28 Fla. L. Weekly Supp. 224a
Online Reference: FLWSUPP 2803DORE
Insurance — Homeowners — Coverage — Interior damage due to windstorms — Class action — Certification — Motion for certification of proposed class of insureds who submitted claims for interior damage to structure and/or contents and whose claims were denied on ground that there were no visible openings is denied — Court cannot reasonably ascertain if an insured is a member of proposed class where determination necessitates an individualized claims analysis — Inherently unique nature of windstorm claims also prevents plaintiffs from establishing numerosity and commonality — Due to insurer’s unique defenses to plaintiffs’ claim for contents and differences in letter denying plaintiffs’ claim and letters to other insureds containing similar terms, typicality is not established — Class certification as action for declaratory relief under rule 1.220(b)(2) is improper where declaratory relief is not primary relief requested — Plaintiffs have failed to establish commonality, predominance, and superiority requisites for class certification under rule 1.220(b)(3)
KENNETH DOREMUS and REBECCA DOREMUS, Plaintiffs, v. UNIVERSAL PROPERTY & CASUALTY INSURANCE COMPANY, Defendant. Circuit Court, 17th Judicial Circuit in and for Broward County. Case No. CACE16-021507(07). March 31, 2020. Jack Tuter, Judge. Counsel: Ty Tyler, Tyler & Hamilton, P.A., and Michael S. Drews, Drews Law Firm, for Plaintiffs. Marcy Levine Aldrich and Bryan T. West, Akerman LLP, Miami, for Defendant.
ORDER ON PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
This cause came before the Court on Plaintiffs’ Motion for Class Certification (the “Motion”). Having reviewed the Motion, the response, reply, transcript of the proceedings, and materials submitted by the parties, the Court finds and decides as follows:
Procedural Background
1. On November 23, 2016, Plaintiffs filed their class action complaint (“Complaint”) against Universal Property and Casualty Insurance Company (“Universal”) alleging causes of action for breach of contract (count I) and declaratory relief (count II). Plaintiffs assert their claims pursuant to the windstorm provisions of their homeowner’s policy (the “Policy”) for alleged interior water damage as a result of wind. They also seek coverage for damaged contents. Plaintiffs allege that the interior of their home was damaged as a result of Hurricane Matthew in October 2016.
2. Plaintiffs’ claim is premised on the “Perils Insured Against” provision of their named-perils Policy. The provision that provides coverage for windstorm states:
We insure for direct physical loss to the property described in Coverages A, B and C caused by a peril listed below unless the loss is excluded in SECTION I — EXCLUSIONS . . .
Windstorm or hail. This peril does not include loss to the inside of a building or the property contained in a building caused by rain, snow, sleet, sand or dust unless the direct force of wind or hail damages the building causing an opening in a roof or wall and the rain, snow, sleet, sand or dust enters through this opening. This peril includes loss to watercraft and their trailers, furnishings, equipment, and outboard engines or motors, only while inside a fully enclosed building.
3. Plaintiffs’ theory of recovery is based on a letter they received from Universal dated October 12, 2016, in connection with their Hurricane Matthew claim. That letter indicates that Universal would cover the damage to Plaintiffs’ roof and fence caused by the hurricane; but would deny the portion of the claim related to interior damage. That letter states, in part:
The inspection was completed and it was determined that due to wind or hail damaged [sic] to the roof, water penetrated and caused damage to the interior of the dwelling. There was no evidence of any visible openings observed to the roof system, and damage was isolated to the shingles. Based on the above, we are hereby denying coverage in connection with this claim for the interior water damage and contents portion of your loss.
The letter quotes the Policy’s “Perils Insured Against” provision. Plaintiffs focus on the portion of the letter that states “[t]here was no evidence of any visible openings observed to the roof system, and damage was isolated to the shingles.” They allege that their Policy does not contain a requirement that an opening must be “visible” so as to trigger coverage; and therefore, they seek coverage for the denied interior water damage and contents.
4. Universal filed an Answer to the Complaint, asserted defenses, and denied that this action is suitable for class action treatment.
