Filing Number: 784428
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| Filing Accepted: 9/25/2024 |
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EMERALD SHORES HOTEL, LLC
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First Name |
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| Street Address
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2613 S ATLANTIC AVE |
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DAYTONA BEACH,
FL
32118
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| Email Address
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WITHHELD |
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Insured |
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EMERALD SHORES HOTEL, LLC |
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First Name |
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| Policy # * |
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2019-809379-04 |
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Claim #* |
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SDA22039570 |
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Attorney is Applicable
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| Last Name* |
DELGADO
First Name *
JAVIER
Initial
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| Street Address* |
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777 S. HARBOUR ISLAND BLVD. STE 950 |
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TAMPA
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FLORIDA
33602
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| Email Address * |
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JDTEAM@MERLINLAWGROUP.COM |
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| Insurer Type
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 Authorized Insurer
 Unauthorized Insurer
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| Insurer Name |
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| Insurer Name* |
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VELOCITY SPECIALTY INSURANCE COMPANY
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,
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NAIC Company Code 39640 |
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| Name of individual responsible for violation (if any):*
BRAD RIEGLER, DONNIE WESTLAKE, EDDIE UPCHURCH WITH CHOICE SOLUTIONS, SARAH JACKSON, DON LEFFERT, EVAN FOSTER AND ALL OTHER ADJUSTERS, SUPERVISORS, MANAGEMENT AND INDIVIDUALS ASSOCIATED WITH OR RETAINED BY INDEPENDENT SPECIALTY INSURANCE COMPANY NOW
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| Type of Insurance
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Commercial Property & Casualty
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| Reason for Notice
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Claim Delay
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Unsatisfactory Settlement Offer
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Other
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Failure to Properly Investigate Claim with Due Regard to Insured’s Interest
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Statutory provision(s) which the insurer allegedly violated.
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| 624.155(1)(b)(1) |
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Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests.
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| 626.9541(1)(i)(3)(d) |
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Denying claims without conducting reasonable investigations based upon available information.
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| 626.9541(1)(i)(3)(f) |
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Failing to promptly provide a reasonable explanation in writing to the insured of the basis in the insurance policy, in relation to the facts or applicable law, for denial of a claim or for the offer of a compromise settlement.
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Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.
In addition to the Statutory violations set forth above, the specific policy language that is relevant to the violations includes, but is not limited to, the following:
Name: EMERALD SHORES HOTEL, LLC
Policy #: 2019-809379-04
Policy Dates From: 2/7/2022 To: 2/7/2023
Location 1 - 2613 S ATLANTIC AVE., DAYTONA BEACH, FL 32118
Building: 1 of 1
Coverage:
A. Building $6,328,000
B. Other Structures $ 72,000
C. Contents $ 345,000
D. Business Income $1,200,000
Mold/Fungi $ $15,000
Law and Ordinance Coverage A -Coverage for Loss to the Undamaged Portion of the Building (lessor of % Coverage A-Covered Property or fixed dollar amount if indicated)----100%
Coverage B – Demolition Cost Coverage (% of Coverage
A- Covered Property) ---20%
Coverage C – Increased Cost of Construction (lessor of
% Coverage A – Covered Property or fixed dollar amount)—15%
Debris Removal (lessor of % of the amount paid for direct physical loss or damage to Covered Property or the amount stated)
25% or $1,000,000
Outdoor Signs, Fences, $250,000
Antennas, and Vegetation
(lessor of $ amount given or
Coverage B limit)
a. Sublimit for each tree, shrub a. $250/ $5,000
or plant (per item and occurrence
maximum)
b. Sublimit for fences b. $30,000
Deductible* $ 238,350 (3% of all Coverages)
The insurance policy in question provides in pertinent part as follows:
PROPERTY COVERAGES
1. Coverage A - Covered Property
Covered Property, as used in this Coverage Part, means the type of property described in this
Covered Property Section and limited in the Property Not Covered Section, if a Limit of Insurance is
shown in the Declarations for that type of property.
a. Building, meaning the building or structure described in the Declarations, including:
1) Completed additions;
2) Fixtures, including outdoor fixtures;
3) Permanently installed:
a) Machinery; and / or
b) Equipment;
4) Hard costs, meaning:
a) Foundations, fixtures, attachments and similar property that has become or intended to
become a permanent part of the building(s) or structure(s); and / or
b) Materials, supplies and similar property owned by others for which you are responsible
for. This property must be used in the construction operations insured under this policy
and be located at the premise(s) described in the schedule of values.
