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Filing # 103367420 E-Filed 02/14/2020 05:07:14 PM
IN THE CIRCUIT COURT, 14TH
JUDICIAL CIRCUIT, IN AND FOR
BAY COUNTY, FLORIDA
CASE NO.: — 19 004405 CA
PATSY J. ODOM,
Plaintiff,
v.
TOWER HILL SIGNATURE INSURANCE
COMPANY, a Florida insurance corporation,
Defendant.
PLAINTIFF’S MEMORANDUM OF LAW IN OPPOSITION
TO DEFENDANT’S MOTION TO DISMISS
Plaintiff, PATSY J. ODOM, by and through her undersigned attorneys, submits to the Court
her Memorandum of Law in Opposition to Tower Hill Signature Company’s Motion to Dismiss as
follows:
I. INTRODUCTION AND BRIEF FACTUAL SYNOPSIS:
This action concerns an insurance dispute arising from damage to Plaintiffs home caused
by Hurricane Michael, on or about October 10, 2018. As is alleged in the Complaint, at the time of
the damage, the Plaintiff’s home was insured under a policy of insurance issued by Defendant.
Plaintiff brought suit for breach of the insurance contract and for a declaration concerning the legal
correctness of Defendant’s instructions to Plaintiff, set forth in written correspondence to Plaintiff,
of the procedure to be followed by Plaintiff in the event she sought to recover depreciation which
had been withheld by Defendant in its payments to Plaintiff for what it unilaterally determined by
Defendant to be the damage to her home. Defendant filed its Motion to Dismiss under Rule 1.140,
Fla.R.Civ.P. and alleges the Complaint fails to state a cause of action both as to Count I (Breach of
Contract) and Count II (Declaratory Relief).I. DEFENDANT’S MOTION AS TO COUNT I:
As will be argued below, Defendant’s motion under Rule 1.140 must fail. The crux of
Defendant’s argument as to Count | is that the Plaintiff's Complaint contains allegations which
Defendant deems to be “inappropriate” See Defendant’s Memorandum of Law, at page 2. In
particular, Defendant argues that because Plaintiff's Complaint alleges Defendant withheld
“excessive” amounts for depreciation, and “grossly underestimated” the cost to repair Plaintiff's
damages, the Complaint should be dismissed because those allegations “can only be seen as an
attempt to circumvent established Florida law protections on the claims file, claims investigation,
and claims handling when there has been no determination of liability and damages.” Defendant’s
boiler plate motion and memorandum as to this count is completely off point.
Not a single case cited by Defendant remotely supports the arguments raised in its motion
directed to Count I. Liberty Mutual Insurance Company v The Farm, Inc., 754 So. 2d 865 (Fla. 3d
DCA 2000) simply holds that a claim for extra-contractual damages (“bad faith”) must be dismissed
pending the outcome of the breach of contract action. Plaintiff has alleged no “extra-contractual”
damages in this action, and they are not at issue. State Farm Florida Insurance Company v
Gallman, 835 So. 2d 389 (Fla 2d DCA 2003), concerns a discovery dispute, and held as a general
rule claims file material is not discoverable in a breach of contract action. State Farm v Valido, 662
So. 2d 1012 (Fla. 3d DCA 1995) also held that as a general rule that an insurer’s claim file, claim
manuals, guidelines, and claims handling documents are irrelevant in a first party insurance dispute.
Discovery issues have no bearing on whether Plaintiffs Complaint states a cause of action.
Under Florida law, a properly pleaded action for breach of contract must allege three
elements: (1) a valid contract; (2) a material breach; and (3) damages flowing from that breach.
Knowles v C.LT. Corp., 346 So. 2d 1042 (Fla. 1* DCA 1977); Abruzzo v Haller, 603 So. 2d 1338
(Fla. 1‘ DCA 1992). Moreover, when a court considers a motion to dismiss, the allegations of the
complaint must be treated as true, and all reasonable inferences which may be drawn from those
allegations must be drawn in favor of the pleador. Abruzzo, supra; Snow v Byron, 580 So. 2d 238
(Fla. 1* DCA 1991). Plaintiff alleges in paragraph 4 the existence of an insurance policy (a contract)
and alleges further, paragraph 5, the policy (the contract) was in effect on the date of loss. In
Page -2-paragraph 14, Plaintiff alleges that by paying the amounts which had been previously described in
paragraphs 7, 8, and 9, Defendant breached the contract by failing to pay Plaintiff the amount she
was owed under the terms of the policy. In paragraph 15, Plaintiff alleges she was damaged by
Defendant’s breach in that she did not receive the benefits to which she is entitled. Without
question, Plaintiff has properly pleaded the elements required to state a cause of action for breach
of contract in Florida. Plaintiff has not pleaded any allegation for “bad faith” or “extra contractual”
damages; Plaintiff has not served discovery which seeks information beyond that which is
discoverable in a first party action. Even if she had sought such discovery, that would certainly be
no basis to support a motion to dismiss the complaint. In fact, Defendant has not alleged Plaintiff
failed to state a cause of action, other than in its preliminary allegations. It objects to some of the
language pleaded by Plaintiff in her Complaint. That is no basis to dismiss the Complaint.
