City of Bradenton, Florida v. Safety National Casualty Corporation

Filing 22

ORDER: Defendant Safety National Casualty Corporation's Motion for Summary Judgment (Doc. # 14 ) is DENIED. Signed by Judge Virginia M. Hernandez Covington on 6/6/2017. (DMD)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
CITY OF BRADENTON,
Plaintiff,
v.

Case No.: 8:17-cv-267-T-33MAP

SAFETY NATIONAL CASUALTY
CORP.,
Defendant.
______________________________/
ORDER
This matter comes before the Court upon consideration of
Defendant Safety National Casualty Corporation’s Motion for
Summary Judgment, filed on May 1, 2017. (Doc. # 14). Plaintiff
City of Bradenton filed a response in opposition on May 19,
2017. (Doc. # 16). For the reasons that follow, the Motion is
denied.
I.

Background
In October of 2000, Safety National and the City entered

into an insurance contract for excess workers’ compensation
coverage with a policy period of October 1, 2001, to October
1, 2002. (Doc. # 14-1). Under the policy, Safety National
would provide coverage to the City for any loss above a
specified amount the City incurred on account of an employee’s
bodily injury caused by an accident or occupational disease.
1

(Id. at 1). The specified amount the City had to incur before
the policy’s excess coverage applied was $400,000. (Id. at
8).

The

policy

additionally

states

under

the

heading

“Reimbursement”:
If the [City] pays any Loss incurred in any
Liability Period in excess of the [$400,000] SelfInsured Retention Per Occurrence, [Safety National]
shall reimburse the [City] upon receipt of a formal
proof of loss and other evidence acceptable to
[Safety National] of such payment. Within a
reasonable period of time, reimbursement payments
shall be made by [Safety National].
(Id. at 5).
In April of 2001, a City of Bradenton police officer,
J.L., tested positive for Hepatitis C and was deemed disabled
in December of 2001. (Doc. # 2 at ¶ 6; Doc. # 14-2). Under
Florida law, police officers who contract Hepatitis C under
certain conditions are deemed to have contracted the disease
in the line of duty. (Doc. # 1 at ¶ 7). Because the police
officer met those statutory conditions, he was able to submit
a workers’ compensation claim that the City accepted. (Id.).
The City sent Safety National “Large Loss Reports,”
which summarized the benefits the City had paid out to J.L.
and provided status updates on his condition. (Doc. # 14-9).
The “Large Loss Report” dated August 31, 2011, reflected that
the City had paid benefits exceeding $400,000. (Doc. # 14-9

2

at 5-6). On October 10, 2011, Safety National sent the City
a letter stating, in relevant part,
We have completed our investigation and determined
that we must deny coverage of the loss as it was
reported late and, as a result, we were kept from
the opportunity to participate in the investigation
and defense of the claim. Further, the loss did not
occur during our Liability Period. . . . The correct
date of loss is 5/29/1999 which pre-dates our
liability coverage. Under the Coverage of Agreement
section cited above, our policy only covers
occurrences that take place within our Liability
Period.
(Doc. # 14-11). The City received the letter on October 25,
2011. (Doc. # 14-12 at 2-3).
Despite Safety National’s letter, the City sent Safety
National an initial Request for Excess Reimbursement on June
28, 2012. (Doc. # 14-14). Safety National denied the City’s
first Request for Reimbursement on June 28, 2012, in an email
stating, “Thank you for the correspondence and request for
reimbursement on the above claim. However, Safety National
has denied coverage for this claim on 10/10/2011. Our position
remains

unchanged.”

(Doc.

#

14-15).

The

City

submitted

numerous requests for reimbursement in the following months,
all of which Safety National denied on the same grounds. (Doc.
# 14-16).
The City filed its Complaint in state court on November
23, 2016, bringing claims for declaratory relief and breach

3

of contract. (Doc. # 2). Safety National removed the case to
this Court on February 2, 2017, and filed its answer and
affirmative defenses on February 13, 2017. (Doc. ## 1, 5). As
one

of

its

“affirmatively

affirmative
states

defenses,

that

the

Safety

applicable

National

Statute

of

Limitations precludes the City from pursuing the relief that
it is seeking in this action.” (Doc. # 5 at 6).
With the Court’s permission (Doc. # 12 at 1), Safety
National filed its Motion for Summary Judgment addressing
only the statute of limitations issue on May 1, 2017. (Doc.
# 14). The City responded on May 19, 2017. (Doc. # 16). The
Motion is ripe for review.
II.

