Southpoint Condo. Ass'n v. Lexington Ins. Co.

• Decision Date: 16 June 2020
• Docket Number: Case No. 19-cv-61365-BLOOM/Valle
• Citation: Southpoint Condo. Ass'n v. Lexington Ins. Co., Case No. 19-cv-61365-BLOOM/Valle (S.D. Fla. Jun 16, 2020)
• Parties: SOUTHPOINT CONDOMINIUM ASSOCIATION, INC., Plaintiff, v. LEXINGTON INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Southern District of Florida

SOUTHPOINT CONDOMINIUM ASSOCIATION, INC., Plaintiff, v. LEXINGTON INSURANCE COMPANY, Defendant.

Case No. 19-cv-61365-BLOOM/Valle

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

June 16, 2020

ORDER

THIS CAUSE is before the Court upon Defendant, Lexington Insurance Company's ("Defendant"), Motion for Summary Judgment, ECF No. [49] ("Motion"). Plaintiff, Southpoint Condominium Association, Inc. ("Plaintiff"), filed a Response in Opposition, ECF No. [56] ("Response"), to which Defendant filed a Reply, ECF No. [60] ("Reply"). The Court has considered the Motion, the Response, the Reply, the record in this case, the applicable law, and is otherwise fully advised. For the reasons set forth below, the Motion is denied.

I. BACKGROUND

This matter stems from a lawsuit Plaintiff initiated in the Seventeenth Judicial Circuit in and for Broward County, Florida against Defendant, which was later removed to this Court on diversity jurisdiction. ECF No. [1].

According to the Complaint, ECF No. [1-2], Plaintiff is the owner of real property that suffered physical damage due to high winds from Hurricane Irma in September 2017. Id. at ¶ 6. During the relevant time period, Defendant insured Plaintiff under a commercial property coverage insurance policy bearing policy number 41-LX-092177517 (the "Policy"). Id. at ¶ 4. Plaintiff alleges that the wind/hurricane damages to the property are covered under the Policy. Id. at ¶ 7. After Plaintiff applied for insurance benefits for the damages, Defendant allegedly "accepted coverage for Plaintiff's claim, but it failed to pay the full amount of benefits Plaintiff is entitled to receive for this loss." Id. at ¶ 9.

The Complaint asserts a single count for breach of contract. Id. at ¶¶ 11-17. Specifically, Plaintiff alleges that Defendant breached the Policy "by failing to pay the full benefits due and owing under the Policy for a covered cause of loss during the policy period," and it has been damaged by "failing to receive the full cost of repair of the damage to the property, including but not limited to, complete repair to the structure, emergency services, and all other coverages afforded by the policy for this loss." Id. at ¶¶ 13, 15.

On February 11, 2020, Defendant was permitted to file an Amended Answer and Affirmative Defenses, ECF No. [30], asserting additional affirmative defenses because of Plaintiff's alleged breach of the policy's Concealment, Misrepresentation or Fraud provision. The Defendant now seeks summary judgment in its favor based on Plaintiff's alleged breach of that same provision. See ECF No. [49].

II. MATERIAL FACTS

Based on the parties' statements and counterstatements of material facts,¹ along with the evidence in the record, the following facts are not genuinely in dispute unless otherwise noted.

A. The policy and the claim

Defendant issued an insurance policy bearing policy number 41-LX-092177517 to Plaintiff insuring the condominium towers located at 3400 and 3410 Galt Ocean Drive, Fort Lauderdale, Florida 33308 (the "Premises"), effective for the one-year period commencing May 10, 2017. Def's SOMF at ¶ 1. According to Defendant, the claims for windstorm are subject to a $2,118,131.31 deductible, whereas Plaintiff asserts that the deductible for each building is $1,052,079.54, which is 3% of each building's value of $35,069,318.00. Pls.' SOMF at ¶ 1.² On or about September 13, 2017, Plaintiff notified Defendant of its claim for wind damage to the Premises from Hurricane Irma. Def.'s SOMF at ¶ 2. Defendant's consultants then inspected the Premises and determined that the cost of repairing the wind-related damages was less than the deductible amount. Pls.' SOMF at ¶ 3.

Defendant retained an engineering firm, Halliwell Engineering Associates ("Halliwell"), to "provide an engineering opinion on the scope as well as the cause and origin of the claimed damage of water intrusion via windows, doors (swing and sliding) to the interior, as well as possible wind damage to the roof systems, and general building envelope, as a result of the Weather Event that occurred on the Date of Loss (DOL), September 10, 2017." ECF No. [49-11] at 1-2. The Halliwell engineering report noted that Hurricane Irma caused damages to the Premises, including by wind, but the Premises also had pre-existing damages to the roof, sliding glass doorsand windows, exterior stucco finish, and other areas. Id. at 9-16. The Policy excludes coverage for damages caused by wear and tear, deterioration, decay, rust, corrosion, settling, cracking, shrinking or expansion. ECF No. [1-2] at 60.