5) Business Personal Property owned by you that is used to maintain or service the building
or structure or its locations, including:
a) Fire-extinguishing equipment;
b) Floor coverings; and / or
c) Appliances used for refrigerating, ventilating, cooking, dishwashing or laundering.
6) If not covered by other insurance:
a) Additions under construction, alterations and repairs to the building or structure; and / or
b) Materials, equipment, supplies and temporary structures, on or within 1,000 feet of the
described locations, used for making additions, alterations or repairs to the building or structure.
b. COVERAGE B- Other Buildings / Structures - Additional Building Property(ies) and / or structure(s) as described on the Declarations.
1) Includes swimming pools, detached garages, sheds, signs, pump houses
2) Includes all fixed outdoor property, and some categories are subject to sublimits.
***
c. Coverage C – Your Business Personal Property consists of the following property located in or
on the building(s) or structure(s) described in the Declarations, in the open, or in a vehicle within
1,000 feet of the covered building or structure or within 1,000 feet of the locations described in the
Declarations, whichever distance is greater.
1) Furniture and fixtures;
2) Machinery and equipment;
3) Stock;
4) All other Business Personal Property owned by you and used in your business;
5) Labor, materials or services furnished or arranged by you on Business Personal Property of
others;
6) Your use interest as tenant in improvements and betterments. Improvements and
betterments are fixtures, alterations, installations or additions:
a) Made a part of the building or structure you occupy but do not own; and / or
b) You acquired or made at your expense but cannot legally remove;
7) Leased Business Personal Property for which you have a contractual responsibility to insure,
unless otherwise provided for under Business Personal Property of Others and / or
8) Animals, owned by others and boarded by you, or if owned by you, only as stock while inside
of buildings.
***
3. Coverage D - Business Income Coverages
This policy is extended to cover Business Income Coverages and Additional Business Income
Coverages for the Actual Loss Sustained by you up to the annual limits shown in the Declarations, during the Period of Interruption directly resulting from a Covered Cause of Loss to Covered Property.
a. Actual loss sustained occurs in the event you are prevented from producing goods or from
continuing business operations or services and are unable to:
1) Make up lost production within 365 continuous days after the Period of Interruption, or
2) Continue business operations or services:
a) through the use of any property or service owned or controlled by you; or
b) obtainable from other sources, whether the property or service is at an insured location;
or
c) through working extra time or overtime at any other substitute locations, including any
other locations acquired or for this purpose;
then subject to all other conditions of this policy, for the Actual Loss Sustained of the following
during the Period of Interruption shall be Covered Property.
b. The Period of Interruption, not to exceed 365 continuous days, is
1) from the time of physical loss or damage insured against by this policy to the time when, with
the exercise of due diligence and dispatch, to either:
a) Resume normal operations; or
b) Repair, replace, or prepare for operations, the physically damaged covered buildings and
equipment, to the same or equivalent physical and operating conditions that existed prior
to the loss or damage, whichever is less.
c) Such period of time shall not be cut short by the expiration or earlier termination date of
the policy.
2) In addition, if applicable, such time as may be required with the exercise of due diligence and
dispatch:
a) To restore stock in process to the same state of manufacture in which it stood at the time
of the initial interruption of production or suspension of business operations or services;
or
b) To replace physically damaged or destroyed mercantile stock necessary to resume
operations; or
c)To replace raw materials and supplies in order to continue operations.