5. Plaintiffs have now moved for class certification on behalf of the following class:
All persons and entities whose properties in the State of Florida are or were insured under a policy of insurance issued by Universal under its forms HO3, HO6, HO8 and/or DP1, including but not limited to those policies which contained endorsement form number UPCIC 250196 (06-07), who submitted claims which included interior damage to structure and/or contents, whose claims were denied (in whole or part) from and after November 23, 2011 on the stated ground that there were no “visible openings” when Universal: (a) admitted in writing that a roof or wall was damaged due to wind or hail (named perils under the policy); and (b) admitted in writing that due to such roof o[r] wall damage, water entered and caused damage to the interior of the dwelling/building or contents contained therein.
Findings of Fact
6. At all relevant times, Plaintiffs have resided at a single-family home located at 284 Woodland Avenue, Daytona Beach, Florida.
7. Universal issued a policy insuring that residence. Plaintiffs’ Policy form is a “Homeowners 8 Modified Coverage Form” (“HO8”) and contains numerous endorsements and exclusions. It provided windstorm coverage and was in effect on the date of Hurricane Matthew.
8. Beginning in or about 2011 — and before Hurricane Matthew — Plaintiffs’ roof had experienced water leakage which led to water entering the interior of the house and causing damage to several rooms. Plaintiffs attempted to repair the roof leaks over a period of several years prior to Hurricane Matthew. While Plaintiffs claim to have repaired the exterior roof leaks prior to the time of the arrival of Hurricane Matthew, there was water damage to the interior to Plaintiffs’ home immediately prior to Hurricane Matthew, including (as indicated by Plaintiffs in their depositions) water stains and holes (partially covered with stapled garbage bags) in the ceilings.
9. Hurricane Matthew reached the Daytona Beach, Florida area on October 6-7, 2016, and Plaintiffs thereafter reported a claim to Universal and requested that Universal send a claims adjuster to inspect Plaintiffs’ residence.
10. On October 10, 2016, a Universal field adjuster inspected Plaintiffs’ residence. He prepared an internal inspection report noting that there was roof damage in the form of missing shingles, a flat roofing pealed back to the sheathing, soffit and gutter damage, and damage to over 25% of the roofing system. He noted damage to the fence. He concluded that the interior damage was pre-existing. Based on his conclusions, he recommended that Universal pay Plaintiffs’ claim as to the roof and the fence but deny the claim for interior damage based on the pre-existing damage to the interior. He also prepared an estimate to calculate the payment for the roof and fence.
11. Universal adjusted the amount of Plaintiffs’ loss for the roof and fence damage, which, after applying the $9,888.00 deductible, resulted in a payment of $4,607.56.
12. Universal concedes that the October 12, 2016, letter is not consistent with the circumstances of Plaintiffs’ claim. The adjuster’s report recommended denial of the claim for interior damage based on pre-existing damage — and not for the lack of an opening. While the letter refers to damage being “isolated to the shingles,” Plaintiffs’ roof exhibited damage beyond damage to the shingles. Indeed, Universal paid Plaintiffs for damage over and above damage to the shingles. Universal concedes that the October 12, 2016, letter was sent in error.
13. As to Plaintiffs’ claim for contents, Plaintiffs did not notify Universal of that claim until after this lawsuit was filed. A claim for “contents” was not part of Plaintiffs’ original claim in 2016. It was not until October 2018, during discovery, that Plaintiffs first raised the issue of contents damage. Despite determining that they had damaged contents, Plaintiffs discarded those damaged “contents” before advising Universal of their claim for contents damage.
14. In response to discovery requests, Universal conducted an electronic search for denial letters to insureds based on the following criteria: (1) the letters included both the terms “visible opening” and “isolated”; (2) the insured peril was wind and/or hail; (3) the insurer was Universal; (4) the state was Florida; and (5) the dates of loss were dates on or after November 23, 2011. Approximately 1,300 sent letters met this search criteria. The search criteria do not correspond directly with the proposed class definition, which includes different criteria. Many of the 1,300 letters relate to claims that have been individually litigated and/or settled. Moreover, a letter-by-letter review reveals that there are significant differences among many of the letters. While not exclusive, examples of such letters refer to damages being caused by failure to make repairs, compromised roofing systems, “wear and tear,” and, as to others, the damage through which water entered was not to a roof or wall (which are the exclusive areas subject to windstorm coverage). In other letters, there was a lack of correlation between roof damage and interior damage. The mere fact that the letters contain the terms “visible opening[s]” and “isolated” does not mean that the recipients of those letters fulfill the criteria for class membership.
