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

United States District Court, S.D. Florida, Miami Division

December 23, 2019

ALIGNED BAYSHORE HOLDINGS, LLC, Plaintiff,
v.
WESTCHESTER SURPLUS LINES INSURANCE COMPANY, Defendant.

          FINAL ORDER GRANTING DEFENDANT'S MOTION TO DISMISS WITH PREJUDICE AND CLOSING CASE

          FEDERICO A. MORENO UNITED STATES DISTRICT JUDGE.

         THIS CAUSE came before the Court upon Defendant's Motion to Dismiss Plaintiffs Complaint for Declaratory Relief Compelling Appraisal and for Ancillary Relief, and Defendant's Request for Judicial Notice in support of its motion to dismiss. THE COURT has considered the motion and request, the responses in opposition, the replies, the pertinent portions of the record, and being otherwise fully advised in the premises, it is ADJUDGED that the motion and request are GRANTED for the reasons outlined below, and the case DISMISSED with PREJUDICE.

         I. Background

         This action arises from an earlier case filed in this district presently before the Honorable Robert N. Scola, styled Aligned Bayshore Holdings, LLC v. Westchester Surplus Lines Insurance Co., case No. 18-cv-21692. On May 17, 2018, Plaintiff Aligned Bayshore Holdings, LLC filed an amended complaint in the related action alleging two claims against Defendant Westchester Surplus Lines Insurance Company: (1) breach of contract under the applicable commercial property insurance policy and (2) bad faith.[1] Plaintiff stated, under the first section of the amended complaint which was titled "Nature of Action," that "[t]his is an action arising from Westchester's breach of the insurance contract it issued to Aligned and for Westchester's failure to timely and properly adjust and pay Aligned's windstorm and flood damage claims." Plaintiff sought $ 15.5 million for damages to Monty's Restaurant (the building) and the surrounding marina area that were allegedly caused by Hurricane Irma. It wrote that "[t]he policy provided coverage for Aligned's windstorm and flood damage claims, including physical damage and business interruption." A few days later, Magistrate Judge Edwin G. Torres promulgated discovery procedures, and, a few months after that, on August 24, 2018, the parties effectively began discovery, with Plaintiff serving its initial disclosures under Federal Rule of Civil Procedure 26.[2]

         After extensive discovery spanning more than half a year (at least), the case proceeded to summary judgment where, for one reason or another, the parties filed cross-motions for summary judgment dealing not with windstorm damages, but rather flood damages. The cardinal issue in the case, as laid out in Plaintiffs motion, became whether and which statement of values would apply to the flood coverage under the insurance policy. Plaintiff argued that the policy provided for $10 million in blanket flood coverage and did not incorporate a statement of values. Judge Scola subsequently entered an order granting final summary judgment in favor of Defendant.[3]

         Around three months later, on September 10, 2019, Plaintiff filed a separate action, this one, seeking a declaratory judgment to compel appraisal so that it may "expeditiously obtain a determination of the amount of covered windstorm damage suffered as a result of Hurricane Irma." In seeking appraisal, Plaintiff relied on the same insurance policy it cited in the related action. It then pointed to the appraisal provision itself, which stated in relevant part:

2. Appraisal
If we and you disagree on the value of the property or the amount of loss, either may make written demand for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. If they cannot agree, either may request that selection be made by a judge of a court having jurisdiction. The appraisers will state separately the value of the property and amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will:
a. Pay its chosen appraiser; and
b. Bear the other expenses of the appraisal and umpire equally.
If there is an appraisal, we will still retain our right to deny the claim.

         In response, Defendant filed a motion to dismiss accompanied by a request for judicial notice of the filings in the related action. Defendant argued that over the course of litigation in the related action, in a period spanning almost fifteen months, Plaintiff extensively litigated, and conducted discovery on, the issue of windstorm damages, thus waiving its right to appraisal. Plaintiff, in turn, denied the accusation, and pointed to the summary judgment proceedings as evidence that the parties only litigated the issue of flood damages and statement of values.

         The Court now, respectively, analyzes the request for judicial notice and motion to dismiss.

         II. ...


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