On October 13, 2017, Plaintiff hired the public adjustment firm, Global Pro Recovery, Inc. ("Global Pro"), to act as "its representative under the insurance contract issued" by Defendant. Def.'s SOMF at ¶ 5. Plaintiff also hired the engineering firm, The Falcon Group ("Falcon"), to determine the cause and scope of the damage caused by Hurricane Irma, as well as a construction consultant firm, DSS Condo LLC ("DSS"), to determine the cost of repairs. Id. at ¶ 6. In October 2018, Plaintiff submitted its Hurricane Irma claim in the amount of $29,521,729.00 in damages. Id. at ¶ 7. In support of this claim, Plaintiff submitted an August 22, 2018 report from Falcon and a September 7, 2018 estimate from DSS. Id. Falcon's August 22, 2018 Post-Hurricane Engineering Evaluation ("August Falcon Report") attributes all of the observed damage to Hurricane Irma's winds. Pls.' SOMF at ¶ 8. Plaintiff states that the August Falcon Report "does not incorporate all observed damages," but rather incorporates only "those damages that Falcon determined could be attributed to the Hurricane." Id. (citing ECF No. [49-2] at 85, 92-93). DSS' September 2018 estimate calls for the replacement of all exterior windows, the roofs of both towers, and the lobby. Id. DSS' estimate was purportedly based on the scope prepared by Falcon. Id.

B. Plaintiff's discovery responses

In response to Defendant's interrogatory requesting that Plaintiff describe in "detail the cause(s), nature, and extent of all of the alleged physical damage to the Property that is the subject of the Claim," Plaintiff stated that the "damage was caused by Hurricane Irma" but that for the "most complete description of the nature and extent of the damages, refer to the estimates, reports, and invoices for incurred expenses being produced herewith[.]" ECF No. [22-12] at 1. Plaintiffcontends that it "clarified" its response in its amended interrogatory answer by stating that "[t]he damage was caused by Hurricane Irma. The buildings suffered water and sand intrusion to a vast majority of the condominium units, as well as common areas. The buildings also suffered wind damage to the roofs and windows." Pls.' SOMF at ¶ 10 (citing ECF No. [55-4]). Plaintiff's initial interrogatory response asserted that the cost to repair the physical damage at the Premises was $28,986,615.00. Id.

In response to Defendant's request for Plaintiff to identify pre-existing damages (including deterioration, rust, wear and tear, water leaks, or malfunction of any kind), Plaintiff informed Defendant that pre-loss renovation had taken place at the Premises. Id. at ¶ 11. Specifically, Plaintiff stated that "[t]he South Condominium complex underwent major renovation to the exterior of the building between 2012 and 2017. All balconies were replaced, windows and sliding glass doors were repaired and resealed, curbing around windows and doors was repaired, concrete and stucco were repaired and patched, and the buildings were completely repainted. Additionally, the pool deck, promenade, tennis courts, garages, and elevators were all renovated. Following the renovations at the property, the complex underwent a 40-Year Recertification confirming the completion of all necessary repairs to the property prior to the loss." ECF No. [22-12] at 3.

In response to an interrogatory asking Plaintiff to identify all previous litigations "in which a subject matter of the lawsuit, in whole or in part, was the physical condition of the Property," Plaintiff responded "[n]one." Def.'s SOMF at ¶ 12. Plaintiff contends that this was an "inadvertent oversight" and that it has since amended its response. Pls.' SOMF at ¶ 12 (citing ECF No. [55-4] at 2-3). See also id. at ¶ 23. In response to Defendant's request for audio or video recordings of its Board of Directors' meetings from January 1, 2015 through May 16, 2019, Plaintiff stated "[n]one." Id. at ¶ 13. Plaintiff asserts that this response was a "clerical error." Id.

C. Plaintiff's Rule 30(b)(6) witness' deposition

In addition to written discovery, Defendant requested the deposition of Plaintiff's representative with the most knowledge regarding, among other things, the pre-loss condition of the Premises and pre-loss renovations. Plaintiff, in response, produced its property manager, Ryan Johnson ("Mr. Johnson"). Def.'s SOMF at ¶ 14. Mr. Johnson testified that Plaintiff was aware that its insurance claim included the cost of replacing all exterior windows and all three roofs (two towers and the lobby). Pls.' SOMF at ¶ 15. He added that it was his understanding that Falcon "call[ed] for every window and door to be replaced." Id. (quoting from ECF No. [37-3] at 164:16-18). Mr. Johnson testified that the DSS damages estimate was submitted to Plaintiff's Board of Directors before it was provided to Defendant, and the Board "agreed with" the estimate although it did not "per se" independently approve it. ECF No. [37-3] at 238:21-239:3.³ No one from Plaintiff's side "voice[d] any objection to the DSS Condo estimate[.]" Id. at 239:4-6.

Mr. Johnson testified that the August Falcon Report recommended replacement of racked windows and doors, yet the report does not identify specific windows and doors. ECF No. [37-1] at 244. He stated that the specific windows would appear in the DSS estimate. Id. The DSS estimate included "every window and door[.]" Id. He also testified that the August...