Reyes et al v. American Security Insurance Company

Filing 34

Order on Motion for Summary Judgment granting 22 Motion for Summary Judgment. Closing Case. Motions Terminated: 22 MOTION for Summary Judgment filed by American Security Insurance Company, 31 MOTION in Limine to Exclu de Testimony of Sunil Gulati as to Subsurface Conditions, Causes of Loss and Any Data Not Identified in Gulati's June 23, 2017 Peer Review Report, and Incorporated Memorandum of Law filed by American Security Insurance Company, 33 First MOTION to Continue Trial filed by Juan Reyes, Haday Reyes. Signed by Judge Robert N. Scola, Jr on 9/21/2017. (lan) NOTICE: If there are sealed documents in this case, they may be unsealed after 1 year or as directed by Court Order, unless they have been designated to be permanently sealed. See Local Rule 5.4 and Administrative Order 2014-69.

United States District Court
for the
Southern District of Florida
Juan Reyes and Haday Reyes,
Plaintiffs,
v.
American Security Insurance Co.,
Defendant.

)
)
) Civil Action No. 16-23978-Civ-Scola
)
)

Order on Motion for Summary Judgment
This matter is before the Court on the Defendant American Security
Insurance Company’s (“ASIC”) motion for summary judgment (ECF No. 22). The
Plaintiffs Juan and Haday Reyes filed a response (ECF No. 25), and ASIC filed a
reply (ECF No. 30). Having reviewed the Motion, all supporting and opposing
submissions, the record in this case, and the relevant legal authorities, for the
reasons that follow, the Court grants the motion for summary judgment (ECF
No. 22).
1. Introduction
This case arises from damage to the Plaintiffs’ home as a result of alleged
sinkhole activity. The present dispute concerns whether the damage can be
attributed to sinkhole activity, and is therefore covered by the Reyes’s
insurance policy issued by ASIC. ASIC seeks summary judgment as to the
Reyes’s single claim for breach of contract, on the basis that the record
evidence demonstrates that sinkhole activity has been eliminated as a cause of
loss at the Reyes’s property. Before addressing the issue, the Court will set out
the undisputed material facts and the parties’ arguments for and against
summary judgment.
2. Statement of Facts
The Reyeses own their home located at 3098 NW 4th Terrace, Miami,
Florida 33125 (the “Property”), which was built in 1955. See Defendant’s
Statement of Material Facts (ECF No. 21), ¶¶ 1-2 (“DSMF”); Plaintiffs’ Response
to Defendant’s Statement of Material Facts (ECF No. 26), ¶ 2 (“PSMF”).1 ASIC
This District’s Local Rule 56.1(b) requires the movant’s facts to be controverted by
reference to record evidence. Thus, where the Plaintiffs have responded to ASIC’s
Statement of Material Facts by merely asserting that the fact is “disputed,” without
citing any record evidence to create a genuine issue of material fact, the Court has
deemed such facts admitted. This result is consistent with the Supreme Court’s
directive that the nonmoving party cannot rest on its laurels with “mere allegations or
denials,” but instead must “go beyond the pleadings and present competent evidence
1

issued a lender-placed insurance policy, which includes a Sinkhole Loss
Coverage Endorsement. (DSMF ¶¶ 3, 7.) According to the policy, “‘[s]inkhole
activity’ means settlement or systematic weakening of the earth supporting
such property. The settlement or systematic weakening must result from
movement or raveling of soils, sediments, or rock material into subterranean
voids created by the effect of water on limestone or similar rock formations.”
(Id. ¶ 7 (quoting (ECF No. 20-1 at 17)).) Furthermore, “sinkhole loss” is defined
under the policy as “actual physical damage [a]rising out of, or [c]aused by
‘[s]inkhole activity.’” (Id.) The Reyeses reported a sinkhole claim with a date of
loss on May 2, 2013 to ASIC on November 4, 2013. (Id. at 8). As a result of the
claim, ASIC engaged the services of Central Florida Testing Laboratories, Inc.
(“CFTL”), to perform a geotechnical analysis of the Reyes’s property in order to
determine whether sinkhole activity was a cause of the damage observed. (Id.
¶ 9). Following its investigation, CFTL issued two reports—a Structural
Inspection report dated January 10, 2014 (ECF No. 20-2 at 5-31), and a
Comprehensive Geotechnical Investigation report dated March 24, 2014 (ECF
No. 20-2 at 32-70).
Ultimately, CFTL concluded that the damage to the Reyes’s residence
was as a result of “atypical construction of the home and its supporting
foundation, wood destroying organism damage to the floor framing, as well as
the consolidation of the buried debris encountered and the erratic
heterogeneous fill materials placed on the site.” (Id. at 39; DSMF ¶ 15)
Significantly, CTFL also concluded that
within the same reasonable professional probability, it
is our opinion that the damage observed was not the
result of sinkhole activity. The SPT [standard
penetration test] borings completed at the site all
found similar geologically stable soil profiles, beneath
buried debris and erratic fill material, with no cavities,
zones of raveled soils, or systematic weakening of the
soil profile related to sinkhole activity.
(ECF No. 20-2 at 39; DSMF ¶¶ 14, 16.) As such, there was no evidence of
sinkhole activity found beneath the Property. (ECF No. 20-2 at 40; DSMF ¶ 17.)
Based upon CTFL’s findings and conclusions, ASIC notified the Plaintiffs by
designating specific facts showing that there is a genuine issue for trial.” See United
States v. $183,791.00, 391 F. App’x 791, 794 (11th Cir. 2010) (quoting Celotex Corp. v.
Catrett, 477 U.S. 317, 324, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)); Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). The
Court notes that the Plaintiffs respond to two paragraphs only of ASIC’s Statement,
and do so in a conclusory fashion.

