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Filing # 22198803 E-Filed 01/06/2015 10:57:31 AM
IN THE CIRCUIT COURT OF THE 17" JUDICIAL CIRCUIT
IN AND FOR BROWARD COUNTY, FLORIDA
CASE NO: CACE- 14-016655 (02)
DEBRA HINES,
Plaintiff,
vs.
HOMEOWNERS CHOICE PROPERTY &
CASUALTY INSURANCE COMPANY, INC.,
a Florida corporation,
Defendants.
A
PLAINTIFF’S RESPONSE TO DEFENDANT’S MOTION TO DISMISS
COUNT II OF THE AMENDED COMPLAINT
COMES NOW, Plaintiff, DEBRA HINES, by and through her undersigned
counsel, and hereby file her Response to Defendant’s Motion to Dismiss Count II of the
Amended Complaint, and as grounds therefore states:
Legal Memorandum in Response to Motion to Dismiss Count II
Defendant’s Motion to Dismiss alleges that the Plaintiff's Petition for Declaratory
Relief is not proper, because the allegations are related to a factual dispute about the
amount of benefits due under an insurance policy and are not sufficient to support a
viable cause of action for declaratory relief in the context of this case. Yet, contrary to the
Defendant’s claim in its Motion to Dismiss the issue is not only amount of benefits, but
whether the particular policy covers the Plaintiff's sinkhole claim. Specifically, the
Defendant failed to fully or even partially indemnify the Plaintiff for her sinkhole claim.
A true and correct copy of denial letter is attached as Exhibit “A.”
In Count II, the Plaintiff is requesting that the Court make a Declaratory Judgment
regarding whether Plaintiff's sinkhole claim is covered under the policy. The question
*** FILED: BROWARD COUNTY, FL HOWARD FORMAN, CLERK 1/6/2015 10:57:30 AM.****whether or not a particular policy covers a certain risk is a question of law. Central Cold
Storage, Inc. v. Lexington Ins. Co., 452 So.2d 1014 (Fla. 3d DCA 1984), see also,
Liberty Mut. Ins. Co. v. Weiss, 790 So. 2d 475, 476 (Fla. 3d DCA 2001). The declaratory
judgments statutes do authorize a declaratory judgment action to declare an insurer’s
obligations under an unambiguous policy, even if the court must determine the existence
or nonexistence of a fact in order to determine the insurer’s responsibility. Higgins v.
State Farm Fire & Cas. Co., 894 So. 2d 5, 9 (Fla. 2004).
The issue of whether an exclusionary clause precludes coverage for damages is a
question of law. _Cf. Dimmitt Chevrolet, Inc. v. Southeastern Fidelity Ins. Corp.,636
So.2d 700, 701 (Fla.1993). “[T]he construction of an insurance policy is a question of
law...” Jones v. Utica Mut. Ins. Co., 463 So.2d 1153, 1157 (Fla.1985), see also, Fayad
vy. Clarendon Nat. Ins. Co., 899 So. 2d 1082, 1085 (Fla. 2005). Even though some
questions of fact may exist in this case, questions of fact may be determined in
declaratory proceedings if necessary to a construction of legal rights. Smith v. Milwaukee
Insurance Company of Milwaukee, Wisconsin, 197 So.2d 548 (Fla. 4th DCA 1967).
Thus, section 86.011(2), Florida Statutes (1989), provides for declaratory judgments on
the existence or nonexistence of any fact upon which a right may depend. Prudential
Prop. & Cas. Ins. Co. v. Castellano, 571 So. 2d 598, 599 (Fla. 2d DCA 1990).
In light of the foregoing, Plaintiff is clearly entitled to proceed with her Petition
for Declaratory Relief requesting that the Court determine their right to coverage under
the subject policy for her sinkhole claim.
