Court Opinion

ID: 3161083
Source: CourtListenerOpinion
Date Created: 2015-12-09 16:04:37.424571+00
Date Added: 2024-06-11T12:01:55.852106
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FOURTH DISTRICT

             STATE FARM FLORIDA INSURANCE COMPANY,
                            Appellant,

                                     v.

    RICHARD MOODY, ROBERTA MOODY and ROBERT DENNEY,
                       Appellees.

                Nos. 4D13-3377, 4D14-273 and 4D14-274

                            [December 9, 2015]

   Consolidated appeals from the Circuit Court for the Fifteenth Judicial
Circuit, Palm Beach County; Janis Brustares Keyser, Judge; L.T. Case
Nos. 502006CA014072XX and 502007CC002907XX.

   Elizabeth K. Russo of Russo Appellate Firm, P.A., Miami, and
Bernstein, Chackman, Liss & Rose, Hollywood, for appellant.

  Bard D. Rockenbach of Burlington & Rockenbach, P.A., West Palm
Beach, and Louis M. Silber and Allison J. Davis of Silber & Davis, P.A.,
West Palm Beach, for appellees.

MAY, J.

   Aristotle once said: “The whole is greater than the sum of all its parts.”
This appeal gives us an opportunity to reflect on this statement as an
insurer appeals a final judgment for “Additional Living Expenses” that
were incurred as a result of Hurricane Jeanne. The insurer argues that
two separate trial courts erred in entering summary judgment for the
insureds in these consolidated cases.1 We agree with the insurer and
reverse.

   In 2004, the National Hurricane Center issued a Tropical Cyclone
Report naming an upcoming storm Hurricane Jeanne. On September 24,
25, and 26, the National Hurricane Center issued hurricane warnings for
Hurricane Jeanne for South Florida. On the night of September 25 and
the morning of September 26, Hurricane Jeanne hit South Florida. During

1 Judge Keyser and Judge Damico ruled on separate motions for summary
judgment, but the cases were consolidated before Judge Keyser for the trial.
Hurricane Jeanne, the insureds’ condominiums were severely damaged
and became uninhabitable.

    The insureds held separate condominium policies with the same
insurer, including building property, personal property, and additional
living expense coverages. Before section one in both policies, a notice read
“Hurricane Notice–You may have no coverage or you may have limited
coverage for damage caused by hurricane.” Section one listed the
protection for the dwelling (Coverage A), personal property (Coverage B),
loss of use (Coverage C), and loss assessment (Coverage D). “Section 1 . .
. Losses Insured,” listed familiar perils the policy protected against, but
had a section stating, “Windstorm, hail–See special hurricane coverage
that follows.”

   The policies also contained a Hurricane Coverage Endorsement, which
stated:

      There is no coverage for loss caused by a hurricane under
      Section I of the policy to which this endorsement is attached.
      No coverage is provided for accidental direct physical loss to
      the property described in the policy caused by a hurricane
      other than that which is provided in this endorsement. The
      provisions of this endorsement apply only in respect to loss
      caused by hurricane.

The Hurricane Coverage Endorsement contained “Section I – Coverages,”
which replaced Coverages A, B, C, and D. “Coverage C – Loss of Use,”
read, in part:

      1. Additional Living Expense. When a hurricane causes the
      covered dwelling to become uninhabitable, we will cover the
      necessary increase in cost you incur to maintain your
      standard of living for up to 12 months. Our payment is limited
      to incurred costs for the shortest of: (a) the time required to
      repair or replace the covered dwelling; (b) the time required for
      your household to settle elsewhere; or (c) 12 months.
      ....
      Our payment will not exceed an amount equal to 10% of the
      Coverage B limit applicable at the time of loss.

   The Hurricane Coverage Endorsement also contained the definition of
“hurricane.”

      When used in this endorsement:

                                     2
      “hurricane” means a storm system that has been declared to
      be a hurricane by the National Hurricane Center of the
      National Weather Service. The duration of the hurricane
      includes the time period, in Florida:

      a. beginning at the time a hurricane watch or hurricane
      warning is issued for any part of Florida by the National
      Hurricane Center of the National Weather Service;

      b. continuing for the time period during which the hurricane
      conditions exist anywhere in Florida; and

      c. ending 72 hours following the termination of the last
      hurricane watch or hurricane warning for any part of Florida
      by the National Hurricane Center of the National Weather
      Service.

