Florida International University Business Law Case Study Analysis

https://www.5dca.org/

Oral-Arguments/Archived-Video…

The case assignment  will require you to use  review a case, opinion,  and video. You may select a case from either the Florida Third District Court of Appeal,

https://www.3dca.flcourts.org/

, the Florida Fourth District Court of Appeal

https://www.4dca.org/

or the Fifth DCA: https://www.5dca.org/ First, go to the District Court of Appeal (DCA) website to find a recent opinion (less than one year old). Read the opinion  for and find a commercial case. Typically a commercial case will not have the “State of Florida” as a party as those cases are usually criminal. Next, make a note of the case number and then go to the DCA video archive and find the video of the oral arguments. Please note that not all opinions  have oral arguments so you may need to find another opinion.  If the opinion  is a “per curiam” type opinion, then find another case. A “per curiam” opinion is not an opinion. The court simply stated its ruling with no opinion. IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FIFTH DISTRICT
NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
SECURITY FIRST INSURANCE COMPANY,
Appellant,
v.
Case No. 5D20-2528
LT Case No. 2018-CA-012158-O
LYDIA VAZQUEZ AND SANTOS VAZQUEZ,
Appellees.
________________________________/
Opinion filed February 18, 2022
Appeal from the Circuit Court
for Orange County,
Patricia Strowbridge, Judge.
Angela C. Flowers, of Kubicki Draper,
Ocala, for Appellant.
Mark A. Nation, of The Nation Law
Firm, LLP, Longwood, for Appellees.
EVANDER, J.
In this insurance coverage dispute, Security First Insurance Company
(“Security First”) appeals a final summary judgment entered in favor of Lydia
and Santos Vazquez (“the Vazquezes”). We conclude that the $10,000 limit
of liability provision contained in the policy’s Limited Water Damage
Endorsement (“LWD Endorsement”) did not preclude the Vazquezes from
recovering additional monies for “tear-out” costs. Accordingly, we affirm.
The parties agree to the basic facts.
Security First insured the
Vazquezes’ dwelling pursuant to a homeowner’s insurance policy.
The
dwelling incurred physical damage from the discharge or overflow of water
from the plumbing system. Specifically, the home “sustained a covered loss
due to water damage caused in whole or part by water that escaped as a
result of a failed cast iron sanitary plumbing system in the dwelling.”
The failure of the cast iron pipes was caused by wear and tear, deterioration,
and corrosion.
Security First acknowledged coverage for the water damage and paid
$10,000 under the LWD Endorsement. That endorsement states:
For an additional premium, the policy is endorsed to provide the
following:
Sudden and accidental direct physical loss to covered
property by discharge or overflow of water or steam from within
a plumbing . . . system . . . .
LIMIT OF LIABILITY:
The limit of liability for all damage to covered property provided
by this endorsement is $10,000 per loss. This coverage does not
2
increase the limit of liability that applies to the damaged covered
property.
All other provisions of your policy apply.
The Vazquezes’ suit claimed they were owed additional monies for the cost
to tear out and replace a part of the concrete slab—an action necessary to
gain access to the corroded pipes. The parties stipulated that the tear-out
costs would be $40,000. The Vazquezes’ tear-out costs claim is based on
language in the main policy, providing that where covered perils:
cause water damage not otherwise excluded, from a plumbing
system . . . , we cover loss caused by the water including the cost
of tearing out and replacing any part of a building necessary to
repair the system . . . . We do not cover loss to the system . . .
from which this water escaped.
In addition to agreeing on the basic facts, the parties also agree on
certain coverage matters. First, the parties agree that because of certain
exclusion provisions, the Vazquezes’ claimed losses would not be
recoverable but for their procurement of the LWD Endorsement. Second, the
parties agree that the LWD Endorsement provides coverage for both water
damage to covered property and tear-out costs. Third, the parties agree that
the cost to repair and/or replace the corroded pipes is not covered.
However, the parties disagree over the proper interpretation of the
limitation of liability provision contained in the LWD Endorsement. Security
First argues that the $10,000 limit applies to both water damage and tear-out
3
costs. The Vazquezes contend that the $10,000 limit applies only to water
