United Automobile Ins. Co. v. Millennium Radiology, LLC
Case No: 4D11-3248

United Automobile Insurance Company (“United”) appealed a county court order to the circuit court sitting in its appellate capacity. The circuit court panel believed that the order was not appealable as originally rendered, and issued an order to United to show cause why the appeal should not be dismissed. The circuit court then allowed United to obtain a corrected final order, but provided that the appeal would be dismissed if United failed to obtain the corrected final order before the record was transmitted. This was impossible because the record had already been transmitted at the time the circuit court issued that order. United obtained a corrected final order and filed an amended notice of appeal within five days. The circuit court still dismissed the appeal.

On certiorari review, the Fourth DCA held that the circuit court departed from the essential requirements of law and denied United due process by dismissing the appeal, since it was literally impossible for United to have complied with the order. The Fourth DCA granted the petition.

J.C. Penney Company, Inc. v. Dillard’s, Inc.
Case No. 4D10-1770

JCPenney sued Dillard’s for damage to its store at the Turtle Creek Mall in Mississippi. In 2005, the roof over the Dillard’s store (which was adjacent to the JCP store) collapsed from Hurricane Katrina, severing a sprinkler main and causing uncontrolled water flow into the mall and the JCP store. Dillard’s moved for partial summary judgment, arguing that pursuant to the Turtle Creek Mall Operating Agreement (OA), JCP and Dillard’s agreed to release each other from liability from any loss or damage to property covered by the party’s insurance policy. However, they expressly reserved the right to bring an action for any “deductible” amount contained in their insurance policies. Dillard’s also filed a second motion for partial summary judgment, arguing that JCP could not recover any damages because JCP had already recovered from its insurer the entire damage amount claimed without any deductible being applied. In opposition, JCP argued that the notion that it had been made whole for its Turtle Creek Mall losses was illusory because JCP’s insurer treated Hurricane Katrina-related losses at several covered JCP stores as one “occurrence” for coverage purposes and unilaterally elected to apply the policy’s entire $2.5 million-per-event deductible to one JCP store (the Biloxi, Mississippi store). JCP argued that it had not been made whole for its losses in the Turtle Creek Mall. The trial court granted both partial motions for summary judgment.

The Fourth District Court of Appeal disagreed with JCP’s argument that the trial court erred in limiting its recovery to the deductible because under Mississippi law, Dillard’s cannot contractually exculpate itself against breaches of duties imposed by common law and for torts involving gross negligence. Instead, the court noted the parties were sophisticated national retailers, occupying equal bargaining positions, in negotiations for a commercial operating agreement and that the exculpatory clause was valid and did not contravene public policy. The court also found that Dillard’s conduct did not rise to the level of gross negligence simply because a different Dillard’s roof, in a different store, sustained damage in a prior hurricane, and Dillard’s internal memoranda acknowledged the potential for damage due to hurricanes and the need to perform maintenance prior to such storms. The Fourth District Court of Appeal reversed the trial court’s summary judgment order and held that a genuine issue of material fact existed as to how the deductible was apportioned and whether the application of the deductible was beyond JCP’s control.

Rahabi v. FIGA
Case No. 4D10-846*

The issue on appeal was whether our clients were entitled to an award of attorney’s fees because FIGA affirmatively denied our clients’ claim under the insurance policy prior to paying the appraisal award.

Our clients’ roof was damaged by Hurricane Wilma in 2005. Our clients sought coverage under the insurance policy to repair their roof. FIGA took over our clients’ insurance policy with Atlantic Preferred. In 2007, our clients filed a complaint and, initially, FIGA moved for dismissal. Later, FIGA filed an answer with affirmative defenses, and, after several months of discovery, FIGA decided to send the dispute for appraisal. An appraisal award was issued to our clients and FIGA paid the appraisal award. Our clients requested an award of attorney’s fees and costs from the trial court. The trial court denied the request reasoning that FIGA never affirmatively denied coverage of our clients’ claim. Our clients appealed arguing that FIGA affirmatively denied their claim by its actions.

The Fourth District Court of Appeal agreed. The court held that FIGA affirmatively denied our clients’ claim by asserting, in several of its affirmative defenses that our clients’ damages “were not caused by a covered loss.” The court disagreed with FIGA’s argument that its actions amounted to no more than a delay in payment of the claim. The court distinguished our clients’ decision from its recent decision in Ehrlich in which it held that FIGA did not affirmatively deny the party’s claim by filing its affirmative defenses because it was forced to file the pleading by a court order and sought an extension of time to complete its investigation. The court held that, in our clients’ case, FIGA neither sought an extension to complete its investigation nor had a court order compelling it to file a responsive pleading. The Fourth District Court of Appeal reversed and remanded with instructions that the trial court set an evidentiary hearing to determine our clients’ reasonable sum of fees and to determine whether our clients were entitled to a reimbursement of their costs.

* The Mandate has yet to be issued.

The issue as to whether or not an insurance company can deny coverage to an innocent co-insured based on the failure of a spouse to attend an examination under oath (EUO) was resolved in favor of our client, the innocent co-insured.

Our client’s home was burglarized by an unknown assailant. The client preformed all conditions precedent to coverage. The insurance company required that the husband, who lived at home at the time of the burglary and was the person who discovered the home burglarized, sit for an EUO. The problem was that by the time the EUO was scheduled, the husband was no longer living at home; and in fact a restraining order for domestic violence had been issued against him. Counsel for the client argued the innocent co-insured exception at the trial level, and we reasserted it at the appellate level.

The Circuit Court sitting in its appellate capacity overturned the trial courts summary judgment. Further, the reviewing court held that where an insurance policy does not expressly state whether the obligation to attend an EUO is joint or several, the ambiguity should be resolved as requiring the obligations and coverage to apply severally. The summary judgment finding that the failure of the husband to submit to an EUO was a material breach which barred the insured from recovering under the policy was reversed and remanded.  Our client was awarded appellate attorney fees pursuant to Florida Statute 627.428(1).