***
d. Business Income Coverages will be:
1) Gross Earnings, which in the event of a loss and for the purpose of this coverage are:
a) For manufacturing operations: The net sales value of production less the cost of all raw
stock, materials and supplies utilized in such production; or
b) For mercantile or non-manufacturing operations: The total net sales less cost of
merchandise sold, materials and supplies consumed in the operations or services
rendered by you;
c) Plus, all other earnings derived from the operation of the business;
d) Less all charges and expenses which do not necessarily continue during the interruption
of production or suspension of business operations or services.
2) Net Sales, which in the event of loss at mercantile or non-manufacturing operations, and for
the purpose of this coverage, are determined as the amount for which merchandise could
have been sold to your regular customers if there was no loss or damage to merchandise.
3) Ordinary Payroll, which is the entire payroll expense for all your employees except officers,
executives, department managers, employees under contract, and other essential employees.
The specified number of days that Ordinary Payroll expense is covered is shown on the
Additional Coverages and Sublimits Endorsement. The number of days need not be
consecutive, but must fall within the Period of Interruption of production or suspension of
business operations or services, or fall within the extension of that period, if an extension is
provided.
4) Rental Value: In respect to Covered Property held for rental to others, this policy is extended
to cover the Actual Loss Sustained during the Period of Interruption but not exceeding the
reduction in rental value less charges and expenses which do not necessarily continue. Due
consideration will be given to the historic rental expenses prior to the loss and the probable
expenses.
***
2) Extended Period of Indemnity covers extra expense incurred during the additional length of
time required to restore you to the same condition as existed had no loss occurred. This will
commence with the later of the following dates:
a. the date on which the coverage for loss or damage would otherwise terminate; or
b. the earliest date on which either normal operations resume, or repair, replacement, or
rebuilding of the property that has been damaged is actually completed; but in no event
for a period of time exceeding the number of days specified in the Additional Coverages
and Sublimits Endorsement. The Extended Period of Indemnity does not apply to any
Business Income Coverages.
3) Extra Expense covers expenses, during the Period of Interruption, over and above normal
operating expenses, necessarily incurred by you to avoid or minimize the suspension of
business at the described location or at replacement locations or temporary locations,
including relocation expenses and costs to equip and operate the replacement location or
temporary location and to minimize suspension of business if you cannot continue operations
up to the Sublimits shown on the Additional Coverages and Sublimits Endorsement.
You will agree to use any suitable property or service owned or controlled by you or obtainable
from other sources in reducing the Extra Expense incurred under this policy.
***
C. Additional Coverages
The following Additional Coverages are subject to the terms and conditions of this policy, including the Deductibles and Sublimits of Insurance corresponding to each Additional Coverage as included on the Additional Coverages and Sublimits Endorsement. These Additional Coverage items are either included or excluded Sublimits of Insurance and are part of, and not in addition to the Limits of Insurance of this policy.
***
3. Debris Removal
a. We will pay your expense to remove debris of Covered Property and other debris that is on the
described location(s), when such debris is caused by or results from a Covered Cause of Loss that occurs during the policy period. The expenses will be paid only if they are reported to us in writing within 180 days of the date of the sudden and accidental direct physical loss or damage.
***
8. Fungus, Mold(s), Mildew, Spores, or Yeast
Associated losses will be covered if you establish that the Fungus, Mold(s), Mildew, Spores, or Yeast is a direct result of a Covered Cause of Loss and this loss is reported within twelve (12) months from the expiration date of the policy.
***
18. Ordinance or Law
In the event of sudden and accidental direct physical loss or damage from a Covered Cause of Loss under this policy that results in the enforcement of any law, ordinance, governmental directive or standard in effect at the time of loss or damage regulating the construction, repair or use and occupancy of the property, the following is covered under this policy:
a. Coverage A – Coverage for Loss to Undamaged Portion of the Building - For the loss in value of the undamaged portion of the building due to the enforcement of an Ordinance or Law that requires demolition of undamaged parts of the same building.
b. Coverage B – Demolition Cost Coverage- For the cost to demolish and clear the site of
undamaged parts of the same building, due to the enforcement of an Ordinance or Law that
requires demolition of such undamaged property.
c. Coverage C - Increased Cost of Construction - For the increased cost of repair or replacement of the damaged and undamaged building on the same or another site, limited to the cost that would have been incurred to comply with the minimum requirements of such Ordinance or Law regulating the repair or reconstruction of the damaged property on the same site. However, there is no coverage for any increased cost of construction loss unless the damaged property is rebuilt or replaced.
