Mama Jo's Inc. v. Sparta Ins. Co.
| Decision Date | 18 August 2020 |
| Docket Number | No. 18-12887,18-12887 |
| Parties | MAMA JO'S INC., d.b.a. Berries, Plaintiff - Appellant, v. SPARTA INSURANCE COMPANY, Defendant - Appellee. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
[DO NOT PUBLISH]
D.C. Docket No. 1:17-cv-23362-KMM
Appeal from the United States District Court for the Southern District of Florida
Before NEWSOM, TJOFLAT, Circuit Judges, and PROCTOR,* District Judge.
In this insurance coverage case, we are called upon to assess whether the district court properly excluded the opinions of Plaintiff's experts and granted Defendant's motion for summary judgment based upon the conclusion that Plaintiff failed to establish that it suffered a direct physical loss that would trigger coverage. We conclude the district court correctly ruled on both questions. Therefore, for the reasons more fully discussed below, we affirm.
Appellant Mama Jo's Inc. d/b/a Berries ("Berries") owns and operates a restaurant located at 2884 SW 27th Avenue, Miami, FL 33133. (Doc. 107-1 at 8-9). The restaurant is located less than one mile from the ocean (Doc. 111-5 at 4; Doc. 111-6 at 57-58, 104), and is partially enclosed by a retractable awning, wall, and roof system. (Doc. 109-4 at 4, 31; Doc. 109-5 at 66-68, 75-81; Doc. 110-8 at 104). When the system is opened, the restaurant's interior areas are exposed to the elements. (Id.). The restaurant's front entrance, bar, and seating areas are adjacent to SW 27th Avenue. (Doc. 107-1 at 95-97; Doc. 109-5 at 51-54, 66-71, 80; Doc. 116-8 at 4-5).
From December 2013 until June 2015, there was roadway construction at different locations along SW 27th Avenue in the general vicinity of the restaurant.(Doc. 102 at 2; Doc. 107-1 at 58-60; Doc. 116-5 at 11). During that time, dust and debris generated by the construction migrated into the restaurant. (Doc. 116 at 3-5; Doc. 110-3 at 51-55; Doc. 110-8 at 54; Doc. 116-8 at 3-7; Doc. 116-9 at 3-15, 19-29). Berries performed daily cleaning using its normal cleaning methods, employing dust pans, hoses, rags, towels, and blowers. (Id.).
Berries was open every day throughout the time period of the roadwork. (Doc. 116 at 3-5; Doc. 110-8 at 56-57, 95-97; Doc. 116-8 at 7-10; Doc. 116-9 at 25). Although the restaurant maintained the ability to serve the same number of customers as it had before the construction began, customer traffic decreased during the roadwork. (Doc. 116 at 3-5; Doc. 107-1 at 73-74; Doc. 110-8 at 56-57; Doc. 116-8 at 9-12; Doc. 116-9 at 24-27).
From September 19, 2013 to September 19, 2014, Berries was insured by Appellee, Sparta Insurance Company ("Sparta"). (Doc. 110-1 at 5, 31-54). Sparta issued an "all risk" commercial property insurance policy, which included, in relevant part, a Building and Personal Property Coverage Form and a Business Income (and Extra Expense) Coverage Form. (Doc. 110-1 at 31-54).
The Building and Personal Property Coverage Form contained in the policy covers "direct physical loss of or damage to Covered Property . . . caused by or resulting from any Covered Cause of Loss." (Id. at 31). The policy defines"Covered Causes of Loss" as "Risks of Direct Physical Loss unless the loss is" excluded or limited. (Id. at 33, 63).
The policy's Business Income (and Extra Expense) Coverage Form provides that Sparta will pay for "the actual loss of Business Income you sustain due to the necessary 'suspension' of your 'operations' during the 'period of restoration.'" (Id. at 46). The policy provides that the "'suspension' must be caused by direct physical loss of or damage to" covered property. (Id.).
On December 12, 2014, Berries submitted a claim to Sparta under the policy. (Doc. 143 at 4). Berries asserted that the claim was related to dust and debris generated by the roadway construction. (Id.). Sparta assigned Corey Buford, an insurance adjuster, to review the claim on behalf of Sparta. (Doc. 116-10 at 5). Berries hired a public adjuster, Robert Inguanzo of Epic Group Public Adjusters, to assist with its claim. (Doc. 110 at 3).
