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Aligned Bayshore Holdings, LLC v. Westchester Surplus Lines Insurance Co.

United States District Court, S.D. Florida

June 17, 2019

Aligned Bayshore Holdings, LLC, Plaintiff,
v.
Westchester Surplus Lines Insurance Company, Defendant.

          ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT

          Robert N. Scola, Jr. United States District Judge

         Plaintiff Aligned Bayshore Holdings, LLC (“Aligned”) claims Westchester Surplus Lines Insurance Company (“Westchester”) breached an insurance contract by failing to cover damages it suffered as a result of Hurricane Irma. Before the Court are the parties' cross motions for summary judgment. (ECF Nos. 48, 49.) After reviewing the parties' written submissions and exhibits, and the applicable law, the Court grants Westchester's motion for partial summary judgment (ECF No. 48) and denies Aligned's motion (ECF No. 49).

         I. Factual Background

         Westchester issued an insurance policy to Aligned that provided coverage for Aligned's windstorm and flood damage claims, including physical damage and business interruption to both Monty's Restaurant (the building) and the marina area. (ECF No. 48 at ¶ 2). On September 10, 2017, Aligned sustained losses due to the impacts of Hurricane Irma. (Id. at ¶ 3.) Aligned notified Westchester of its losses, but claims Westchester did not promptly pay all covered losses to Aligned. (ECF No. 6 at ¶¶ 9-11.) Aligned alleges that their damages exceed $15.5 million, with the majority of the damage sustained by the marina. (ECF No. 49 at ¶ 35.) Westchester has paid over $3 million in insurance claims to Aligned. (ECF No. 48 at 4.)

         Aligned alleges in its breach of contract claim that Westchester willfully misinterpreted the insurance policy by improperly relying on an unverified statement of values to cap its coverage. (See id. at ¶ 19-20.) Westchester maintains that it properly interpreted the contract and has paid out the policy maximum under the insurance policy's flood coverage. (ECF No. 48 at 1.) Aligned also asserted a bad faith claim, which was dismissed without prejudice by this Court. (ECF No. 38.)

         II. The Insurance Contract

         Westchester issued a commercial property policy, No. D37380118008, to Aligned for the year May 21, 2017 to May 21, 2018. (ECF No. 49 at ¶¶ 1-2.) The policy provides coverage for buildings, personal property, business interruption, improvements and betterments, and docks and piers. (ECF No. 48 at ¶ 2.) The insured property is a commercial property which includes a building, housing Monty's restaurant, and the outdoor marina and piers. (Id.). The insurance policy covers various "causes of loss," including flood damage. (ECF No. 47-1 at 14.)

         The insurance policy contains Commercial Property Declarations (the "Commercial Declarations"), which provide coverage of up to $12, 250, 000 as per the "[m]ost recent schedule on file with Company." (Id. at 10.) The parties agree that the schedule referenced in the Commercial Declarations is a statement of values. (ECF No. 49 at ¶ 8; ECF No. 55 at ¶ 8.) The statement of values, which is incorporated by reference in the contract, sets out the property value and thus the limit of insurance for each insured item. For example, the building is insured up to $6, 250, 000, the docks up to $2, 000, 000, personal property up to $1, 000, 000, and so on, equaling a total of $12, 250, 000 in insurance coverage. (ECF No. 49 at ¶ 11.) The Commercial Declarations set out the following information with regard to "location" and "coverages and limits provided."

         company: Westchester Surplus Lines Insurance Company

         SYM: FS Policy ID; D37380118 008

         (Image Omitted)

(ECF No. 47-1 at 10.)

         The insurance policy also contains Flood Endorsements Declarations ("Flood Declarations"). The Flood Declarations set out a reduced limit for flood insurance: $10, 000, 000 per occurrence. (Id. at 14.) The Flood Declarations states that "[t]he Flood limit is not a separate or additional Limit of Insurance. . . The Reduced limit does not apply separately to the Premises, Locations, Covered Property or Coverages listed. It is the most we will pay for all loss or damage to the indicated Covered Property/ Coverages at the Premises and Locations listed, subject to ...


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