15. Homeowners’ insurance claims implicate a multiplicity of individualized factual and legal issues, including, but not limited to, the extent of damage to the residence, and the application of particular policy provisions, exclusions, or limits. There are also individualized defenses. With regard to Plaintiffs’ claim standing alone, Universal has raised or will likely raise defenses associated with Plaintiffs’ pre-existing water damage, Plaintiffs’ late notification of their contents claim, and Plaintiffs’ discard of the damaged contents themselves. In addition, other putative class members may seek coverage for items beyond the limited interior water damage and contents sought by Plaintiffs (e.g., they may be seeking coverage for a fence (which was paid for on Plaintiffs’ claim) or challenging the extent of coverage to a roof or other structures). Plaintiffs’ own causation expert, Neil Hall, whom Plaintiffs proffered in support of class certification, testified under oath that windstorm claims are “not straightforward” and that each windstorm claim “stands on its own.” (Hall Dep. at 208.) Universal also indicated that each individual homeowners claim is unique and must be adjusted and reviewed on its own merits. (Peer Aff., ¶¶ 4-6.)
Conclusions of Law
16. In addition to the threshold issue of standing, a class plaintiff must first satisfy the requirement of Florida Rule of Civil Procedure 1.220(a):
Under Fla. R. Civ. P. 1.220, the prerequisites for bringing a class action are as follows: (1) the members of the class are so numerous that separate joinder of each member is impracticable, (2) the claim or defense of the representative party raises questions of law or fact common to the questions of law or fact raised by the claim or defense of each member of the class, (3) the claim or defense of the representative party is typical of the claim or defense of each member of the class, and (4) the representative party can fairly and adequately protect and represent the interests of each member of the class.
Arrowsmith v. Broward Cty., 633 So. 2d 21, 21-22 (Fla. 4th DCA 1993).
17. Plaintiffs must also plead and prove that certification is appropriately sought pursuant to one of the categories set forth in Florida Rule of Civil Procedure 1.220(b). In the instant case, Plaintiffs contend that certification is appropriate pursuant to Rule 1.220(b)(2) and Rule 1.220(b)(3).
18. Upon review, Plaintiffs have not presented an adequate factual record to support the class action requirements set forth in Rule 1.220(a) and Rule 1.220(b). The Court finds that Universal has proffered substantial competent evidence demonstrating the inapplicability of class treatment in this matter.
19. Florida Rule of Civil Procedure 1.220(a) requires that a court be able “to reasonably ascertain if a person or entity is a member of the class.” Canal Ins. Co. v. Gibraltar Budget Plan, Inc., 41 So. 3d 375, 377 (Fla. 4th DCA 2010) [35 Fla. L. Weekly D1690b]. Here, Plaintiffs have failed to propose a class that can be reasonably ascertained because whether or not a class member makes a valid claim for interior damage to structure and/or contents necessitates an individualized claims analysis. Essentially a class member who did not suffer the requisite damage has no claim. This reality also poses an impediment to the numerosity determination. Further, class members other than Plaintiffs may wish to seek coverage for items beyond the limited interior water damage and contents sought by Plaintiffs (e.g., a fence, roof, and other structural coverage, etc.).
20. Given the highly individualized nature of homeowners’ claims, courts in Florida have repeatedly rejected proposed class actions involving the litigation of individual homeowners’ insurance disputes. See, e.g., Mills v. Foremost Ins. Co., 269 F.R.D. 663, 677 (M.D. Fla. 2010). As the Third District Court of Appeal has observed with respect to auto insurance claims, the litigation of individual insurance claims necessarily “devolve[s] into a series of mini-trials.” Ocean Harbor Cas. Ins. v. MSPA Claims, 1, 261 So. 3d 637, 639 (Fla. 3d DCA 2018) [43 Fla. L. Weekly D2219a].
