MARY S. SCRIVEN, District Judge.
Defendant Castle Key Indemnity Company ("Castle Key") issued a policy of insurance to Plaintiff Theresa Bednarz ("Plaintiff") and Almerick Dolan ("Dolan") for their home and contents, effective June 10, 2011 to June 12, 2012. The Castle Key homeowners policy named the Plaintiff and Dolan as the insureds and listed Wells Fargo Bank and its successors/assigns as the mortgagee. Defendant Allstate Fire and Casualty Insurance Company ("Allstate") issued a policy of insurance to Plaintiff and Dolan for their vehicles, effective December 10, 2011 to June 10, 2012. On March 9, 2012, a fire damaged Plaintiff's and Dolan's home, its contents, and a vehicle. (Dkt. 60) After Castle Key and Allstate denied Plaintiff's claims, Plaintiff filed the instant action alleging that Defendants breached their obligations under the respective policies. (Dkt. 1)
On the morning of the fire, Dolan was at home. (Dkt. 35-2, p. 44) Plaintiff had left for work and their children were at daycare and school. (Dkt. 35-1, pp. 47-49, 53-54) At approximately 7:55 a.m., a neighbor, Shawn Bernier, was sitting on her back porch and heard a fire alarm at Plaintiff's house. She also saw white smoke coming out of the house. Bernier walked to the house and banged on the front door. Dolan came to the door, pulled the blind back, mouthed "I'm okay," and waved at her. Bernier returned home, went to her back porch, and saw that the smoke had turned black. She called 911. The Hillsborough County Fire Department arrived and extinguished the fire. (Dkt. 34-1, p. 3-9; Dkt. 34-4)
When Plaintiff returned to the house, Dolan was in an ambulance and looked dazed, as if he did not know who she was. (Dkt. 35-1, p. 53) Dolan was transported by ambulance to Tampa General Hospital and was admitted to the psychiatric unit until mid-April 2012. (Dkt. 35-1, p. 19) He was ultimately diagnosed with schizophrenia. (Dkt. 35-2, p. 37) On April 18, 2012, Dolan was arrested on first-degree arson charges. (Dkt. 34-6) On December 12, 2012, he was adjudicated not guilty by reason of insanity. (Dkt. 35-3)
In his deposition, Dolan testified that he knew that he set the fire, but he did not remember how the fire started. (Dkt. 35-2, pp. 40, 47-49, 65-67, 71) He recalled kicking a gas can into the house from the porch, but he could not recall pouring gas in the house. (Dkt. 35-2, pp. 47-49) He testified that he was pretty sure that he used matches to start the fire, but he did not recall getting the matches or lighting the fire. (Dkt. 35-2, pp. 66-67)
Fire Inspector Daniel Edwards determined that the fire was an incendiary fire. (Dkt. 34-8) In addition, Castle Key's adjuster ordered a report on the origin and cause of the fire, which was completed by Senior Fire Investigator Frank Hutton, of Casalinova Investigations, Inc. (Dkt. 34-9, p.1, 3; Dkt. 35-4, p. 34) Hutton concluded:
Plaintiff notified Castle Key of her claim on the day of the fire. She later provided two recorded statements and other documents, attended an Examination Under Oath ("EUO"), and allowed Castle Key to physically inspect the home. (Dkt. 35-4, pp. 32, 34-35, 38, 43, 45, 47, 49-50; Dkt. 35-1, p. 31). By letter dated August 9, 2012, Castle Key denied the claim based on Dolan's failure to attend his own EUO on three separate occasions. (Dkt. 35-5; Dkt. 34-10) By letter dated August 14, 2012, Allstate denied Plaintiff's claim under a similar provision in the automobile policy. (Dkt. 34-10, p. 6-7)
By letter dated September 7, 2012, Plaintiff's attorney inquired as to whether Castle Key would forward the dwelling coverage limits to the mortgagee listed on the policy. (Dkt. 35-6) By letter dated September 14, 2012, Castle Key answered that it would not forward the coverage limits to the mortgagee because the loss was excluded from coverage as an "intentional or criminal act" by an insured. (Dkt. 35-7)
