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denying summary judgment because fact issue remained as to whether insureds had requisite intent to constitute "fraud" or "misrepresentation" under the policy
Summary of this case from Southpoint Condo. Ass'n v. Lexington Ins. Co.Opinion
Case No.: 1:18-cv-23585-UU
2019-10-22
Jose RODRIGUEZ, et al., Plaintiffs, v. GEOVERA SPECIALTY INSURANCE COMPANY, Defendant.
Lazaro Vazquez, Anthony Accetta, Law Office of Lazaro Vazquez, P.A., Eduardo Gomez, Eduardo Gomez, P.A., Coral Gables, FL, for Plaintiffs. Daniel Martin McNalis, Groelle & Salmon, West Palm Beach, FL, for Defendant.
Lazaro Vazquez, Anthony Accetta, Law Office of Lazaro Vazquez, P.A., Eduardo Gomez, Eduardo Gomez, P.A., Coral Gables, FL, for Plaintiffs.
Daniel Martin McNalis, Groelle & Salmon, West Palm Beach, FL, for Defendant.
ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
URSULA UNGARO, UNITED STATES DISTRICT JUDGE
THIS CAUSE is before the Court upon the cross-motions for summary judgment filed by Defendant GeoVera Specialty Insurance Company ("GeoVera"), D.E. 34, and Plaintiffs Jose Rodriguez and Marcee K. Rodriguez ("Plaintiffs"), D.E. 48 (collectively, the "Motions"). The Court has reviewed the Motions and the pertinent portions of the record and is otherwise fully advised of the premises. For the reasons set forth below, GeoVera's Motion is DENIED and Plaintiffs' Motion is GRANTED IN PART AND DENIED IN PART.
I. FACTUAL BACKGROUND
A. The Policy
GeoVera issued homeowners insurance policy number GH50053835 (the "Policy") for the property located at 9558 SW 166th Ct, Miami, Florida 33196 (the "Property"). See D.E. 63 at 3 ¶ 5(A); see also D.E. 34-1 at 1 ¶ 2 & Ex. 1. The Policy's effective dates were August 22, 2015 through August 22, 2016. See D.E. 63 at 3 ¶ 5(A); see also D.E. 34-1 at 1 ¶ 2 & Ex. 1. Plaintiffs were the named insureds under the Policy. D.E. 34-1 at Ex. 1. Coverage under the Policy was subject to the Policy terms, conditions, exclusions, and limitations. See Pretrial Stipulation at 3 ¶ 5(A); see also D.E. 34-1 at Ex. 1.
As discussed infra , the parties to this action are also parties to a related case pending before U.S. District Judge Federico A. Moreno involving an alleged loss in 2017. The Court takes judicial notice that the insurance policy filed in that case bears the same policy number GH50053835 as the Policy in this case and that the policy in the Moreno Case (as defined herein) has effective dates of August 22, 2017 through August 22, 2018. See Rodriguez v. GeoVera Specialty Ins. Co. , Case No. 1:19-cv-21173-FAM (S.D. Fla.), D.E. 1-3 at 1. It is possible, but not before the Court, that the policy in the Moreno Case is an extension of the Policy in this case. Further, the parties failed to file a Notice of Related Case under Local Rule 3.8 and Internal Operating Procedure § 2.15.00. The Court hereby makes clear that its rulings apply only to the Policy at issue in this case.
Under the Policy, GeoVera insured "against risk of direct physical loss to" the Property "described in Coverages A and B," subject to certain exclusions and limitations, including: (1) loss caused by wear and tear, marring, or deterioration; (2) loss caused by faulty, inadequate or defective design, specifications, workmanship, repair, construction, or maintenance; and (3) losses caused by mold or rot, if the mold or rot was caused by the events described in (1) and/or (2). See D.E. 34-1 at 15–16, 19, 42; see also D.E. 48-1 at 161–65. Further, under the "seepage or leakage" limitation, GeoVera "insure[s] for direct physical loss to property described in Coverage[ ] A ... caused by ... water or steam that seeps or leaks ... above the surface of the ground over a period of 14 days or more. However, such coverage is subject to the ‘per policy period seepage or leakage combined total sublimit.’ " D.E. 34-1 at 42. "Per policy period seepage or leakage combined total sublimit" is a defined term, imposing a $1,000 limit of liability for "covered loss caused by or resulting from water or steam that seeps or leaks ... above the surface of the ground over a period of 14 days or more." See id. at 41–42.
Coverage A covers the dwelling on the Property, including structures attached to the dwelling. Id. at 10.
Additionally, the Policy was voidable under a "Concealment or Fraud" provision, which reads in pertinent part:
The entire policy will be voidable if, regardless of whether related to a loss, any ‘insured’, their agent, or their broker:
1. Intentionally conceals or misrepresents any material fact or circumstance;
2. Engages in fraudulent conduct; or
3. Makes false statements;
relating to the insurance provided under any part of this policy.
D.E. 34-1 at 48.
B. The Alleged December 19, 2015 Loss
On or about January 15, 2016, Plaintiffs—through their public adjuster, Jorge Aucar—notified GeoVera that on December 19, 2015, the Property sustained a covered loss consisting of interior damage from a roof leak (the "2015 Loss"). See D.E. 63 at 3 ¶ 5(B); D.E. 34 at 2 ¶ 2; D.E. 48-1 at 7:2–10; see also D.E. 48-1 at 154 (acknowledgment of claim). A letter from GeoVera to Mr. Aucar dated January 27, 2019, reflects that Mr. Aucar "reported that a hole in the roof...caused water damage to the ceiling, walls and wood floor [in] the interior of the insured's home." D.E. 48-1 at 157.
