### D ISTRICT 

### C OURT 

### O F 

### A PPEAL 

### O F 

### T HE 

### S TATE 

### O F 

### F LORIDA

F OURTH D ISTRICT

FIVE SOLAS, LLC and WILLIAM W. PRICE, P.A., Appellants/Cross

- Appellees,

v.

RAM REALTY SERVICES, LLC and SODIX FERN, LLC d/b/a ALEXANDER LOFTS, Appellee s/Cross

- Appellants.

No. 4D19

- 2211

[ May 26, 2021 ]

Appeal and cross

- appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County ; Cymonie S. Rowe , Judge; L.T. Case

No. 502016CA004267

.

Bard D. Rockenbach of Burlington & Rockenbach, P.A., West Palm Beach, fo r appellants/cross

- appellees.

Todd R. Ehrenreich, David L. Luck, and Jenna L. Fischman of Lewis Brisbois Bisgaard & Smith, LLP, Coral Gables, for appellees/cross

appellants.

A RTAU
, J.

In 2016, a brick wall from a neighboring building collapsed

, causing it to fall upon a building owned by Five Solas, LLC (“owner”) . The owner had

leased the building to its affiliated law firm, William Price, P.A. (“lessee”). The collapse was so destructive that it rendered the building untenantable

and displaced the lessee. The owner’s building was covered by a replacement cost insurance policy which the owner had purchased from Foremost Insurance Company (“insurer”). However, the policy was subject

to a liability limit for the replacement cost and a c orresponding deductible.

The owner’s and lessee’s resulting claims against the parties responsible for the collapse of the neighboring building (“tortfeasors”) were determined by jury verdict, with the trial court disposing of post

- verdict set

- off claims

.

The owner and lessee have asserted five issues on appeal

. The tortfeasors, for their part, asserted a cross

- appeal , but did not pursue it in

their answer brief

. While we affirm without further comment as to the2 cross

- appeal and two of the issues assert ed by the owner and lessee

, w e

reverse on the remaining three issues asserted by them and remand for the trial court to correct a scrivener’s error in the final judgment that

a

wards the entire recovery to the owner despite delineat ing $176,219.17 of the recovery for the lessee

.

First Issue: Replacement Costs P aid by I nsu rer

To compensate the owner, the insurer paid $430,518.25 (“ building

p ayout”) representing the insurer’s maximum l iability pursuant to the insurance policy for the replacement cost of the building after subtracting the applicable deductible

.

Despite the building payout, the owner and lessee proceeded with their claims against the tortfeasors, asserting that their insurance proceeds did not make them whole for the losses they incurred.

After bringing its own claim against the tortfeasors, t he insurer settled

with the m and agreed, as part of its settlement, to assign any of their subrogation rights to the tort feasor s who stand in the insurer’s shoes, so to speak, for purposes of this appeal. See Despointes v. Fla. Power Corp.

, 2 So. 3d 360, 361 (Fla. 2d DCA 2008) (where the insurance company assigned its right of subrogation, the assignee “stepped into the sho es” of the insurer).

The jury determined that the replacement cost for the owner’s building was $943,829

, and the fair market value of the building was $535,000. In determining the set

- off claims, t he trial court subtract ed the difference

between the bui lding p ayout for the partial replacement cost

— $430,518.25

— from the jury’s determination of $535,000 as the fair market of the damaged building . Thus, the tortfeasors were only required to pay the building owner $104,481.75

.

The building owner argue s that it should be placed back in the position

it was in before the building damage, and that it is entitled to the benefit

of its bargain for having purchased replacement cost insurance

. Conversely, the tortfeasor s contend the trial court was correct to set

- off

the building p ayout from the jury verdict , without which the building

owner would obtain a windfall or duplicative recovery.

This situation mimics the ancient p arable of the blind men and the elephant. In this parable, blind men approach what the y have heard is a strange animal in the center of town and begin to describe the creature.

One touche s the trunk and sa ys that the animal must be like a thick3 snake. Another touche s a leg and sa ys the animal must be like a tree

trunk. Still another touche s the tusk and th inks the animal must be like

a spear. However, no ne of them see the whole picture, and consequently how all parts comprise the whole.

Both sides here point to different measures of damages, but each measure is a different part of the animal, as it were, while neither comprise

the animal in its full form.

