Last week on the Property Insurance Law Blog, I wrote about a condominium association that sued its insurance company for failing to discover all Hurricane Wilma damage. The association discovered additional damage several years after the storm, and rather than file a supplemental claim for damage, the association filed suit. The insurance company claimed that the association needed to notify it of the newly found damage and submit to a secondary investigation before it could recover benefits. Judge Robert N. Scola, Jr., of the United States District Court for the Southern District of Florida, disagreed, finding that the insurance policy did not require a supplemental claim.
Following Judge Scola’s December 22, 2010, opinion, the insurance company asked the Court to reconsider. On New Year’s Day, in Ocean View Towers Ass’n, Inc. v. QBE Ins. Corp., 11-60447-CIV, 2012 WL 8569 (S.D. Fla. Jan. 1, 2012), Judge Scola denied that motion. Below are some of the highlights of Judge Scola’s denial.
In support of its Motion for Reconsideration, QBE cites numerous opinions from the Southern District of Florida in cases involving this very same Defendant-none of which were cited by QBE in its Response to the Corrected Motion for Summary Judgment. It boggles the mind to consider how QBE could not be aware of opinions in its own cases from the same federal district court and yet not cite those cases until after receiving an adverse ruling from the court.
QBE cites no decision holding that the insured must submit a supplemental claim before bringing suit where, as here, the insured alleges breach of contract and has not sought an appraisal or declaratory relief as to coverage under the policy.
QBE also cannot demonstrate any “manifest error” because, in this case, the Court simply followed the plain language of the policy. The Court reached the conclusion that Ocean View complied with its post-loss duties, despite the fact that Ocean View never submitted a supplemental claim before filing suit, because nothing in the policy’s plain language required Ocean View to do anything more than provide the initial notification of the “loss,” which it unquestionably did in the days after Hurricane Wilma. That QBE failed to fully exercise its investigatory rights cannot be blamed on Ocean View or this Court. Although QBE argues that “the Court’s order essentially abolishes the concept of a supplemental claim,” see Mot. at 7, this is hyperbole. The Court followed the law and interpreted the unambiguous policy terms according to their plain meaning. If QBE is unsatisfied with this result, it can only blame itself. If QBE wanted to ensure a contrary result, it should have included a provision in its policies expressly requiring insureds to submit supplemental claims as a prerequisite to bringing suit. It failed to do so, and this Court will not rewrite the policy for QBE after the fact.
As I stated last week, Judge Scola’s reading of the insurance policy sends a strong message to insurance companies to get their investigations right the first time. If they don’t, they can’t blame it on the insured, the court, or anyone else for that matter. The blame lies squarely on an insurance company that fails to fully exercise its investigatory rights.