GeoVera assigned claim number HL15010774 (the "2015 Claim") to the notice of claim for the 2015 Loss, for purposes of conducting a claim inquiry. D.E. 34-1 at 2 ¶ 4; D.E. 48-1 at 7:2–5; see also D.E. 48-1 at 154, 157–59. GeoVera then requested a letter of representation and sworn proof of loss and assigned an independent adjuster to inspect the loss. D.E. 48-1 at 7:15–8:1.
Team One Adjusting inspected the Property on January 21, 2016, on behalf of GeoVera. D.E. 48-1 at 8:18–9:5; see also id. at 199–207. In a letter addressed to Mr. Aucar and dated February 22, 2016, GeoVera advised that it had determined Plaintiffs were entitled only to the $1,000 limit under the "seepage or leakage combined total sublimit" provision. See D.E. 48-1 at 160. GeoVera explained:
A thorough review of the insurance policy was performed. Due to the circumstances of the loss, it has been determined that a portion of your client's loss is not covered. In addition, the covered portion of your client's loss is subject to and limited by the $1,000 limit for long-term water damage per policy period limits as outlined in the US 03 55 (04-15) Limited Smog, Rust, Mold, Rot, or Bacteria Coverage and Limited Seepage or Leakage Coverage Endorsement (copy attached). The balance of this letter will provide you with a detailed explanation outlining our position and the reasons why the policy will limit the amount of recoverable damages.
Our understanding of your client's claim as you reported to us is that on the above captioned date of loss, your client discovered a hole in his roof which has resulted in interior water damage to the ceiling, walls and wood floor of their home.
As you know, we retained the services of Rafael Mayoral with Team One Adjusting services to inspect your client's property and assist us with our investigation of the cause of loss and extent of damage. The inspection of your client's home has revealed the following damage and/or conditions:
• There were no signs of wind, hail or other storm damage found to the 20 year old roof tiles or any exterior elevations of your client's home.
• Your client's roof is exhibiting signs of wear & tear and deterioration that occurs over time.
• The inspection also noted evidence of poor installation issues at the valley channels over the bedroom and garage gable roofs. The channels stop at the walls of the foyer gable. This does not allow for proper rain drainage. The water accumulates in this area and as the underlayment has deteriorated, water has leaked into the dwelling.
• The leak has caused water and mold damage to the drywall ceiling and walls in the garage, bedroom and bedroom closet and the laminate flooring in the bedroom and closet.
• Based on the extent of damage, it is apparent that the leak has been ongoing for a long period of time, certainly for more than 14 days.
D.E. 48-1 at 160–61; see also id. at 165–66; D.E. 40-1 at 12:14–13:24. GeoVera explained that because the Policy expressly excludes from coverage all damage caused by (1) wear and tear and deterioration; (2) faulty, defective or inadequate workmanship, construction and maintenance; and/or (3) mold and rot resulting from wear and tear and faulty workmanship and/or design, the only covered portion of the 2015 Claim was water damage to the interior. See D.E. 48-1 at 165. GeoVera stated:
With regard to the ensuing water damage to your client's home, although limited, this would be considered covered damages under your client's policy. Since the leak has been ongoing for more than 14 days, the water damages would be subject to the per policy period
seepage or leakage combined total sublimit of $1,000 as outlined above. Our evaluation of the covered water damage portion of your client's claim totals $6,077.73. To this amount we have applied the long term water damage limits of $1,000.00 and issued payment in that amount.
Id. ; see also id. at 168 (GeoVera's statement of loss for the 2015 Loss).
Plaintiffs accordingly received a $1,000 payment from GeoVera. See D.E. 34-2 at 19:16–20; D.E. 34-3 at 15:20–25; D.E. 40-1 at 12:3–11. Plaintiff Jose Rodriguez testified that he used that money for some "minor repair work" to roof tiles and roofing tar, which work was done in February of 2016. D.E. 34-3 at 16:1–13, 21:12–21, 23:4–10.
Notably, in Plaintiffs' instant Motion, they make clear that they seek in this case only a final judgment of $5,077.73, representing the unpaid balance for the 2015 Claim of interior water damage. D.E. 48 at 2, 7 ¶ 12, 14. The 2015 Loss Estimate (as defined herein) includes alleged amounts to repair other damage, such as for roof replacement, but that damage is nowhere addressed in Plaintiffs' Motion. The Court deems Plaintiffs to have abandoned any request for reimbursement for property damage sustained on December 19, 2015, beyond their requested $5,077.73.
Further, though it is undisputed that GeoVera paid out $1,000 on the 2015 Claim, GeoVera appears to now take the position that the interior water damage is not a covered loss—as distinct from the February 22nd letter describing the damage as covered but limited. Compare D.E. 55 at 2 ¶ 8; D.E. 48-1 at 47:3–23 (testimony from GeoVera's corporate representative that interior water damage was caused only by wear and tear, deterioration, faulty and inadequate effective repair and maintenance) with D.E. 48 at 9 ¶ 18 (Plaintiffs argue that GeoVera "admits that the water damages occurred during the policy period, given the fact that it paid the $1,000 policy limit for water that leaks over a period of 14 days or more."); D.E. 48-1 at 11:19–12:9 (testimony from GeoVera's corporate representative that, based on Team One Adjusting estimate of the covered damages, GeoVera paid out $1,000); id. at 160, 165.