Defendant’s motion as to Count I must be denied.
Til. DEFENDANT’S MOTION AS TO COUNT II:
In Count II of the Complaint, Plaintiff seeks a declaration from the Court concerning the
procedure outlined by Defendant in its letters to the Plaintiff of November 14, 2018 and January 29,
2019, as to how Plaintiff may recover withheld depreciation. The Complaint specifically quotes the
letters and alleges the procedure outlined in those letters is contrary to the express provisions of
Florida Statute §627.7011. See, paragraphs 25, 26, and 27 of the Complaint. Defendant cites State
Farm Mutual Auto Insurance Company v Wallace, 209 So. 2d 719 (Fla. 2d DCA 1968) in support
of its position. Defendant misconstrues the holding in Wallace. The Wallace court simply held that
when a plaintiff brings a declaratory judgment action asking for a declaration as to defendant’s
liability under a specific medical payment provision of the contract, the complaint had to be
dismissed for failure to state a cause of action where it failed to make allegations as to the plaintiff’s
doubt or need for construction of such provision. It is not a blanket requirement that the only way
in which an insured can seek a declaratory relief in the context of an insurance case, the insured must
allege a question of construction regarding a specific policy provision as to specific facts.
Moreover, the Complaint specifically quoted from Florida Statute §627.7011(3)(a), which
provides how depreciation may be recovered. Plaintiff further alleged that although she did not have
Page -3-acopy of the contract (Defendant having refused to provide it until after suit was filed), she believed
her contract (the policy) had language consistent with the statute and inconsistent with the express
instructions provided her by Defendant in the correspondence. See paragraphs 22 and 23 of the
Complaint. Plaintiff could not specifically allege with certainty the policy language because, as
stated earlier, she did not have the contract. A copy of the contract was recently provided by
Defendant and Plaintiff suggests the contract generally tracks §627.7011 as to how she may recover
the withheld depreciation.
The controlling statute, and the policy provision require that depreciation may be recovered
“as repairs are made and costs incurred”. Notwithstanding this clear statutory and policy
requirement, Defendant, in its letter to Plaintiff dated November 14, 2018, notified the Plaintiff that
she could make a claim for the recoverable depreciation “within 180 days”, by providing proof “that
repairs have been completed and costs incurred’. Nowhere in the statute nor in the policy is there
a 180 day limitation, nor is there the requirement that the insured provide proof “that repairs have
been completed and costs incurred”. For the same reason, Defendant’s provisions set forth in its
January 29, 2019 correspondence to Plaintiff are equally as violative of the statute and the policy
provisions. Plaintiff has made this specific allegation, as stated earlier, in paragraph 27.
Succinctly stated, controlling statute and the policy provision require that depreciation may
be recovered “as repairs are made and costs incurred”. Notwithstanding this clear statutory and
policy requirement, Defendant, in its correspondence attached as Exhibits A and B to the Complaint,
require much more than that, including 180 time limitation.
The subject policy requires the insured to pay replacement cost under Coverage A but does
allow for an actual cash value payment with depreciation payable “as work is performed and
expenses are incurred.” This is consistent with the requirements of Florida Statute §627.7011,
entitled “Homeowners Policy; Offer of Replacement Cost Coverage and Law and Ordinance
Coverage”. Clearly the statute applies to the policy at issue. This particular subsection at issue is
subsection (3)(a) and provides:
“(3) In the event of a loss for which a dwelling or personal property is insured on the
basis of replacement cost:
Page -4-(a) For a dwelling, the insurer must initially pay at least the actual cash value of the
insured loss, less any applicable deductible. The insurer shall pay any remaining
amounts necessary to perform such repairs as work is performed and expenses are
incurred...”