   The insurer paid the insureds their full coverage amounts on the
building property and personal property coverages.        Based on the
Hurricane Coverage Endorsement, the insurer paid the insureds their
additional living expenses, which were limited to 10% of the Coverage B
(personal property coverage) limit.

   In June 2006, the insureds, Richard and Roberta Moody, filed a two-
count complaint against the insurer; and in March 2007, another insured,
Robert Denney, filed suit. The insureds alleged in count one that the
insurer breached its contract with them by providing additional living
expenses coverage under the Hurricane Coverage Endorsement rather
than under the general policy provisions because “the loss of use was
caused by a peril other than a hurricane.”

   They alleged their loss was caused by a tornado or microburst, not a
hurricane. They alleged their policies’ Hurricane Coverage Endorsement
was ambiguous and coverage should not be limited to 10% of the Coverage
B (personal property coverage) limit. The Moodys requested $11,245.00
and Denney requested $10,059.10 in additional living expenses.

   The insurer answered both complaints and asserted affirmative
defenses. In its first affirmative defense, the insurer asserted that “[t]he
[insureds’] actions [were] barred or limited by the Hurricane Coverage
Endorsement of the policy.” In its third affirmative defense, the insurer
asserted that “[t]he [insureds] [were] barred from recovery because the
tornado which allegedly caused [the] loss occurred during and was

                                     3
therefore part of Hurricane Jeanne which affected [the] property on or
about September 26, 2004.”

    The insureds and insurer all moved for summary judgment. Denney
argued a tornado, not a hurricane, caused damage to his condominium so
the ten percent additional living expenses limitation under Coverage C of
the Hurricane Coverage Endorsement should not apply. He also argued
the definition of hurricane in the Hurricane Coverage Endorsement “is
limited to a hurricane, and does not include other meteorological events,
such as a tornado.” If the insurer “wanted to exclude tornado as part of
its hurricane exclusion, it could and should have said so,” and that “a
hurricane can occur without a tornado, and a tornado can occur without
a hurricane.”     He asserted that hurricanes and tornados are not
synonymous as understood by an everyday person.

   The Moodys made similar arguments. They also argued the insurer
used only the definition of hurricane found in section 627.4025(2)(c),
Florida Statutes, and not the definitions of hurricane coverage and
windstorm in sections (2)(a) and (2)(b). They asserted that if the insurer
used all three statutory sections in the policy, the Hurricane Coverage
Endorsement would have included tornados. The Moodys attached a
Citizens windstorm policy, which included all three statutory sections.
They argued the insurer’s choice to include only one section should be
construed against it. They filed an affidavit from their daughter attesting
that the attached Citizens policy was hers.

   The insurer argued that its policy was unambiguous and should be
given its plain and ordinary meaning. It argued the definition of hurricane
was clear and damage resulting from the storm system was covered under
the Hurricane Coverage Endorsement. To the insurer, the real issue was
whether the tornado occurred during the storm system. No one disputed
that the National Hurricane Center declared the storm system Hurricane
Jeanne; the hurricane hit the insureds’ condominiums on September 26,
which was a day the hurricane warning occurred; and the insureds
incurred losses on that day.

   Separate trial judges granted summary judgment for the insureds, and
denied the insurer’s motion for summary judgment. Both courts found:

         If [the insurer] had included in its policy the definition of
      “hurricane” sections 2(a) and 2(b) in addition to Section 2(c) of
      section 627.4025, Florida Statutes, there would be no
      question that the policy’s hurricane definition included
      tornados. If [the insurer] had intended to include tornados in

                                     4
      its Hurricane Coverage Endorsement, it should have used
      language clearly stating this purpose.
      ....
      The Court finds that the fact that [the insurer] had available
      language such as that contained in Section 627.4025, Florida
      Statutes and chose not to insert that language in their policy
      should be construed against [the insurer] and in favor of a
      finding of coverage. Based on [the insurer]’s failure to include
      the language set [forth] in Sections 2(a) and 2(b) of Section
      627.4025 in its definition of “hurricane,” the Court finds that
      the Hurricane Endorsement does not apply to losses caused
      by tornados.2