Replacement cost is what the building owner contracted for, but the insurance policy only covered a portion of the replacement cost because of the policy’s liability limits

. See Prudential Prop. & Cas. Ins. Co. v. Swindal

, 622 So. 2d 467, 470 (Fla. 1993) (“Insurance cont r acts are construed in accordance with the plain language of the poli cies as bargained for by the parties. ”).

On the other hand, t he fair market value of the damaged building is what the tortfeasors must pay. See Davey Compressor Co. v. City of Delray

Beach , 613 So. 2d 60, 61 (Fla. 4th DCA 1993) (“As a general rule, damag es for injury to real property cannot exceed the value of the property

. ”) ; see also Trinidad v. F la. Peninsula Ins. Co ., 121 So. 3d 433, 438 (Fla. 2013) (“In contrast to a replacement cost policy, actual cash value is generally

defined as ‘fair market valu e [.] ’ ”).

‘ “Replacement cost insurance is designed to cover the difference between what property is actually worth and what it would cost to rebuild or repair that property. ’ ” Trinidad

, 121 So. 3d at 438 ( quoting State Farm

Fire & Cas. Co. v. Patrick , 647 So. 2d 983, 983 (Fla. 3d DCA 1994)). Replacement cost covers the cost to replace the damaged structure on the same premises. Id

. “In other words, replacement cost policies provide greater coverage than actual cash value policies because dep reciation is

not excluded [.]” Id . (citing Goff v. State Farm Fla. Ins. Co. , 999 So. 2d 684, 689 (Fla. 2d DCA 2008)).

Thus, the replacement cost was contractually obtained here to cover much more than the value of the prior structure. It covers the cost of replac ing the old depreciated structure with a new building.

While the tortfeasors are correct that the building owner should not

receive a windfall or duplicat ive recovery, the building owner is also correct that it is entitled to the benefit of its bargain from its purchas e of the replacement cost insurance. Although the building owner could not be

awarded more than the fair market value of the building from th e tortfeasors , the owner was entitled to the benefit of its bargain from its4 insurer because it purchased replacement cost insurance which pays to replace the building, rather than the value of the existing structure

. See

Swindal , 622 So. 2d at 470 (“Florida law has l ong followed the general rule that tort law principles do not control judicial construction of insurance contracts.”) ; se e also Fla. Farm Bureau Ins. Co. v. Martin

, 377 So. 2d 827, 829 (Fla. 1st DCA 1979) ( s ubrogation is not available simply because the

in sured had ‘“the foresight to obtain, and had paid the expense of procuring, insurance for his protection;’” it is only available ‘“after the insured has been fully indemnified .’” (quoting DeCespedes v. Prudence Mut. Cas. Co. of Chicago, Ill. , 193 So. 2d 224, 227 (Fla. 3d DCA 1966)).

Florida adheres to the common law rule that an insurer does not have a right to subrogation against an insured who has not been made whole. E.g.

, Humana Health Plans v. Lawton , 675 So. 2d 1382, 1384 (Fla. 5th DCA 1996). In other words, Florida follows the general rule of subrogation

that an insurer ‘“ may recover from insured only the excess, which insured has received from the wrongdoer causing the loss, remaining after insured is fully compensated for his [or her] loss and the cost and expenses of the recovery thereof .’” Martin , 377 So. 2d at 829 (quoting Cent. Nat’l Ins. Grp.

v. Hotte , 312 So. 2d 235, 237 (Fla. 1st DCA 1975)).

Accordingly, the trial court erred in limiting the jury’s award against

the tortfeasors to $104, 481.75

, by awarding a set

- off for the difference between the building payout for its partial replacement cost

— $430,518.25

— and the jury’s award of the fair market value of the building

— $535,000

.

T hese amounts were not awarded to compensate for the same dam ages. Instead, t he insurer paid the construction cost of replacing the old structure with a new building

, while the fair market value awarded against

the tortfeasors only compensates for the damage to the old depreciated building.

Because it was incorrect to conflate the two different me asures of damages, and the owner was entitled to be made whole under the common

law rule b efore a subrogation right can inure to the insurer

, the tortfeasors

are only entitled to a set

- off or subrogation claim as the insurer’s assignees for any amounts exceeding the greater of the two me asures of recovery.