21. Plaintiffs have failed to establish commonality. Given that windstorm claims are inherently unique, there is no common right of recovery based on the same essential facts. See Arvida/JMB Partners v. Council of Villages, Inc., 733 So. 2d 1026, 1030 (Fla. 4th DCA 1998) [23 Fla. L. Weekly D1766a].
22. Plaintiffs have failed to establish typicality. Plaintiffs contend that typicality exists because they received a letter with the terms “visible openings” and “isolated.” However, Plaintiffs’ letter is not identical to other letters with these search terms and Plaintiffs do not necessarily possess the same interest and/or seek recovery for the same injury as other insureds. Plaintiffs’ position on typicality is also tenuous with respect to their “contents” claim because Universal has unique defenses to that claim, including the fact that the claim was made almost two years after the date of loss and only after the allegedly damaged contents had been discarded.
23. Class certification under Florida Rule of Civil Procedure 1.220(b)(2) is improper in this matter because declaratory relief is not the primary relief requested. Freedom Life Ins. Co. v. Wallant, 891 So. 2d 1109, 1117-18 (Fla. 4th DCA 2004) [30 Fla. L. Weekly D110c] (finding that when monetary recovery is the predominant issue in the presence of a claim for declaratory relief, 1.220(b)(2) certification is improper). Here, the essence of the declaratory relief claim in this matter is to lay the predicate for subsequent payment of individual windstorm claims. Plaintiffs’ attempt to characterize their claim as one for “readjustment” of insurance claims is unavailing.
24. Plaintiffs have also failed to establish the requisites for class certification under Rule 1.220(b)(3): (1) commonality; (2) predominance; and (3) superiority. The Court’s analysis is guided by the following standard:
The conclusions shall be derived from consideration of all relevant facts and circumstances, including (A) the respective interests of each member of the class in individually controlling the prosecution of separate claims or defenses, (B) the nature and extent of any pending litigation to which any member of the class is a party and in which any question of law or fact controverted in the subject action is to be adjudicated, (C) the desirability or undesirability of concentrating the litigation in the forum where the subject action is instituted, and (D) the difficulties likely to be encountered in the management of the claim or defense on behalf of a class.
Fla. R. Civ. P. 1.220(b)(3).
25. Plaintiffs have not satisfied the predominance requirement. The Fourth District Court of Appeal has advised that in order to establish predominance:
[t]he class representative must demonstrate the existence of a reasonable methodology for generalized proof of class-wide impact and damages. The predominance requirement is established if the class representative can prove his own individual case and, by so doing, necessarily prove the cases for each of the other class members.
InPhyNet Contracting Servs., Inc. v. Soria, 33 So. 3d 766, 771 (Fla. 4th DCA 2010) [35 Fla. L. Weekly D880a] (emphasis in original). By the very nature of the windstorm claims at issue, common questions of law and fact cannot predominate over the circumstances of the individual claims of each class member. See Mills, 269 F.R.D. at 677 (“post-hurricane claim adjustments are not appropriate for class treatment due to the individualized facts of each claim”). Even if Plaintiffs were able to prove their own windstorm claim, that would not necessarily prove the cases of other class members.
26. Plaintiffs also fail to establish superiority. The Florida Supreme Court has set forth the factors that courts should consider on the issue of superiority:
Three factors for courts to consider when deciding whether a class action is the superior method of adjudicating a controversy are: (1) whether a class action would provide the class members with the only economically viable remedy; (2) whether there is a likelihood that the individual claims are large enough to justify the expense of separate litigation; and (3) whether a class action cause of action is manageable.
Sosa v. Safeway Premium Fin. Co., 73 So. 3d 91, 116 (Fla. 2011) [36 Fla. L. Weekly S373a].
27. The Mills court noted, in the context of windstorm claims, that it had “grave concerns regarding the manageability of this suit as a class action, specifically the claim by claim review that will undoubtedly be needed.” Mills, 269 F.R.D. at 678. The Mills court indicated that “the court in determining manageability should consider the potential difficulties in notifying class members of the suit, calculation of individual damages, and distribution of damages,” advising that the insurer may raise defenses founded on an individual basis. Id. at 680. This Court shares those same concerns.
For the reasons stated herein, Plaintiffs’ Motion is DENIED. The Court notes that the foregoing analysis does not constitute a merits determination of any kind.
