316, Inc. v. Maryland Cas. Co.

• Decision Date: 21 August 2008
• Docket Number: Case No. 3:07cv528/RS/MD.
• Citation: 625 F.Supp.2d 1187
• Parties: 316, INC., Plaintiff, v. MARYLAND CASUALTY COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Florida

625 F.Supp.2d 1187

316, INC., Plaintiff, v. MARYLAND CASUALTY COMPANY, Defendant.

Case No. 3:07cv528/RS/MD.

United States District Court, N.D. Florida, Panama City Division.

August 21, 2008.

COPYRIGHT MATERIAL OMITTED

A. Woodson Isom, Jr., Merlin Law Group, Tampa, FL, for Plaintiff.

John Michael Grimley, Jr., Kurtis Jay Keefer, Phillip Steven Howell, Galloway Johnson Tompkins Etc., Pensacola, FL, for Defendant.

ORDER

RICHARD SMOAK, District Judge.

Before me are Defendant's Motion for Summary Judgment (Doc. 55), Plaintiff's Response and Memorandum of Law in Opposition to Defendant's Motion for Summary Judgment (Docs. 58 and 59), and Plaintiff's Statement of Facts in Opposition to Summary Judgment (Doc. 60).

I. STANDARD OF REVIEW

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment should be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The "purpose of summary judgment is to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct 1348, 1356, 89 L.Ed.2d 538 (1986) (quoting Advisory Committee Note to 1963 Amendment of Fed.R.Civ.P. 56(e)). A factual dispute is "`genuine' if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). A fact is "material" if it "might affect the outcome of the suit under the governing [substantive] law." Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 998 (11th Cir.1992).

The basic issue before the court on a motion for summary judgment is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 251, 106 S.Ct. at 2512. The moving party has the burden of showing the absence of a genuine issue as to any material fact, and in deciding whether the movant has met this burden, the court must view the movant's evidence and all factual inferences arising from it in the light most favorable to the nonmoving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970); Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir.1993); Welch v. Celotex Corp., 951 F.2d 1235, 1237 (11th Cir.1992). Thus, "[i]f reasonable minds could differ on the inferences arising from undisputed facts, then a court should deny summary judgment." Miranda v. B & B Cash Grocery Store, Inc., 975 F.2d 1518, 1534 (11th Cir.1992) (citing Mercantile Bank & Trust v. Fidelity & Deposit Co., 750 F.2d 838, 841 (11th Cir. 1985)). However, "[a] mere `scintilla' of evidence supporting the [nonmoving] party's position will not suffice; there must be enough of a showing that the jury could reasonably find for that party." Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir.1990) (citing Anderson, 477 U.S. at 251, 106 S.Ct. at 2511).

In this case, the court's jurisdiction is based upon diversity, 28 U.S.C. § 1332, and this case arises under Florida law. In diversity cases arising under Florida law, a federal court is bound by the law articulated by the Florida Supreme Court. See Shapiro v. Associated Int'l Ins. Co., 899 F.2d 1116, 1118 (11th Cir.1990). If the Florida Supreme Court has not spoken on an issue, Florida District Courts of Appeal decisions control absent persuasive indication that the Florida Supreme Court would rule otherwise. See Blanchard v. State Farm Mut. Auto. Ins. Co., 903 F.2d 1398, 1399 (11th Cir.1990). If there is no authority, this Court is to make an "educated guess" as to how a Florida court would rule. See Shapiro, 899 F.2d at 1118-19.

II. FACTS

This case involves a dispute over damage to commercial property owned by Plaintiff 316, Inc. ("316") and insured by Defendant Maryland Casualty Company ("Maryland"). When the parties could not agree on the amount of 316's loss, Maryland invoked its right to appraisal under the insurance contract, following which 316 filed a Civil Remedy Notice of Insurer Violation with the Florida Department of Financial Services, demanding payment of the insurance contract within sixty days. Maryland did not pay within sixty days, but instead waited for the outcome of the appraisal process. Eventually, an umpire determined the amount of 316's loss and Maryland promptly paid the appraisal award. Seven weeks later, 316 filed suit in state court for civil remedy pursuant to § 624.155 Florida Statutes, alleging "bad faith" on the part of Maryland in its contractual dealings with 316. For the reasons that follow, Defendant's Motion for Summary Judgment is GRANTED, and Plaintiff's complaint is dismissed with prejudice.