On December 17, 2012, Plaintiff filed the instant action for breach of contract against Castle Key (Count 1) and Allstate (Count 2), based on Defendants' failure to pay benefits to her or to other loss-payees, mortgagees, and third-party beneficiaries under the policy, including Wells Fargo. (Dkt. 1) In response, Defendants raised five affirmative defenses: (1) Dolan failed to provide a recorded statement, attend an EUO, or otherwise cooperate in the investigation; (2) Plaintiff and Dolan failed to file a sworn proof of loss form within 60 days of the loss; (3) Plaintiff and Dolan failed to execute the requested authorization forms relating to the mortgage records; (4) the intentional acts exclusions barred coverage; and (5) Plaintiff and Dolan concealed or misrepresented material facts or circumstances. (Dkt. 15)
Castle Key and Allstate have filed a joint partial motion for summary judgment, arguing that the intentional acts exclusions bar coverage under both policies, based on Dolan's involvement in the fire. Defendants do not seek summary judgment on their remaining affirmative defenses. (Dkt. 31)
Plaintiff has filed a partial motion for summary judgment as to Castle Key only. Plaintiff argues that the intentional acts exclusions do not apply, and even if they do, Castle Key is required to pay the mortgagee, Wells Fargo, in an amount equal to the dwelling coverage limits. Plaintiff also argues that Castle Key may not rely on failure to cooperate as a defense to coverage because she substantially complied with the investigation and Castle Key has failed to demonstrate that it suffered any prejudice. (Dkt. 35)
Summary judgment is appropriate when the movant can show that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law.
Evidence is reviewed in the light most favorable to the non-moving party.
When a moving party has discharged its burden, the non-moving party must then designate specific facts (by its own affidavits, depositions, answers to interrogatories, or admissions on file) that demonstrate there is a genuine issue for trial.
As noted by the parties, "[t]he interpretation of an insurance contract is a question of law."
Section I of the Castle Key homeowners policy provides three types of property coverage relevant to this action: Dwelling Protection ("Coverage A"), Other Structures Protection ("Coverage B"), and Personal Property Protection ("Coverage C"). In relevant part, the policy contains the following coverage provisions:
(Dkt. 1-1, pp. 49, 54)
The parties do not dispute that the March 9, 2012 fire and associated damage constituted a "sudden and accidental direct physical loss" under the foregoing coverage provisions. As discussed below, the parties do dispute whether: (1) the intentional acts exclusions bar coverage; (2) even if the intentional acts exclusions bar coverage, whether Castle Key must pay the Coverage A policy limits to Wells Fargo, as mortgagee; and (3) whether Plaintiff's and Dolan's failure to cooperate results in forfeiture of coverage. These issues are addressed in turn.
In Castle Key's fourth affirmative defense (Dkt. 15, ¶ 26), Castle Key maintains that coverage for the losses is specifically excluded by the policy's intentional acts exclusions. Specifically, the policy provides:
9. Intentional or criminal acts of or at the direction of any
Both Plaintiff and Castle Key have moved for summary judgment on the applicability of these exclusions.
Before addressing the parties' arguments regarding whether an "intentional act" occurred, the Court must address Plaintiff's argument that the exclusions are ambiguous. Plaintiff maintains that Section II of the policy contains a similar intentional acts exclusion pertaining to Family Liability Protection ("Coverage X"), as follows:
Unlike the Coverage A, B, and C intentional acts exclusions, the Coverage X exclusion specifies that coverage is excluded even if the insured lacks mental capacity to govern his conduct. Plaintiff argues that Castle Key's omission of this additional language in the Coverage A, B, and C exclusions demonstrates that Castle Key did not intend for those exclusions to apply if the insured lacked mental capacity to govern his conduct.
