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Gagliardi v. Liberty Mutual Fire Insurance Co.

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

January 2, 2018




         THIS CAUSE comes before the Court upon Defendant's Motion for Summary Judgment (Dkt. 18), Plaintiffs' Response in Opposition (Dkt. 22), and Defendant's Reply (Dkt. 25). The Court, having reviewed the motion, response, reply, record evidence, and being otherwise advised in the premises, concludes that the motion should be denied because there are genuine issues of material fact that the jury must decide.

         RELEVANT FACTS[1]

         Plaintiffs Gerald Gagliardi and Patricia Gagliardi allege that Defendant Liberty Mutual Fire Insurance Company breached its insurance policy with Plaintiffs when it denied their claim associated with a sinkhole loss to their residence located in Hudson, Florida.

         At all material times, Plaintiffs owned the property located at 13433 Oscar Ct., Hudson, FL 34669 (the “Insured Property”). Defendant issued to Plaintiffs an insurance policy, policy number H32-251-459831-101 3 (the “Policy”), which was effective February 24, 2011, to February 24, 2012. The Policy includes special provision form FMHO 1067 12 10 that provides coverage for “sinkhole loss” defined as “structural damage to the building, including the foundation, caused by sinkhole activity.” The Policy also provides that Defendant will “pay to stabilize the land and building and repair the foundation in accordance with the recommendations of a professional engineer and in consultation with you.” (Dkt. 22-1).

         On or about March 12, 2011, Plaintiffs noticed cracking damage to the Insured Property. Plaintiffs timely reported the loss and damage to Defendant. In response to Plaintiffs' claim, Defendant retained Ground Down Engineering (“GDE”), a geotechnical and engineering firm, to complete an investigation of the Insured Property.

         On or about June 29, 2011, GDE issued a report of its findings and conclusions from its investigation of the Insured Property. In its report, GDE concluded that sinkhole activity was a cause of damage, within a reasonable degree of professional probability, and verified the existence of a sinkhole loss, as that term is defined under the Policy. For subsidence repairs, GDE estimated 300 to 400 cubic yards of compaction grout.

         After sinkhole activity and resulting damages to the structure were confirmed by GDE, Plaintiffs entered into a contract with C&N Foundation Technologies (“C&N”) to implement the subsurface repairs recommended by GDE. Defendant used GDE to review and monitor implementation of the subsurface repairs that were performed by C&N at the Insured Property. C&N finished conducting subsurface repair work at the Insured Property on or about October 5, 2011.

         On October 19, 2011, GDE issued its Grout Monitoring Report. According to GDE's Grout Monitoring Report, only 113.8 cubic yards of compaction grout were installed at the Insured Property. The Grout Monitoring Report noted that GDE monitored the remediation at the Insured Property and that the “purpose of the monitoring was to ensure that the repairs were completed in accordance with GDE's repair recommendations.” (Dkt. 18-14).

         Defendant did not renew Plaintiffs' homeowners' insurance coverage after the Policy expired February 24, 2012.

         Following the completion of the remediation program, Plaintiffs experienced continuing and increasing damage to the Insured Property and reported their concerns to Defendant. Specifically, Plaintiffs noticed a hole at the Insured Property that occurred after completion of the remediation. Plaintiffs also noticed drainage issues in the yard and were concerned that the grouting process was causing the ground to hold water and not drain as it had previously. In response, Defendant retained GDE to conduct a site inspection of the Insured Property.

         GDE issued a report dated September 7, 2012. GDE concluded that the additional damage at the Insured Property was not due to sinkhole activity and/or the subsidence repairs conducted at the Insured Property. The report stated that: “It is our opinion that [the hole] is related to natural drainage that occurs around sprinkler heads.” (Dkt. 18-18). GDE also concluded that the grout was not affecting the drainage and noted that the rainfall in the area had been higher than normal.

         On or about July 28, 2015, Plaintiffs continued to observe damage at the Insured Property. Plaintiffs notified Defendant of the damage and voiced their concerns regarding the sufficiency of the subsurface repair work performed at their home. In response, on or about August 10, 2015, Defendant requested that Plaintiffs submit to examinations under oath. Defendant also retained Anticus Engineering to evaluate whether the damage Plaintiffs had reported was new damage or related to the 2011 remediation.

         Anticus issued a report dated January 11, 2016, that concluded that the damage was not associated with sinkhole activity, that the prior sinkhole activity was remediated, and that the current damage was attributable to “construction/installation methods and aging (exposure ...

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