Background

On September 15, 2004, Hurricane Ivan damaged commercial property owned by 316 and insured by Maryland. 316 timely filed a proof of loss. After assessing 316's claim, Maryland acknowledged coverage and paid $3.8 million over the course of seven months. The parties could not agree on the total amount of the loss. As a result, Maryland invoked its right to appraisal under the terms of the insurance contract with 316 by letter dated June 10, 2005. The appraisal provision of 316's insurance contract states:

Appraisal—If we and you disagree on the value of the property or the amount of loss, either may make written demand for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. If they cannot agree, either may request that selection be made by a judge of a court having jurisdiction. The appraisers will state separately the value of the property and amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will:

1. Pay its chosen appraiser; and

2. Bear the other expenses of the appraisal and umpire equally.

One week later, on June 17, 2005, 316 filed a Civil Remedy Notice of Insurer Violation with the Florida Department of Financial Services, alleging claim delay, claim denial, unfair trade practice, and unsatisfactory settlement offer on the part of Maryland. On August 27, 2007, an appraisal award of nearly $6.8 million was determined by a neutral umpire. On September 18, 2007, Maryland paid in full the net amount of the appraisal award, $2.7 million.

On November 8, 2007, 316 filed a complaint under the Florida Civil Remedy Statute in the Circuit Court of Escambia County, Florida, asking for "actual and compensatory damages, punitive damages, pre-judgment and post judgment interest, costs, attorney fees and the disgorgement of all unlawful or illegitimate monies Defendant profited from its bad faith claims handling practices or unfair insurance claims practices, including, but not limited to any interest or monies Defendant gained from such unlawful or illegitimate monies" under § 624.155 (Civil Remedy) and § 626.9541 (Unfair or Deceptive Acts or Practices Prohibited) Florida Statutes. Maryland timely removed the case. 316's request for punitive damages was dismissed with prejudice. (Doc. 47).

III. ANALYSIS

Plaintiff's claim is entirely based upon Section 624.155, the Florida Civil Remedy Statute, and not upon a theory of breach of contract. Plaintiff asserts that it is entitled to relief based on the language of § 624.155(8) Florida Statutes which reads in pertinent part: "The damages recoverable pursuant to this section shall include those damages which are a reasonably foreseeable result of a specified violation of this section by the authorized insurer ...." Plaintiff provides no legal support for its claims to relief, however. While Plaintiff would have me assess the merits of its case by simply reading the text of the Civil Remedy Statute, there is no way for a court to assess a bad faith claim under § 624.155 without evaluating the contractual obligations of the parties. A claim for bad faith failure to settle is "founded upon the obligation of the insurer to pay when all conditions under the policy would require an insurer exercising good faith and fair dealing towards its insured to pay." Vest v. Travelers Ins. Co., 753 So.2d 1270, 1275 (Fla.2000). To determine whether there was an obligation by the insurer to pay, a court must look to the underlying policy to determine the obligation of the parties and to determine whether there was bad faith in the handling of the claims.

In 1982, the Florida Legislature enacted Florida Statutes Section 624.155 which provides that a person can institute a civil action against an insurer when the person is damaged by the insurer's failure to settle claims in good faith. As a condition precedent to bringing such an action, Florida's Department of Financial Services and the insurer must be given sixty days written notice of the violation. See § 624.155(3)(a), Fla. Stat. (2008). No action will lie if, within those sixty days, "the damages are paid or the circumstances giving rise to the violation are corrected." See § 624.155(3)(d), Fla. Stat. (2008). In Talat Enters., Inc. v. Aetna Cas. & Sur. Co., 753 So.2d 1278 (Fla.2000), the Florida Supreme Court explained that, "in creating this statutory remedy for bad-faith actions, the Legislature provided this sixty day window as a last opportunity for insurers to comply with their claim-handling obligations when a good-faith decision by the insurer would indicate that contractual benefits are owed." Id. at 1284. Furthermore, "the purpose of the civil remedy notice is to give the insurer one last chance to...