C. The Alleged September 10, 2017 Loss and Post-2017 Loss Inspection
On or about September 19, 2017, Plaintiffs reported that the Property had sustained damages on or about September 10, 2017, due to Hurricane Irma (the "2017 Loss"). See D.E. 34-1 at 2 ¶ 5. GeoVera assigned claim number HL17504437 (the "2017 Claim") to the notice of claim with the September 10, 2017 date of loss, for purposes conducting a claim inquiry to ascertain whether coverage existed. D.E. 34-1 at 2 ¶ 6. The 2017 Loss and 2017 Claim are the subject of a separate lawsuit pending before U.S. District Judge Federico A. Moreno. See Rodriguez v. GeoVera Specialty Ins. Co. , No. 1:19-cv-21173-FAM (S.D. Fla.) [hereinafter the "Moreno Case"].
Plaintiffs' position in the Moreno Case is that GeoVera's failure to fully pay for the damages from the 2015 Loss resulted in Plaintiffs being unable to make necessary repairs, and as a result, when Hurricane Irma hit, those damages got worse and led to the 2017 Loss. See generally D.E. 48 at 2 n.1; Moreno Case, D.E. 32. Plaintiff claims the damages "cannot now be distinguished between the two losses" and should be paid in accordance with Sebo v. American Home Assurance Company , 208 So. 3d 694 (Fla. 2016). See id. The Court finds that it need not reach this issue in resolving the instant Motions and accordingly declines to do so.
GeoVera's forensic engineer, Ryon Plancer of Haag Engineering, offers opinions as to both the 2015 Loss in this case and the 2017 Loss in the Moreno Case. See generally D.E. 40-2; D.E. 41-7; Moreno Case, D.E. 37-1. For present purposes, it suffices to say that GeoVera did not retain Mr. Plancer until after the date of the 2017 Loss, and Mr. Plancer did not personally inspect the Property before the 2017 Loss. See D.E. 40-2 at 64:15–66:13. Rather, Mr. Plancer's analysis as to the 2015 Loss relies on the photographs by Team One Adjusting and Mr. Plancer's inspection of the Property in 2018 (as well as historical weather data). See id. ; see also D.E. 41-7 (affidavit and engineering report). As to this case, Mr. Plancer opines that the interior stains (1) were not the result of wind-caused damage to the roof, (2) were located beneath dead valleys at roof-to-wall junctions with inadequate flashing details and evidence of past repair attempts with sealant, and (3) indicated, particularly with respect to the dark moisture stains in the attic, that leaks had been ongoing prior to the reported storm date in December of 2015. D.E. 41-7 at 5–6 ¶ 16; id. at 13.
Mr. Plancer researched historical weather data to determine whether, in his opinion, the wind speed could have caused the 2015 Loss. See D.E. 40-2 at 36:3–39:22; D.E. 41-7 at 10–13.
Mr. Plancer's report erroneously cites December 15, 2015 as the reported date of loss, instead of December 19, 2015. Nevertheless, Mr. Plancer testified that he evaluated wind speed and weather for the entire month of December. See D.E. 40-2 at 36:3–38:3.
D. The Sworn Proofs of Loss and Estimates
On or about November 21, 2017, GeoVera received from Plaintiffs' counsel a letter of representation in connection with the 2015 Claim. D.E. 34-1 at 2 ¶ 7 & Ex. 2. The letter enclosed (1) a sworn proof of loss for the 2015 Claim for $78,845.72, dated October 10, 2017; (2) an estimate for the 2015 Claim totaling $78,845.72 (the "2015 Loss Estimate"); and (3) numerous undated photographs of the claimed damages to the roof areas above the garage and front bedroom and interior damages to the garage and front bedroom. D.E. 34-1 at 2 ¶ 7 & Ex. 2.
On or about November 6, 2018, GeoVera received from Plaintiffs' counsel a letter of representation in connection with the 2017 Claim. The letter enclosed (1) a sworn proof of loss for the 2017 Claim for $129,484.49, dated October 30, 2018; and (2) an estimate for the 2017 Claim totaling $129,484.49 (the "2017 Loss Estimate"). D.E. 34-1 at 2–3 ¶ 8 & Ex. 3.
The 2015 Loss Estimate and the 2017 Loss Estimate contain several similar line items, including:
Main Level
• Compare 2015 Loss Estimate: "Dumpster load – per independent dumpster company" totaling $550.00 (D.E. 34-1 at 63) with 2017 Loss Estimate: "Dumpster load – Approx. 20 yards, 4 tons of debris" totaling $635.00 (D.E. 34-1 at 115)
• Compare 2015 Loss Estimate: "R&R Drip edge" totaling $753.20 (D.E. 34-1 at 63) with 2017 Loss Estimate: "R&R Drip edge" totaling $686.28 (D.E. 34-1 at 115)
• Compare 2015 Loss Estimate: "Remove Tile roofing – Clay – ‘S’ or flat tile" totaling $26,914.94 (D.E. 34-1 at 63) with 2017 Loss Estimate: "Tile roofing – Comm – Glzd – (Barrel or ‘S’) – w/out felt" totaling $48,299.43 (D.E. 34-1 at 115).
Bedroom
• Compare 2015 Loss Estimate: "R&R 5/8" drywall – hung, taped, ready for texture" totaling $1,132.01 (D.E. 34-1
at 63) with 2017 Loss Estimate: "R&R 5/8" drywall – hung, taped, ready for texture" totaling $1,289.56 (D.E. 34-1 at 117)
• Compare 2015 Loss Estimate: "R&R Engineered wood flooring" totaling $1,674.35 (D.E. 34-1 at 64) with 2017 Loss Estimate: "R&R Engineered wood flooring" totaling $1,649.82 (D.E. 34-1 at 118).
E. Testimony Concerning the Two Alleged Losses
Plaintiffs Jose Rodriguez and Marcee K. Rodriguez were deposed about the above-referenced line item similarities.
