Kendall S. Med. Ctr., Inc. v. Consol. Ins. Nation, Inc.

• Decision Date: 10 May 2017
• Docket Number: No. 3D16–926,3D16–926
• Citation: 219 So.3d 185
• Parties: KENDALL SOUTH MEDICAL CENTER, INC., Appellant, v. CONSOLIDATED INSURANCE NATION, INC., d/b/a Insurance Nation, Appellee.
• Court: Florida District Court of Appeals

219 So.3d 185

KENDALL SOUTH MEDICAL CENTER, INC., Appellant,

v.CONSOLIDATED INSURANCE NATION, INC., d/b/a Insurance Nation, Appellee.

No. 3D16–926

District Court of Appeal of Florida, Third District.

Opinion filed May 10, 2017.

Raul A. Montaner, for appellant.

Fowler White Burnett, P.A., and June Galkoski Hoffman and Rory Eric Jurman (Fort Lauderdale), for appellee.

Before ROTHENBERG, LAGOA and SCALES, JJ.

SCALES, J.

Kendall South Medical Center, Inc. ("Kendall South"), the plaintiff below, appeals a final order dismissing its Fourth Amended Complaint with prejudice for failure to state a cause of action against one of the defendants below, Consolidated Insurance Nation, Inc. d/b/a Insurance Nation ("Insurance Nation"). We have jurisdiction. See Fla. R. App. P. 9.110(k). Concluding that Kendall South has sufficiently stated a cause of action for negligent procurement of an insurance policy, we reverse.

Underlying Facts¹

Kendall South operates a medical center on leased premises located in North Miami Beach, Florida. On January 3, 2013, the sprinkler system on the leased premises was undergoing maintenance when a leak occurred, resulting in significant water damage to both the physical improvements (i.e., walls, flooring, baseboards) and to the contents (i.e., equipment and machinery) located therein. Kendall South had a commercial property insurance policy with Nation Insurance—issued in August 2011, and later renewed—which provided $100,000 of coverage for the physical improvements and contents of the subject property, and which contained a $1,000 deductible and a 90 percent coinsurance clause.² As a result of the sprinkler leak, Kendall South suffered property damaging totaling approximately $260,000. Kendall South made an insurance claim, purportedly expecting to receive a $100,000 payout, but received only $16,562.67 due to the policy's coinsurance clause.

In March 2013, Kendall South filed a negligence claim against the management company for the leased premises, Equity One Realty & Management, FL., Inc., which allegedly undertook the work on the sprinkler system. As an affirmative defense, the management company asserted that Kendall South had failed to maintain sufficient insurance on the subject premises in compliance with the parties' lease agreement. In April 2013, Kendall South filed an Amended Complaint, adding a negligence claim against Countryside Power Sweeping, Inc., which allegedly performed the work on the sprinkler system.

The matter was referred to mediation and later set for trial, which was rescheduled on numerous occasions.

Before the trial was held, on January 20, 2015, Kendall South was granted leave to file a Second Amended Complaint in order to add claims for negligent procurement of insurance and breach of fiduciary duty against Kendall South's insurer, Insurance Nation. The lower court then struck the pending trial date.³ On February 26, 2015, Insurance Nation moved to dismiss the two claims against it, claiming that Kendall South had failed to state causes of action. The trial court agreed, dismissing the Second Amended Complaint without prejudice.

On July 31, 2015, Kendall South filed its Third Amended Complaint, again alleging a claim for negligent procurement of insurance against Insurance Nation, but dropping the claim for breach of fiduciary duty. Insurance Nation moved to dismiss the Third Amended Complaint, alleging that Kendall South had again failed to state a cause of action. The trial court agreed, dismissing the Third Amended Complaint without prejudice.

On November 18, 2015, Kendall South filed its Fourth Amended Complaint, once again alleging a claim for negligent procurement of insurance against Insurance Nation. In this pleading, Kendall South alleged that it had met with Insurance Nation's agent, Humberto Torres, on or about August 10, 2011, in order to obtain a "a commercial property coverage policy of insurance in the amount of $100,000[.]00 that would cover the property, equipment, supplies, and improvements" of Kendall South.

At this meeting, after informing the agent that the subject premises had "office equipment, supplies and furnishings in excess of $100,000.00 and that [Kendall South] had spent in excess of $100,000.00 for the buildouts, betterments or improvements" thereon, Kendall South "requested from [agent] Torres insurance coverage of $100,000.00 to cover the property, supplies, furnishings, betterments or improvements of Kendall South Medical Center, Inc." Thereupon, "Torres informed [Kendall South] that Defendant Insurance Nation would procure a commercial policy of insurance that would cover and protect all the property, equipment, furnishings and improvements of the Plaintiff Kendall South Medical Center, Inc., and as specifically requested by Plaintiff."

After Kendall South paid the premium for a policy that provided property damage coverage of $100,000 with a $1,000 deductible and a 90 percent coinsurance clause, "Defendant Insurance Nation by and through its agent Torres again assured plaintiff that the policy procured by Defendant Insurance Nation would cover and fully pay the amount of $100,000[.]00 that was requested by Plaintiff." Kendall South renewed the policy under the same terms in August 2012. As a result of the sprinkler leak in January 2013, Kendall South's premises purportedly suffered property damage in excess of $260,000. The subject policy, however, provided coverage in the amount of only $16,562.67 as a result of a penalty imposed by the coinsurance clause.

Kendall South specifically alleged that Insurance Nation "had the duty to procure the insurance coverage as requested," as well as a "duty of reasonable care in ... properly explaining the policy of insurance procured on [Kendall South's] behalf." This duty was allegedly breached when the agent "failed to advise and or inform and or adequately and or properly explain to [Kendall South] the 90% coinsurance clause" where the agent "knew or should have known that the policy written by [Insurance Nation] with the 90% coinsurance clause would not cover and pay [Kendall South's] property as requested by [Kendall South] in the event" of a covered claim.

Insurance Nation moved to dismiss the Fourth Amended Complaint, once again alleging that Kendall South had failed to allege a claim for negligent procurement of insurance. Insurance Nation asserted, in pertinent part that: (i) it "explained this policy, including the coinsurance requirements, to Kendall South in the same way that Insurance Nation always explains similar policies to its customers as a matter of custom and practice"; (ii) "[b]y procuring and explaining the insurance requested by Kendall South, Insurance Nation met its duty"; and (iii) "Kendall South is attempting to manufacture a broker's liability claim against Insurance Nation despite 1) receiving the insurance it requested; and 2) never specifically asking for a higher level of insurance given the value of its office equipment."

This time the trial court dismissed the Fourth Amended Complaint with prejudice. For the following reasons, we conclude the trial court erred in finding that the Fourth Amended...