U.S. District Court for the Middle District of Florida Grants Insurer’s Motion for Summary Judgment on Nine-Month Delay Following Prejudice Analysis 

By Kelly M. Vogt

On February 23, 2024, in Baytree v. Clear Blue Specialty Ins. Co., No. 6:22-cv-2041-ACC-EJK, the U.S. District Court for the Middle District of Florida, Orlando Division, granted an insurer’s motion for summary judgment on late notice in a wind and hail damages case after weighing several key factors in an extensive prejudice analysis.

Clear Blue issued a policy of insurance to Baytree, a condominium association, effective from April 1, 2021 through April 1, 2022. Throughout this case, it was undisputed that the policy required the insured to provide prompt notice in the event of a claimed loss under the policy. 

On January 27, 2022, Baytree submitted a claim to Clear Blue for damages under the policy due to a wind and hail event that occurred nine months earlier, on April 11, 2021 (the Date of Loss). 

In the days immediately following the Date of Loss, prior to Baytree’s notice to Clear Blue, Baytree’s corporate representative and property manager noticed shingles on the ground. In the following months, Baytree received unit owner reports of roof leaks. Baytree tarped various roofs and performed semi-permanent repairs in response to the roof leak complaints. 

While Clear Blue performed a survey of the damaged property before the policy’s effective date, it was not aware of the preexisting roof issues because the prior repairs were not communicated by Baytree to the surveyor or Clear Blue. Clear Blue asserts that Baytree failed to provide photographs or any evidence of the damages sustained at or around the date of loss and did not provide any invoices evidencing the intervening repairs. Additionally, Clear Blue proffered evidence regarding significant pre-loss repairs to the roofs made by various contractors and handymen occurring in the years directly preceding the Date of Loss. 

On February 4, 2022, Clear Blue sent Baytree its Reservations of Rights Letter requesting additional documents and information from Baytree. Several months later, Clear Blue issued its coverage determination letter which found that the covered damages at the property included only 10 impacted shingles and estimated that repairs would cost an amount less than the policy’s deductible. Therefore, Clear Blue determined that no insurance proceeds were due to Baytree under the policy.

On September 16, 2022, Baytree filed a lawsuit in state court asserting claims for declaratory relief and breach of contract and alleging that Clear Blue improperly denied coverage for the claim. The complaint was subsequently removed to the U.S. District Court for the Middle District of Florida, Orlando Division. Clear Blue filed its motion for summary judgment arguing that it was entitled to judgment in its favor because Baytree did not timely notify Clear Blue of its claim and could not rebut the prejudice that is presumed in favor of Clear Blue under Florida law.

In its judgment, the court found that Baytree improperly tried to shift the burden of prejudice to Clear Blue. The court also rejected the argument that Clear Blue’s expert was able to opine on causation and that Clear Blue’s field adjuster was able to determine scope and cost of repairs for covered damages.

The court granted Clear Blue’s motion for summary judgment on the issue of untimely notice, denied as moot the alternative motion for partial summary judgment on a damages issue, and entered judgment providing that Baytree take nothing on its claims against Clear Blue and that Clear Blue was entitled to recover its costs.