With respect to the main level dumpster load line item, Mrs. Rodriguez testified that she did not know why the same type of thing was on both estimates, as it was never explained to her. D.E. 34-2 at 39:12–40:8. Mr. Rodriguez claimed that, despite the similarities in the line items, he believed (but did not know) that the estimates reflected different needs. See D.E. 34-3 at 36:12–38:17. He testified:
Q Okay. So those both say dumpster load, approximately yards.
A Okay.
Q All right. And any reason why you would need dumpster load twice if --
[A] Well 'cause this was done 2015, and this is Irma so it was two different. I'm not here to get paid twice. So I don't know if this is -- I'm not here to get paid twice, so obviously you know, so like I said this is estimate. This is from one incident. This is from another one. So I don't know.
Q We're trying to find out which is which, and why --
A Well, this is for 2015, and this is for Irma.
Q All right. Well they're both very similar items.
A Okay.
Id. at 37:22–38:17 (attorney objection omitted).
Likewise, Mrs. Rodriguez did not know why the "drip edge" line item was on both estimates; she knew only that the adjuster explained that "if certain things get paid on one claim, they will not get paid on another. In other words, it won't be paid twice." D.E. 34-2 at 40:9–24.
As to the tile roofing, Mr. Rodriguez also believed the two estimates reflected different damages, testifying:
Q First one says you got number six, tile roofing.
A Okay.
Q And number eight on the 2017 one is also for tile roofing. So --
A Two different damages, I guess. That's what he -- what he wrote.
Q So does the roof -- so you're saying the roof needed to be replaced from the 2015 rainstorm, but --
A Yeah, that's what he has.
Q And then for Hurricane Irma it also needs to be replaced again.
A That's what he has. [...] Two different.
D.E. 34-3 at 38:18–39:8 (attorney objection omitted). And Mrs. Rodriguez testified that Mr. Aucar did not advise why the tile roofing item was on both claims, "except that he did say if it got paid on one claim, it wouldn't be paid on another." D.E. 34-2 at 41:5–22.
With respect to the drywall in her son's bedroom, Mrs. Rodriguez did not know whether the damages were the same from the 2015 Loss or were newly caused by Hurricane Irma; she deferred to her husband. D.E. 34-2 at 41:23–43:16. Likewise, as to the wood flooring, she did not know why this line item appeared twice, offering: "Maybe, like you said, they weren't fixed previously so he just added them to the new estimate. I'm not sure." D.E. 34-2 at 43:17–44:12. Mrs. Rodriguez did testify that no repairs were done to the either the floor or the walls in her son's room, as she was told not to touch anything in case the room needed to be re-inspected. D.E. 34-2 at 44:14–24. Mrs. Rodriguez also testified that she did not believe any additional rooms, apart from those damaged in the 2015 Loss, were damaged by Hurricane Irma. D.E. 34-2 at 60:14–61:8.
Finally, Mr. Rodriguez generally deferred to Mr. Aucar, the adjuster who drafted both Loss Estimates underlying the sworn proofs of losses:
Q So if I went through every single one that overlapped --
A Okay.
Q Are you going to say that's because it's new damage, or you thin [sic ], that there is any overlap between the two?
[A] Again, you have to ask him, and I'm not here to get paid twice, so if it overlaps, absolutely I don't want to get paid for the other one. I would -- I would give you guys the credit. Well the insurance.
D.E. 34-3 at 44:2–13 (attorney objection omitted).
II. PROCEDURAL HISTORY
In their operative Complaint, Plaintiffs bring a single breach of contract claim for GeoVera's alleged failure to fully pay for the 2015 Loss, which they contend is a covered loss. See D.E. 9. On October 12, 2018, GeoVera filed its answer to the Complaint, along with eight affirmative defenses. D.E. 12. GeoVera's first affirmative defense reads, in its entirety:
As for its First Affirmative Defense, GeoVera asserts that the claim is subject to any and all policy terms, conditions, exclusions, and/or other limitations regarding coverage for the claimed loss. Plaintiffs' action is a claim for Breach of Contract, as such Policy No. GH50053835 effective from August 22, 2015 through August 22, 2016 controls the rights and obligations of the parties, the applicable deductibles and the amount and limits of available insurance coverage, and any indemnity obligation of GeoVera, if any.
Id. at 6. Plaintiffs moved to strike this defense as too vague to give notice of the specific facts or insurance policy provisions upon which GeoVera would rely. D.E. 13 at ¶¶ 4, 12–15. The Court denied the motion to strike, concluding that "at the pleading stage, [GeoVera] need not set out every single provision that it contends does not provide coverage for Plaintiff's loss." D.E. 18 at 7 (citing Fed. R. Civ. P. 8(b)(1)(A) ).
On August 2, 2019, GeoVera filed an unopposed motion to amend its affirmative defenses to add a ninth affirmative defense. D.E. 31. The proposed defense would read as follows:
As and for its Ninth Affirmative Defense, GeoVera asserts that Plaintiffs' fraud and misrepresentation relieves GeoVera of any further indemnity obligations to Plaintiffs under the insurance policy:
I. Concealment Or Fraud
The entire policy will be voidable if, regardless of whether related to a loss, any "insured", their agent, Or their broker:
1. Conceals or misrepresents any material fact or circumstance;
2. Engages in fraudulent conduct; Or
3. Makes false statements;
relating to this insurance.
We consider all information provided, or that should have been provided, and all questions asked on the on-line application for this policy to be material.
