In SUMMIT TOWERS CONDOMINIUM ASSOCIATION, INC., v. QBE INSURANCE CORPORATION, 23 Fla. L. Weekly Fed. D265a (S.D. Fla. May 29, 2012)(Seitz, D.J.), the court found that where one section of policy provides for
the insured to receive “actual cash value” for a loss and another section provides for
“replacement cost,” the section providing for replacement cost provides that,
“[i]f shown as applicable in the Declarations, the following Optional Coverages
apply separately to each item,” and the Declarations page identifies the “Value
Option” as “RC,” replacement cost is the value option in force under the policy.
Given the shortness of the opinion, the entire opinion is provided below:
QUOTE
AMENDMENT TO ORDER ON DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT
THIS MATTER is before the Court following the Court's Order
[DE-153] denying Defendant QBE Insurance Corporation's Motion for Partial
Summary Judgment [DE-69]. During the pretrial conference, the parties and the
Court identified a legal issue of insurance policy (Commercial Property
Insurance Policy (No. QF2310-08) (“Policy”)) involving Valuation and the
parties agreed to brief that issue for the Court. The Court has now considered
Summit Towers' brief [DE-177], QBE's response [DE-178] and Summit Towers reply
[DE-179]. For the reasons set fort below, the Court will enter summary judgment
in favor of QBE finding that the “Valuation” section G.3 of the Policy
completely supercedes Section E.8.
The parties disagree about how QBE will determine the value
of property in the event of a covered loss.1 The Policy contains two sections
relevant to valuation -- one provides for Summit Towers to receive “actual cash
value” for a loss (see Section E.8.a-c) while the other provides for
“replacement cost” (see Section G.3.a-f). Summit Towers argues that these two
sections coexist and can be read together to determine the value of a covered
loss under the Policy. The Court, however, agrees with QBE that Section E.8 has
been superseded by Section G.3. Section G provides that, “[i]f shown as
applicable in the Declarations, the following Optional Coverages apply
separately to each item.” Policy, G [DE 69-3, p. 42 of 57]. The Declarations
page, in turn, identifies the “Value Option” as “RC”. Id. at p. 4 of 57. The
optional coverage Summit Towers purchased, “Replacement Cost,” set out at G.3
and identified in the declarations as “RC” is therefore the value option in
force under the Policy.
Summit Towers disagrees and argues that only the phrase
“actual cash value” in Section E.8. has been replaced by the phrase
“replacement cost” from Section G.3. This construction would allow for
subsection E.8.c. to remain a part of the Policy and ostensibly allow Summit
Towers to obtain glass at the cost of replacement with safety glazing
materials. Summit Towers' argument, however, does not give effect to all of the
provisions of the Policy and renders the subsections of G.3. superfluous.
Moreover, it is not possible to harmonize all of the sections of the Policy
under Summit Towers' interpretation. The subsections of E.8 provide exceptions
to the payment of actual cash value to Summit Towers and identify scenarios
where QBE will pay at replacement cost for covered losses. If the Court merely
replaces the phrase “actual cash value” with “replacement cost” in Section E.8,
that section would then provide that Summit Towers would be paid at replacement
cost for a covered loss except in certain circumstances where it would still be
paid at replacement cost. It is nonsensical to interpret the Policy in the
manner Summit Towers suggests. The Court must reject this interpretation and
concludes that Section G.3 completely replaces Section E.8 of the Policy. This
construction gives effect to each provision of the Policy and comports with the
plain language of that agreement. City of Homestead v. Johnson, 760 So.2d 80,
84 (Fla. 2000) [25 Fla. L. Weekly S206a] (“All the various provisions of a
contract must be so construed, if it can reasonably be done, as to give effect
to each.”).
Based on the forgoing, it is
ORDERED that this Order shall amend the Court's Order
[DE-153] denying Defendant QBE Insurance Corporation's Motion for Partial
Summary Judgment [DE-69]. Summary Judgment is hereby GRANTED in favor of QBE on
the policy interpretation issue addressed herein such that Section G.3 of the
Policy completely supercedes Section E.8.
__________________
1Generally, under Florida law, “in construing insurance
policies, courts should read each policy as a whole, endeavoring to give every
provision its full meaning and operative effect.” Auto-Owners Ins. Co. v.
Anderson, 756 So.2d 29, 34 (Fla. 2000) [25 Fla. L. Weekly S211a]; see also Fla.
Stat. § 627.419(1) (“Every insurance contract shall be construed according to
the entirety of its terms and conditions as set forth in the policy.”). Policy
terms are given their plain and ordinary meaning and read in light of the skill
and experience of ordinary people. Anderson, 756 So.2d at 34; see also Vencor
Hosps., Inc. v. Blue Cross Blue Shield of R.I., 284 F.3d 1174, 1180-81 (11th
Cir. 2002) [15 Fla. L. Weekly Fed. C315a].
* * *
UNQUOTE
Comments
Post a Comment