damage to covered property.
After hearing argument on the parties’ cross-motions for summary
judgment, the trial court ruled in favor of the Vazquezes. A final judgment for
$40,000 was subsequently entered against Security First, and this appeal
followed.
The interpretation of an insurance policy is a question of law reviewed
de novo. Principal Life Ins. Co. v. Halstead, as Tr. of Rebecca D. McIntosh
Revocable Living Tr., 310 So. 3d 500, 502 (Fla. 5th DCA 2020). The guiding
principal for insurance policy interpretation is that the policy must be read as
a whole, affording words their plain meaning as bargained for by the parties.
See § 627.419(1), Fla. Stat. (2016) (requiring every insurance contract “be
construed according to the entirety of its terms and conditions as set forth in
the policy and as amplified, extended, or modified by any application therefor
or any rider or endorsement thereto”); see also Auto-Owners Ins. Co. v.
Anderson, 756 So. 2d 29, 34 (Fla. 2000) (“Florida law provides that insurance
contracts are construed in accordance with the plain language of the policies
as bargained for by the parties.”).
If the relevant policy language is susceptible to more than one
reasonable interpretation, one providing coverage and the other limiting
4
coverage, the insurance policy is considered ambiguous. Auto-Owners Ins.
Co., 756 So. 2d at 34. Ambiguous policy provisions are interpreted in favor
of the insured. Id.
A plain reading of the limit of liability provision contained in the LWD
Endorsement arguably supports the Vazquezes’ argument. The provision
recites that: “[t]he limit of liability for all damage to covered property provided
by this endorsement is $10,000 per loss.” (emphasis added). Here, it is
undisputed that the part of the concrete slab that needs to be removed was
not damaged by the discharge or overflow of water.
Furthermore, in the Perils Insured Against section of the main policy,
tear-out costs are not included in the definition of water damage. Rather,
tear-out costs are referenced as an item that can be covered as part of a loss.
Security First argues that under the policy, a water damage loss necessarily
includes the tear-out costs. While that may be so, the limitation of liability
provision did not use the term “water damage loss,” rather it uses the term
“damage to covered property.”
We further observe that even if a water damage loss includes both
water damage to covered property and tear-out costs, there would be no
requirement to place both types of losses under a single liability sublimit.
Homeowner’s policies frequently place different liability sublimits for different
5
types of losses. Here, the LWD Endorsement expressly sets forth a sublimit
for damage to covered property but is silent as to any sublimit for tear-out
costs.
Of course, Security First could have expressly recited the tear-out
costs were subject to the $10,000 limit of liability contained in the LWD
Endorsement. Indeed, the Limited Fungi, Mold, Wet or Dry Rot, or Bacteria
Coverage
Endorsement
(“Mold
Endorsement”)
to
the
Vazquezes’
homeowner’s policy contains such language:
a. We will pay up to the amount stated in the Declarations for
Limit of Liability for “fungi” Coverage for:
1) The total of all loss payable under Coverages caused by
or resulting directly or indirectly from “fungi”, mold, wet or
dry rot, or bacteria;
2) The cost to remove “fungi”, mold, wet or dry rot, or bacteria
from property covered under Coverages;
3) The cost to tear out and replace any part of the building or
other covered property as needed to gain access to the
“fungi”, mold, wet or dry rot, or bacteria; and . . .
In essence, Security First is asking this Court to insert the type of
language used in the Mold Endorsement into the LWD Endorsement, so as
to make tear-out costs subject to the LWD Endorsement’s limit of liability
provision.
6
We acknowledge that the limit of liability provision could reasonably be
interpreted to apply to both water damage and tear-out costs. After all, it can
be reasonably argued that “damage to covered property” would include tearout costs because the floor slab would clearly be damaged when it was torn
out to gain access to the corroded pipes.
However, the Vazquezes’
interpretation, based on the policy’s structure and definitions, is also
reasonable. Because the limit of liability provision in the LWD Endorsement
can reasonably be interpreted in each party’s favor, and because the
ambiguity was created by Security First, we affirm the final summary
judgment entered below.
AFFIRMED.
NARDELLA and WOZNIAK, JJ., concur.
7