Legal Standard
Summary Judgment is appropriate “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). A factual dispute alone is not enough to
defeat a properly pled motion for summary judgment; only the
existence of a genuine issue of material fact will preclude
a grant of summary judgment. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247-48 (1986).
An issue is genuine if the evidence is such that a
reasonable jury could return a verdict for the non-moving
4

party. Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742
(11th Cir. 1996)(citing Hairston v. Gainesville Sun Publ’g
Co., 9 F.3d 913, 918 (11th Cir. 1993)). A fact is material if
it may affect the outcome of the suit under the governing
law. Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir.
1997). The moving party bears the initial burden of showing
the court, by reference to materials on file, that there are
no genuine issues of material fact that should be decided at
trial. Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256,
1260 (11th Cir. 2004)(citing Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986)). “When a moving party has discharged
its burden, the non-moving party must then ‘go beyond the
pleadings,’ and by its own affidavits, or by ‘depositions,
answers

to

interrogatories,

and

admissions

on

file,’

designate specific facts showing that there is a genuine issue
for trial.” Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590,
593-94 (11th Cir. 1995)(quoting Celotex, 477 U.S. at 324).
If there is a conflict between the parties’ allegations
or evidence, the non-moving party’s evidence is presumed to
be true and all reasonable inferences must be drawn in the
non-moving party’s favor. Shotz v. City of Plantation, Fla.,
344 F.3d 1161, 1164 (11th Cir. 2003). If a reasonable fact
finder evaluating the evidence could draw more than one
5

inference from the facts, and if that inference introduces a
genuine issue of material fact, the court should not grant
summary judgment. Samples ex rel. Samples v. City of Atlanta,
846 F.2d 1328, 1330 (11th Cir. 1988)(citing Augusta Iron &
Steel Works, Inc. v. Emp’rs Ins. of Wausau, 835 F.2d 855, 856
(11th Cir. 1988)).
consists

of

However,

nothing

conclusional

if

“more

allegations,”

the

non-movant’s

than

a

summary

repetition

judgment

is

response
of
not

his
only

proper, but required. Morris v. Ross, 663 F.2d 1032, 1034
(11th Cir. 1981).
III. Analysis
The

parties

limitations

agree

period

set

that
by

the

five

section

year

statute

95.11(2)(b),

of

Florida

Statutes, applies to the City’s claims. (Doc. # 14 at 12;
Doc. # 16 at 6); see also Fla. Stat. § 95.11(2)(b) (setting
a five year statute of limitations for “[a] legal or equitable
action on a contract, obligation, or liability founded on a
written

instrument”).

The

question

before

the

Court

is

whether the five year statute of limitations period for the
City’s claims for declaratory relief and breach of contract
began to run when the City received Safety National’s letter
stating the City’s loss was not covered by the policy, which

6

occurred by October 25, 2011, or when Safety National rejected
the City’s initial request for reimbursement on June 28, 2012.
Under section 95.031(1), “[a] cause of action accrues
when the last element constituting the cause of action occurs”
for statute of limitations purposes. Fla. Stat. § 95.031(1).
“For a breach of contract claim, Florida law requires the
plaintiff to plead and establish: (1) the existence of a
contract; (2) a material breach of that contract; and (3)
damages resulting from the breach.” Vega v. T-Mobile USA,
Inc., 564 F.3d 1256, 1272 (11th Cir. 2009)(citing Friedman v.
N.Y. Life Ins. Co., 985 So. 2d 56, 58 (Fla. 4th DCA 2008)).
Thus, “a cause of action on a contract accrues and the statute
of limitations begins to run from the time of the breach of
contract.” State Farm Mut. Auto. Ins. Co. v. Lee, 678 So. 2d
818,

821

(Fla.

1996);

see

also

Allstate

Ins.

Co.

v.