Here, the jury fo u nd that the greater of the two me asures of recovery was the replacement cost of $943,829. Because the combined amounts

received from the tort feasor s and the insurer exceeded the total replacement cost determined by the jury by $21,689.25, the tortfeasor s

were only entitled to a set

- off for that amount.5 Therefore, we reverse the set

- off which credited the replacement cost paid by the owner’s ins urer against the fair market value awarded against

the tortfeasors by the jury . We remand for a set

- off and judgment consistent with this opinion.

Second Issue: Lost Rent al Income

The second issue pertains to the trial court’s set

- off or reduction of $127,200 received by the lessee in business interruption damages from

the $302,400 awarded by the jury for the building owner’s lost rental

income.

The $127,200 was paid to the displac ed lessee by the insurer to cover
the maximum amount allowed under the policy to cover the expense of renting a substitute leasehold from another landlord.

The building owner argues that while its lessee was reimbursed for

some of the amounts it had to pa y to another landlord to rent substitute space, the owner lost its rental income while the building was rendered

untenantable

.

The tortfeasors argue that because the building owner and the lessee have common ownership, the building owner did not ultimately lose any

rent al income

. They allege an alter ego theory should entitle them to pierce the corporate veil because of the common ownership and affiliation

between the building owne r and the lessee

.

We agree with the building owner ’s argument

.

For the corporate veil to be pie r ced, a litigant would have to demonstrate the existence of improper conduct in the formation or use of the entity in question. 111 Prop s. , Inc. v. Lassiter

, 605 So. 2d 123, 125 (Fla. 4th DCA 1992). Sole ownership interest of a corporate entity does

not entitle a claimant to pierce the corporate veil, absent some fraudulent purpose or conduct. Rashdan v. Sheikh , 706 So. 2d 357, 357

- 58 (Fla. 4th DCA 1998).

A hallmark of corporate law is the feasibility, legality

, and propriety of different entities for separate business or economic purposes. See generally Burnet v. Clark , 287 U.S. 410, 415 (1932) (“A corporation and its

stockholders a re generally to be treated as separate entities

. ”) ; see also

Am

. States Ins. Co. v. Kelley , 446 So. 2d 1085, 1086 (Fla. 4th DCA 1984) (“ The general rule is that corporations are legal entities separate and6 distinct from the persons comprising them. Absent fraud, the corporate veil is not pierced

. ” (citation omitted)).

T he tortfeasors here d id not present any competent, substantial evidence of any fraudulent purpose or conduct that would overcome the benefit of the bargain which the building owner had with its affiliated

lessee , nor was that issue presented for a jury determination

. See Church of Scientology of Cal. v. Blackman , 446 So. 2d 190, 192 (Fla. 4th DCA 1984) (“Normally, the question of whether a corporation is an instrumentality or

an alter ego of another corporation is an issue of fact for the jury .”).

Accordingly, the trial court erred in setting off the jury award of lost

rent al income based on the amount which the insurer paid to rent a

substitute leasehold from another landlord for the displaced lessee. While

th e amount which the insurer paid for a substitute leasehold compensated the lessee for part of its damages, it did not make the building owner whole for the lost income it suffered while its building remained untenantable

.

Theref ore, we reverse the set

- off or reduction of the lost rental income awarded by the jury to the building owner

, and remand for entry of judgment consistent with this opinion.

Third Issue: Prejudgment Interest

As to the third issue, the parties agree that the trial court should have awarded prejudgment interest because the loss here was that of a vested property right as of a date certain. See Argonaut Ins. Co. v. May Plumbing

Co. , 474 So. 2d 212, 21 5 (Fla. 1985) (prejudgment interest is properly awarded in a case involving the negligent destruction of a building by fire

on a date certain ).

“Once a verdict has liquidated the damages as of a date certain, computation of prejudgment interest is merely a mathematical computation. There is no ‘finding of fact’ needed. Thus, it is a purely ministerial duty of the trial judge or clerk of the court to add the appropriate amount of interest to the principal amount of damages

awarded in the verdict.” Id

.

We agree with the parties and remand the denial of prejudgment

interest for the trial court to make the appropriate computation.

Affirmed in part

, reversed in part, and remanded for further proceedings

consistent with this opinion and correction of the scri vener’s error.7 W ARNER and M AY
, J J., concur.

* * *

Not final until disposition of timely filed motion for rehearing.