W. 32nd/33rd Place Warehouse Condo. Ass'n v. W. World Ins. Co.

• Decision Date: 05 May 2023
• Docket Number: 22-CV-21408-MORE/GOODMAN
• Parties: WEST 32ND/33RD PLACE WAREHOUSE CONDOMINIUM ASSOCIATION, INC., Plaintiff, v. WESTERN WORLD INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Southern District of Florida

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WEST 32ND/33RD PLACE WAREHOUSE CONDOMINIUM ASSOCIATION, INC., Plaintiff, v. WESTERN WORLD INSURANCE COMPANY, Defendant.

No. 22-CV-21408-MORE/GOODMAN

United States District Court, S.D. Florida, Miami Division

May 5, 2023

ORDER GRANTING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT

JONATHAN GOODMAN, UNITED STATES MAGISTRATE JUDGE.

In this breach of contract action, Plaintiff West 32nd/33rd Place Warehouse Condominium Association (“the Association” or “Plaintiff”) alleges that Defendant Western World Insurance Company (“Western World” or “Defendant”) failed to pay all covered damages caused by a nearby crane falling on property covered by the insurance policy. [ECF No. 1-1]. Western World filed a motion for partial summary judgment, contending that Plaintiff's damages should be calculated by using the “price of labor and construction materials as of the time of loss.” [ECF No. 27]. Plaintiff filed a response [ECF No. 34] and Defendant filed an optional reply [ECF No 38].

United States Senior District Court Judge Federico A. Moreno referred to the Undersigned Defendant's motion for an Order. [ECF No 29].^[1]

For the reasons discussed below, the Undersigned grants Defendant's Motion.

I. CLAIMS AND INTRODUCTION^[2]

Plaintiff maintains a warehouse (the “Property”) located in Hialeah, Florida. Defendant issued a commercial property insurance policy to Plaintiff effective July 18, 2019 through July 18, 2020, covering the Property. On October 25, 2019, a crane positioned at an adjacent property fell and landed on the Property, causing damage to the warehouse.

Plaintiff submitted a claim to Defendant, who elected to pay the cost of repairing the warehouse and, after its investigation, paid Plaintiff approximately $525,000. But Plaintiff contends that the cost of repairing the warehouse is approximately $2.2 million. Plaintiff's figure is based on the price of labor and construction materials as of August 2022. The cost of labor and construction materials has increased significantly between October 2019 -- the date of the loss -- and August 2022.

During the pendency of the claims process and this lawsuit, Defendant's adjusters have prepared multiple estimates, often based on cost of materials at the time the estimate was prepared. At defense counsel's request, Robert DeLoach (Defendant's damages expert) prepared an estimate using the October 2019 prices.

II. LEGAL FRAMEWORK

Summary judgment is appropriate “if 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 a judgment as a matter of law.” Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997) (citation omitted). Thus, the Court may enter summary judgment “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

The moving party must “show the district court, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). If the movant does so, then “the burden shift[s] to the non-moving party to demonstrate that there is indeed a material issue of fact that precludes summary judgment.” Id. A genuine factual dispute exists “if the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Damon v. Fleming Supermarkets of Fla., Inc., 196 F.3d 1354, 1358 (11th Cir. 1999). The opposing party must proffer more than “a mere scintilla of evidence” to show “that the jury could reasonably find for that party.” Abbes v. Embraer Servs., Inc., 195 Fed.Appx. 898, 899-900 (11th Cir. 2006) (internal quotations omitted).

Contract interpretation is “a question of law” to be decided by the court “by reading the words of a contract in the context of the entire contract and construing the contract to effectuate the parties' intent.” Feaz v. Wells Fargo Bank, N.A., 745 F.3d 1098, 1104 (11th Cir. 2014). “Under Florida law, if the terms of [a contract] are clear and unambiguous, [then] a court must interpret the contract in accordance with its plain meaning.” Key v. Allstate Ins. Co., 90 F.3d 1546, 1549 (11th Cir. 1996). “Although contract interpretation is generally a question of law for the Court, if the contract contains ambiguities, [then] a question of fact for the jury may be presented.” Assa Compania De Seguros, S.A. v. Codotrans, Inc., No. 13-23563, 2014 WL 11906600, at *3 (S.D. Fla. Sept. 12, 2014).

