June 14, 2018
February 28, 2018
Case Law Update: , 2018 WL 1020272 (Fla. 5th DCA Feb. 23, 2018).
In this case, the Fifth District Court of Appeal explored the exclusion for constant and repeated seepage of water in the American Integrity Homeowner's Insurance Policy. Insurance Companies should consider this ruling in framing a proper defense to a case in which a water leak has been occurring at the insured property for a period of time. The case is a good reminder that the insured’s initial burden is low. The insured must only prove that a direct, physical loss occurred to the property during the policy period. The insured does not have the burden to prove that a loss occurred on a specific date or during a specific period of time, only that a direct, physical loss occurred during the policy period. The burden then shifts to the insurer to prove an exclusion to coverage.
In this case, the policy language excludes coverage for constant and repeated seepage or leakage of water which occurs over a period of 14 or more days. This exclusionary language is common to most homeowner’s insurance policies. Per the Court's ruling, even if there is evidence that a leak has been going for a period of 14 days or more, damages resulting from the first 13 days of water release are covered under the insurance policy. Below is detailed summary of the Appellate Court's ruling:
The American Integrity policy issued to insured Hicks was an All-Risk policy. Mr. Hicks' water supply line began leaking in September, 2012, while he was out of town. When he returned at the end of October, 2012, the supply line was leaking heavily, releasing almost 1,000 gallons of water a day. The claim submitted by Mr. Hicks was denied by American Integrity based on the provision of the policy which provides as follows:
We do not insure...for loss...[c]aused by...[c]onstant or repeated seepage of leakage of water...over a period of 14 or more days.”
American Integrity filed a motion a summary judgment, arguing that because the record evidence reflected that the leak was going on for a period exceeding 14 days, the claim was unambiguously excluded under the terms of the policy. In response, Mr. Hicks filed his own motions for summary judgment, arguing that his property sustained a direct, physical loss during the policy period, that the damages arising from the first 13 days of the leak are covered under the policy and that the total damages for the first 13 days of the leak totaled $40,926.77 (based on an expert opinion). At the trial level, American Integrity's motion for summary judgment was granted because the Court was unsure, based on the facts presented that it could make the determination that the loss from the first 13 days was covered.
The Appellate Court here reversed the grant of summary judgment in favor of American Integrity, finding that the policy language at issue does not unambiguously "exclude(d) losses caused by constant or repeated leakage or seepage over a period of thirteen days or less." The Court also found that it was unambiguously clear that "a provision excluding losses caused by constant leakage of water over a period of fourteen or more days likewise excludes losses caused by constant leakage of water over a period of less than fourteen days. Because there is ambiguity in the policy language, the language most be construed in the light most favorable to the insured. In the light most favorable to the insured, coverage exists for damages caused by the first 13 days of the leak.
The Appellate Court therefore, reversed summary judgment in favor of American Integrity and remanded with instructions for the trial Court to enter partial summary judgment in favor insured on the issue of damages from the first 13 days of the loss being covered by the policy. Therefore, the issue at trial would be the damages arising from days 1-13 of the water leak. The Court also states that the insurer has the burden at trial to prove that a particular loss was sustained after the 13th day and therefore, not covered under the exclusionary provision.
Thoughts Going Forward
Insurers should consider re-writing the “Constant and Repeated Leakage and Seepage” provision, making it clear that ALL DAMAGE first presented in a claim beyond 14 days after the date of loss are simply not covered. However, if a claim is presented within the first 13 days it is not considered “repeated leakage and seepage.” (More or Less “All water losses need to be reported within the first 13 days or else coverage will not apply unless good cause can be shown otherwise.")
February 8, 2018
January 24, 2018
In addition to the firm being recognized as a "Top Law Firm," we are pleased to congratulate the following "Top Lawyers":
- Laurie J. Adams – Civil Litigation
- Peter S. Baumberger – Professional Liability – Defense, Corporate and Business Litigation
- Caryn L. Bellus – Appellate, Insurance
- Michael J. Carney – Civil Litigation
- Daniel A. Miller – Bankruptcy, Corporate and Business Litigation
- Scott M. Rosso – Corporate and Business Litigation, Insurance Litigation – Defense
December 15, 2017
November 9, 2017
After this "apprenticeship," Blake arrived at Kubicki Draper last year toting an S&P 500 client and a specialty in negligent security and premises liability. Properly defending negligent security cases requires a certain level of expertise derived only in the trenches, and Blake has been involved in a great number of very significant such cases.
Blake’s negligent security cases run the gamut from HUD subsidized properties to high-end luxury residences.