letter dated April 9, 2014 that their claim for sinkhole loss would be denied.
(DSMF ¶ 18.)
3. Legal Standard
Under Federal Rule of Civil Procedure 56, “summary judgment is
appropriate where there ‘is no genuine issue as to any material fact’ and the
moving party is ‘entitled to a judgment as a matter of law.’” See Alabama v.
North Carolina, ––– U.S. ––––, ––––, 130 S. Ct. 2295, 2308, 176 L. Ed. 2d 1070
(2010) (quoting Fed. R. Civ. P. 56(a)). “Summary judgment is particularly suited
to cases of insurance coverage because the interpretation of a written contract
is a matter of law to be decided by the court.” Int’l Ship Repair & Marine Servs.,
Inc. v. N. Assur. Co. of Am., 2011 WL 5877505, at *4 (M.D. Fla. Nov. 23, 2011).
At the summary judgment stage, the Court must view the evidence in the light
most favorable to the nonmoving party, see Adickes v. S.H. Kress & Co., 398
U.S. 144, 158-59, 90 S. Ct. 1598, 26 L. Ed. 2d 142 (1970), and it may not
weigh conflicting evidence to resolve disputed factual issues, see Skop v. City of
Atlanta, Ga., 485 F.3d 1130, 1140 (11th Cir. 2007). Yet, where the record as a
whole could not lead a rational trier of fact to find in the nonmovant’s favor,
there is no genuine issue of fact for trial. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986).
“[O]nce the moving party has met its burden of showing a basis for the
motion, the nonmoving party is required to ‘go beyond the pleadings’ and
present competent evidence designating ‘specific facts showing that there is a
genuine issue for trial.’” United States v. $183,791.00, 391 F. App’x at 794
(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S. Ct. 2548, 91 L. Ed.
2d 265 (1986)). Thus, the nonmoving party “may not rest upon the mere
allegations or denials of his pleadings, but [ ] must set forth specific facts
showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 248
(citation omitted). Mere “metaphysical doubt as to the material facts” will not
suffice. Matsushita, 475 U.S. at 586. “Likewise, a plaintiff cannot defeat
summary judgment by relying upon conclusory assertions.” Maddox-Jones v.
Bd. of Regents of Univ. of Ga., 448 F. App’x 17, 19 (11th Cir. 2011).
4. Analysis
ASIC moves for summary judgment on the basis that CTFL’s reports
demonstrate that the damage to the Property did not occur as a result of
sinkhole activity. In response, the Plaintiffs provide the declaration of Sonny
Gulati, P.E. (ECF No. 23 at 3-4) and a report by Florida Testing &
Environmental, Inc. (“FTE”) (ECF No. 23 at 5-27), in which Mr. Gulati finds
that sinkhole activity cannot be ruled out as the cause of the damage at the
Property. Thus, the Plaintiffs argue that a genuine issue of material fact

