Yanes v. Nat'l Specialty Ins. Co.

Decision Date29 April 2021
Docket NumberCase No. 1:20-cv-21179-KMM
Parties Veronica YANES, et al., Plaintiffs, v. NATIONAL SPECIALTY INSURANCE CO., Defendant.
CourtU.S. District Court — Southern District of Florida

Kaneily Alfaro Valdes, Your Insurance Attorney, PLLC., Coconut Grove, FL, for Plaintiffs.

William Mason Mims, Rolfes Henry Co., LPA, Orlando, FL, Brian Patrick Henry, Smith, Rolfes & Skavdah Co., LPA, Sarasota, FL, for Defendant.

ORDER

K. MICHAEL MOORE, CHIEF UNITED STATES DISTRICT JUDGE

THIS CAUSE came before the Court upon Defendant National Specialty Insurance Company's ("NSIC" or "Defendant") Motion for Summary Judgment. ("Mot.") (ECF No. 30). Plaintiffs Veronica Yanes and Daniel Yanes Alvarez ("Plaintiffs") responded in opposition to the Motion. ("Resp.") (ECF No. 42). Defendant filed a reply. ("Reply") (ECF No. 45). The Motion is now ripe for review.

I. BACKGROUND1

Plaintiffs are homeowners who purchased an insurance policy (the "Subject Policy") from NSIC. Def.’s 56.1 ¶ 2; Pls.’ Resp. 56.1 ¶ 2. "The policy provided insurance coverage to the Insured's Property for all risks, subject to all definitions, conditions, exclusions, and requirements contained therein." Def.’s 56.1 ¶ 3; Pls.’ Resp. 56.1 ¶ 3. The Subject Policy contains a Limited Water Damage Coverage Endorsement ("LWDCE"), which "limits liability for all covered property damaged by the discharge or overflow of water or steam from within a plumbing system to a total of $10,000.00 per occurrence." Def.’s 56.1 ¶¶ 4–5; Pls.’ Resp. 56.1 ¶¶ 4–5. In addition to the LWDCE, the Subject Policy contains (1) tear out and repair coverage ("Tear Out Coverage") and (2) Ordinance and Law Coverage. Pls.’ Resp. 56.1 ¶¶ 13, 15; Def.’s Reply 56.1 ¶¶ 13, 15.

It is undisputed that on or about January 15, 2019, Plaintiffs’ Property sustained a covered water loss as a result of sudden and accidental failure of the plumbing system in their home located at 1265 NW 118th Street (the "Property").2 Def.’s 56.1 ¶ 1; Pls.’ Resp. 56.1 ¶ 1. After investigating Plaintiffs’ claim and determining it was a covered loss under the Subject Policy, Defendant tendered a $10,000.00 check to Plaintiffs on September 19, 2019, which was deposited or cashed on or about October 16, 2019. Def.’s 56.1 ¶¶ 6–8; Pls.’ Resp. 56.1 ¶¶ 6–8; ("Bentschneider Aff.") (ECF No. 30-4) at 67. Defendant tendered two additional checks—one for $7,515.00 to First Response Carpet Cleaning, and the other for $1,500.00 to Truview Mold, LLC—on August 28, 2019 and March 31, 2020, respectively. Def.’s 56.1 ¶¶ 9–10; Pls.’ Resp. 56.1 ¶¶ 9–10; Bentschneider Aff. at 68–69. "In total, Defendant has made $19,015.00 in payments either to Plaintiffs or agents of Plaintiffs." Def.’s 56.1 ¶ 11; Pls.’ Resp. 56.1 ¶ 11. It is undisputed that Defendant has not issued payment for Tear Out Coverage or Ordinance and Law Coverage. Pls.’ Resp. 56.1 ¶¶ 14, 23; Def.’s Reply 56.1 ¶¶ 14, 23.

After the covered water loss and Defendant's alleged breach of the Subject Policy for failure to make additional payments for Tear Out Coverage and/or Ordinance and Law Coverage, Plaintiffs retained Reynaldo Alvarez ("Alvarez") from Plumbing Diagnostics Corp. and George Quintero ("Quintero") from Vanguard Public Adjusters as experts "to inspect and prepare an estimate to repair the property."3 Pls.’ Resp. 56.1 ¶¶ 16, 20; Def.’s Reply 56.1 ¶¶ 16, 20. The Parties do not dispute that Alvarez ran a camera through the drain lines as part of his inspection of the property. Pls.’ Resp. 56.1 ¶ 17; Def.’s Reply 56.1 ¶ 17.

In their Complaint, Plaintiffs assert one claim for breach of contract against NSIC ("Count I"). See generally ("Compl.") (ECF No. 8-1). Now, NSIC moves for summary judgment on Plaintiffs’ breach of contract claim against it. See generally Mot. Specifically, the Parties dispute which provisions of the Subject Policy apply in the instant case and, for those that do, to what extent Defendant is liable. See generally Mot.; Resp.; Reply.