There is a trend in the area of negligent security where certain potentially damaging information obtained in key manager depositions can be recycled and shared among plaintiff firms, and then used to the detriment of institutional property owners elsewhere. Accordingly, Blake believes that every deposition matters in these cases as each has potentially wider ramifications.
Blake cares deeply, not just about the result in a given case, but also how a high-stakes litigation experience might affect a business or an insurance carrier. She takes her cases and her clients very seriously and personally.
One lawyer in our firm was struck recently listening to Blake during a mediation presentation. After listening to opposing counsel portray his client as the "sympathetic plaintiff" against a corporation, Blake deftly put a human face on the defendant corporation. She talked about how that corporation was comprised of people, and was the product of the dreams of successful individuals trying to provide a good service but also trying to do things safely. And she emphasized that her clients should be afforded the same level of respect and compassion as the plaintiff.
Knowing how important compassion can be to decision makers, Blake believes this is a big part of her job as a case approaches trial.
Blake’s clients know they can call her at any time for her assistance. She strongly believes that the key to a successful relationship with her clients starts with excellent customer service. Clients hire her because she makes them believe she will be "all in" with every case she handles.
Blake has learned to never underestimate an issue, or a lawyer, or the impact any piece of evidence might have at trial.
Blake still believes strongly in our jury system, and reminds her clients that - even in the "Wild West" of Southeast Florida - the Plaintiff bears the burden of proof so that, approached correctly, Defendants should remain confident to push forward to a trial absent the ability to reach some other satisfactory result.
November 9, 2017
For more information about GCAIP, please visit: GCAIP.
November 1, 2017
October 27, 2017
In 2011, Lee Memorial Health Systems filed suit against Progressive for impairing its hospital lien when Progressive settled an accident claim without discharging or otherwise settling the hospital's lien for medical services. Progressive asserted that Lee Memorial's statute, codified at 2000-439, which entitled the hospital to sue insurers for the full value of the hospital lien, violated Article III section 11(a)(9) of the Florida Constitution because it was a "special law pertaining to the creation, enforcement, extension and/or impairment of a lien based on a private contract." Progressive further asserted that the lien was a violation of Article I section 10 of the Florida Constitution as an unconstitutional impairment of the insurance contract between the insurer and its insured because the statute allowed the hospital to recover the full value of its lien irrespective of the liability limits afforded under the insurance policies.
On appeal, Lee Memorial sought to avoid the application of the Article III section 11(a)(9) scrutiny by arguing that because it is a public hospital, its contracts with its patients must also be "public contracts" and not "private contracts" as addressed by the constitutional provision. The Appellate court rejected this argument and found that the contract between the hospital and its patient was private in nature because the lien attached to the patient's private assets (his cause of action for injury and damages) rather than to "public assets," citing Mercury Ins Co v. Shands Teaching Hospital, 21 So3d 38 (Fla 1st DCA 2009). The Appellate court also declared the lien statute an unconstitutional impairment of a contract by providing Lee Memorial with the right to seek the full value of the lien amount without regard to the policy limits. The court concluded that "absent bad faith, an insurer's liability is limited to the amount of policy limits."
Several insurers and patients have been sued by Lee Memorial under the provisions of this lien law, however, Progressive and Valerie Dondero’s prevailing arguments at both the trial and appellate levels set the stage to allow insurers to perform their good faith duties to settle claims on behalf of their insureds without also negotiating or settling the hospital liens presented by Lee Memorial Health Systems. This is a significant win for Florida insurers who have been repeatedly sued for hundreds of thousands of dollars in extra contractual damages by Lee Memorial Health Systems.
October 27, 2017
To complicate matters, McCoy relied on the First District in Boatright v. Philip Morris USA Inc., 218 So. 3d 962 (Fla. 2d DCA 2017) (holding that Rule 2.516 does not require e-service of a PFS), whereas Wheaton relied on the Second District in Floyd v. Smith, 160 So. 3d 567 (Fla. 1st DCA 2015) (implying that all service requirements of Rule 2.516 apply to the service of a PFS). Accordingly, for the time being, within the jurisdiction of the First and Third Districts, a PFS must be e-served in accordance with Rule 2.516. But within the jurisdiction of the Second and Fourth Districts, a PFS does not have to be e-served as long as there is notice of its service.
Take note too that the First District, in Boatright, has certified conflict with the Third District’s Wheaton opinion on this issue, and review is pending in the Florida Supreme Court. Since the conflict could ultimately be resolved either way, it might be a good idea to play it safe by e-serving proposals for settlement in all cases no matter the jurisdiction. Also be sure to comply with all other service requirements in Rule 2.516 until the Florida Supreme Court says otherwise.
For questions about the above, please contact Caryn Bellus and/or Brian Ellison.