El Dorado Towers Condo. Ass'n, Inc. v. QBE Ins. Corp.

• Decision Date: 16 June 2010
• Docket Number: Case No. 09-20047-CIV
• Citation: 717 F.Supp.2d 1311
• Parties: EL DORADO TOWERS CONDOMINIUM ASSOCIATION, INC., Plaintiff, v. QBE INSURANCE CORPORATION, Defendant.
• Court: U.S. District Court — Southern District of Florida

717 F.Supp.2d 1311

EL DORADO TOWERS CONDOMINIUM ASSOCIATION, INC., Plaintiff,

v.QBE INSURANCE CORPORATION, Defendant.

Case No. 09-20047-CIV.

United States District Court,

S.D. Florida.

June 16, 2010.

Robert Anthony Reynolds, Merlin Law Group PA, Coral Gables, FL, William F. Merlin, Jr., Jean Frances Niven, Merlin Law Group PA, Tampa, FL, Daniel S. Rosenbaum, John Marcus Siracusa, Joseph William Janssen, III, Laurel Ruthanne Wiley, Melissa Devlin, Richard Chambers Valuntas, Tatiana B. Yaques, Rosenbaum Mollengarden Janssen & Siracusa, PLLC, West Palm Beach, FL, for Plaintiff.

Constantine Georgalis Nickas, Damian Dwight Daley, William Frederick Fink, Wicker Smith O'Hara McCoy & Ford PA, Miami, FL, Evelyn Maureen Merchant, William S. Berk, Berk Merchant & Sims PLC, Coral Gables, FL, Catherine Deborah Bain, Ronaflor E. Smith, C. Deborah Bain PA, North Palm Beach, FL, James Joseph Wicker, II, Rachel Studley, Wicker Smith Tutan O'Hara McCoy Graham & Ford, West Palm Beach, FL, for Defendant.

AMENDED ORDER DENYING DEFENDANT QBE INSURANCE CORPORATION'S MOTION FOR SUMMARY JUDGMENT [DE 41] ¹

ALAN S. GOLD, District Judge.

THIS CAUSE is before the Court upon Defendant QBE Insurance Corporation's ("QBE") Motion for Summary Judgment [DE 41], filed on December 30, 2009. Plaintiff El Dorado Towers Condominium Association, Inc. ("Plaintiff") filed a Response to QBE's Motion [DE 58] on January 26, 2010, and QBE filed a Reply [DE 61] on February 10, 2010. Oral argument on the Motion was held on May 7, 2010. I have carefully reviewed the pleadings filed by the parties, the record and the applicable law. For the reasons set forth below, Defendant's Motion is denied.

I. Background

Upon review of the record, including QBE's Statement of Material Facts, the Plaintiff's Response, and the evidentiary materials offered by both sides, the followingfacts relevant to the disposition of QBE's Motion are undisputed: ²

Plaintiff was insured by Defendant QBE through a commercial property insurance policy, number QF2950-06 (the "Policy"), for a total of $31,861,000.00. (Pl. Statement, ¶ 1). The Policy was issued to Plaintiff for the twelve month period commencing February 2, 2005. [ See DE 18, Ex. A]. The Policy contained the following provisions setting forth the insured's duties in the event of loss or damage:

a. You must see that the following are done in the event of loss or damage to Covered Property:

(6) As often as may be reasonably required, permit us to inspect the property proving the loss or damage and examine your books and records. Also permit us to take samples of damaged and undamaged property for inspection, testing and analysis, and permit us to make copies from your books and records.

(7) Send us a signed, sworn proof of loss containing the information we request to investigate the claim. You must do this within 60 days after our request. We will supply you with the necessary forms.

(8) Cooperate with us in the investigation or settlement of the claim.

b. We may examine any insured under oath, while not in the presence of any other insured and at such times as may be reasonably required, about any matter relating to this insurance or the claim, including an insured's books and records. In the event of an examination, an insured's answers must be signed.

[DE 18, Ex. A]. The Policy also contained the following provision governing the insured's right to bring legal action against the insurer:

D. Legal Action Against Us

No one may bring a legal action against us under this Coverage Part unless:

1. There has been full compliance with all of the terms of this Coverage Part ...

( Id.)

Plaintiff alleges that Hurricane Wilma struck El Dorado on October 24, 2005. [ See DE 18]. At some point shortly after the Hurricane, Plaintiff provided QBE with an initial notice of the loss. (Pl. Statement, ¶ 6). Thereafter, on November 21, 2005, QBE's insurance adjuster, Sanford Siegel ("Mr. Seigel"), in conjunction with the public adjuster retained by Plaintiff, Joseph Zevuloni ("Mr. Zevuloni"), inspected the loss location. ( Id., ¶ 7). At that time, QBE's adjuster requested copies of records from Plaintiff's public adjuster, including preliminary damage surveys, invoices/estimates relating to the alleged damages, and any reports from Plaintiff's engineers and contractors. ³ ( Id., ¶ 6).