Kaklamanos, 843 So. 2d 885, 892 (Fla. 2003)(“In regard to
insurance contracts, a specific refusal to pay a claim is the
breach which triggers the cause of action.” (quoting Donovan
v. State Farm Fire & Cas. Co., 574 So. 2d 285, 286 (Fla. 2d
DCA 1991))). The parties dispute when the alleged breach of
contract occurred.
Safety National argues the alleged breach occurred when
the City received its October 10, 2011, letter. (Doc. # 14 at
7

15). The City admitted receiving that letter no later than
October 25, 2011. (Doc. # 14-12 at 2-3). Therefore, Safety
National reasons the statute of limitations ran on October
25, 2016, and the City’s claims are time-barred. (Doc. # 14
at 15).
The City counters that Safety National’s October 10,
2011,

letter

was

merely

an

anticipatory

breach

or

“repudiation,” which the City was not required to treat as an
actual breach of the contract. (Doc. # 16 at 10-12). The
Supreme Court has explained the important difference between
an immediate breach and a repudiation:
Failure by the promisor to perform at the time
indicated
for
performance
in
the
contract
establishes an immediate breach. But the promisor’s
renunciation of a “contractual duty before the time
fixed in the contract for . . . performance” is a
repudiation. Such a repudiation ripens into a
breach prior to the time for performance only if
the promisee “elects to treat it as such.”
Franconia Assocs. v. United States, 536 U.S. 129, 142–43
(2002)(internal citations omitted)(emphasis original). When
faced with a repudiation, the non-breaching party has three
options: “first, to rescind the contract altogether; second,
to elect to treat the repudiation as a breach by bringing
suit or by making some change in position; or, third, to await
the time for performance of the contract and bring suit after

8

that time has arrived.” Barbara G. Banks, P.A. v. Thomas D.
Lardin, P.A., 938 So. 2d 571, 575 (Fla. 4th DCA 2006)(citation
omitted). If the injured party does not treat the repudiation
as a present breach but “instead opts to await performance,
the cause of action accrues, and the statute of limitations
commences to run, from the time fixed for performance rather
than

from

the

earlier

date

of

repudiation.”

Franconia

Assocs., 536 U.S. at 144 (citation and internal quotation
marks omitted).
In support of its argument that the October of 2011
letter was a repudiation, the City emphasizes the contract
requires it to submit a formal proof of loss as a condition
precedent to reimbursement. (Id. at 12-13; Doc. # 14-1 at 5).
Thus,

the

definitively

City

reasons

breach

the

that

Safety

contract

National

until

after

did
the

not
City

submitted a formal proof of loss because Safety National’s
duty to reimburse the City did not arise until that condition
precedent was met. See Starling v. Allstate Floridian Ins.
Co., 956 So. 2d 511, 513-14 (Fla. 5th DCA 2007)(stating that
submission of a sworn proof of loss within 60 days was a
condition precedent to recovery under an insurance contract).
The City also insists an insurer cannot deny a claim — “a
formal request for payment made pursuant to the terms of the
9

policy” — until the insured actually submits a claim. (Id. at
9-10); see also Yacht Club on the Intracoastal Condo. Ass’n,
Inc. v. Lexington Ins. Co., No. 10-81397-CV, 2011 WL 5223127,
at *3 (S.D. Fla. Nov. 2, 2011)(“There can be no breach of the
instant policies for failure to pay before a claim has been
made.”), aff’d in part, rev’d in part, 509 F. App’x 919 (11th
Cir. 2013); Golden View Condo., Inc. v. QBE Ins. Corp., No.
11-60137-CIV, 2011 WL 13112060, at *4 (S.D. Fla. July 29,
2011)(“[I]t is undisputed that as of the date it filed this
suit, Golden View had not provided QBE with a claim or
estimate regarding the nature or extent of the Hurricane
Wilma-related damage to its property — an unequivocal fact
which seemingly renders a specific denial by QBE as legally
and factually impossible.”). The City reasons that the August
of 2011 “Large Loss Report” indicating the City had paid
benefits beyond the $400,000 threshold was neither a claim
nor

a

formal

proof

of

loss

because

the

report

did

not

explicitly request reimbursement.
Instead, the City argues its June 28, 2012, request for
reimbursement was its first claim and formal proof of loss
because the City first made a specific demand for payment
from Safety National in that request. (Doc. # 16 at 7-10);
see also Roth v. State Farm Mut. Auto. Ins. Co., 581 So. 2d
10

981, 983 (Fla. 2d DCA 1991)(“[T]he statute of limitations
began to run on each claim when the Roths first received
written

notification

denied.”)(emphasis

that

added).