If the Ordinance or Law requires relocation to another location, the most we will pay for the
increased cost of construction is the increased cost of construction at the new location. The
increased rebuilding costs must be kept to the minimum needed to satisfy legal requirements.
19. Outdoor Signs, Fences, Antennas, and Vegetation
You may extend the insurance provided by this policy to apply to your outdoor signs, fences, radio and television antennas (including satellite dishes), trees, shrubs and plants (other than trees, shrubs or plants which are stock or are part of a vegetated roof), including debris removal expense.
Subject to all terms and limitations of coverage, this Additional Coverage includes the expense of
removing from the described locations the debris of trees, shrubs and plants which are the property of others, except when you are a tenant and such property is owned by the landlord of the described locations.
Outdoor Signs, Fences, Antennas, and Vegetation has a sublimit within Coverage B, Other Buildings and Structures.
***
F. Deductible
If the amount of loss is less than or equal to the Deductible, we will not pay for that loss. If the amount of loss exceeds the Deductible, we will then subtract the Deductible from the adjusted amount of loss and will pay the resulting amount or the Limit of Insurance, whichever is less.
A Named Storm Deductible will apply to the covered perils of wind & hail and ALL flood and / or earthquake losses, with a minimum occurrence deductible of $5,000. A Named Storm Deductible applies as an aggregate percentage of the total of all Coverages (A, B, C and D) at the damaged location, on a per occurrence basis.
The Named Storm Deductible amount will be determined by multiplying the percentage in the Declarations by the aggregate sum of Coverage A, Coverage B, Coverage C and Coverage D values for each location as defined in the Building Details in the Declaration and applying the policy percentage for the Named Storm Deductible to that amount to determine the applicable deductible.
If two or more locations are indicated in the Declarations, then the applicable Named Storm Deductible will be applied separately at each location against the sum of all losses or damages incurred at each location on a per occurrence basis.
An All Other Wind and Hail Deductible will apply to all other wind and hail losses that are not caused by a Named Storm (per occurrence.) A deductible of $5,000 per occurrence will apply to all policies with less than $500,000 in Total Insured Value (TIV) for Coverages A, B, C and D total. A deductible of $10,000 per occurrence will apply to all policies with $500,000 or more TIV for Coverages A, B, C and D total. Only one All Other Wind Deductible will apply per occurrence.
An All Other Peril Deductible will apply if the covered perils are other than wind, hail, flood and / or earthquake. The All Other Peril Deductible applies per occurrence.
***
7. Legal Action Against Us
No person or organization may commence, cause to be commenced, or assert a demand for arbitration, legal action, claim, demand or suit against us unless:
a. There has been full compliance with all terms and conditions of this Policy; and
b. The arbitration demand, claim, demand or suit is brought within two (2) years after the date of the occurrence or event which occasioned the sudden and accidental direct physical loss or damage from a Covered Cause of Loss or within the shortest limit of time permitted by applicable laws.
Damages outside the terms and conditions of this policy and more than the policy sublimits and limits will not be paid. Any settlements agreed to will be signed by all parties involved and will release us of all future liability.
***
3. Arbitration Clause and Choice of Law
All matters in difference between an insured and the Insurer (hereinafter referred to as "the Parties") in relation to this insurance, including its formation, validity, and the arbitrability of any dispute, and whether arising during or after the period of this insurance, shall be referred to an Arbitration Tribunal in the manner hereinafter set out. This Arbitration Clause applies to all persons or entities claiming that they are entitled to any sums under the policy, including, but not limited to, additional insureds,
mortgagees, lender's loss payees, assignees, and/or lienholders.
