Filing Number: 786961
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| Filing Accepted: 10/15/2024 |
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GOLF RIDGE VILLAS CONDOMINIUM
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First Name |
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| Street Address
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20490 NW 7TH AVE |
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MIAMI,
FL
33169
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| Email Address
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SERVICE@LRLC.LEGAL |
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Insured |
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| Last/Business Name* |
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GOLF RIDGE VILLAS CONDOMINIUM INC. |
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First Name |
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ALEX |
| Policy # * |
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CPS7977855 |
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Claim #* |
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02180186 |
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Attorney is Applicable
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| Last Name* |
STERN
First Name *
ALEX
Initial
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| Street Address* |
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16375 NE 18TH AVE., STE. 321 |
| City, State Zip* |
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NORTH MIAMI BEACH
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FLORIDA
33162
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| Email Address * |
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ALEX@LRLC.LEGAL |
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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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SCOTTSDALE INSURANCE COMPANY
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| Insurer Name* |
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| Street Address* |
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,
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NAIC Company Code 41297 |
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| Name of individual responsible for violation (if any):*
JORDAN THOMPSON,
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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 Denial
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Unsatisfactory Settlement Offer
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Unfair Trade Practice
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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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| 624.155(1)(b)(3) |
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Except as to liability coverages, failing to promptly settle claims, when the obligation to settle a claim has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.
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| 626.9541(1)(i)(2) |
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A material misrepresentation made to an insured or any other person having an interest in the proceeds payable under such contract or policy, for the purpose and with the intent of effecting settlement of such claims, loss, or damage under such contract or policy on less favorable terms than those provided in, and contemplated by, such contract or policy.
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| 626.9541(1)(i)(3)(a) |
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Failing to adopt and implement standards for the proper investigation of claims.
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| 626.9541(1)(i)(3)(b) |
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Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue.
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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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| 626.9541(1)(i)(3)(g) |
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Failing to promptly notify the insured of any additional information necessary for the processing of a claim.
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| 626.9541(1)(i)(4) |
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Failing to pay undisputed amounts of partial or full benefits owed under first-party property insurance policies within 60 days after an insurer receives notice of a residential property insurance claim, determines the amounts of partial or full benefits, and agrees to coverage, unless payment of the undisputed benefits is prevented by factors beyond the control of the insurer as defined in s. 627.70131(5).
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| 626.9541(1)(i)(3)(j) |
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Altering or amending an insurance adjuster’s report without:
(I) Providing a detailed explanation as to why any change that has the effect of reducing the estimate of the loss was made; and
(II) Including on the report or as an addendum to the report a detailed list of all changes made to the report and the identity of the person who ordered each change; or
(III) Retaining all versions of the report, and including within each such version, for each change made within such version of the report, the identity of each person who made or ordered such change;
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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.
SCHEDULE OF LOCATIONS
Policy No. CPS7977855 Effective Date 04/28/2024
12:01 A.M. Standard Time
Named Insured
GOLF RIDGE VILLAS CONDOMINIUM
ASSOCIATION I Agent No. 09057
UTS-SP-3 08-96
Prem.
No.
Bldg.
No.
Designated Premises
(Address, City, State, Zip Code) Occupancy
1 1 20400 NW 7TH AVE MIAMI FL 33169 CONDO ASSOCIATION
A. Coverage
We will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss.
1. Covered Property
Covered Property, as used in this Coverage Part, means the type of property described in this section, A.1., and limited in A.2. Property Not Covered, 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:
2. Property Not Covered
Covered Property does not include:
m. Underground pipes, flues or drains;
A. Covered Causes Of Loss
When Special is shown in the Declarations, Covered Causes of Loss means direct physical loss unless the loss is excluded or limited in this policy.
CAUSES OF LOSS – SPECIAL FORM
Words and phrases that appear in quotation marks have special meaning. Refer to Section G. Definitions.
A. Covered Causes Of Loss
When Special is shown in the Declarations,
Covered Causes of Loss means direct physical loss
unless the loss is excluded or limited in this policy.
B. Exclusions
1. We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.
g. Water
(1) Flood, surface water, waves (including tidal wave and tsunami), tides, tidal water, overflow of any body of water, or spray from any of these, all whether or not driven by wind (including storm surge);
(2) Mudslide or mudflow;
(3) Water that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment;
(4) Water under the ground surface pressing on, or flowing or seeping through:
(a) Foundations, walls, floors or paved surfaces;
(b) Basements, whether paved or not; or
(c) Doors, windows or other openings; or
(5) Waterborne material carried or otherwise moved by any of the water referred to in Paragraph (1), (3) or (4), or material carried or otherwise moved by mudslide or mudflow.
