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Lucky Star Horses, Inc. v. Diamond State Insurance Co.

Florida Court of Appeals, Third District

November 1, 2017

Lucky Star Horses, Inc., et al., Appellants,
v.
Diamond State Insurance Company, Appellee.

         Not final until disposition of timely filed motion for rehearing.

         An Appeal from a non-final order from the Circuit Court for Miami-Dade County Lower Tribunal No. 15-14380, Thomas J. Rebull, Judge.

          Lopez & Best, and Virginia M. Best, for appellants.

          Cole Scott & Kissane, and Scott A. Cole and Lissette Gonzalez, for appellee.

          Before ROTHENBERG, C.J., and SALTER and LINDSEY, JJ.

          SALTER, J.

          This is an appeal from a non-final order granting the appellee/insurer's motion to stay a circuit court case and to compel arbitration. The two appellants/insureds, Lucky Star Horses, Inc. ("Lucky Star"), and Marlen Fundora, [1]claimed coverage and insurance benefits under an "Equine Mortality Policy" following the death of a Paso Fino horse owned by Ms. Fundora. Although the appellants have identified a succession of pleadings filed in the case before the insurer, Diamond State Insurance Company ("Diamond State"), invoked the limited right to arbitration in the insurance policy, the trial court found the appellants' claim of waiver unpersuasive and granted Diamond State's motion to stay the lawsuit pending arbitration. On the unusual facts presented by the record in this case, we affirm.

         Facts and Procedural History

         In April 2014, Ms. Fundora bought the four year-old, registered, Paso Fino stallion, "Secreto del Rosario, " for $180, 000.00, payable $40, 000.00 at the time of the sale and delivery and in monthly instalments payable thereafter for a period of 19 months. The Equine Mortality Policy at issue here insured the life of the stallion for a policy period April 28, 2014, to April 28, 2015. No formal documentation is in the record transferring ownership of the horse to Lucky Star, but both Lucky Star and Ms. Fundora are identified in the policy as the "named insured" at the same address in Hialeah, Florida. Lucky Star is a Florida corporation wholly owned and controlled by Ms. Fundora. Ms. Fundora testified that she intended to convey the stallion to Lucky Star when the horse was older and would become a breeder.

         Before any such transfer of ownership, however, the horse died-on January 17, 2015-while in a stall awaiting a competitive Paso Fino show at Tropical Park. Ms. Fundora promptly notified the insurer by telephone, and worked with the insurer to arrange a necropsy. In compliance with the policy, Ms. Fundora submitted a single, sworn proof of loss on behalf of both Lucky Star and herself, and Diamond State investigated (including an examination under oath of Ms. Fundora). In June 2015, having received no payment for her claim of loss under the policy, Ms. Fundora retained counsel and filed a circuit court lawsuit with Lucky Star as the sole plaintiff and Diamond State as the defendant.

         Diamond State filed an answer and numerous affirmative defenses, and the parties exchanged pretrial discovery requests. To that point, Diamond State did not move to compel arbitration or assert that right as an affirmative defense. Diamond State did, however, contend that Ms. Fundora was the only owner of the horse, such that Lucky Star had no standing to make a claim for benefits under the policy. In November 2016, Diamond State moved for final summary judgment on this issue, contending that there was no genuine issue of material fact that Lucky Star had no ownership interest in the insured stallion.

         Two weeks later, Lucky Star (then the only plaintiff) moved to amend the complaint to add Ms. Fundora as an individual plaintiff and claimant under the policy, attaching a proposed amended complaint. Diamond State opposed the motion, but the motion to amend was granted and the amended complaint was deemed filed in December 2016.

         In January 2017, and before filing any other pleading or paper in response to the amended complaint, Diamond State filed its motion to compel arbitration and stay the circuit court proceedings. Diamond State invoked the limited arbitration provision in Part V. of the Equine Mortality Policy:

Should there arise a difference of opinion solely concerning the value of a deceased horse which cannot be amicably settled between the Company [Diamond State] and the Insured, it is understood and agreed that such difference of opinion shall, by agreement of the Company and the Insured, be submitted for arbitration to three (3) disinterested parties, one to be selected by the Company, one to be selected by the Insured, and one to be selected by the two so selected. A decision of the majority of the three shall be final in each ...

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