1. This provision governs the appointment of the Arbitration Tribunal. Unless the Parties otherwise agree, the Arbitration Tribunal shall consist of disinterested persons currently or formerly employed or engaged in a senior position in insurance underwriting or claims at an insurer. The Arbitrators may not have any interest or claimed interest in the outcome of the arbitration, including any contingency interest or an assignment of any portion of the claim.
The Parties may agree upon a single Arbitrator within thirty (30) days of one receiving a written request from the other for arbitration. If they do not agree on one Arbitrator, the Claimant (the party requesting arbitration) shall appoint his or her Arbitrator and give written notice thereof to the Respondent (the party receiving a request for arbitration). Within thirty (30) days of receiving such notice, the Respondent shall appoint his or her Arbitrator and give written notice of his or her selection to the Claimant. If the Respondent does not provide written notice of his or her Arbitrator within thirty (30) days of receiving the Claimant's notice, the Claimant may nominate an Arbitrator on behalf of the Respondent.
The two Arbitrators shall then select an Umpire. If the two Arbitrators fail to agree on the selection of the Umpire within thirty (30) days of the appointment of the second named Arbitrator, each Arbitrator shall submit to the other a list of three Umpire candidates. Each Arbitrator shall then select one name from the list submitted by the other. The Umpire shall be selected from the two names chosen by a lot drawing procedure to be agreed upon by the Arbitrators.
The Arbitration Tribunal consists of the Umpire, the Claimant's selected Arbitrator, and the Respondent's selected Arbitrator.
2. The Arbitration Tribunal shall have the power to fix all procedural rules for the Arbitration, including discretionary power to make orders as to any matter which it may consider proper in the circumstances of the case with regard to pleadings, discovery, inspection of documents, examination of witnesses, and any other matter whatsoever relating to the conduct of the Arbitration. The Arbitration Panel may receive and act upon such evidence in its discretion,
regardless of whether that evidence is oral or written or strictly admissible or not.
3. The seat of the Arbitration shall be in New York, unless some other location is agreed to by the Parties and the Arbitration Tribunal. The Arbitration Tribunal shall apply the law of New York when resolving all matters in difference between the Parties, regardless of the location of the Arbitration.
4. The Arbitration Tribunal may not award exemplary, punitive, multiple or other damages of a similar nature.
5. The parties shall each bear their own costs, expenses and attorney’s fees in any Arbitration proceeding. Each party will also bear the costs of its own Arbitrator and will bear, jointly and equally with the other party, the costs of the Umpire. The Arbitration Tribunal will allocate the remaining costs of the arbitration.
6. The award of the Arbitration Tribunal shall be in writing and binding upon the Parties, who covenant to carry out the same. If either of the Parties should fail to carry out any award, the other may apply for its enforcement as permitted by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
7. The provisions in this Arbitration Clause are severable, and if any portion is found to be unenforceable, the other paragraphs, or parts thereof, shall remain full, valid, and enforceable.
15. Loss Settlement Conditions
We will pay no more than the actual cash value of covered damages until actual repair or replacement is complete. Once actual repair or replacement is complete, we will pay the applicable and supported replacement cost up to, but not in excess of, any applicable policy limits.
However, if the cost to repair or replace the damage is less than $5,000, we will pay the replacement cost up front without deduction(s) for depreciation.
The amount of loss under this policy shall be payable within thirty (30) days after the required proof of loss is received and accepted. Ascertainment of the amount of loss is made either by agreement with you or an amount is determined by binding Arbitration in accordance with the provisions of this policy.
We shall have the option to take all or any part of the property at the agreed or arbitrated value, or to repair, rebuild or replace the property physically lost or damaged with other of like kind and quality, within a reasonable time, on giving notice of its intention to do so within sixty (60) days after receipt of the proof of loss herein required.