The Court rejects this argument. The intentional acts exclusions in Coverages A, B, and C are not ambiguous because the plain language of the exclusions is not susceptible to more than one reasonable interpretation. Indeed, Plaintiff offers no countervailing interpretation of these provisions. Moreover, even if the Court were to consult the Coverage X exclusion, the additional language in that exclusion does not create an ambiguity: subsection (a) merely elaborates on the meaning of the intentional acts exclusion by specifying that a lack of mental capacity does not preclude an intentional act. As Plaintiff recognizes, this was likely in response to the Florida Supreme Court decision in
In her motion for summary judgment, Plaintiff's primary argument is that Castle Key has not met its burden under Florida law to demonstrate that the intentional acts exclusions apply. In particular, Plaintiff maintains that Castle Key is unable to prove: (1) that Dolan set the fire; or (2) that he did so intentionally. In its cross-motion for summary judgment, Castle Key argues that it is undisputed that Dolan intentionally set the fire.
The Court rejects Plaintiff's first argument. Dolan specifically testified during his deposition as follows:
Plaintiff identifies no specific facts in evidence calling Dolan's testimony into dispute.
With respect to Plaintiff's second argument—that there is not sufficient evidence that the fire was intentional —the Court finds that Dolan's intent is a disputed issue of material fact. Under Florida law, it is well-established that an injury inflicted by an insane person may be intentional, for purposes of an intentional acts exclusion. Specifically, the Florida Supreme Court has held that a person who escapes criminal liability by reason of insanity may still "intend" an act for purposes of a civil insurance claim, if the person "understands the physical nature and consequences of the act."
Based on this authority, the relevant question in this case is whether Dolan understood the physical nature and consequences of his actions. In contrast to
Although there is a factual issue as to the application of the intentional acts exclusions, this does not mandate summary judgment in Plaintiff's favor, as she argues. While it is Castle Key's burden to prove the exclusion, there is sufficient evidence by which a jury could find that Dolan acted with the requisite intent. Among other things, that evidence includes Dolan's testimony that he recalled kicking a gas can into the house, Dolan's interaction with his neighbor during the fire—indicating that he was alert and responsive, and the opinions of Inspector Edwards and Inspector Hutton that the fire was intentional and incendiary, with two separate and unrelated points of origin.
As a final point, Plaintiff claims that the applicability of the intentional acts exclusions is called into question by the fact that Castle Key initially denied Plaintiff's claim based on Dolan's failure to cooperate, not based on the intentional acts exclusions. (Dkt. 35-5; Dkt. 49-1, pp. 7-10; Dkt. 35-4, pp. 59-63) Nonetheless, Plaintiff has not alleged estoppel or waiver claims in this case, so as to preclude Castle Key's reliance on the intentional acts exclusions. (
Based on the foregoing, the Court
In Defendants' motion for summary judgment, Castle Key maintains that, if Dolan's conduct was subject to an intentional acts exclusion, coverage would not only be barred for Dolan, it would be barred for Plaintiff, pursuant to the policy's "joint obligation" clause. Although the Court has found that disputed issues of fact preclude summary judgment on the intentional acts exclusions, the applicability of the joint obligation clause will be at issue if a jury finds that Dolan acted with the requisite intent. Therefore, the Court will address Castle Key's argument on this provision in order to narrow the remaining legal issues.
The policy's joint obligation clause provides: "[t]he terms of this policy impose joint obligations on the persons defined as an
The Court therefore
In addition to Coverages A, B, and C, the Castle Key policy provides for payment of additional living expenses as follows:
(Dkt. 1-1, p. 57)
Plaintiff moves for summary judgment on this provision, arguing that it is not subject to an intentional acts exclusion.
The above provision specifies that additional living expenses will be paid only when a covered physical loss occurs under Coverages A, B, or C. As discussed above, there are disputed issues of material fact as to whether the intentional acts exclusions bar coverage under Coverages A, B, or C. Plaintiff's motion is therefore
Because Plaintiff has not established entitlement to additional living expenses as a matter of law, the Court does not consider Plaintiff's affidavit regarding the amount of living expenses she has incurred. (
In her motion for summary judgment, Plaintiff also maintains that, even if the intentional acts exclusion in Coverage A applies, Castle Key must pay Wells Fargo, as mortgagee, an amount equal to the Coverage A limits of $278,871.00. (Dkt. 1-1, p. 6) In relevant part, the policy provides:
In response to the motion, Castle Key acknowledges that the mortgagee's interests are protected under the policy, notwithstanding the intentional acts exclusion. (
As authority for her argument that Castle Key must pay the policy limits of $278,871.00, Plaintiff cites section 627.702 of the Florida Statutes, which provides that "[i]n the event of the total loss of any building [or] structure," an insurer's liability "shall be in the amount of money for which such property was so insured." Fla. Stat. § 627.702(1)(a). Yet, as Defendant argues, Plaintiff wholly fails to address whether her house was subject to a "total loss," sufficient to trigger this provision.