In December 2014 and January 2015, Buford requested information about the claim from Berries. (Doc. 116-10 at 6-8, 17-19). In January 2015, Inguanzo responded to these requests and informed Buford that the claimed loss "occurred as early as December of 2013 in the form of construction debris and dust from the [roadwork]" and that, (Id. at 17).
In March 2015, Inguanzo provided Berries with an estimate in the amount of $16,275.58 to clean and paint the restaurant. (Doc. 110-10 at 1-10; Doc. 116-11 at 11-15, 23-25; Doc. 116-12 at 5-6). Inguanzo testified that, "based on our inspection back then" the estimate encompassed "the work that we felt was necessary to bring the property to its pre-loss condition includ[ing] the cleaning and painting," and that, "[a]t that time, we didn't have anything for removal or replacement . . . ." (Doc. 116-11 at 14-15).
In April 2015, Inguanzo sent Buford a "Sworn Statement in Proof of Loss" for the building claim, including a preliminary damage estimate in the amount of $13,775.58. (Doc. 116-10 at 21). This amount was calculated based on the amount of the estimate -- $16,235.58 -- minus a deductible. (Id.). Inguanzo also sent Buford a "Sworn Statement in Proof of Loss" and supporting documentation regarding a business income claim in the amount of $292,550.84. (Id.). Berries contended that its 2014 sales were lower than expected when compared to its rate of sales growth in previous years. (Doc. 109-2).
On January 30, 2017, Sparta denied the claim because it was "not covered under the [] policy." (Doc. 110-13). As Sparta explained: (Doc. 110-13 at 5). Sparta also stated that:
Under the Business Income Coverage Form, coverage is provided for the actual loss of business income the insured sustains due to the necessary "suspension" of "operations" during the "period of restoration." The "suspension" must be caused by direct physical loss of or damage to property at the premises . . . .
(Doc. 110-13 at 6) (emphasis in original).
Berries initiated this action in Florida state court in May 2017. (Doc. 1-2). Sparta removed the action to the United States District Court for the Southern District of Florida based on diversity jurisdiction. (Doc. 1). In its initial disclosures in the lawsuit, Berries claimed the same damages it had before the suit was filed: $16,275.58 for cleaning and painting the restaurant, and $292,550.84 for lower-than-expected sales in 2014. (Doc. 20 at 4).
On February 26, 2018, Berries also served amended answers to interrogatories. (Doc. 116-5 at 8). In those responses, it identified for the first time new categories of damages totaling $319,688.57. (Id.). Berries contended that the newly claimed damages were due to replacement of the restaurant's awning and retractable roof systems, HVAC repairs, and replacement of the restaurant's audio and lighting systems. (Id. at 8-9).
Berries relied on three experts to causally link its newly-claimed damages to the construction dust and debris generated more than two and a half years earlier, i.e., during Sparta's policy period ending on September 19, 2014. First, Alex Posada offered opinion testimony about Berries' audio and lighting systems. Second, Christopher Thompson opined about the awning and retractable roof systems. Third, Alfredo Brizuela proffered his opinion about "engineering" and "the cause and origin of the loss." (Doc. 105-1 at 5-6; Doc. 113 at 2-4).
Posada's firm, United Audio, had "been in the audio and special lighting industry for over 15 years providing integrated audio, video, lighting & control solutions. . . ." (Doc. 109-1 at 2). Posada's proposed methodology included performing a "QC diagnostic" which would have involved, among other things, "[d]ismantl[ing] all Audio & Lighting Equipment, . . . [t]est[ing] all existing wiring and terminations[,] [d]isassembl[ing] each and every speaker and lighting fixture[],[t]est[ing] all audio devices[, and] [e]xamin[ing] all components in every lighting fixture." (Id. at 2-3; Doc. 108-1 at 51-53). However, Posada did not perform the QC diagnostic. (Doc. 108-1 at 53). Rather, in February 2018, he performed a two-hour site inspection and concluded that "it [wa]s more cost effective to replace the system." (Id. at 24-34).
At Posada's deposition, the following exchange occurred:
(Doc. 108-1 at 55-56). Posada's inspection consisted of visually observing some of the system's audio and lighting components, and listening to some of its audio components. (Doc. 109 at 3; Doc. 108-1 at 51-53).
Posada did not inspect all of the restaurant's speakers and components because some were out of reach and, during his inspection, there were patrons in the restaurant whom he did not wish to disturb. (Doc. 108-1 at 24-25, 31-39). He only walked around...
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