There is no coverage under the policy. Plaintiffs have concealed or misrepresented material facts or circumstances; engaged in fraudulent conduct; and/or made false statements related to this insurance. More specifically, on or about September 21, 2017, Plaintiffs and or their representative reported this hurricane Irma loss (DOL 9/9/17) to which GeoVera assigned claim number HL17504437. In accordance with the terms of the policy, GeoVera requested Plaintiff to provide a Sworn Proof of Loss. On or about October 30, 2018, GeoVera received Plaintiffs' Sworn Proof of Loss dated October 30, 2018 in the amount of $129,484.49. Apparently, the Sworn Proof of Loss was based on an estimate prepared by public adjuster Jorge Aucar of Star Public Adjusters, Inc.
In this case, on or about January 15, 2016, Plaintiffs and/or their representative reported a loss (DOL 12/19/15) to the insured property to which GeoVera assigned claim number HL15010774. In accordance with the terms of the policy, GeoVera requested Plaintiffs to provide a Sworn Proof of Loss. On or about November 21, 2017, GeoVera received Plaintiffs' Sworn Proof of Loss dated October 10, 2017 in the amount of $78,845.72. Apparently, the Sworn Proof of Loss was based on an estimate prepared by public adjuster Jorge Aucar of Star Public Adjusters, Inc.
Upon review of the two (2) Sworn Proofs of Loss and two (2) estimates prepared by Star Public Adjusters, Inc., Plaintiffs are claiming substantially the same damages for both losses. In other words, Plaintiffs alleged losses are duplicative and overlapping but Plaintiffs have commenced this litigation, as well as another lawsuit related to claim number HL17504437 seeking recovery of the same losses in both cases.
D.E. 31; D.E. 31-1 at 11.
On August 5, 2019, the Court denied leave to amend to add this affirmative defense pursuant to Federal Rule of Civil Procedure 16(b)(4). D.E. 32. Specifically, the Court's Scheduling Order for Pretrial Conference and Trial (the "Scheduling Order"), D.E. 19, set a deadline to amend pleadings of April 19, 2019, and a discovery cut-off of August 9, 2019. GeoVera alleged that it learned of the facts underlying the proposed ninth affirmative defenses at Plaintiffs' depositions on May 30, 2019, D.E. 31 ¶¶ 5–8; the Court held that GeoVera failed to act diligently to promptly seek leave to amend the affirmative defenses. D.E. 32 at 2. The Court noted that GeoVera "provides no reason why it waited over two months—and, importantly, until a week before the August 9th discovery cutoff—to assert these claims. As such, the Court will not grant [GeoVera] leave to amend its Affirmative Defenses."
Plaintiffs' deposition transcripts reflect that Plaintiffs were deposed on April 30, 2019—not May 30th. See D.E. 34-2 at 1; D.E. 34-3 at 1. This only bolsters the Court's conclusion that GeoVera failed to act diligently in seeking leave to amend its affirmative defenses.
On August 8, 2019, GeoVera filed its summary judgment Motion, arguing that Plaintiffs' overlapping estimates in the 2015 Claim and 2017 Claim triggered the Policy's "Concealment or Fraud" provision, making the entire Policy voidable. See D.E. 34. On August 30, 2019, Plaintiffs filed their cross-Motion for summary judgment, arguing that the Policy creates a burden-shifting framework wherein (1) Plaintiffs need only show that they suffered some damage within a period of 13 days or less resulting from water that leaks above the surface of the ground, and (2) the burden shifts to GeoVera to establish what damage occurred over a period of 14 days or more and thus would be excluded from coverage. See D.E. 48. Plaintiffs argue that they have satisfied their burden to prove damage within the policy period, but GeoVera has not satisfied its burden to limit coverage. See id. As a result, Plaintiffs argue, they are entitled to final summary judgment that they are entitled to $5,077.73 for the interior water damage, plus prejudgment interest from the date of loss as well as attorney's fees and costs. See id. at 2, 7 ¶ 12, 14.
The Motions are now fully briefed and ripe for adjudication.
III. LEGAL STANDARD
Summary judgment is authorized only when the moving party meets its burden of demonstrating that "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 judgment as a matter of law." Fed. R. Civ. P. 56. When determining whether the moving party has met this burden, the Court must view the evidence and all factual inferences in the light most favorable to the non-moving party. Adickes v. S.H. Kress & Co. , 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970) ; Rojas v. Florida , 285 F.3d 1339, 1341-42 (11th Cir. 2002).
The party opposing the motion may not simply rest upon mere allegations or denials of the pleadings; after the moving party has met its burden of proving that no genuine issue of material fact exists, the non-moving party must make a showing sufficient to establish the existence of an essential element of that party's case and on which that party will bear the burden of proof at trial. See Celotex Corp. v. Catrett , 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Poole v. Country Club of Columbus, Inc. , 129 F.3d 551, 553 (11th Cir. 1997) ; Barfield v. Brierton , 883 F.2d 923, 933 (11th Cir. 1989).
If the record presents factual issues, the Court must not decide them; it must deny the motion and proceed to trial. Envntl. Def. Fund v. Marsh , 651 F.2d 983, 991 (5th Cir. 1981). Summary judgment may be inappropriate even where the parties agree on the basic facts, but disagree about the inferences that should be drawn from these facts. Lighting Fixture & Elec. Supply Co. v. Cont'l Ins. Co. , 420 F.2d 1211, 1213 (5th Cir. 1969). If reasonable minds might differ on the inferences arising from undisputed facts, then the Court should deny summary judgment. Impossible Elec. Techs., Inc. v. Wackenhut Protective Sys., Inc. , 669 F.2d 1026, 1031 (5th Cir. 1982) ; see also Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ("[T]he dispute about a material fact is ‘genuine’ ... if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.").
