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Fox v. Starr Indemnity & Liability Co.

United States District Court, M.D. Florida, Tampa Division

April 28, 2017

FRED FOX, et al., Plaintiffs,
v.
STARR INDEMNITY & LIABILITY COMPANY, Defendant.

          ORDER

          STEVEN D. MERRYDAY UNITED STATES DISTRICT JUDGE.

         On April 19, 2014, a vagrant torched a building owned by Robert and Fred Fox. The Foxes submitted a claim to Starr Indemnity & Liability Company, which insured the building for “fire loss.” (Doc. 2 at 41-90, the insurance policy) Dissatisfied with Starr's handling of the claim and Starr's purported tardiness in tendering $1, 057, 192.56 (the building's estimated damage, according to the Foxes' contractor), on September 9, 2014, Fred Fox filed a “Civil Remedy Notice” with the Florida Department of Financial Services. (Doc. 2 at 93-95) In a response to the department, Starr argues that Fred's notice fails to identify with specificity the Florida law allegedly violated by Starr and fails to identify with specificity the policy term allegedly breached by Starr. (Doc. 2 at 96-97)

         The parties disagreed about the amount of the loss. In accord with the policy's appraisal provision (Doc. 2 at 62), each party selected an appraiser, and the two appraisers selected an umpire. (Doc. 2 at ¶ 14) On May 12, 2016, the appraisal panel awarded the Foxes $930, 041.36 for the building's damage, and Starr paid the award. Alleging that Starr delayed payment in bad faith, the Foxes sue (Doc. 12) Starr under Section 624.155, Florida Statutes. For the second time, Starr moves (Doc. 13) to dismiss the bad-faith claim for the failure to state a claim for relief and for the lack of particularity in the fraud allegation.

         DISCUSSION

         1. The civil remedy notice

         Identifying several purported defects in the civil remedy notice, Starr alleges that the failure to submit a “valid” civil remedy notice requires dismissal of the action.[1] First, Starr argues that Robert's claim requires dismissal because Robert failed to submit a civil remedy notice. Section 624.155(3)(a) requires an insured to submit a civil remedy notice as a condition precedent to a bad-faith claim. The notice includes a blank space to identify the complainant and another to identify the insured. (Doc. 1 at 98) Fred's responses fail to mention Robert, but the “narrative” part of the notice states that “[t]his claim involves the insureds, Fred J. Fox and Robert A. Fox's (commercial) property.” (Doc. 1 at 100) The Foxes argue that the inclusion of Robert's name in the “narrative” section satisfies Section 624.155(3)(a).

         Second, Starr argues that the notice fails to comply with Section 624.155(3)(b)(3), which requires an insured to state “[t]he name of any individual involved in the violation.” A prompt on the first page of the notice requests that the insured “identify the person or persons representing the insurer who are most responsible for/knowledgeable of the facts giving rise to the allegations in this notice.” (Doc. 1 at 98) Although Fred wrote that the notice is “against” “Starr Liability & Indemnity Company, ” Fred declined to identify a natural person “involved in the violation.” The Foxes respond that Starr “fails to cite any authority where a bad faith case was barred solely because a [notice] failed to state the name of any individual involved in the violations.” (Doc. 17 at 12) Also, the Foxes argue that they “did not have direct dealings with [Starr] and did not know the names of [Starr's] employees who were responsible for the claim.” (Doc. 17 at 13)

         Neither party scrutinizes the statute's text, perhaps because an examination of the text contributes more to confusion than to clarity. As the parties recognize, “any” might mean that an insured must identify at least one “individual involved in the violation” or that an insured must identify every “individual involved in the violation.” See Garner's Dictionary of Legal Usage at 65-66 (“Any may be either singular or plural.”). And the parties apparently disagree about the meaning of “individual.” Without citation to authority, Starr assumes that “individual” means a “natural person.” Unable to resolve the disagreement, Garner's Dictionary of Legal Usage observes:

[I]ndividual was formerly thought to be a newfangled barbarism as a noun substituting for man, woman, or person. Certainly, those more specific terms are generally preferred over individual, but this word should no longer be stigmatized. Still, individual is best confined to contexts in which the writer intends to distinguish the single (noncorporate) person from the group or crowd.

Garner's Dictionary of Legal Usage at 448 (italics omitted). More helpful, Black's Law Dictionary defines “individual” as “of or relating to a single person or thing, as opposed to a group.” Black's Law Dictionary at 789 (8th ed. 2002). In this instance, Starr Liability & Insurance Company is a unique entity - the only Starr Liability & Insurance Company. Finally, the statute requires identifying an individual “involved in” the violation. “Involved in” lacks meaning, so the notice prompts an insured to identify “the person or persons representing the insured who are most responsible for/knowledgeable of the facts giving rise to the allegations.” (Doc. 1 at 98)

         Third, Starr argues that the notice fails to comply with Section 624.155(3)(b)(4), which requires that the Foxes “shall state with specificity . . . [r]eference to specific policy language that is relevant to the violation, if any.” To identify the terms allegedly breached, the notice includes this list:

-Building coverage
-Business income coverage
-All coverage provided by endorsement ...

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