United States District Court, S.D. Florida, Key West Division
NEW SOUTH COMMUNICATIONS, INC D/B/A FLORIDA KEYS MEDIA, LLC, ROBERT HOLLADAY, in his individual capacity, and FLORIDA KEYS MEDIA, LLC, Plaintiffs,
HOUSTON CASUALTY COMPANY, Defendant.
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY
LAWRENCE KING, UNITED STATES DISTRICT JUDGE.
CAUSE comes before the Court upon Defendant Houston Casualty
Company's ("HCC's") Motion for Summary
Judgment (the "Motion," ECF No. 36), filed April
15, 2019. The Court is fully briefed on the
matter. A hearing was held on the Motion on May
13, 2019. Upon review of the record and careful
consideration, the Court finds that the Motion should be
dispute arises out of a claim under an insurance policy (the
"Policy") issued by HCC for property damage to
certain insured properties (the "Properties")
allegedly caused by Hurricane Irma when it struck the Florida
Keys in September 2017 (the "Claim"). HCC issued
the Policy to New South Communications, Inc. ("New
South") for the period of February 1, 2017 to February
1, 2018, but a change endorsement amended the Policy to
include additional persons and entities as named insureds,
including Florida Keys Media, LLC ("Florida Keys")
and Robert Holladay ("Holladay"), the owner of
Florida Keys and the president and a member of the board of
New South. Plaintiffs claim in their Amended Complaint that
HCC breached the insurance contract by failing to issue
proper payment for the cost to repair the alleged damages and
to issue payments as required by the Policy.
case was originally filed by Plaintiff New South on May 21,
2018, in the Circuit Court of the 16th Judicial Circuit in
and for Monroe County, Florida. (ECF No. 1-1.) On July 16,
2018, HCC removed the case based upon the Court's
diversity jurisdiction under 28 U.S.C. § 1332. (ECF No.
1.) The Complaint was thereafter amended to add Florida Keys
and Holladay as plaintiffs. (ECF No. 19.) The Amended
Complaint remains the operative Complaint. Discovery is now
moves for summary judgment for three reasons. First, HCC
contends that none of the Plaintiffs has standing to assert
the claim for relief made in this action. HCC states that
discovery has revealed that New South, the only insured to
bring a claim under the Policy for the damage at issue in the
Amended Complaint, has no insurable interest in the
Properties, which Plaintiffs now admit are all owned or
leased by Florida Keys or Holladay, the recently added
Plaintiffs to this litigation. Additionally, and
notwithstanding the caption of this case, New South and
Florida Keys are separate corporations. "Florida Keys
Media, LLC" was never a trade name of New South; nor was
New South ever doing business as "Florida Keys Media,
LLC." Thus, HCC contends that New South cannot have
sustained an injury in fact with respect to Properties in
which it has no interest, and it cannot recover for any
rights allegedly belonging to persons or entities other than
itself. HCC further asserts that Florida Keys and Holladay
are likewise disallowed from suing on a claim brought under
the Policy by their co-insured. HCC argues that where a
plaintiff fails to show that it has standing to bring its
case in response to a summary judgment motion, as it states
the Plaintiffs have failed to do here, the motion for summary
judgment should prevail.
HCC contends that, jurisdictional deficiencies aside, the
suit is barred because Plaintiffs failed to comply with
conditions precedent to coverage and to filing suit against
HCC. Specifically, HCC argues that Plaintiffs neglected their
responsibilities that arose under the Policy when, prior to
New South's commencement of this lawsuit, HCC offered to
pay the full amount of the damages it determined to be
covered under the Policy, subject to the execution and return
of a sworn proof of loss. HCC asserts that, under the Policy,
a signed, sworn proof of loss should have been submitted
within sixty days thereafter as a condition precedent to any
coverage and to filing any suit against HCC. However, the
record shows that none of the Plaintiffs - not New South,
Florida Keys, or Holladay - ever submitted a sworn proof of
loss to HCC. Instead, New South filed this lawsuit. HCC
contends that that the failure to submit a proof of loss bars
Plaintiffs from bringing this suit.