We will determine the value of Covered Property in the event of loss or damage as follows:
a. The total maximum limit paid in any one occurrence as a result of a Covered Cause of Loss regardless of the number of locations, coverages, or perils insured under this policy shall not exceed the lessor amount of the Actual Loss Sustained or the limit provided on the Declarations, Locations and Building Detail section, after the application of any Deductible.
b. If one Limit of Insurance applies to two or more separate items, this condition will apply to the total of all property to which the limit applies.
c. Unless otherwise endorsed, the property, as described below, will be valued as follows:
***
12) Business Income Value is determined by calculating the “Average Daily Value” (ADV). ADV
means the total 100% Business Income Value that would have been projected for the Period
of Interruption for the locations where the physical loss or damage occurs, had no physical loss
or damage occurred, divided by the number of working days in such Period of Interruption. The
sum shall include all Business Income Values to which the operations of the locations directly
or indirectly contribute.
***
14) All Other Property: Will be valued at replacement cost if replaced; otherwise, will be valued at the actual cash value, but not to exceed the cost to repair or replace the property with material of like kind and quality.
With respect to Subparagraphs 1 through 14, inclusive, unless otherwise specifically stated, the
valuations will be computed at the time and place of the loss.
15) The following property will always be valued at the actual cash value, even when attached to
the building:
a) Awnings or floor coverings;
b) Appliances for refrigerating, ventilating, cooking, dishwashing or laundering; and / or
c) Outdoor equipment or furniture.
***
16. Roof Replacement Conditions
Partial repairs, recoating or temporary repairs are considered maintenance only and do not determine the age of the roof.
***
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Facts and circumstances giving rise to the violation.
Enter all words or phrases (one at a time) that should be used to filter.
Form DFS-10-363, Rev. 10/14/2008, contains a field for the insureds to include their email addresses. Prior to filing the CRN, said form contains an instruction that, in the event the insureds do not wish for certain information to become part of the public record, the insureds must simply include the term “WITHHELD” to satisfy the filing requirement. This is further established through the following statement which appears on Civil Remedy Notices which have been filed: Warning! Information submitted as part of this civil remedy notice is a public record. Data entered into this form will be displayed on the DFS website for public review. Please DO NOT enter Social Security Numbers, personal medical information, personal financial information or any other information you do not want available for public review. As any information contained herein becomes part of the public record, the insureds have withheld their email addresses so as not to make same available for public review and indicated same accordingly. Furthermore, as the insureds are represented by counsel, it would be improper for any representative of the Insurance Company to contact the insureds directly for any reason utilizing their email addresses and, as such, the information is neither material to the Insurance Company’s ability to correct the violations contained herein nor required by the Department of Financial Services. The Insurer herein should direct all follow-up correspondences to the attorney listed above.
Additionally, as the above section requesting people with knowledge as to the allegations in the instant CRN often gets cut off, the following are those responsible for the violations alleged herein: Brad Riegler, Donnie Westlake, Eddie Upchurch with Choice Solutions, Sarah Jackson, Don Leffert, Evan Foster and all other adjusters, supervisors, management and individuals associated with or retained by Independent Specialty Insurance Company now known as Velocity Specialty Insurance Company, Certain Underwriters at Lloyd’s and Other Insurers Subscribing to Binding Authority B604510568622021, the Insurer involved in this claim including those from their account manager Sedgwick Delegated Authority, including those individuals from Halliwell Engineering Associates and Donan Engineering
The facts and circumstances giving rise to the insurer's violation as the insureds understand them at this time:
This Civil Remedy Notice is made on behalf of Emerald Shores Hotel, LLC (the “INSURED”). The INSURED purchased a commercial policy from Independent Specialty Insurance Company now known as Velocity Specialty Insurance Company and Certain Underwriters at Lloyd’s London and Other Insurers Subscribing to Binding Authority B604510568622021 (“the Carriers”), Policy No. 2019-809379-04 (the “Policy”), which provided coverage for the property located at 2613 S Atlantic Ave., Daytona Beach, FL 32118 (the “Property”). The INSURED paid all premiums associated with the Policy. The Policy was in full force and effect at the relevant times herein.