WHEREFORE, the Plaintiff prays for the Court to deny Defendant’s Motion to
Dismiss Count II of Plaintiff's Complaint and enter any other relief it deems just and
proper.CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing instrument
was sent via email this 6" day of January, 2015, to: Jonathan Hall, Esq. and Robert
Schulte, Esq.; GROELLE & SALMON P.A., 11301 Okeechobee Blvd., Second Floor,
West Palm Beach, Florida 33411; Telephone: (561) 963-5500; Fax: (561) 963-2265;
email: gsweourtdocs@gspalaw.com and gclausen@gspalaw.com.
Sherman Law, P.A.
4000 Hollywood Blvd., #265-S
Hollywood, FL 33021
Office: (954) 894-8000
Direct: (305) 494-6345
Fax: (305) 397-1725
By:_/s/ Julio Martinez
RYAN SHERMAN, Esq.
Florida Bar No.: 686271
JULIO MARTINEZ, Esq.
Florida Bar No.: 85128
Eservice: EserviceSLPA@gmail.comExhibit “A”CacD
HOMEOWNERS CHOICE
Insurance for Floridians by Floridians
June 25, 2012
James Hines
3816 S. Lake Terrace
Miramar, FL 33023
Re: Insured: James Hines
Claim Number: 821089
Policy Number: 276483-1
Date of Discovery: 2/20/2012
Location of Loss: 3816 S Lake Ter., Miramar, FL 33023
Dear Mr. Hines:
We wish to thank you for allowing us to inspect your property and have an engineering study conducted following
the report of your claim to Homeowners Choice Property & Casualty Company. The investigation was completed
by MCD Engineering.
The report of your claim advised that you found cracking to the exterior and interior of the master bedroom wall.
In response, Homeowners Choice Property & Casualty Insurance Company engaged the services of SDII Global Inc.
to determine the cause of the claim. Following the completion of their studies, SDII Global issued their report. A
signed and sealed copy has been provided to you for your records. The report concluded the following.
It is SDII’s opinion, within reasonable professional probability, that the observed damage to the
main structure is most consistent with either the direct result, or the collateral effect, of
differential foundation movement. The observed conditions are structurally significant, in that
they compromise the load capacity of primary structural members or systems.
The differential movement of the foundation can be attributed to soils within the upper 6 feet
below land surface (bls) that have high organic contents by weight. Historical imagery! of the
area indicates a history of dredging and filling at the location of the house and throughout the
surrounding neighborhood. An historical image from 1957 shows unaltered swamp land in the
vicinity of the house. The current Google Earthe image shows the previously dredged canals.
The spoil materials from these activities are commonly used to level the land surface prior to
construction. Evidence of in-filling includes the limestone gravel that was identified in hand
auger boring HA-3, as well as in the predominantly very loose conditions of the soils within the
upper 10 feet bls across the site.
It is SDII's opinion, within a reasonable professional probability, that sinkhole activity as
defined by §627.706 Florida Statutes does not exist at the Hines residence.
HOMBOWNERS CHOICE PROPERTY & CASUALTY INSURANCE CO., INC.
PO BOX 22967 + IPA, B 33622
CLAIMS PHONE: 877-235-5076 * CLAIMS FAX: 727-412-8305
F-2- September 17, 2014
Please refer to page 6 Of 18, Section | — Perils Insured Against, of your Homeowners 3 Special Form
Policy, HO 00 03 04 91, which states:
SECTION I — PERILS INSURED AGAINST
COVERAGE A — DWELLING and COVERAGE B — OTHER STRUCTURES
We insure against risk of direct loss to property described in Coverages A and B only if that loss is a
physical loss to property. We do not insure, however, for loss:
2. Caused by:
e. Any of the following:
(1) Wear and tear, marring, deterioration;
(6) Settling, shrinking, bulging or expansion, including resultant cracking, of pavements, patios, foundations,
walls, floors, roofs or ceilings;
Please refer to page 8 of 18, Section I — Exclusions, which states:
1. We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded
regardless of any other cause or event contributing concurrently or in any sequence to the loss.
