Summary Judgment Granted in Insurer’s Favor After Insured Failed to Perform Repairs

By Zachary D. Sonenblum

In Dis Invs., LLC. v. Great Lakes Ins. Se., 2024 U.S. Dist. LEXIS 157850 (S.D. Fla. Aug. 29, 2024), the United States District Court for the Southern District of Florida granted summary judgment as to both damages and matching costs in favor of the insurer Great Lakes after the Insured failed to present any evidence of repairs.

By way of factual background, the Insured filed a claim with Great Lakes alleging damage due to Hurricane Ian. The insurer investigated the claim with the assistance of both a third-party field adjuster and a forensic engineer, and concluded that the damage was not caused by Hurricane Ian, and instead was caused by perils excluded under the Policy such as long-term wear and tear and noted evidence of various repairs throughout the roof over the years. The Insured filed suit following Great Lakes denial of the claim.

Great Lakes moved for summary judgment arguing that Plaintiff’s proof of damages was insufficient to find Great Lakes liable because Plaintiff did not provide any evidence that Plaintiff performed any permanent repairs as required by the Policy’s replacement cost provision. Specifically, the Policy explicitly stated that Great Lakes will not pay the replacement cost for any loss or damage “until the lost or damaged property is actually repaired or replaced” and “unless the repair or replacement is made as soon as reasonably possible after the loss or damage.”

The Court rejected Plaintiff’s arguments that it could pursue a claim for actual cash value recovery because the Policy expressly provides that any loss or damage would only be assessed according to its replacement cost value.

In granting summary judgment as to damages, the Court explained:

As of the time of Mr. Boaziz’s deposition on May 3, 2024, nearly two (2) years after submitting its Claim to GLISE, Plaintiff had neither replaced the roof covering to the Warehouse nor completed any permanent repairs to the interior. Plaintiff has presented no evidence that it has replaced or repaired the roof of the Warehouse. In fact, since discovering the roof leaks, Plaintiff has only completed temporary ‘patching,’ which even Plaintiff’s witnesses did not consider to be repairs. Accordingly, as it relates to damages, summary judgment should be granted. Accordingly, as it relates to damages, summary judgment should be granted. CMR Constr. & Roofing, 843 Fed. App’x at 192 (affirming summary judgment for an insurer where the insured sought replacement cost damages but had not made repairs as required by the insurance policy); Ocean View Towers Ass’n Inc., v. QBE Ins. Corp., 2011 U.S. Dist. LEXIS 147579, 2011 WL 6754063, at *11 (S.D. Fla. Dec. 22, 2011) (ruling that insurer is entitled to summary judgment where repairs have not been initiated in violation of plain policy language providing replacement cost coverage only after “the lost or damaged property is actually repaired or replaced” as soon as reasonably possible).

In entering summary judgment as to matching costs, the Court explained that “matching damages do not fall within the Policy’s terms as coverage is limited to ‘direct physical loss of or damage to Covered Property . . . by or resulting from any Covered Cause of Loss.” See Battat v. QBE Specialty Ins. Co., 2022 U.S. Dist. LEXIS 16984, 2022 WL 1642296, at *10 (S.D. Fla. Jan. 31, 2022) (“Under Florida law, matching damages do not fall within an insurance policy’s definition of ‘direct loss’ to a property.”).

Accordingly, the Court granted summary judgment in favor of Great Lakes and directed the clerk to close the case. However, the Court did also note in its ruling that the ruling “does not foreclose Plaintiff from pursuing its breach of contract claim seeking replacement cost damages once matching costs have been excluded and the appropriate repairs or replacements have been completed.”