On February 15, 2006 QBE sent two letters to Plaintiff's lawyer requesting additional records, and advising that QBE would "travel to the condominium or management office where the records are maintained" and "bring our own photocopy machines to facilitate copying of any records deemed to be material to the investigation." ( Id., ¶ 8) QBE also advised Plaintiff that "one or more" examinations under oath would be required after QBE had reviewed Plaintiff's records. ( Id., ¶ 33). Two days later, on February 17, 2006, Plaintiff submitted a claim for damages allegedly caused by Hurricane Wilma totaling $31,754,520.25, and advised QBE that the requested records would be made available for inspection.⁴ ( Id., ¶ 9). On the same day, the estimate prepared by Plaintiff's public adjuster, Mr. Zevuloni, consisting of two thousand nine hundred and thirty nine pages (2,939) was received by QBE's adjuster, Mr. Seigel. Thereafter, certain records were produced on March 13, 14 and 15, 2006; however, Plaintiff did not permit QBE to inspect unit owner files. ( Id.) On March 28, 2006, QBE again inspected the loss location for three days. ( Id., ¶ 23). Additional documents were also produced in March 2006. ( Id., ¶ 11). However, Plaintiff's counsel advised QBE that additional unspecified documents were being withheld under a claim that they were privileged or confidential.⁵ ( Id.)

In a letter dated May 25, 2006, after reviewing the records produced by Plaintiff, QBE requested an examination under oath of a designated corporate representative with the most knowledge of the damages sustained from Hurricane Wilma, the necessary repairs, and the insurance claim. (Def. Statement, ¶ 34). QBE also requested examinations under oath of six additional witnesses, including Plaintiff's property manager and current and former members of Plaintiff's Board of Directors ("Board Members"). ( Id.). On August 9, 2006, QBE conducted examinations of Plaintiff's corporate representative and property manager. ( Id., ¶ 35). Both of these individuals produced by Plaintiff deferred to Plaintiff's public adjuster on a number of issues. ( Id., ¶ 36). For example, when asked about the estimates for the Hurricane repairs, Plaintiff's corporate representative deferred to the public adjuster stating "as far as that was concerned he took care of that." ( Id.). Plaintiff's Property Manager also claimed to have no involvement in determining the extent of the Hurricane Wilma damages or obtaining bids or estimates. ( Id.)

On August 13 and 31, 2006, QBE reiterated its request for the remaining examinations under oath, but Plaintiff's attorney advised that he would not produce any other individuals for examination. ( Id. ¶ 37). On September 11, 2006, QBE again requested the additional examinations under oath; requested the examination of Plaintiff's public adjuster; and provided proposed dates for the examination of Plaintiff's public adjuster. ( Id.). Plaintiff responded on October 3, 2006 by denyingQBE's request for the additional examinations. ( Id.)

QBE informed Plaintiff on October 30, 2006, that its failure to produce the records and the additional examinations under oath had impeded and delayed QBE's investigation, reiterated its offer of a confidentiality agreement for any unit member files, and attached a proposed confidentiality agreement. ( Id., ¶ 38). With regard to the withheld documents referred to by Plaintiff's attorney as "solely limited to board meeting and minutes," QBE requested a list of the documents withheld and further requested that Plaintiff provide copies of the documents with allegedly privileged material redacted. ( Id., ¶ 14). On December 14, 2006, QBE explained the purposes behind the policy conditions, again requested access to the unit owner files and withheld documentation, and informed Plaintiff that this was its final opportunity to comply and cooperate. ( Id., ¶ 15). In the December 14, 2006 letter QBE also cited the Sworn Statement in Proof of Loss ("sworn proof of loss") provision of the Policy and provided a copy of the sworn proof of loss form. ( Id., ¶ 49).

QBE received no communication for the next six months. ( Id., ¶ 16). Then, on June 26, 2006, QBE received a letter of representation from Plaintiff's second attorney, Hugh Lumpkin ("Mr. Lumpkin"). ( Id.). On July 17, 2007, QBE reiterated its request for the examinations under oath; stated that it was prejudiced by Plaintiff's failure to provide a sworn proof of loss; and provided another copy of the sworn proof of loss form. ( Id., ¶ 40). On July 20, 2007, Mr. Lumpkin advised that he was searching for someone with similar knowledge to Plaintiff's public adjuster to produce for an examination under oath because Mr. Zevuloni was no longer the public adjuster for Plaintiff. ( Id.; Pl. Statement ¶ 40). Moreover, in the same correspondence, Mr. Lumpkin advised that he was reviewing the unit owner files and meeting minutes for the possible production of additional documentation. ( Id., ¶ 18). The letter also reminded QBE that it had already copied over eleven thousand pages of documents belonging to Plaintiff, and that QBE failed to produce QBE's estimate of damage, engineering reports,⁶ or provide any cooperative response to arrive at an agreed amount of the loss. (Pl. Statement, ¶ 18). Mr. Lumpkin also advised QBE that Plaintiff would be submitting "numbers as accurate as possible within the next couple of weeks-numbers substantially refined." (Def. Statement, ¶ 52). However, no sworn proof of loss or revised claim was submitted to QBE in 2007. ( Id.)

No further communication was received for several months, and QBE sent a follow-up letter on ...