remains as to whether sinkhole activity caused the damage. However, under
the circumstances in this case, the Plaintiffs fail to make a sufficient showing
of specific facts in the record demonstrating that there is a genuine issue for
trial.
A. Timeliness
ASIC points out that the Plaintiffs disclosed Mr. Gulati and provided the
FTE report only in response to the instant motion. The Plaintiffs do not dispute
their failure to properly and timely disclose Mr. Gulati as an expert witness
according to this Court’s scheduling order (ECF No. 9). As such, the Plaintiffs
have violated Rules 26 and 37 of the Federal Rules of Civil Procedure with no
explanation whatsoever. In pertinent part, Rule 37 states that “[i]f a party fails
to provide information or identify a witness as required by Rule 26(a) or (e), the
party is not allowed to use that information or witness to supply evidence on a
motion, at a hearing, or at a trial, unless the failure was substantially justified
or harmless.” Fed. R. Civ. P. 37(c)(1).
According to the Scheduling Order, the discovery deadline and deadline
to exchange expert witness summaries/reports was May 30, 2017. Only after
ASIC filed the instant motion on June 13, 2017, did the Plaintiffs identify Mr.
Gulati in response on June 29, 2017. In fact, the Plaintiffs have effectively
conceded that no person conducted testing on their behalf until FTE’s
inspection in response to ASIC’s motion. (See ECF No. 20-3 at 6; DSMF ¶ 28.)
Therefore, the Court will not consider Mr. Gulati’s declaration, or FTE’s report.
Reese v. Herbert, 527 F.3d 1253, 1265 (11th Cir. 2008). The record is otherwise
devoid of any facts indicating that there is a triable issue in this case. The
Plaintiffs may not now attempt to create an issue of fact in order to defeat
summary judgment, especially where their attempt violates the Court’s
Scheduling Order and the Federal Rules of Civil Procedure without explanation.
On this basis alone, the instant motion is due to be granted.
B. The Reports
Nevertheless, even if the Court were to consider the evidence presented
in support of the Plaintiffs’ argument, the FTE report and Mr. Gulati’s findings
are insufficient, as they are based upon a limited inspection conducted on
June 22, 2017, more than three years after ASIC’s investigations and testing,
and almost four years after the claimed loss.
In contrast, the CFTL reports provide specific detailed findings upon
which the conclusion that the damage to the Property did not occur as a result
of sinkhole activity, which the Plaintiffs have only responded to in conclusory
fashion. The results in the CFTL Structural Inspection report include findings
based upon an interview with the homeowner and photographs of the reported

damage, a visual site inspection, and a relative elevation survey to measure
interior elevation differential throughout the floor of the home. (ECF No. 20-2 at
5.) The results reported in the Comprehensive Geotechnical Investigation report
include findings based upon the following tasks and tests:
• Review available published information from the
Natural Resource Conservation service (NRCS), Florida
Department of Transportation Aerial Look-up system,
United States Geological Survey (USGS), Florida
Geological Survey (FGS) and the Dade County Property
Appraiser[’]s Office.
• Conduct a geophysical study of the property using
ground penetrating radar (GPR) to document the
lateral continuity of subsurface strata and to identify
any anomalies consistent with sinkhole activity if
present.
• Conduct scans of the elevated concrete floors using
high frequency ground penetrating radar (GPR)
equipment to identify the presence and location of
steel reinforcement.
• Complete hand auger borings around the perimeter of
the home to better characterize the shallow soil
conditions and to identify any deleterious materials
such as debris, organic soils or expansive clays that
may be present.
• Complete test pit excavations to expose the foundation
of the house and enable us to measure the dimensions
and depth of embedment.
• Complete standard penetration test (SPT) borings to
determine the stability of the soil profile relative to the
possible presence of sinkhole activity.
(ECF No. 20-2 at 33-34).
The FTE report is based upon a review of CFTL’s Structural Inspection
report only, a visual site inspection, and a floor elevation survey conducted by
FTE on June 22, 2017. (ECF No. 23 at 5-7.) The FTE report makes no reference
to the detailed findings contained in CFTL’s Comprehensive Geotechnical
Investigation report—nor is there any evidence that FTE conducted any similar
type of testing—and concludes upon the limited scope of FTE’s inspection, that
“the floor system has undergone excessive overall differential settlement,” and
that “adverse impact due to sinkhole activity at the subject residence cannot be
ruled out.” (Id. at 7-8.) Thus, FTE’s disagreement with CFTL’s conclusions is

not based upon a review of the relevant data, and the FTE report does not
provide competent evidence of specific facts to indicate that a triable issue
exists.
5. Conclusion
As explained above, the Court concludes that ASIC is entitled to
summary judgment on the Plaintiffs’ claim, as they have failed to provide
competent evidence to indicate that a triable issue exists as to the whether the
damage to the Property occurred as a result of sinkhole activity.
Accordingly, it is ORDERED and ADJUGDED that ASIC’s motion, (ECF
No. 22) is granted. Any pending motions are denied as moot, and all
remaining deadlines are terminated. The Clerk of Court shall close this case.
Done and ordered, at Miami, Florida, on September 21, 2017.

________________________________
Robert N. Scola, Jr.
United States District Judge