll U.S. 242, 249 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586-87 (1986). A factual issue is “material” if it might affect the
outcome of the trial under the governing substantive law. Id. at 248; Hickson Corp. v.
Northern Crossarm Co., 357 F.3d 1256, 1259-60 (11th Cir. 2004). When ruling on a
motion for summary judgment, the Court must view all inferences to be taken from the
facts “in the light most favorable to the party opposing the motion.” U.S. v. Diebold, 369
U.S. 654, 655 (1962). The weighing of evidence, the determination of credibility, and the
drawing of reasonable inferences from the facts are all functions of the jury, not the
judge. Anderson, A ll U.S. at 255. Therefore, if determination of the case rests on
deciding which competing version of the facts and events is true, then summary judgment
is inappropriate, and the case should be submitted to the jury. Rollins v. TechSouth, Inc.,
833 F.2d 1525, 1531 (11th Cir. 1987).
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DISCUSSION
Partial summary judgment of Plaintiff s Count III is denied because Plaintiff has
presented material facts that may affect the outcome of a trial. Whether Defendant, in the
absence of privilege, intentionally and unjustifiably caused Plaintiff to breach the
mortgage contract is a factual issue for the jury.
Under Florida law, the elements of tortious interference with a contractual
relationship are: 1) the existence of a contract; 2) Defendant’s knowledge of the contract;
3) Defendant’s intentional procurement of the contract’s breach; 4) absence of any
justification or privilege; and 5) damages resulting from the breach. Johnson Enterprises
of Jacksonville, Inc. v. FPL Group, Inc., 162 F.3d 1290, 1321 (11th Cir. 1998).
In the Amended Complaint, Plaintiff claimed that a mortgage contract existed
between Plaintiff and Lender and Defendant was aware of the contract. Plaintiff claimed
that Defendant intentionally withheld the benefits owed under the contract without
justification or privilege, and the failure to pay the claim has caused Plaintiff to suffer
damages.
Plaintiff is not arguing that he did not fulfill his mortgage obligations. Instead,
Plaintiff alleges that Defendant interfered with his mortgage contract by not paying the
claim to properly repair the sinkhole damage, which is a breach of the terms in his
mortgage. The mortgage requires Plaintiff to maintain insurance on the subject property
and, in the event of a loss, the Lender (mortgagee) is authorized to collect and apply the
insurance proceeds at Lender’s option either to restore the property or to apply to the
sums secured by the mortgage. The terms of the mortgage state that the “Borrower shall
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keep the Property in good repair and shall not commit waste or permit impairment to the
deterioration of the Property.”
Both parties presented arguments using McKinney-Green, Inc. v. Davis, which
said, “[t]he gravamen of an action for tortious interference with a contractual relationship
is the malicious interference by a third party, with a contract between other persons,
whereby one contracting party is induced to breach the contract to the injury of the
other.” 606 So. 2d 393, 397 (Fla. 1st DCA 1992). Plaintiff argues that Defendant is a
third-party to the mortgage contract, which is between Plaintiff and Lender, and
Defendant induced Plaintiff to breach the contract to the injury of the Lender by requiring
Plaintiff to enter into a repair contract that is insufficient. Defendant argued that
Plaintiffs claim of tortious interference is based on the “illogical” premise that
Defendant induced Plaintiff to breach the mortgage with the Lender because the claim
would require Defendant to induce the Lender to breach the mortgage to the injury of
Plaintiff.
According to McKinney-Green, tortious interference requires malicious
interference by a non-contracting party with an agreement between other parties where
“one of the parties is induced to breach the contract” and causes an injury to “the other
contracting party.” Id. at 398. Here, Defendant is a non-contracting party in regards to
the mortgage contract, which is between Plaintiff and Lender. Whether Defendant
maliciously interfered with Plaintiffs mortgage contract depends on whether Defendant
failed to proceed in good faith to repair the property under the terms of the insurance
contract. All parties to a contract have the obligation to proceed in good faith, which
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should be determined by a jury. See Burger King Corp. v. Ashland Equities, Inc., 161 F.
Supp. 2d 1331, 1336-37 (S.D. Fla. 2001).
The insurance policy states that the insured must provide “a contract for the
performance of building stabilization or foundation repairs,” and when this occurs, the
insurer will “settle the loss.” Defendant claims that Plaintiff did not comply with the
insurance provisions to provide a contract in accordance with the recommendations of the
engineer that Defendant selected. However, on September 24, 2012, Plaintiff entered
into a contract with an engineer and a licensed contractor to repair the sinkhole damage,
which complied with the policy’s provisions.
The neutral evaluation process under section 627.7074 of the Florida Statutes is
non-binding and does not require Plaintiff to accept the results. The Florida Supreme
Court confirmed that “[t]he sinkhole statutes appearing] in chapter 627 . . . was designed
to provide a framework for insurance companies to follow when encountering specific
types of claims . . . involving sinkhole damage. The application of a specific provision
within that scheme to the evidentiary context is both misguided and inappropriate.”
Universal Ins. Co. ofN. Am. v. Warfel, 82 So. 3d 47, 57 (Fla. 2012).
Here, Defendant’s argument that Plaintiff failed to comply with the policy terms
is not persuasive. Further, Plaintiff identified specific facts that are in dispute between
the parties, such as the need for interior chemical grouting to restore the property. This
demonstrates a genuine issue of material fact that should be decided by a jury. Hence, if
a jury finds that Defendant withheld payment for the reason of undervaluing the claim,
the jury may find that Defendant tortiously interfered with the mortgage agreement by
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causing Plaintiff to permit impairment or deterioration of the property. Accordingly, it is
ORDERED that Defendant’s Motion for Partial Summary Judgment on Count III is
DENIED.
DONE and ORDERED in Chambers at Tampa, Florida, th i s ^ ^ f d a v of
September, 2014.
Copies to: All parties and counsel of record.
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