Moreover, the party opposing a motion for summary judgment need not respond to it with evidence unless and until the movant has properly supported the motion with sufficient evidence. Adickes , 398 U.S. at 160, 90 S.Ct. 1598. The moving party must demonstrate that the facts underlying the relevant legal questions raised by the pleadings or are not otherwise in dispute, or else summary judgment will be denied notwithstanding that the non-moving party has introduced no evidence whatsoever. Brunswick Corp. v. Vineberg , 370 F.2d 605, 611-12 (5th Cir. 1967). The Court must resolve all ambiguities and draw all justifiable inferences in favor of the non-moving party. Liberty Lobby, Inc. , 477 U.S. at 255, 106 S.Ct. 2505.
IV. ANALYSIS
A. GeoVera's Motion
GeoVera argues that the evidence indisputably shows that Plaintiffs committed fraud or misrepresentation, such that the Policy is now voidable. Under GeoVera's theory, the overlapping line items in the 2015 and 2017 Loss Estimates sworn to in the Proofs of Loss, coupled with Plaintiffs' deposition testimony, purportedly show that Plaintiffs "asserted...that the two separate events caused the same damages and have demanded payment from GeoVera for the same damages twice. Thus, they have misrepresented the cause, and amount and scope of their alleged damages." D.E. 34 at 8. The Court finds that GeoVera's Motion for summary judgment should be denied for two reasons.
First, "when applying insurance contract provisions voiding coverage on account of fraud," the Court considers whether the insurer has shown the insured made "a willful false statement of material fact" (though the insurer need not show prejudicial reliance on the statement). El-Ad Residences at Miramar Condo. Ass'n, Inc. v. Mt. Hawley Ins. Co. , No. 09-60723-CIV, 2010 WL 8961438, at *6 (S.D. Fla. Sept. 28, 2018) (emphasis added) (internal quotations omitted) (quoting Lopes v. Allstate Indem. Co. , 873 So. 2d 344, 347 (Fla. 3d DCA 2004) ). "As a general rule, a party's state of mind (such as knowledge or intent) is a question of fact for the factfinder, to be determined after trial." Int'l Ship Repair & Marine Servs., Inc. v. St. Paul Fire & Marine Ins. Co. , 906 F. Supp. 645, 651 (M.D. Fla. 1995) (quoting Chanel, Inc. v. Italian Activewear of Fla., Inc. , 931 F.2d 1472, 1476 (11th Cir. 1991) ); see also State Farm Auto. Ins. Co. v. Performance Orthapaedics & Neurosurgery, LLC , 315 F. Supp. 3d 1291, 1303 (S.D. Fla. 2018) (denying summary judgment as to whether defendants violated Florida's insurance fraud statute because the alleged omissions and misrepresentations presented "a highly factual inquiry that is generally left for the finder of fact").
In International Ship Repair & Marine Services, Inc. , the insurer of a floating dry dock sought summary judgment on its claim that the insured made material misrepresentations, voiding the insurance policy. Id. at 647, 650. The insurer argued that the insured knew or should have known the dry dock was unseaworthy but did not disclose the unseaworthiness to the insurer. Id. at 650. In order to meet its burden of proof, the insurer submitted evidence tending to show that the insured knew the dry dock was unseaworthy, including sale records with surveys detailing the deteriorated condition of the dry dock. Id. The court noted that "[e]ven if [the insurer's] evidence was uncontroverted at trial, ... it would be insufficient to warrant summary judgment," given that questions of intent and knowledge are generally jury questions. Id. However, the evidence was controverted: the insured submitted affidavits stating that it sent several people to inspect the dry dock before purchasing it and believed the dry dock to be in good condition. Id. "By its evidence, [the insured] has demonstrated the existence of a triable issue of fact." Id. The court thus denied summary judgment. Id.
Here, too, the evidence does not conclusively establish that Plaintiffs had the requisite intent to constitute "fraud" or "misrepresentation" under the Policy. The testimony is far more equivocal than GeoVera represents. Plaintiffs testified that they did not truly understand the differences (if any) between the 2015 and 2017 Claim Estimates, and they never intended to recover twice for the same damages. See Section I.E., supra. A fact finder could reasonably conclude that Plaintiffs acted in good faith, not willfully. The Court therefore would deny summary judgment due to the triable issue of material fact as to Plaintiffs' intent—if the fraud or misrepresentation defense were adequately pled.
Therein lies the second basis for denying summary judgment. The Court specifically denied leave for GeoVera to amend its affirmative defenses to plead fraud and misrepresentation under the Policy. See D.E. 32. GeoVera now argues that its fraud and misrepresentation claim falls within its first affirmative defense, which summarily "asserts that the claim is subject to any and all policy terms, conditions, exclusions, and/or other limitations regarding coverage for the claimed loss." See Mot. at 7 ¶ 15; D.E. 41 at 4 n.2. True, the Court found this defense to be adequately pled under Rule 8's pleading standard. See D.E. 18 at 7. But the Court was not asked to decide whether the first affirmative defense satisfied Rule 9(b)'s requirement that fraud claims must be pled "with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). Courts considering contractual fraud/misrepresentation claims analyze such claims under the more stringent requirements of Rule 9(b). See, e.g. , Landmark Am. Ins. Co. v. Hacienda Village Homeowners Ass'n, Inc. , No. 2:07-cv-480-FtM-DNF, 2008 WL 11335064, at *2 (M.D. Fla. July 14, 2008) ; Nova Hills Villas Condo. Ass'n, Inc. v. Aspen Specialty Ins. Co. , No. 07-60939-CIV, 2008 WL 179878, at *5 (S.D. Fla. Jan. 21, 2008). The first affirmative defense fails to meet this pleading standard—it does not plead any of the specifics required by Rule 9.
