On April 13, 2023, The Eleventh Circuit affirmed our client’s position that an insurance company cannot deny a claim based on an exclusion it never included in the insurance policy that it issued to its insured. Eleventh Circuit Court Judge Newsom started the opinion, which you can find here, by saying, “This is an insurance case. Fear not, keep reading.” He was right–we could not stop reading, and you shouldn’t either.
 
In 2016 and 2017 Hurricanes Matthew and Irma peeled back our client’s roof causing extensive water damage. The insurance company denied both claims taking the position that the subject policies excluded losses caused by named windstorms.
 
STRUBLE, P.A. was retained over three years after the claim for Hurricane Matthew damages was denied. The denial letter claimed the “policy appears to specifically exclude Named Windstorm as a covered peril” which did not comport with the policy provisions cited in the denial letter or provisions our firm had seen in any other policies throughout the years. We filed suit for breach of contract and sought a declaration that the 2016 and 2017 policies covered damages caused by named windstorms. Ultimately, litigation confirmed our suspicion that there was no such “Named Windstorm” exclusion in the policy—a fact the insurance company was aware of during its claim investigation but still maintained that the nonexistent “Named Windstorm” exclusion barred coverage.
 
The parties cross-moved for summary judgment, and the district court relied upon extrinsic evidence to find that intent of the parties was to exclude named windstorm coverage. Summary judgment was granted to the insurance company.  
 
On appeal, Struble, P.A. argued that the lower court erred by relying on extrinsic evidence, including by impermissibly looking at emails exchanged with the church’s insurance agent. The Eleventh Circuit agreed and reversed, holding that both policies cover named windstorms. It did so by applying the general rules governing the interpretation of insurance policies under Florida law. Let’s discuss each policy in turn.
 
Irma Policy: The Eleventh Circuit reviewed the Irma Policy and determined it unambiguously covers named windstorms. It explained in Florida, the law is “ruthlessly straightforward” and when the policy’s language is unambiguous, the policy must be interpreted in accordance with the plain meaning “even where extrinsic evidence contradicts the policy’s terms.” This is “especially true when the contract contains an integration clause indicating that the parties intended the written agreement to be the entire agreement.”
 
The Eleventh Circuit explained that because the list of exclusions “conspicuously does not include ‘Named Windstorms,’ either as a defined category of claim or in any other way, shape, form, or fashion,” the policy unambiguously covers named windstorms. This makes sense because insurance coverage must be interpreted broadly, and exclusions are to be applied narrowly. Even more, on its face, the policy clearly doesn’t exclude losses resulting from named windstorms. Therefore, it clearly covers them.
 
Matthew Policy: The Eleventh Circuit determined that the Matthew Policy was potentially ambiguous based on a deductible provision. But, under contra proferentem, even if ambiguous, this policy also covers named windstorms. That rule stands for the proposition that “any ambiguity which remains after reading each policy as a whole and endeavoring to give every provision its full meaning and operative effect must be liberally construed in favor of coverage and strictly against the insurer.” The Florida Supreme Court has clarified that facial ambiguities in insurance contracts should be resolved by reference to contra proferentem rather than extrinsic evidence of the parties’ supposed “intent.” If the policy is ambiguous, then it “must be construed in favor of coverage” and against the insurer.
 
As a result, the lower court’s decision was reversed, and the suit remanded for further proceedings. Judge Newsom concluded by saying, “[The Church] may well be entitled to summary judgment.”
 
The general rules governing the interpretation of insurance policies matter. The text matters. Struble, P.A. kept the faith!

Watch the full Broadcast excerpted above from 4/16/23 here. The above clip where Mr. Struble begins to share the news with the Church is featured about 57 minutes in.

Read the full opinion here.

 

 

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