b, Earth Movement and Settlement, meaning:
(5) Earth sinking, rising or shifting;
(8) Settling, cracking or expansion of foundations; or
2. We do not insure for loss to property described in Coverages A and B caused by any of the following.
However, any ensuing loss to property described in Coverages A and B not excluded or excepted
in this policy is covered.
c. Faulty, inadequate or defective:
(1) Planning, zoning, development, surveying, siting;
(2) Design, specifications, workmanship, repair, construction, renovation, remodeling,
grading, compaction;
(3) Materials used in repair, construction, renovation or remodeling; or
(4) Maintenance;
of part or all of any property whether on or off the "residence premises
Then refer to SINKHOLE LOSS Endorsement, HW 07 07 04 11, PAGE 1 of 3, which states:
We insure the property covered under Section | for a “Sinkhole Loss” that occurs during the policy
period.
This endorsement is subject to the terms and conditions of the policy.
DEFINITIONS
The following definitions are added:-3- September 17, 2014
“Sinkhole activity” means settlement or systematic weakening of the earth supporting property only when settlement
or systematic weakening results from movement or raveling of soils, sediments, or rock materials into subterranean
voids created by the effect of water on limestone or similar rock formation.
“Sinkhole Loss” means “Structural Damage” to the building, including foundation, caused by “sinkhole Activity’.
Contents coverage shall apply only if there is “Structural Damage” to the building caused by “Sinkhole Activity’.
a. The settlement or systematic weakening must result from movement or raveling of soils, sediments, or rock
material into subterranean voids created by the effect of water on limestone or similar rock formations.
2. “Sinkhole loss” means actual physical damage caused by “Sinkhole Activity”.
“Structural Damage “ for purposes of “Sinkhole Loss” coverage means:
1. Damage to a covered building, including the foundation, that prevents the primary structural members and/or
primary structural systems from supporting the loads and forces that they were designed to support; and
2. Atleast one of the following:
a. For buildings utilizing a concrete slab foundation, that horizontal surface mapping of the floor proves there is
a vertical variance within the floor resulting from sinkhole related displacement that is greater than the
maximum allowable vertical variance permitted by the current Florida Building Code of one half inch within a
10 foot horizontal distance; or
b. For buildings utilizing wood floors members, that horizontal surface mapping of the floors proves there is a
vertical variance within the floor resulting from sinkhole related displacement that is greater than the
maximum allowable deflection permitted by current Florida Building Code.
3. “Structural Damage” for purposes of “Sinkhole Loss” coverage exists only if both 1. and 2. Above are satisfied.
Based on the results of our investigation, we must respectfully inform you there is no coverage for your loss. This
letter is not intended to be a full disclosure of all policy coverages, conditions and exclusions. For a full disclosure,
we encourage you to refer to your copy of your insurance policy for complete details.
Homeowners Choice Property & Casualty Insurance Company reserves each and every right that it has under and
pursuant to this policy of insurance. Neither you, nor anyone acting on your behalf, should construe any
statements or actions, either previously or in the future, by Homeowners Choice Property & Casualty Insurance
Company, or any of its agents, attorneys or representatives, to constitute a waiver of any rights given to
Homeowners Choice Property & Casualty Insurance Company under this policy of insurance, nor is it the purpose
of this letter to waive any of the policy terms and/or conditions.
Please be advised that by issuing this declination of coverage for the sinkhole loss, it is not the intent of
Homeowners Choice Property & Casualty Insurance Company to waive any of the rights and privileges afforded to
it under the policy issued to you, and Homeowners Choice Property & Casualty Insurance Company hereby
continues to reserve those rights and privileges-4- September 17, 2014
If you should have any additional questions, or have any other information you would like us to consider in regards
to this claim, please contact the undersigned at the phone number shown below.
Sincerely,
Steven Kelley ChFC
Senior Claims Examiner
813-405-3253
Cc: Bruening Insurance Agency Inc.
If this document contains an excerpt from a Home Owners Choice Property & Casualty Insurance Co. Policy ( “the Policy”) it is
proved here for informational purposes only. This excerpt is not the official version of the policy. The official version of the
policy is the policy issued to the insured on the policy effective date. In the event there is inconsistency between this
document and the Policy, the Policy shall serve as the official version.