II. LEGAL STANDARD

Summary judgment is appropriate where there is "no genuine issue as to any material fact [such] that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting Fed. R. Civ. P. 56 ). A genuine issue of material fact exists when "a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "For factual issues to be considered genuine, they must have a real basis in the record." Mann v. Taser Int'l, Inc. , 588 F.3d 1291, 1303 (11th Cir. 2009) (citation omitted). Speculation cannot create a genuine issue of material fact sufficient to defeat a well-supported motion for summary judgment. Cordoba v. Dillard's, Inc. , 419 F.3d 1169, 1181 (11th Cir. 2005).

The moving party has the initial burden of showing the absence of a genuine issue as to any material fact. Clark v. Coats & Clark, Inc. , 929 F.2d 604, 608 (11th Cir. 1991). In assessing whether the moving party has met this burden, a court must view the movant's evidence and all factual inferences arising from it in the light most favorable to the non-moving party. Denney v. City of Albany , 247 F.3d 1172, 1181 (11th Cir. 2001).

Once the moving party satisfies its initial burden, the burden shifts to the non-moving party to present evidence showing a genuine issue of material fact that precludes summary judgment. Bailey v. Allgas, Inc. , 284 F.3d 1237, 1243 (11th Cir. 2002) ; see also Fed. R. Civ. P. 56(e). "If reasonable minds could differ on the inferences arising from undisputed facts, then a court should deny summary judgment." Miranda v. B & B Cash Grocery Store, Inc. , 975 F.2d 1518, 1534 (11th Cir. 1992). But if the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial, and summary judgment is proper. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

III. DISCUSSION

In its Motion, Defendant argues that it applied the appropriate provisions from the Subject Policy when providing coverage for Plaintiffs’ loss. Mot. at 5–7. Plaintiffs assert in response that (1) the cost of Tear Out Coverage is not included in the LWDCE and (2) "the policy provides additional coverage for law & ordinance." Resp. at 4–10. In reply, Defendant maintains that (1) the Tear Out Coverage is limited by the LWDCE; (2) Plaintiffs have produced no genuine issue of material fact showing they are entitled to receive Tear Out Coverage; and (3) "the [Subject] Policy does provide additional coverage for Law & Ordinance for Plaintiffs’ claim." Reply at 2–10. The Court addresses each argument below.

A. The Subject Policy's Tear Out Coverage is Limited by the LWDCE, and, Alternatively, Plaintiffs Have Failed to Show They Are Entitled to Tear Out Coverage.

In its Motion for Summary Judgment, Defendant argues generally that it correctly applied the relevant provisions in limiting Plaintiffs’ coverage to $10,000.00. Mot. at 5–6. Plaintiffs respond that (1) the Subject Policy provides Tear Out Coverage; (2) the LWDCE does not "limit the amounts available for the Tear Out Coverage" but rather "applies to actual ‘direct’ physical water damage, i.e. items that are actually water damaged"; and (3) "if Defendant intended to include the cost of tear out within the [LWDCE], Defendant knew how to clearly and unambiguously do so." Resp. at 4–6. Defendant contends in its Reply that (1) Tear Out Coverage under the Subject Policy is limited by the LWDCE and (2) Plaintiffs have not shown that they are entitled to receive Tear Out Coverage under the Subject Policy. Reply at 2–6.

"Under basic insurance contract interpretation principles, where the policy language is clear and unambiguous, the Court must give effect to the plain language of the policy and any vendor's endorsement contained therein." Twin City Fire Ins. Co. v. Fireman's Fund Ins. Co. , 386 F. Supp. 2d 1272, 1276 (S.D. Fla. 2005). "Where the terms of a policy are susceptible of two reasonable constructions, the court should adopt the interpretation which will sustain coverage for the insured." United States v. Pepper's Steel & Alloys , 823 F. Supp. 1574, 1581 (S.D. Fla. 1993). And, "[i]f the language of an insurance policy is unclear, confusing, or ambiguous, the language should be construed against the insurer." Id. "But courts should not strain to find ambiguity. [I]f there is no genuine ambiguity, there is no reason to bypass the policy's plain meaning." Travelers Prop. Cas. Co. of Am. v. Salt ‘N Blue LLC , 731 F. App'x 920, 923 (11th Cir. 2018) (citing Sphinx Int'l, Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh , 412 F.3d 1224, 1228 (11th Cir. 2005) ). Moreover, "[a] single policy provision should not be read in isolation and out of context, for the contract is to be construed according to its entire terms, as set forth in the policy and amplified by the policy application, endorsements, or riders." State Farm Mut. Auto. Ins. Co. v. Mashburn , 15 So. 3d 701, 704 (Fla. Dist. Ct. App. 2009). Additionally, "in construing insurance policies, courts should read each policy as a whole, endeavoring to give every provision its full meaning and operative effect." Auto-Owners Ins. Co. v. Anderson , 756 So. 2d 29, 34 (Fla. 2000).

For the reasons set forth below, Defendant has met its burden of showing that no genuine issue of material fact exists as to (1) the LWDCE limiting its liability for the covered water loss to $10,000.00, and (2) Plaintiffs’ non-entitlement to Tear Out Coverage under the Subject Policy.

1. The LWDCE Limits Defendant's Liability under Section I.2.f of the Subject Policy to $10,000.00.

As an initial matter, the relevant portion of the Subject Policy that the Court must consider in adjudicating this dispute is Section I, titled "Perils Insured Against," which states in relevant part:

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