Accordingly, the Court turns to the policy language, which provides that a loss will be payable to the mortgagee "to the extent of their interest." (Dkt. 1-1, p. 66) Based on this provision, Castle Key maintains that it is liable only for the amount owed under the mortgage. Pamela Bennett, a Castle Key claims representative, testified in her deposition that it was Castle Key's intent to fully pay the mortgage amount upon receipt of an appropriate proof of loss form. (Dkt. 35-4, pp. 9, 68). Bennett also testified that neither Plaintiff nor Wells Fargo ever submitted a proof of loss, and Plaintiff also failed to execute an authorization form permitting Castle Key to communicate with Wells Fargo. (Dkt. 35-4, pp. 68-69;
Plaintiff has not addressed these points in her motion. The Court therefore
Finally, Plaintiff moves for summary judgment on Castle Key's first, second, and third affirmative defenses, all of which allege that Plaintiff and/or Dolan failed to fulfill their obligations under the policy.
Section I of the Castle Key policy provides as follows:
In the event of a loss to any property that may be covered by this policy,
f) as often as
g) within 60 days after the loss, give
In the same section, the policy contains a "no-action" clause, as follows:
Under Florida law, proof-of-loss obligations and examinations under oath have historically been considered conditions precedent to suit, when coupled with similar no-action clauses.
Here, Plaintiff asserts both substantial compliance and lack of prejudice. In particular, Plaintiff argues that she promptly notified Castle Key of the claim, provided two recorded statements and other documents, attended her EUO, and allowed Castle Key to physically inspect the home. Plaintiff also maintains that Castle Key was not prejudiced by Dolan's failure to attend his EUO because Dolan could not have provided any useful information, due to his mental incapacity and inability to recall the events leading up to the fire. Further, Plaintiff points out that Pamela Bennett, the Castle Key claims representative, testified that Plaintiff's failure to provide an authorization form was not the reason the claim was denied. (
In response, Castle Key does not assert that it suffered any prejudice as a result of Dolan's failure to attend his EUO or provide a recorded statement. Because Plaintiff has adequately discharged her burden as the party moving for summary judgment, and because Castle Key fails to provide any meaningful response, the Court finds that Plaintiff's motion is due to be
Castle Key does argue that it was substantially prejudiced by Plaintiff's failure to provide the requisite proof of loss form as well as an authorization form. Specifically, Castle Key maintains that, had Plaintiff submitted a proof of loss form, the form would have specified Wells Fargo's mortgage interest in the property, allowing Castle Key to make payment to Wells Fargo and avoid this lawsuit. Likewise, Castle Key maintains that the authorization form would have allowed it to obtain the mortgage information directly from Wells Fargo.
In her motion, Plaintiff does not argue that she substantially complied with the proof-of-loss requirement, nor does she provide any explanation for her apparent failure to comply. Rather, she suggests that any failure to cooperate may have been waived by Castle Key's payment of hotel expenses. (
Because Castle Key has adequately raised a material issue of fact as to prejudice, Plaintiff's motion is
Similar to the Castle Key policy, the Allstate policy includes an intentional acts exclusion and a joint obligation clause. In Defendants' joint motion, Allstate seeks summary judgment on these provisions.
In relevant part, the Allstate policy provides:
This exclusion applies even if:
This exclusion applies regardless of whether an
(Dkt. 33-1, pp. 52, 55)
The parties do not dispute that both Plaintiff and Dolan are "insured persons" under the automobile policy.
For the reasons discussed in connection with the Castle Key homeowners policy, the Court finds that there is a material issue of disputed fact as to the applicability of the intentional acts exclusion. As a result, Allstate's motion for summary judgment is
Upon consideration of the foregoing, it is hereby