F.S. 817.234(1)(b) Any person who knowingly and with intent to injure, defraud, or deceive any insure files a statement of
claim or an application containing any false, incomplete, or misleading information is guilty of a felony of the third degree.
Preview
Filing # 22198803 E-Filed 01/06/2015 10:57:31 AM IN THE CIRCUIT COURT OF THE 17" JUDICIAL CIRCUIT IN AND FOR BROWARD COUNTY, FLORIDA CASE NO: CACE- 14-016655 (02) DEBRA HINES, Plaintiff, vs. HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE COMPANY, INC., a Florida corporation, Defendants. A PLAINTIFF’S RESPONSE TO DEFENDANT’S MOTION TO DISMISS COUNT II OF THE AMENDED COMPLAINT COMES NOW, Plaintiff, DEBRA HINES, by and through her undersigned counsel, and hereby file her Response to Defendant’s Motion to Dismiss Count II of the Amended Complaint, and as grounds therefore states: Legal Memorandum in Response to Motion to Dismiss Count II Defendant’s Motion to Dismiss alleges that the Plaintiff's Petition for Declaratory Relief is not proper, because the allegations are related to a factual dispute about the amount of benefits due under an insurance policy and are not sufficient to support a viable cause of action for declaratory relief in the context of this case. Yet, contrary to the Defendant’s claim in its Motion to Dismiss the issue is not only amount of benefits, but whether the particular policy covers the Plaintiff's sinkhole claim. Specifically, the Defendant failed to fully or even partially indemnify the Plaintiff for her sinkhole claim. A true and correct copy of denial letter is attached as Exhibit “A.” In Count II, the Plaintiff is requesting that the Court make a Declaratory Judgment regarding whether Plaintiff's sinkhole claim is covered under the policy. The question *** FILED: BROWARD COUNTY, FL HOWARD FORMAN, CLERK 1/6/2015 10:57:30 AM.****whether or not a particular policy covers a certain risk is a question of law. Central Cold Storage, Inc. v. Lexington Ins. Co., 452 So.2d 1014 (Fla. 3d DCA 1984), see also, Liberty Mut. Ins. Co. v. Weiss, 790 So. 2d 475, 476 (Fla. 3d DCA 2001). The declaratory judgments statutes do authorize a declaratory judgment action to declare an insurer’s obligations under an unambiguous policy, even if the court must determine the existence or nonexistence of a fact in order to determine the insurer’s responsibility. Higgins v. State Farm Fire & Cas. Co., 894 So. 2d 5, 9 (Fla. 2004). The issue of whether an exclusionary clause precludes coverage for damages is a question of law. _Cf. Dimmitt Chevrolet, Inc. v. Southeastern Fidelity Ins. Corp.,636 So.2d 700, 701 (Fla.1993). “[T]he construction of an insurance policy is a question of law...” Jones v. Utica Mut. Ins. Co., 463 So.2d 1153, 1157 (Fla.1985), see also, Fayad vy. Clarendon Nat. Ins. Co., 899 So. 2d 1082, 1085 (Fla. 2005). Even though some questions of fact may exist in this case, questions of fact may be determined in declaratory proceedings if necessary to a construction of legal rights. Smith v. Milwaukee Insurance Company of Milwaukee, Wisconsin, 197 So.2d 548 (Fla. 4th DCA 1967). Thus, section 86.011(2), Florida Statutes (1989), provides for declaratory judgments on the existence or nonexistence of any fact upon which a right may depend. Prudential Prop. & Cas. Ins. Co. v. Castellano, 571 So. 2d 598, 599 (Fla. 2d DCA 1990). In light of the foregoing, Plaintiff is clearly entitled to proceed with her Petition for Declaratory Relief requesting that the Court determine their right to coverage under the subject policy for her sinkhole claim. WHEREFORE, the Plaintiff prays for the Court to deny Defendant’s Motion to Dismiss Count II of Plaintiff's Complaint and enter any other relief it deems just and proper.CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing instrument was sent via email this 6" day of January, 2015, to: Jonathan Hall, Esq. and Robert Schulte, Esq.; GROELLE & SALMON P.A., 11301 Okeechobee Blvd., Second Floor, West Palm Beach, Florida 33411; Telephone: (561) 963-5500; Fax: (561) 963-2265; email: gsweourtdocs@gspalaw.com and gclausen@gspalaw.com. Sherman Law, P.A. 4000 Hollywood Blvd., #265-S Hollywood, FL 33021 Office: (954) 894-8000 Direct: (305) 494-6345 Fax: (305) 397-1725 By:_/s/ Julio Martinez RYAN SHERMAN, Esq. Florida