"When the defendant has waived his affirmative defense by failing to allege it in his answer, ... he cannot revive the defense in a memorandum in support of a motion for summary judgment." Funding Sys. Leasing Corp. v. Pugh , 530 F.2d 91, 96 (5th Cir. 1976). Thus, the Policy's fraud and misrepresentation provision is not the proper subject of summary judgment here.
The Eleventh Circuit has adopted as precedent the decisions of the former Fifth Circuit prior to October 1, 1982. Bonner v. City of Prichard , 661 F.2d 1206, 1209 (11th Cir. 1981).
Nevertheless, the Eleventh Circuit has a "longstanding practice of permitting unpled affirmative defenses to be raised at trial so long as the plaintiff had prior notice of the defendant's intent to raise them." Lawton-Davis v. State Farm Mut. Auto. Ins. Co. , No. 6:14-cv-1157-Orl-37GJK, 2015 WL 12839263, at *1 (M.D. Fla. Aug. 19, 2015) ; see also Hassan v. United States Postal Serv. , 842 F.2d 260, 262–64 (11th Cir. 1988) (affirming trial court's consideration of collateral source evidence at trial even though defendant did not raise collateral source payments as an affirmative defense, because the issue had been fully developed through discovery, giving plaintiff notice of defendant's intent to raise the issue at trial). The record evidence clearly establishes that Plaintiffs had notice of GeoVera's intent to challenge the overlapping Loss Estimates. Plaintiffs were questioned about the overlaps in their depositions. And Plaintiffs' counsel had the opportunity to question GeoVera's corporate representative about the alleged fraud and misrepresentation, as that defense was fairly presented in the Moreno Case. See D.E. 40-1 at 89:4–93:24; D.E. 41-1 at 12–13. Accordingly, GeoVera will be permitted to present the "Concealment or Fraud" provision defense at trial.
B. Plaintiffs' Motion
As explained above, based on the inspection of the 2015 Loss, GeoVera determined that Plaintiffs were entitled only to $1,000 for interior water damage, as it was "apparent that the leak has been ongoing for a long period of time, certainly for more than 14 days." See Section I.B, supra. According to Plaintiffs, the interior water damage is indisputably a covered loss, and due to burden shifting, GeoVera must prove how much of the damage was incurred on day 14 or later. To show a prima facie breach of the Policy, Plaintiffs argue that they need only establish that the Property suffered some damage within the Policy period due to leaks above the surface of the ground over a period of 13 days or less. Once they show some damage during the Policy period, the burden shifts to GeoVera to prove which damage was caused on day 14 or later, and GeoVera need not pay for such later damage (having already paid $1,000). If GeoVera cannot prove which damage was caused on day 14 or later, rather than on days 1 through 13, GeoVera must pay for all the alleged damages.
Florida law applies a burden shifting framework to claimed exclusions or limitations under an insurance policy. With respect to the "seepage or leakage" provision at issue here, the case of Hicks v. American Integrity Insurance Company of Florida , 241 So. 3d 925 (Fla. 5th DCA), is instructive. In Hicks , the insured purchased an "all risks" policy from the insurer, which covered his home from May 31, 2012, until May 31, 2013. Id. at 926. In September 2012, while the insured was out of town, the water supply line to his refrigerator started leaking, slowly at first, but with increasing strength over time. Id. By the time the insured returned to his home, the supply line was discharging almost one thousand gallons each day. Id. The insured filed a claim with the insurer, but the insurer's expert determined that the pipe had been leaking for five weeks or more. Id. The insurer denied the claim in whole, quoting the policy's 14-day "seepage or leakage" exclusion: "We do not insure ... for loss ... [c]aused by ... [c]onstant or repeated seepage or leakage of water ... over a period of 14 or more days." Id. (alterations in original).
"An all-risks insurance policy covers ‘all losses not resulting from misconduct or fraud unless the policy contains a specific provision expressly excluding the loss from coverage.’ Hudson v. Prudential Prop. & Cas. Ins. , 450 So. 2d 565, 568 (Fla. 2d DCA 1984)." Id. at 926 n.1.
The insured filed suit, and the insurer raised the "seepage or leakage" provision as an affirmative defense. Id. The insurer moved for summary judgment, arguing that "because the leak occurred over a period of more than fourteen days, the provision unambiguously excluded coverage for all of [the insured's] losses." Id. The insured also moved for summary judgment, arguing that (1) he indisputably suffered a loss within the policy period, (2) all losses occurring within the first 13 days were covered under the policy, and (3) he was entitled to $40,926.77 for losses occurring within the first 13 days of the leak, based on a forensic report estimating the damage in that time frame. Id. at 926–27. The trial court rejected the insured's arguments and granted summary judgment for the insurer, explaining: "Basically, you're asking for [this court] to say whether the policy covered the loss in the first 13 days.... It might, but I'm not so sure that the time frame of these particular facts would allow for that determination." Id. (alterations in original).
The appellate court reversed and remanded with instructions to enter partial summary judgment in favor of the insured on the sole issue of coverage within the first 13 days of the leak, with the extent of the losses to be determined at trial. Id. at 928. The court explained that ambiguous policy provisions "should be construed liberally in favor of the insured and strictly against an insurer, and exclusionary clauses should be read even more narrowly[.]" Id. at 927. The court found the "seepage and leakage" provision to be ambiguous: "It is not 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." Id. (emphasis in original). Construing the ambiguous provision in favor of coverage, the court concluded that the insured would be entitled to recover damages for losses incurred during the first 13 days. Id. at 927–28. The court pointed to the applicable burden-shifting framework for all-risks policies: "once the insured establishes a loss within the terms of a policy, the burden shifts to the insurer to prove that a particular loss arose from an excluded cause." Id. at 28. Therefore, the court advised that, on remand, "the burden will be on [the insurer] to prove that a particular loss was sustained after the thirteenth day and is therefore not covered under the language of the exclusion provision." Id.