2     (2) As used in policies providing residential coverage:

      (a) “Hurricane coverage” is coverage for loss or damage caused by
      the peril of windstorm during a hurricane. The term includes
      ensuing damage to the interior of a building, or to property inside a
      building, caused by rain, snow, sleet, hail, sand, or dust if the direct
      force of the windstorm first damages the building, causing an
      opening through which rain, snow, sleet, hail, sand, or dust enters
      and causes damage.

      (b) “Windstorm” for purposes of paragraph (a) means wind, wind
      gusts, hail, rain, tornados, or cyclones caused by or resulting from
      a hurricane which results in direct physical loss or damage to
      property.

      (c) “Hurricane” for purposes of paragraphs (a) and (b) means a
      storm system that has been declared to be a hurricane by the
      National Hurricane Center of the National Weather Service. The
      duration of the hurricane includes the time period, in Florida:

      1. Beginning at the time a hurricane watch or hurricane warning
      is issued for any part of Florida by the National Hurricane Center
      of the National Weather Service;

      2. Continuing for the time period during which the hurricane
      conditions exist anywhere in Florida; and

      3. Ending 72 hours following the termination of the last hurricane
      watch or hurricane warning issued for any part of Florida by the
      National Hurricane Center of the National Weather Service.

§ 627.4025(2), Fla. Stat. (emphasis added).

                                         5
   The consolidated cases proceeded to a jury trial on whether a hurricane
or a tornado caused the losses. Prior to trial, the insureds moved to
determine the burden of proof. The parties disagreed on which party bore
the initial burden of proof. The trial judge found that “[the insureds] ha[ve]
the initial burden to prove that the loss is covered under the applicable
policy of insurance. The burden shall then shift to [the insurer] to prove
that the loss falls within the Hurricane Endorsement of the policy.”

   The trial focused on facts largely irrelevant to the legal issue in this
appeal. The insurer’s expert testified that tornados and hurricanes were
“separate meteorological phenomena.” The insureds’ expert testified to
reasons tornados and hurricanes were different. But, he also testified that
“a tornado is an element of a hurricane.” He noted that there have been
hurricanes, including Hurricane Jeanne, where tornados developed in the
hurricane eye wall. He also distinguished between tornados in the
Midwest and tornados that may occur within a hurricane.

   The evidence showed that the insureds’ building sustained heavy
damage, while the surrounding buildings sustained minor damage. The
insureds’ expert opined that the damage to the insureds’ building was
caused by a tornado. The insurer’s expert opined that the damage was
caused by hurricane-force winds that hit the insureds’ building, which was
unprotected because it was across from a golf course.

   The jury found the insurer did not prove by the greater weight of the
evidence that the damage was caused by a hurricane and not by a tornado
that developed during the hurricane. The trial court entered final
judgment in favor of the insureds. The insureds moved for attorney’s fees
pursuant to section 627.428, Florida Statutes, and the trial court later
entered final judgment for attorney’s fees in their favor for $755,465.00 in
fees and $3,600.00 in expert witness fees.

   The insurer moved for entry of judgment in accordance with its motion
for directed verdict and renewed motion for summary judgment. It also
moved for a new trial, arguing the trial court erred in its burden of proof
ruling, and in giving incorrect jury instructions and an incorrect verdict
form. The trial court denied the insurer’s motions. The insurer now
appeals.

   The insurer continues to argue that the policy is unambiguous and
property damage caused by a storm system declared a hurricane by the
National Hurricane Center is covered under the Hurricane Coverage
Endorsement. It argues that the court erred in considering extrinsic
evidence in the form of the Citizens policy to interpret the policy. It asserts

                                      6
the ten percent coverage limitation on additional living expenses applied
because the insureds’ condominium losses were caused by Hurricane
Jeanne.