“The initial determination of whether the contract term is ambiguous is a question of law for the court. Where the terms of the written instrument are disputed and reasonably susceptible to more than one construction, an issue of fact is presented as to the [contracting] parties' intent which cannot properly be resolved by summary judgment.” Strama v. Union Fid. Life Ins. Co., 793 So.2d 1129, 1131 (Fla. 1st DCA 2001); BKD Twenty-One Mgmt. Co., Inc. v. Delsordo, 127 So.3d 527, 530 (Fla. 4th DCA 2012) (“[C]ontractual language is ambiguous only if it is susceptible to more than one reasonable interpretation.” (emphasis removed)); Laufer v. Norma Fashions, Inc., 418 So.2d 437, 439 (Fla. 3d DCA 1982) (“A phrase in a contract is ambiguous when it is uncertain of meaning and disputed.”).

III. ANALYSIS

The policy language relevant to Defendant's motion states the following^[3]:

E. Loss Conditions

* * *

2. Appraisal

* * *

The appraisers will state separately the value of the property and amount of loss.

* * *

4. Loss Payment a. In the event of loss or damage covered by this Coverage Form, at our option, we will either:

(1) Pay the value of lost or damaged property;

(2) Pay the cost of repairing or replacing the lost or damaged property, subject to b. below;

(3) Take all or any part of the property at an agreed or appraised value; or

(4) Repair, rebuild or replace the property with other property of like kind and quality, subject to b. below.

We will determine the value of lost or damaged property, or the cost of its repair or replacement, in accordance with the applicable terms of the Valuation Condition in this Coverage Form or any applicable provision which amends or supersedes the Valuation Condition.

b. The cost to repair, rebuild or replace does not include the increased cost attributable to enforcement of any ordinance or law regulating the construction, use or repair of any property.

* * *

8. Valuation

We will determine the value of Covered Property in the event of loss or damage as follows:

a. At actual cash value as of the time of loss or damage, except as provided in b. and c. below.

b. If the Limit of Insurance for Building satisfies the Additional Condition, Coinsurance, and the cost to repair or replace the damaged building property is $2,500 or less, we will pay the cost of building repairs or replacement.

The cost of building repairs or replacement does not include the increased cost attributable to enforcement of any ordinance or law regulating the construction, use or repair of any property. However, the following property will be valued at the actual cash value even when attached to the building:

(1) Awnings or floor coverings;

(2) Appliances for refrigerating, ventilating, cooking, dishwashing or laundering; or

(3) Outdoor equipment or furniture.

c. Glass at the cost of replacement with safety-glazing material if required by law.

[ECF No. 28-1].

Defendant's argument is simple: The Loss Payment provision provides that the insurer “will determine the value of lost or damaged property, or the cost of its repair or replacement, in accordance with the applicable terms for the Valuation Condition” and the Valuation Condition provides that the insurer will determine the value of Covered Property “[a]t actual cash value as of the time of loss or damage.” [ECF No. 27] (emphasis added). Thus, Defendant reasons, the cost of repairs should be limited to the cost as it would have been at the time of the loss or damage.

As support for its position, Defendant turns to now-Chief United States District Court Judge Cecilia M. Altonaga's discussion in Fla. Plantation Cold Storage, Inc. v. Pac. Ins. Co., Ltd., No. 08-22028-CIV, 2009 WL 10667539, at *1 (S.D. Fla. May 15, 2009). In Fla. Plantation, the insured argued that the insurer breached the policy because the appraiser valued the property at the time of the appraisal (2009), which was less than what the property would have been valued at had it been valued at the time of the loss (2007). The issue before the Fla. Plantation Court was whether an appraiser was bound by the insurance policy's language that the “[insurer] will determine the value [of the insured property] . . . at the time of the loss.”

Defendant acknowledges that the Fla. Plantation Court was evaluating the effect of the insurance policy's “time of loss” provision for an appraisal (which is not at issue here), but cites to the following language as support for its position:

Again, the Policy stated that “[w]e will determine the value ... at the time of the loss.” “We” in the Policy refers to the insurer, Pacific. Had Pacific valued the property at 2007 rates, Pacific would certainly have materially breached that express term of the Policy. But the Policy further provided that “[i]f we and you disagree on the value,” an appraisal panel would determine the value, and that decision was binding upon the insurer and the insured. Because Pacific and Plantation did not agree on the value of the property, the appraisal panel made the

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