Here, too, the applicable "seepage and leakage" provision is susceptible of more than one interpretation. The interpretation that would favor GeoVera is one where, if water leaked or seeped for 14 days or more, the total amount that Plaintiffs could receive is $1,000. The interpretation that would favor Plaintiffs is one where, if water leaked or seeped for 14 days or more, Plaintiffs may recover their actual damages suffered between days 1 and 13 but may receive only an additional $1,000 for damages suffered on day 14 or later—regardless of the harm actually suffered during that time, such that any actual damage incurred on day 14 and later over and above $1,000 is excluded from coverage. Because "ambiguous insurance provisions—those susceptible to more than one meaning, one providing coverage and the other denying it—must be construed against the insurer and in favor of coverage[,]" id. at 927, the Court adopts the latter interpretation. Plaintiffs may be entitled to their actual damages for losses suffered between days 1 and 13 of the 2015 Loss.
However, this matter of Policy interpretation does not resolve the case entirely. Many disputes of fact remain. First, it is not clear that Plaintiffs suffered a covered loss within the Policy period. For example, Mr. Plancer opines that "[a]lthough it is logical to associate the cause of the leak with the most recent storm event that preceded its discovery, it may be incorrect to do so." D.E. 41-7 at 5 ¶ 14; id. at 12. He suggests that the photographs taken by Team One Adjusting about a month after the reported 2015 Loss revealed "darkly stained wood...above the garage which indicated a long-term, recurring condition." Id. at 5 ¶ 15; id. at 12–13. Yet he acknowledges that the photographs are "limited." Id. at 5 ¶ 15; id. at 12–13. He also states that, at his personal inspection of the Property, he observed severe rotting in the roof decking/framing above the two leaks, indicating "a leak condition that had been ongoing for several years." Id. at 5 ¶ 15; id. at 12–13. But this inspection occurred approximately two and a half years after the reported December 19, 2015 date of loss. Id. at 1 ¶ 4; id. at 9. Moreover, GeoVera itself takes conflicting positions in its February 22, 2016 letter and in its corporate representative's deposition—at times acknowledging that the interior damage was a covered but limited loss, and at other times, claiming that the interior damage was completely excluded. See Section I.B, supra. Therefore, the Court finds a genuine dispute of material fact as to whether GeoVera is liable to pay for any interior damages based on the 2015 Loss.
Further, as explained above, GeoVera may be able to assert the "Concealment or Fraud" provision as an affirmative defense to liability, among its other affirmative defenses. For example, there is a dispute as to GeoVera's Eighth Affirmative Defense, which alleges that Plaintiffs failed to comply with the Policy's duties after loss, such as by giving notice within 72 hours after the date Plaintiffs knew or reasonably should have known about the loss or damage. See D.E. 12 at 10–11 ¶ 8. Plaintiffs claim that the 2015 Loss occurred on December 19, 2015, but it is undisputed that they did not report the loss until January 15, 2016, a full month later. There is a question of whether Plaintiffs immediately knew or reasonably should have known about the 2015 Loss and, assuming notice was untimely, a question of whether Plaintiffs can rebut the presumption of prejudice that GeoVera suffered on account of the late notice. See, e.g. , De La Rosa v. Fla. Peninsula Ins. Co. , 246 So. 3d 438, 441 (Fla. 4th DCA 2018) ; 1500 Coral Towers Condo. Ass'n, Inc. v. Citizens Prop. Ins. Corp. , 112 So. 3d 541, 544 (Fla. 3d DCA 2013). Given the shaky record, summary judgment is not warranted.
The Court notes that, in GeoVera's opposition to Plaintiffs' summary judgment Motion, GeoVera attempts to bring its own request for partial summary judgment on the ground that Mr. Plancer's opinion purportedly "conclusively establishes" that all interior water damages "were long-term and preceded the reported date of loss." D.E. 55 at 11–12. GeoVera did not raise this argument in its own summary judgment Motion. "Rule 7(b), Federal Rules of Civil Procedure, requires a party to move for relief, and a request buried in a response is not a motion." Mosquea v. Bank of Am., N.A. , No. 8:17-cv-2551-T-23TGW, 2018 WL 3548742, at *4 (M.D. Fla. July 24, 2018) (citing Long v. Satz , 181 F.3d 1275, 1279–80 (11th Cir. 1999) ). The request is not only procedurally improper, but also unpersuasive for the reasons explained above. A reasonable fact finder could find no covered loss within the Policy period or, alternatively, could find that GeoVera admitted to a covered loss totaling $6,077.73 for the interior water damage and that GeoVera is liable to pay the balance of $5,077.73.
V. CONCLUSION
For the reasons discussed supra , GeoVera's Motion for Summary Judgment, D.E. 34, is DENIED, and Plaintiffs' Motion for Summary Judgment, D.E. 48, is GRANTED IN PART as to Plaintiffs' construction of the Policy as providing coverage for actual damages incurred during days 1 through 13 of a covered loss under the "seepage and leakage" sublimit provision. However, the questions of coverage for the 2015 Loss and GeoVera's affirmative defenses—including the "Concealment or Fraud" provision—are reserved for trial. The Court also holds, as a matter of law, that if liability is established, Plaintiffs may not recover more than the requested $5,077.73 balance on the 2015 Claim for interior water damage. In all other respects, Plaintiffs' Motion is DENIED.
DONE AND ORDERED in Chambers at Miami, Florida, this 22 day of October, 2019.