This exclusion applies regardless of whether any of the above, in Paragraphs (1) through (5), is caused by an act of nature or is otherwise caused. An example of a situation to which this exclusion applies is the situation where a dam, levee, seawall or other boundary or containment system fails in whole or in part, for any reason, to contain the water.
But if any of the above, in Paragraphs (1) through (5), results in fire, explosion or sprinkler leakage, we will pay for the loss or damage caused by that fire, explosion or sprinkler leakage (if sprinkler leakage is a Covered Cause of Loss).
D. Additional Coverage – Collapse
The coverage provided under this Additional
Coverage, Collapse, applies only to an abrupt
collapse as described and limited in D.1. through
D.7.
1. For the purpose of this Additional Coverage,
Collapse, abrupt collapse means an abrupt
falling down or caving in of a building or any part
of a building with the result that the building or
part of the building cannot be occupied for its
intended purpose.
2. We will pay for direct physical loss or damage to
Covered Property, caused by abrupt collapse of
a building or any part of a building that is insured
under this Coverage Form or that contains
Covered Property insured under this Coverage
Form, if such collapse is caused by one or more
of the following:
a. Building decay that is hidden from view,
unless the presence of such decay is known
to an insured prior to collapse;
b. Insect or vermin damage that is hidden from
view, unless the presence of such damage
is known to an insured prior to collapse;
c. Use of defective material or methods in
construction, remodeling or renovation if the
abrupt collapse occurs during the course of
the construction, remodeling or renovation.
d. Use of defective material or methods in
construction, remodeling or renovation if the
abrupt collapse occurs after the
construction, remodeling or renovation is
complete, but only if the collapse is caused
in part by:
(1) A cause of loss listed in 2.a. or 2.b.;
(2) One or more of the "specified causes of
loss";
(3) Breakage of building glass;
(4) Weight of people or personal property; or
(5) Weight of rain that collects on a roof.
F. Additional Coverage Extensions
2. Water Damage, Other Liquids, Powder Or
Molten Material Damage
If loss or damage caused by or resulting from
covered water or other liquid, powder or molten
material damage loss occurs, we will also pay
the cost to tear out and replace any part of the
building or structure to repair damage to the
system or appliance from which the water or
other substance escapes. This Coverage
Extension does not increase the Limit of
Insurance.
G. Definitions
2. "Specified causes of loss" means the following:
fire; lightning; explosion; windstorm or hail;
smoke; aircraft or vehicles; riot or civil
commotion; vandalism; leakage from fireextinguishing
equipment; sinkhole collapse;
volcanic action; falling objects; weight of snow,
ice or sleet; water damage.
a. Sinkhole collapse means the sudden sinking
or collapse of land into underground empty
spaces created by the action of water on
limestone or dolomite. This cause of loss
does not include:
(1) The cost of filling sinkholes; or
(2) Sinking or collapse of land into manmade
underground cavities.
b. Falling objects does not include loss or
damage to:
(1) Personal property in the open; or
(2) The interior of a building or structure, or
property inside a building or structure,
unless the roof or an outside wall of the
building or structure is first damaged by a
falling object.
c. Water damage means:
(1) Accidental discharge or leakage of water
or steam as the direct result of the
breaking apart or cracking of a plumbing,
heating, air conditioning or other system
or appliance (other than a sump system
including its related equipment and
parts), that is located on the described
premises and contains water or steam;
and
(2) Accidental discharge or leakage of water
or waterborne material as the direct
result of the breaking apart or cracking of
a water or sewer pipe caused by wear
and tear, when the pipe is located off the
described premises and is connected to
or is part of a potable water supply
system or sanitary sewer system
operated by a public or private utility
service provider pursuant to authority
granted by the state or governmental
subdivision where the described
premises are located.
But water damage does not include loss or
damage otherwise excluded under the terms
of the Water Exclusion. Therefore, for
example, there is no coverage under this
policy in the situation in which discharge or
leakage of water results from the breaking
apart or cracking of a pipe which was caused
by or related to weather-induced flooding,
even if wear and tear contributed to the
breakage or cracking. As another example,
and also in accordance with the terms of the
Water Exclusion, there is no coverage for
loss or damage caused by or related to
weather-induced flooding which follows or is
exacerbated by pipe breakage or cracking
attributable to wear and tear.