that
The

specific

contract

does

claim
not

was

define

“formal proof of loss” or “claim” and Safety National does
not specifically allege that the August of 2011 “Large Loss
Report” was a claim. See (Doc. # 16-1 at 2)(stating that “the
City notified [Safety National] that payments it had made”
exceeded

the

$400,000

threshold

as

of

August

31,

2011)(emphasis added). And, while Safety National does not
admit that the City’s request for reimbursement was the first
formal proof of loss, it also does not assert the earlier
“Large Loss Report” provided by the City in August of 2011
qualified as a formal proof of loss. (Id. at 2-3).
Instead, Safety National argues that a formal proof of
loss was not required to be submitted in this instance because
“the requirement to submit a formal proof of loss only applies
to ‘any Loss incurred in any Liability Period.’” (Doc. # 14
at 15-16). And Safety National’s October of 2011 letter stated
the City’s loss concerning J.L. “did not occur during its
Liability

Period.”

(Id.

at

16)(emphasis

original).

But

whether the City’s loss was incurred during the policy period
is hotly disputed, with the City maintaining that its claim
11

falls within the policy period. (Doc. # 2 at ¶ 16; Doc. # 16
at 18-19). And the subject of this Motion is limited to
whether the statute of limitations has run, and the Court
will not address the underlying merits of the City’s claim,
such as whether the J.L. worker’s compensation claim arose
within the policy period. A determination that the City’s
loss did occur within the liability period relates to whether
Safety National actually breached the contract by denying
coverage, as the City argues in its Complaint.

But the

question presented by the instant Motion is whether the Court
may hear the City’s claim for breach of contract at all, or
whether the City waited too long to file its Complaint.
Regardless of whether the J.L. claim arose within the
policy’s liability period, Safety National’s reading of the
contract’s reimbursement provision is flawed. First, the fact
that Safety National posits the loss occurred outside of the
liability period — and told the City as much in its October
of 2011 letter — does not obligate the City to agree. The
City concluded it was entitled to reimbursement and the
contract specifies that Safety National’s duty to reimburse
the

City

is

triggered

when

a

formal

proof

of

loss

is

submitted. There is no explicit exemption from the proof of
loss

requirement

for

instances
12

in

which

Safety

National

determines that a loss occurred outside the liability period
before any proof of loss is submitted. Thus, by the terms of
the contract, regardless of whether Safety National already
made a determination regarding the liability period, Safety
National’s performance was not ultimately due until “receipt
of a formal proof of loss and other evidence acceptable to
[Safety National].” (Doc. # 14-1 at 5).
Second, the language stressed by Safety National — “[i]f
the [City] pays any Loss incurred in any Liability Period” —
merely indicates that Safety National has a duty to reimburse
only losses incurred within the liability period. (Doc. # 141 at 5)(emphasis added). That language does not alter the
contract’s specification of the steps the City must take to
trigger Safety National’s duty to reimburse it when that duty
exists. And, even if that language were ambiguous, it must be
read against Safety National, which drafted the contract.
Biscayne Cove Condo. Ass’n v. QBE Ins. Corp., 971 F. Supp. 2d
1121,

1141

(S.D.

Fla.

2013)(“[A]ny

ambiguity

[in

the

insurance contract] is strictly construed against the drafter
and liberally in favor of the insured.” (quoting Allstate
Floridian Ins. Co. v. Farmer, 104 So. 3d 1242, 1245 (Fla. 5th
DCA 2012))).

13

Taking the facts in the light most favorable to the City,
the City’s first request for reimbursement sent on June 28,
2012, was its first claim and formal proof of loss. And,
because Safety National’s October 10, 2011, letter denying
coverage

was

sent

before

the

City

officially

requested

reimbursement, that letter was a repudiation. Cf. Dutra v.
Kaplan, 137 So. 3d 1190, 1192 (Fla. 3d DCA 2014)(noting that
defendant’s statement that he would not purchase plaintiff’s
interest in a home they co-owned as agreed was an anticipatory
breach or repudiation because it was made before payment was
due under the agreement). And the City had the option to
either treat the repudiation as an immediate breach or wait
for Safety National’s failure to perform under the contract
before filing suit. The City could have treated the letter as
an actual breach, but chose not to.
Instead,

the

City

sent

the

initial

request

for

reimbursement on June 28, 2012. (Doc. # 14-14). After Safety
National

denied

requests

for

that

request,

reimbursement,

the

which

City
Safety

sent

additional

National

again

denied. (Doc. # 14-16). Taking these facts in the light most
favorable

to

the

City,

the

City

did

not

treat

Safety

National’s October of 2011 letter as an immediate breach.
Instead, the City awaited performance and submitted a formal
14