The Policy provides coverage on a replacement cost basis with a limit of liability in the amount of $6,328,000 for building, $72,000 for other structures, $345,000 for contents and $1,200,000 for business income coverage, subject to a 3% deductible ($238,250). The Policy also provides coverage for Ordinance or Law, Debris Removal and Fungi/Mold Coverage.
On or about September 28, 2022, while the Policy was in full force and effect, the INSURED suffered a hurricane loss at the property located at 2613 S Atlantic Ave., Daytona Beach, FL 32118. The windstorm caused direct physical damage to the Property.
According to the Policy language, the Property is covered for damages resulting from a named storm, wind and hail. Under the policy, once the covered Property suffers a loss and that loss is reported to the insurance company, the responsibility to determine the cause(s) of loss and the amount of damage falls to the insurer. If an exclusion in the Policy applies, it is up to the insurer to investigate and determine what specific damage is excluded from coverage and the balance of the claim should be paid timely.
The INSURED timely notified the Carriers of the Hurricane related damages to its property. The Carriers acknowledged the claim and assigned Claim No. SDA22039570 to the loss. Following receipt of the claim, the Carriers evaluated the property. As part of its investigation, the Carriers’ examiner Donnie Westlake prepared an estimate of the covered damages to the Property.
On March 9, 2023, the Carriers issued a prepared estimate of the scope and cost to repair the Property. Notably, the Carriers acknowledged coverage for the loss, but grossly understated the scope and cost for necessary repairs. The March 8, 2023, estimate provided only $124,217.24 in ACV and $163,929.23 in RCV for building repairs, $42,375.00 in ACV and RCV for the other structures to the Property. Pursuant to this estimate, the Carriers issued a claim determination letter dated March 9, 2023, and issued no additional payment to the INSURED.
On May 25, 2023, the Carriers issued a letter with a supplemental estimate from their adjuster Donnie Westlake. The estimate dated May 22, 2023, provided $340,132.22 ACV and $567,499.07 RCV for the building repairs, $21,565.67 ACV and $42,754.08 RCV for the other structures, $53,432.91 for contents and $35,989.00 for business income damages to the Property. Pursuant to this letter the Carrier issued no additional payments to the insured.
On July 26, 2023, the Carriers issued another letter with another supplemental estimate from their adjuster Donnie Westlake. The estimate dated July 24, 2023, provided $463,378.23 ACV and $693,059.28 RCV for the building repairs, $25,507.00 ACV and $50,641.17 RCV for the other structures, $53,432.91 for contents and $35,989.00 for business income damages to the Property. Pursuant to this letter the Carrier issued payments in the amounts of $25,028.23 for building, $25,507.00 for other structures, $41,956.48 for contents and $35,989.00 for business income to the insured.
On January 29, 2024, the Carriers issued another letter with another supplemental estimate from their adjuster Donnie Westlake. The estimate dated January 16, 2024, provided $564,203.81 ACV and $701,901.06 RCV for the building repairs, $ 77,041.17 ACV and $ 77,041.17 RCV for the other structures, $53,432.91 for contents and $35,989.00 for business income damages to the Property. Pursuant to this letter the Carrier issued payments in the amounts of $100,825.58 for building, $51,534.17 for other structures and no additional payments for contents and business income to the insured.
The Carriers’ estimates are woefully deficient in assessing the scope of the Hurricane Ian damages and the costs necessary to bring the property back to its pre hurricane condition. The Carriers ceased communication with the INSURED regarding the damages to the property.
On July 8, 2024, the Carriers sent a letter invoking the arbitration clause of the policy.
The INSURED was forced to hire an attorney to assist them due to Independent Specialty Insurance Company now known as Velocity Specialty Insurance Company, and Certain Underwriters at Lloyd’s and Other Subscribing to Binding Authority B604510568622021 continued failure to adjust its claim properly.