   The insureds respond that their policies provide general coverage for
residential losses and a specific exclusion/limitation for hurricanes. They
argue the trial court did not err in deciding the general loss provisions
applied to their claims for additional living expenses. They argue the
Hurricane Coverage Endorsement defines “hurricane,” in part, as a “storm
system,” but there is nothing in the policy that defines the components of
the system. They argue their loss must be caused “by” a hurricane and
not just caused “during” a hurricane. If the insurer intended for the
Hurricane Coverage Endorsement to apply to tornados, it could have
included section 627.4025(2)(b), which defined “windstorm” as part of a
hurricane including tornados.

   We have de novo review. Rodrigo v. State Farm Fla. Ins. Co., 144 So. 3d
690, 692 (Fla. 4th DCA 2014) (citation omitted). We also have de novo
review of a trial court’s ruling on a motion for directed verdict. Gyongyosi
v. Miller, 80 So. 3d 1070, 1074 (Fla. 4th DCA 2012) (citation omitted).

   “An insurance contract must be construed in accordance with the plain
language of the policy.” Landmark Am. Ins. Co. v. Pin-Pon Corp., 155 So.
3d 432, 437 (Fla. 4th DCA 2015) (citation omitted).

      If the terms of a contract are clear and unambiguous, the
      court is bound by the plain meaning of those terms. Thus,
      where a contract is unambiguous, the parties’ intent must be
      gleaned from “the four corners of the document.” “In the
      absence of ambiguity, the language itself is the best evidence
      of the parties’ intent and the plain meaning controls.”

Id. (internal citations omitted).

   With these clear rules of construction in place, we begin our review.

   The Hurricane Coverage Endorsement defines hurricane as, “a storm
system that has been declared to be a hurricane by the National Hurricane
Center of the National Weather Service.” (Emphasis added). There is only
one reasonable interpretation of this definition. If the National Hurricane
Center names a storm system a hurricane, the entire named storm
system, including the elements of the storm, constitutes the hurricane.

   Under    the   loss   of   use   provision   in   the   Hurricane   Coverage

                                        7
Endorsement, “[w]hen a hurricane causes the covered dwelling to become
uninhabitable, [the insurer] will cover the necessary increase in cost [the
insureds] incur to maintain [their] standard of living for up to 12 months,”
subject to the ten percent limitation. Here, the National Hurricane Center
named the storm system “Hurricane Jeanne” and issued the policy-
required hurricane warnings and watches. On September 26, Hurricane
Jeanne passed over the insureds’ condominiums and the storm system
caused their condominiums to become uninhabitable. Therefore, the
Hurricane Coverage Endorsement unambiguously applied.

    The insureds argue the definition of hurricane is ambiguous by
reference to the Citizens insurance policy, coupled with the insurer’s
failure to include subsections (2)(a) and (2)(b) of section 627.4025, Florida
Statutes, in its policy. But, when a policy is unambiguous, there is no
need to, and courts should not, consider extrinsic evidence. Bombardier
Capital Inc. v. Progressive Mktg. Grp., Inc., 801 So. 2d 131, 134 (Fla. 4th
DCA 2001); see Auto-Owners Ins. Co. v. Anderson, 756 So. 2d 29, 34 (Fla.
2000). Here, the court’s interpretation of the policy effectively rendered
the entire Hurricane Coverage Endorsement meaningless. See Ergas v.
Universal Prop. & Cas. Ins. Co., 114 So. 3d 286, 289 n.1 (Fla. 4th DCA
2013) (“A term of an insurance policy should not be construed to reach an
absurd result.”).

   Both trial courts erred in granting summary judgment in favor of the
insureds and finding the policy’s definition of hurricane did not include
tornados spawned during a named hurricane storm system. The policy
was not ambiguous. The trial courts should have applied the policy’s
plain, unambiguous language. The Hurricane Coverage Endorsement
applied to the insureds’ losses.

   We therefore reverse and remand for entry of judgment for the insurer.
The insurer has also appealed the attorney’s fees and costs judgments.
The insureds agree that if the judgment is reversed, the attorney’s fees and
costs judgments should also be reversed. We therefore reverse the
attorney’s fees and costs judgments.

   Reversed.

GROSS and CONNER, JJ., concur.

                            *        *         *

   Not final until disposition of timely filed motion for rehearing.

                                     8