To the extent that accidental discharge or
leakage of water falls within the criteria set
forth in c.(1) or c.(2) of this definition of
"specified causes of loss," such water is not
subject to the provisions of the Water
Exclusion which preclude coverage for
surface water or water under the surface of
the ground.
SEWER OR DRAIN DEFINITION ENDORSEMENT—FLORIDA
This insurance modifies insurance provided under the following:
CAUSES OF LOSS—BASIC FORMCAUSES OF LOSS—BROAD FORMCAUSES OF LOSS—SPECIAL FORM
Under Section B. Exclusions, paragraph g. Water, subsection (3) the following is added:
For the purpose of this exclusion, “sewer” and “drain” are defined as:
1. “Sewer” means any underground pipe, channel or conduit for carrying water, wastewater or sewage on or away from the premises described in the Declarations;
2. “Drain” means any pipe, channel or conduit for carrying water, wastewater or sewage on or away from the premises described in the Declarations to a “sewer.”
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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.
This Civil Remedy Notice is filed against Scottsdale Insurance Company (“Carrier”) for violations of Florida law, including Fla. Stat. § 624.155 and Fla. Stat. § 626.9541, based on the improper denial of coverage for the insured’s damages.
(“Carrier”) issued insurance policy number CPS7977855 (the “Policy”) to Golf Ridge Villas Condominium (“Policyholder”). The Policy provides insurance coverage for residential property located at 20400 North West 7th Avenue Miami, FL 33169 (the “Property”).
The Policy is an “all-risks” policy, meaning that all damages are covered unless specifically excluded by the Policy. The Policy specifically contains an additional coverage for collapse and an additional coverage extension for water damage.
On or about August 27, 2024, the Property suffered loss covered by the Policy when a broken plumbing line caused water to back up into the Property causing damage. After suffering the covered losses to the Property, Policyholder promptly reported the loss and made a claim against the Policy which was assigned claim number 02180186 by Carrier (the “Claim”). Policyholder substantially complied with all of the Policy’s applicable post-loss conditions, including making the Property available for Carrier’s inspection. The Carrier, however, denied coverage without adequately considering the policy's provisions, especially those that afford additional coverage for necessary repairs.
The Carrier’s denial was primarily based on policy exclusions for water damage associated with sewer or drain lines, citing the policy's Causes of Loss – Special Form and Sewer or Drain Definition Endorsement. However, the Carrier's denial entirely ignored the policy's Water Damage Coverage Extension, which specifically provides coverage for water damage resulting from the accidental discharge or leakage of water as the direct result of the breaking apart or cracking of a system, such as a plumbing or sewer system.
The policy defines water damage under Section c as:
Accidental discharge or leakage of water or steam as the direct result of the breaking apart or cracking of a plumbing, heating, air conditioning, or other system or appliance that is located on the described premises and contains water or steam; and
Accidental discharge or leakage of water or waterborne material as the direct result of the breaking apart or cracking of a water or sewer pipe caused by wear and tear when the pipe is located off the described premises and is connected to or part of a potable water supply system or sanitary sewer system operated by a public or private utility service provider.
The policy further provides for Coverage Extension 2 – Water Damage, Other Liquids, Powder, or Molten Material Damage, which states that if loss or damage is caused by or results from covered water damage, the Carrier will pay the cost to tear out and replace any part of the building or structure necessary to repair the system or appliance from which the water or other substance escapes.
This extension clearly applies to the insured’s loss, as the water damage to the building resulted from the breaking apart or cracking of a system under the policy’s definition of water damage. Further, the Coverage Extension should cover the cost of tearing out and replacing parts of the building necessary to repair the damaged line. However, the Carrier’s denial letter fails to mention or address this critical extension of coverage.
By ignoring this key coverage provision, the Carrier failed to conduct a thorough investigation and to apply the full terms of the policy in its coverage determination. Instead, the Carrier improperly focused on exclusions related to the plumbing issues, misrepresenting the scope of coverage available to the insured under the policy. This failure to consider applicable coverage provisions has delayed necessary repairs to the insured's property and forced the insured to retain legal representation to obtain the benefits they are entitled to under the policy.
The Carrier’s investigation consisted solely of one inspection by a field adjuster, who did not have the specialized expertise to assess the extent of damage to the plumbing system. No licensed plumber or engineer was ever sent by the Carrier to inspect the damaged sewer line or determine whether the water damage was the result of a system failure that should be covered under the policy.
Had the Carrier conducted a proper investigation by involving experts qualified to assess the plumbing system, it would have realized that the water damage was directly caused by the failure of the plumbing system. This failure to conduct a full and proper investigation resulted in the erroneous denial of coverage and constitutes bad faith. The Carrier’s refusal to consider the findings of an expert investigation demonstrates a willful disregard for its obligations under the policy and Florida law.