proof of loss — its first request for reimbursement — months
later on June 28, 2012. That same day, Safety National denied
the City’s request for reimbursement, at which point the cause
of action for breach of contract accrued.
Safety National argues that treating the denial of the
City’s request for reimbursement as the date of accrual
permits

the

City

“to

arbitrarily,

unilaterally

and

indefinitely toll the running of the Statute of Limitations
for commencing a cause of action arising out [of] a claim
that [Safety National] has advised is not covered, by simply
delaying its submission of a ‘formal’ proof of loss.” (Doc.
# 14 at 16). Safety National emphasizes the City submitted
its request for reimbursement about eight months after Safety
National sent its letter stating the J.L. claim did not arise
within the policy period and about ten months after the City
exceeded

the

$400,000

benefits

threshold.

(Id.

at

15).

According to Safety National, holding that the alleged breach
of contract did not occur until the City formally requested
reimbursement and was denied goes against the purpose of the
statute of limitations. “[A]llowing the City to proceed with
the instant action would enable and encourage ‘the unexpected
enforcement of stale claims brought by plaintiffs who have
slept

on

their

rights,’

and
15

a

fair

reading

of

[the

Reimbursement section of the policy] does not warrant a
different conclusion.” (Id. at 17).
But, “[u]nder Florida law, insurance contracts are to be
construed ‘in accordance with the plain language of the
policies as bargained for by the parties.’” State Nat’l Ins.
Co. v. White, 482 Fed. Appx. 434, 438 (11th Cir. 2012)(per
curiam)(quoting Auto–Owners Ins. Co. v. Anderson, 756 So. 2d
29, 34 (Fla. 2000)). And “[a]ny ambiguity [in the insurance
contract]

is

strictly

construed

against

the

drafter

and

liberally in favor of the insured.” Biscayne Cove Condo.
Ass’n, 971 F. Supp. 2d

at

1141 (citation omitted). The

contract required the City to submit a formal proof of loss
as a condition precedent to Safety National’s reimbursement.
Safety National did not include an explicit exemption from
the proof of loss requirement for instances in which it
determines that a loss occurred outside the liability period
before any proof of loss is submitted. And Safety National
chose not to include a deadline for the City to submit such
a proof of loss after meeting the $400,000 benefits threshold.
The Court will not ignore the proof of loss requirement or
infer a time limitation for submission of a proof of loss
that is not present in the contract. Nor will the Court
disregard the well-established law on repudiation because
16

Safety

National

application.

See

(2002)(declining

is

displeased

Franconia
to

adopt

with

the

Assocs.,
an

result

of

its

U.S.

at

146

536

interpretation

that

would

“convert the repudiation doctrine from a shield for the
promisee into a sword by which the [promisor] could invoke
its own wrongdoing to defeat otherwise timely suits”).
Taking the facts in the light most favorable to the City,
the City’s June 28, 2012, request for reimbursement was the
first claim and formal proof of loss submitted to Safety
National, as required to trigger Safety National’s duty to
reimburse the City. Because the City chose not to treat Safety
National’s October 10, 2011, repudiation as a present breach
of contract, the cause of action accrued on June 28, 2012,
when Safety National denied the City’s initial request for
reimbursement. Thus, taking the facts in the light most
favorable to the City, the five year statute of limitations
will run on June 28, 2017, and the City’s Complaint, filed on
November

23,

2016,

was

filed

within

the

statute

of

limitations.
Therefore, Safety National has not met its burden of
proving

that

no

genuine

issue

of

material

fact

exists

regarding the applicability of the statute of limitations.
See Morton’s Mkt., Inc. v. Gustafson’s Dairy, Inc., 198 F.3d
17

823, 828 (11th Cir. 1999), amended in part, 211 F.3d 1224
(11th

Cir.

2000)(“The

commencement

of

the

statute

of

limitations is a question of fact. It cannot be determined
upon motion for summary judgment if there is a genuine
question as to when it began to run.” (internal citations
omitted)). The Motion for Summary Judgment (Doc. # 14) is
denied.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
Defendant Safety National Casualty Corporation’s Motion
for Summary Judgment (Doc. # 14) is DENIED.
DONE and ORDERED in Chambers in Tampa, Florida, this 6th
day of June, 2017.

18