Bar No.: 686271 JULIO MARTINEZ, Esq. Florida Bar No.: 85128 Eservice: EserviceSLPA@gmail.comExhibit “A”CacD HOMEOWNERS CHOICE Insurance for Floridians by Floridians June 25, 2012 James Hines 3816 S. Lake Terrace Miramar, FL 33023 Re: Insured: James Hines Claim Number: 821089 Policy Number: 276483-1 Date of Discovery: 2/20/2012 Location of Loss: 3816 S Lake Ter., Miramar, FL 33023 Dear Mr. Hines: We wish to thank you for allowing us to inspect your property and have an engineering study conducted following the report of your claim to Homeowners Choice Property & Casualty Company. The investigation was completed by MCD Engineering. The report of your claim advised that you found cracking to the exterior and interior of the master bedroom wall. In response, Homeowners Choice Property & Casualty Insurance Company engaged the services of SDII Global Inc. to determine the cause of the claim. Following the completion of their studies, SDII Global issued their report. A signed and sealed copy has been provided to you for your records. The report concluded the following. It is SDII’s opinion, within reasonable professional probability, that the observed damage to the main structure is most consistent with either the direct result, or the collateral effect, of differential foundation movement. The observed conditions are structurally significant, in that they compromise the load capacity of primary structural members or systems. The differential movement of the foundation can be attributed to soils within the upper 6 feet below land surface (bls) that have high organic contents by weight. Historical imagery! of the area indicates a history of dredging and filling at the location of the house and throughout the surrounding neighborhood. An historical image from 1957 shows unaltered swamp land in the vicinity of the house. The current Google Earthe image shows the previously dredged canals. The spoil materials from these activities are commonly used to level the land surface prior to construction. Evidence of in-filling includes the limestone gravel that was identified in hand auger boring HA-3, as well as in the predominantly very loose conditions of the soils within the upper 10 feet bls across the site. It is SDII's opinion, within a reasonable professional probability, that sinkhole activity as defined by §627.706 Florida Statutes does not exist at the Hines residence. HOMBOWNERS CHOICE PROPERTY & CASUALTY INSURANCE CO., INC. PO BOX 22967 + IPA, B 33622 CLAIMS PHONE: 877-235-5076 * CLAIMS FAX: 727-412-8305 F-2- September 17, 2014 Please refer to page 6 Of 18, Section | — Perils Insured Against, of your Homeowners 3 Special Form Policy, HO 00 03 04 91, which states: SECTION I — PERILS INSURED AGAINST COVERAGE A — DWELLING and COVERAGE B — OTHER STRUCTURES We insure against risk of direct loss to property described in Coverages A and B only if that loss is a physical loss to property. We do not insure, however, for loss: 2. Caused by: e. Any of the following: (1) Wear and tear, marring, deterioration; (6) Settling, shrinking, bulging or expansion, including resultant cracking, of pavements, patios, foundations, walls, floors, roofs or ceilings; Please refer to page 8 of 18, Section I — Exclusions, which states: 1. We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss. b, Earth Movement and Settlement, meaning: (5) Earth sinking, rising or shifting; (8) Settling, cracking or expansion of foundations; or 2. We do not insure for loss to property described in Coverages A and B caused by any of the following. However, any ensuing loss to property described in Coverages A and B not excluded or excepted in this policy is covered. c. Faulty, inadequate or defective: (1) Planning, zoning, development, surveying, siting; (2) Design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction; (3) Materials used in repair, construction, renovation or remodeling; or (4) Maintenance; of part or all of any property whether on or off the "residence premises Then refer to SINKHOLE LOSS Endorsement, HW 07 07 04 11, PAGE 1 of 3, which states: We insure the property covered under Section | for a “Sinkhole Loss” that occurs during the policy period. This endorsement is subject to the terms and conditions of the policy. DEFINITIONS The