HCC moves for summary judgment on the basis that, even if
Plaintiffs had standing and were not otherwise barred from
bringing this action, an exclusion in the Policy bars
coverage for the alleged damages beyond those for which HCC
previously offered payment. Specifically, the Policy excludes
coverage for "loss to the interior of buildings or
structures or i;o personal property in the buildings or
structures caused by rain, snow, sleet, ice, sand, or dust,
unless: entering through openings made by a 'named
peril' . . . ." (Policy, ECF No. 40-1, p. 31.) HCC
asserts that Plaintiffs have failed to establish that the
exception to that exclusion applies to any specific piece of
property included in the Claim aside from those damages HCC
acknowledged were potentially caused by rain entering through
an opening made by Hurricane Irma. Thus, HCC contends no
genuine issue of material fact exists that the exclusion
"shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law." Fed.
R. Civ. P. 56(a). "[T]he mere existence of
some alleged factual dispute between the parties
will not defeat an otherwise properly supported motion for
summary judgment; the requirement is that there be no
genuine issue of material fact."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247-48 (1986). A dispute about a material fact is
"genuine" if "the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party." Id. at 248. The applicable substantive
law will determine what facts are "material," but
"[o]nly disputes over facts that might affect the
outcome of the suit under the governing law will properly
preclude the entry of summary judgment." Id.
party seeking summary judgment bears the initial burden of
demonstrating the basis for its motion and "identifying
those portions of the pleadings, depositions, answers:o
interrogatories, and admissions on file, together with the
affidavits, if any, which it believes demonstrate the absence
of a genuine issue of material fact." Hickson Corp.
v. N. Crossarm Co., Inc., 357 F.3d 1256, 1260 (11th Cir.
2004) (internal quotation marks omitted), reh'g
denied, 99 Fed.Appx. 889 (11th Cir. 2004). "[W]hile
it is true that all reasonable inferences must be drawn in
the non-moving party's favor," ultimately,
"summary judgment is appropriate against a party who
fails to make a showing sufficient to establish the existence
of an element essential to that party's case, and on
which that party will bear the burden of proof at
trial." Shotz v. City of Plantation, Fla, 344
F.3d 1161, 1184 (11th Cir. 2003) (internal quotation marks
omitted). "The mere existence of a scintilla of evidence
in support of the plaintiffs position will be insufficient;
there must be evidence on which the jury could reasonably
find ... by a preponderance of the evidence that the
plaintiff is entitled to a verdict" Anderson,
477 U.S. at 252. If the evidence offered by the nonmoving
party is "merely colorable" or is "not
significantly probative," summary judgment is proper.
See Id. at 249-50.
review of the facts and legal arguments, the undersigned
finds persuasive and adopts HCC's legal arguments in
support of its Motion.
New South lacks standing because it has no insurable interest
in the Properties.
party has standing to prosecute a claim in federal court only
if he is the 'real party in interest'" to that
claim, as required by Federal Rule of Civil Procedure 17(a).
Tribue v. Hough, No. 3:04CV286/RV/EMT, 2006 WL
212017, at *2 (N.D. Fla. Jan. 26, 2006) (quoting U.S. v.
936.71 Acres of Land, More or Less, in Brevard Cnty., State
of Fla., 418 F.2d 551, 556 (5th Cir.1969)) (citing
Fed.R.Civ.P. 17(a) (2019)). "An action brought by the
real party in interest is one 'brought by the person who,
according to the governing substantive law, is entitled to
enforce the right.'" Payroll Mgmt, Inc. v.
Lexington Ins. Co., 815 F.3d 1293, 1299 n.10 (11th Cir.