On July 24, 2024, The Carriers received the Letter of Representation from the undersigned’s law firm. Also sent on the same date was the Insureds letter naming their arbitrator.
Statutory Interest
The payment of January 29, 2024, represents the Actual Cash Value (ACV) of the damage to the INSURED’S property at the time of the loss. However, the Carrier failed to pay statutory interest on the undisputed payment in violation of §627.70131(7)(a), Fla. Stat., which provides that any payment of an initial or supplemental claim or portion of such claim made 90 days after the insurer receives notice of the claim, or made more than 15 days after there are no longer factors beyond the control of the insurer which reasonably prevented such payment, whichever is later, bears interest at the rate set forth in s. 55.03
The Carriers violated section 624.155(1)(b)(1), Fla. Sat., when they failed to attempt in good faith to settle the claim when, under all the circumstances, they could and should have done so, had they acted fairly and honestly toward their insured and with due regard for their interests. Specifically, had the Carriers acted fairly and honestly toward the INSURED and with due regard for their interests, the Carriers would have attempted to settle the claim with the INSURED. The Carriers have ignored covered damages during the investigation of the claim.
Within every insurance policy is an implicit duty of good faith and fair dealing. This duty of good faith obligates the insurer to handle its insured’s claims with “the same degree of care and diligence as a person of ordinary care and prudence should exercise in the management of his own business.” Boston Old Colony Ins. Co. v. Gutierrez, 386 So.2d 783 (Fla. 1980). The Carriers had a duty to act in good faith and with due regard for the interests of the INSURED, but failed to do so.
Even though the INSURED has complied with all other post loss obligations under the Policy, the Carriers continue to deny payment to the INSURED that is due and owing under the Policy.
To date, the Carriers have failed and/or refused to provide the INSURED with all the insurance benefits due and owing, despite knowing that the INSURED has sustained covered damages to the insured Property. Despite the INSURED’S repeated pleas, the Carriers have not paid the appropriate amount needed to repair the Property. The carriers have failed to adjust this claim appropriately.
The adjusters assigned to this claim have a duty to adjust and treat all claims equally. Since the beginning of this claim, the representatives on behalf of the Carriers have approached this investigation in a manner prejudicial to the INSURED.
The Carriers have a contractual obligation not to engage in a perfunctory investigation, and to not ignore evidence that which would support the INSURED’S claim. So doing is a breach of the Policy.
The Carriers have a contractual obligation not to look the other way when confronted with facts revealing the possibility of coverage and resisting reasonable interpretations of its policy. This is also a breach of the Policy.
The CURE
This notice is given in order to perfect the right to pursue the civil remedy authorized by Section 624.155, Florida Statutes, should the Carriers fail to cure the violations set forth in this Civil Remedy Notice within the given cure period. While no specific “cure amount” is required for this Civil Remedy Notice to be valid, the INSURED will consider the allegations contained herein “cured” if the Carriers, without any requirement for a release, do the following:
(1) Immediately tender to EMERALD SHORES HOTEL, LLC, payment of all insurance proceeds due and owing to the insured which would reasonably place the Subject Property back in its pre-loss condition.
(2) Immediately tender EMERALD SHORES HOTEL, LLC the appropriate amount of statutory interest for both prior and future payments, pursuant to §627.70131(7)(a), Fla. Stat.
The INSURED continues to remain open to a fair and reasonable settlement offer from the Carriers in an effort to avoid additional delay, costs and expenses, and hereby requests the same prior to the expiration of the statutory “cure” period. The Carriers must act fairly and honestly in their response to the INSURED’S request for a prompt, fair and reasonable settlement offer and resolution of its claim.
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The submitter hereby states that this notice is given in order to perfect the rights of the
person(s) damaged to pursue civil remedies authorized by Section 624.155, Florida Statutes.
Before submitting a Notice using this system, please verify that all text has been entered
correctly and completely. Once the Notice has been submitted, the text cannot be changed
or deleted.
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DFS-10-363
Rev. 10/14/2008
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