following definitions are added:-3- September 17, 2014 “Sinkhole activity” means settlement or systematic weakening of the earth supporting property only when settlement or systematic weakening results from movement or raveling of soils, sediments, or rock materials into subterranean voids created by the effect of water on limestone or similar rock formation. “Sinkhole Loss” means “Structural Damage” to the building, including foundation, caused by “sinkhole Activity’. Contents coverage shall apply only if there is “Structural Damage” to the building caused by “Sinkhole Activity’. a. The settlement or systematic weakening must result from movement or raveling of soils, sediments, or rock material into subterranean voids created by the effect of water on limestone or similar rock formations. 2. “Sinkhole loss” means actual physical damage caused by “Sinkhole Activity”. “Structural Damage “ for purposes of “Sinkhole Loss” coverage means: 1. Damage to a covered building, including the foundation, that prevents the primary structural members and/or primary structural systems from supporting the loads and forces that they were designed to support; and 2. Atleast one of the following: a. For buildings utilizing a concrete slab foundation, that horizontal surface mapping of the floor proves there is a vertical variance within the floor resulting from sinkhole related displacement that is greater than the maximum allowable vertical variance permitted by the current Florida Building Code of one half inch within a 10 foot horizontal distance; or b. For buildings utilizing wood floors members, that horizontal surface mapping of the floors proves there is a vertical variance within the floor resulting from sinkhole related displacement that is greater than the maximum allowable deflection permitted by current Florida Building Code. 3. “Structural Damage” for purposes of “Sinkhole Loss” coverage exists only if both 1. and 2. Above are satisfied. Based on the results of our investigation, we must respectfully inform you there is no coverage for your loss. This letter is not intended to be a full disclosure of all policy coverages, conditions and exclusions. For a full disclosure, we encourage you to refer to your copy of your insurance policy for complete details. Homeowners Choice Property & Casualty Insurance Company reserves each and every right that it has under and pursuant to this policy of insurance. Neither you, nor anyone acting on your behalf, should construe any statements or actions, either previously or in the future, by Homeowners Choice Property & Casualty Insurance Company, or any of its agents, attorneys or representatives, to constitute a waiver of any rights given to Homeowners Choice Property & Casualty Insurance Company under this policy of insurance, nor is it the purpose of this letter to waive any of the policy terms and/or conditions. Please be advised that by issuing this declination of coverage for the sinkhole loss, it is not the intent of Homeowners Choice Property & Casualty Insurance Company to waive any of the rights and privileges afforded to it under the policy issued to you, and Homeowners Choice Property & Casualty Insurance Company hereby continues to reserve those rights and privileges-4- September 17, 2014 If you should have any additional questions, or have any other information you would like us to consider in regards to this claim, please contact the undersigned at the phone number shown below. Sincerely, Steven Kelley ChFC Senior Claims Examiner 813-405-3253 Cc: Bruening Insurance Agency Inc. If this document contains an excerpt from a Home Owners Choice Property & Casualty Insurance Co. Policy ( “the Policy”) it is proved here for informational purposes only. This excerpt is not the official version of the policy. The official version of the policy is the policy issued to the insured on the policy effective date. In the event there is inconsistency between this document and the Policy, the Policy shall serve as the official version. F.S. 817.234(1)(b) Any person who knowingly and with intent to injure, defraud, or deceive any insure files a statement of claim or an application containing any false, incomplete, or misleading information is guilty of a felony of the third degree.