Middle District of Florida Grants Summary Judgment for Insurer Based on Late Notice and Recovery of RCV Damages

By Michael J. Raudebaugh

In a recent order granting summary judgment in favor of Westfield Insurance Company, the United States District Court for the Middle District of Florida reiterated that an insured’s failure to provide timely notice of a claim is a legal basis for denying recovery under the policy. The Court also held that an insured cannot recover replacement cost value of its alleged damages until repairs are made.

In Gulfpoint Constr. Co. v. Westfield Ins. Co., No. 2:22-cv-86-SPC-NPM (M.D. Fla. Jun. 2, 2023), the insured performed emergency repair work to the insured property’s roofing system immediately after Hurricane Irma made landfall on September 10, 2017, but did not notify Westfield of the damage or repair work at that time. The insured finally notified Westfield of the alleged damage almost two years later. Westfield investigated the loss and denied coverage after determining that the property’s roof had not suffered any covered wind damage. The denial letter also noted that the loss was not presented to Westfield until two years after the claimed date of loss.

The Middle District granted summary judgment in favor of Westfield, holding that the record did not support an argument that the delayed notice was reasonable. Having determined that the notice was untimely, the Middle District further held that the insured failed to rebut the presumption that Westfield’s investigation was not prejudiced by the delay. In doing so, the Court confirmed that Westfield did not have the burden of providing evidence that it was prejudiced, but rather that the insured had the burden of providing evidence that Westfield’s investigation was not prejudiced.

While the Court could have stopped there, it also held that the insured could not recover replacement cost damages because it had not yet completed any repair or replacement. The Middle District found that the unambiguous policy language provided that Westfield was not obligated to pay replacement cost until the damaged property is actually repaired or replaced, even though it had denied coverage.