2016) (quoting 6A Charles Alan Wright, Arthur R. Miller, Mary
Kay Kane, Richard L. Marcus & Adam N. Steinman,
Federal Practice and Procedure § 1543 (3d ed.
insurance contracts are enforceable only where the insured
has an insurable interest in the covered property at the time
of the loss." Banta Props., Inc. v. Arch Specialty
Irs. Co., 553 Fed.Appx. 908, 910 (11th Cir. 2014)
(citing Fla. Stat. § 627.405(1) (2019)). Although an
insured does not necessarily have to own certain
property to have an insurable interest therein, it must have
"an 'actual, lawful, and substantial economic
interest' in keeping the property 'free from loss,
destruction, or pecuniary damage or impairment.'"
Id. (quoting Fla. Stat. § 627.405(2)).
"The measure of an insurable interest in property is the
extent to which the insured might be damnified by loss,
injury, or impairment thereof.'" Id.
(quoting Fla. Stat. § 627.405(3)).
fact that an insurance policy insures multiple, separate
insureds along with their respective properties does not give
all insureds under the policy an insurable interest in all
covered properties where no such interest otherwise exists.
See Id. at 911; Unijax, Inc. v. Factory Ins.
Ass'n, 328 So.2d 448, 456 (Fla. 1st DCA 1976),
cert, denied, 341 So.2d 1086 (Fla. 1976). Instead,
each insured must establish its own rights to recovery under
the policy, and it cannot rely on the rights of others.
See Banta, 553 Fed.Appx. at 911; Unijax,
328 So.2d at 453-54. This is so even when the insureds are
related corporate entities, since "[d]ifferent
corporations usually are distinct entities in law," and
disregarding the separate existence of corporations is only
justified where one of the corporations "is a sham, or
is used to perpetrate deception to defeat a public policy ..
. ." Unijax, 328 So.2d at 452 (internal
quotation marks omitted); see also Banta, 553
Fed.Appx. at 909, 911. Absent such justification, the
"claims of various entities, even though interrelated,
must be treated separately, and ... the rights of each must
be maintained in separate actions ... in accord with Florida
law." Unijax, 328 So.2d at 453; see also
Federated Title Insurers, Inc. v. Ward, 538
So.2d 890, 891 (Fla. 4th DCA 1989) ("Claims of various
entities, even though interrelated, must ordinarily be
summary judgment stage, a party "can no longer rest on .
. . mere allegations" to demonstrate its standing,
"but must set forth by affidavit or other evidence
specific facts" establishing standing. Clapper v.
Amnesty Int'l USA, 568 U.S. 398, 412 (2013)
(internal quotation marks omitted). In this case, it is
undisputed between the parties that at all relevant times:
New South did not own or lease the Properties at issue; New
South and Florida Keys were separate corporations;
"Florida Keys Media, LLC" was not a trade name of
New South; and New South was not doing business as
"Florida Keys Media, LLC." (See SUMF, ECF
No. 35, ¶¶ 15-17; RSUMF, ECF No. 40, ¶¶
15-17.) Rather, at all relevant times, the Properties were
all owned or leased by Florida Keys or Holladay in his
individual capacity. (SUMF, ECF No. 35, ¶ 15; RSUMF, ECF
No. 40, ¶ 15.) In an attempt to establish that New South
nevertheless had "an actual, lawful, and substantial
economic interest" in the Properties, entitling it to
sue HCC in connection with the Claim, Plaintiffs contend that
New South: (1) is the named insured on the Policy; (2) was
required under the language of the Policy to give HCC notice
of the Claim; and (3) owned personal property contained
within the subject Properties. See Fla. Stat. §
627.405(2). (See also Pis.' Resp. in Opp'n
to Def.'s Mot. for Summ. J., ECF No. 42, p. 2.) The Court
finds these arguments to be without merit as respects New
Souths standing to bring this lawsuit.
it is clear from the Policy that New South was not the only
named insured thereunder, and that the insurance contract did
not mandate that only New South report claims. Indeed, the
Policy's notice provision provides:
WHAT MUST BE DONE IN CASE OF LOSS
1. Notice -- In case of a loss,