Moreover, the Carrier's denial letter failed to acknowledge the Water Damage Coverage Extension, which provides coverage for tearing out and replacing parts of the building necessary to access and repair the damaged system. By ignoring this critical coverage extension, the Carrier further demonstrates its failure to act in good faith and its intention to deny claims improperly.
Failure to Investigate Properly: The Carrier failed to perform a reasonable investigation by not considering the full scope of the policy’s terms, including the Water Damage Coverage Extension, which applies to this loss. This violates Fla. Stat. § 626.9541(1)(i)(3)(a), which mandates that insurers adopt and implement proper standards for the investigation of claims.
Improper Denial of Coverage: The Carrier’s failure to acknowledge the Water Damage Coverage Extension and the relevant definition of water damage as defined in the policy constitutes an unreasonable denial of coverage. The policy explicitly provides for the tearing out and replacement of parts of the building to repair the damaged system, but the Carrier ignored this provision. This action violates Fla. Stat. § 624.155(1)(b)(1), which requires insurers to act in good faith in settling claims.
Misrepresentation of Policy Terms: The Carrier focused only on exclusions while failing to disclose the broader coverage provided under the Water Damage Coverage Extension. This misrepresentation of the policy’s terms constitutes a material violation of Fla. Stat. § 626.9541(1)(i)(3)(b).
Failure to Settle in Good Faith: The Carrier failed to settle the claim in good faith by not applying the full terms of the policy, resulting in an unjustified denial. The Carrier’s actions were in violation of Fla. Stat. § 624.155(1)(b)(1).
Carrier must:
Acknowledge full coverage for the loss, including the cost to tear out and replace parts of the building necessary to repair the failed sewer line, as covered under the Water Damage Coverage Extension.
Issue full payment to cover all necessary repairs to the property, including interior damages and the costs associated with accessing and repairing the failed system.
Reimburse the insured for all attorney’s fees and costs incurred as a result of the Carrier’s wrongful denial of coverage.
Implement standards and procedures to ensure that claims are properly investigated and adjusted, including sending qualified experts (e.g., plumbers, engineers) when necessary to evaluate damages.
Provide a reasonable explanation as to why the relevant coverage extension and expert assessments were not considered in the initial denial letter.
Carrier failed to abide by the duties owed its Policyholder, committed unfair insurance trade practices, and violated Florida Statute Section 624.155 by, for example, not making good faith efforts to settle the claim when under the circumstances Carrier could and should have done so had it acted fairly and honestly toward its insured and with due regard for Policyholder’s interests because; by making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made; by failing to promptly settle claims when the obligation to settle a claim has become reasonably clear under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage; by making a material misrepresentation to Policyholder for the purpose and with the intent of effecting settlement of such claims, loss, or damage under such contract or policy on less favorable terms than those provided in, and contemplated by, such contract or policy; and by failing to pay undisputed amounts of partial or full benefits owed under this first-party property insurance Policy within 90 days after an Carrier received notice of the Claim, properly determined the amounts of partial or full benefits, and agreed to coverage because Carrier failed to pay the full amounts due and owing under the Policy within 90 days of the Claim being reported. Moreover, Carrier fails to abide by the duties owed its policyholders, commits unfair insurance trade practices, and violates Florida Statute Section 624.155 with such frequency as to indicate a general business practice by, for example, failing to adopt and implement standards for the proper investigation of claims because in multiple instances including this Claim Carrier failed to conduct a thorough and proper investigation by failing to conduct an investigation designed to discover facts beneficial to Policyholder; misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue by not providing policyholders fair and adequate explanation of the coverages available, not explaining to policyholders the benefits available under an all-risks policy; failing to acknowledge and act promptly upon communications with respect to claims by not responding to policyholders’ submission of documents and requests for information; denying claims without conducting reasonable investigations based upon available information; failing to affirm or deny full or partial coverage of claims, and, as to partial coverage, the dollar amount or extent of coverage, or failing to provide a written statement that the claim is being investigated, upon the written request of the insured within 30 days after proof-of-loss statements have been completed; 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; failing to promptly notify the insured of any additional information necessary for the processing of a claim; or failing to clearly explain the nature of the requested information and the reasons why such information is necessary.
To remedy the violations described herein, Carrier must unconditionally tender the full amount of loss covered by the Policy along with interest and attorney’s fees. This amount must be made payable to Policyholder and Policyholder’s attorney.
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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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