Clearly, the statute contains no 180 day restriction, nor any requirement that the work be
completed before depreciation may be recovered.
In Travelers Insurance Company v Emery, 579 So. 2d 798 (Fla 1* DCA 1991), the issue
presented centered around whether an insurance company might file an action for declaratory
judgment seeking a determination of whether the business pursuits exclusion of its policy applied
to excuse its obligation to defend its insured against a liability claim asserted by a third party. The
trial court determined the request for declaratory relief as “premature”, and entered judgment against
the insurer. The case was reversed on appeal. The opinion offers a concise analysis of the
applicability of declaratory judgment actions concerning insurance policy construction and
interpretation. In Emery, the insured argued that because the policy exclusion was clear and
unambiguous, no legal construction was required and declaratory relief was improper. The appellate
court disagreed, noting:
“The Declaratory Judgment Act, application of which is to be afforded liberal
construction, was intended to afford relief from insecurity and uncertainty with
respect to rights, statutes, and other equitable or legal relations. Kelner v Woody, 399
So. 2d 35 (Fla 3d DCA 1981) .. .” Id at 800.
The court also found that while generally declaratory relief is not proper to resolve strictly factual
issues in the context of an insurance policy dispute, “. . . questions of fact and disagreements
concerning coverage under insurance policies are proper subjects for declaratory judgment if
necessary to a construction of legal rights.” Id at 801.
Thus, while Count I of Plaintiff’s action for breach of contract involves a factual dispute,
Florida law provides declaratory relief may also involve some issue of fact to the extent resolution
of those facts are required in order for the court to properly determine the applicability of the policy
and Florida law to the facts, and whether Defendant’ s representations to the Plaintiff are inconsistent
with and/or violative of the policy of Florida law.
Page -5-It is beyond dispute that in its correspondence to Plaintiff, Defendant attempted to require
that all repairs be completed and that her claim for withheld depreciation must be made within 180
days. That is a requirement not found in the policy nor in the statute. It seems doubtful that was
inadvertent. The net effect of this effort, especially when combined with policy deductibles, is that
insureds must make whatever selective repairs they can, but are rarely able to recover the withheld
depreciation because they are rarely able to fund the “completed repairs” as required. In essence,
the company tried to strong-arm the Plaintiff into walking away from thousands of dollars in
withheld depreciation since she, like most insureds, is not in a position to complete repairs under
those onerous terms. Defendant’s motion as to Count II must be denied.
IV. | CONCLUSION:
Defendant’s Motion to Dismiss is completely without merit. Plaintiff has properly alleged
all necessary elements to state a cause of action for breach of contract. All of the allegations
contained in Count I must be treated as true and Plaintiff has alleged a contract, breach of the
contract, and damage resulting therefrom. Further, Defendant’s Motion to Dismiss Count II must
be denied. Plaintiff has alleged a genuine controversy and her uncertainty over the procedures
outlined by Defendant in its letters to her explaining how she might recover withheld depreciation.
The law is clear, Plaintiff is entitled to a declaration in this situation. Defendant’s motion must be
denied.
TYLER & HAMILTON, P.A.
/s/Clark Hamilton, Jr.
CLARK HAMILTON, JR.
Florida Bar No.: 311731
4741 Atlantic Boulevard, Suite A
Jacksonville, Florida 32207
(904) 398-9999 Telephone
(904) 398-0806 Facsimile
tandhpa @bellsouth.net
Page -6-and
MANUEL & THOMPSON, P.A.
Jay Manuel, Esq.
Florida Bar No.: 651052
120 Richard Jackson Boulevard, Suite 200
Panama City, FL 325407
(850) 785-5555 Telephone
(850) 785-0133 Facsimile
jay @manuelthompson.com
velinda@manuelthompson.com
tim @manuelthompson.com
Attorneys for Plaintiff, PATSY J. ODOM
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing document has been
furnished via Electronic Mail (Email) and the Florida Courts E-Filing Portal to: NICOLE M.
FLUET, ESQ. AND SARAH K. CULLETON, ESQ., Galloway, Johnson, Tompkins, Burr &
Smith, PLC, 400 N Ashley Drive, Suite 1000, Tampa, FL 33602, attorneys for Defendant, this 14"
day of February, 2020.
/s/ Clark Hamilton, Jr.
Attorney
Page -7-