Civil Remedy Filing

Civil Remedy Notice of Insurer Violations

Filing Number: 801203

Filing Accepted: 1/15/2025

Print Filing

Complainant

Last/Business Name *

WESTSIDE LAKESHORE, LLC

First Name

Street Address *

1300 LAKE HOWARD DRIVE SW

City, State Zip *

WINTER HAVEN, FL 33880

Email Address *

JAKUB.HEJL@WESTSIDECG.COM

Complainant Type: *

Insured

Last/Business Name*		WESTSIDE LAKESHORE, LLC		First Name
Policy # *		AMP7545216-00		Claim #*		CLM46797

Attorney

Attorney is Applicable

Last Name*	LUMPKIN First Name * R. HUGH Initial
Street Address*		200 S BISCAYNE BOULEVARD, SUITE 2600
City, State Zip*		MIAMI , FLORIDA 33131
Email Address *		HLUMPKIN@REEDSMITH.COM

Violation

Insurer Type *		Authorized Insurer Unauthorized Insurer

Insurer Name
Insurer Name*		INDIAN HARBOR INSURANCE COMPANY
Insurer Name*
Street Address*
City, State Zip*		,
NAIC Company Code 36940

Name of individual responsible for violation (if any):* LAKESHORE IS CURRENTLY UNAWARE OF THE PERSONS MOST RESPONSIBLE FOR/WITH KNOWLEDGE OF THE FACTS GIVING RISE TO THIS NOTICE, BUT PERSONS WITH KNOWLEDGE OF THOSE FACTS INCLUDE BUT ARE NOT LIMITED TO RANDALL WEST (AMRISC), KARI EDWARDS (AMRISC), AMANDA C
Type of Insurance * Commercial Property & Casualty

Reason for Notice *

	Claim Denial
	Claim Delay
	Unsatisfactory Settlement Offer
	Unfair Trade Practice

* Statutory provision(s) which the insurer allegedly violated.

	624.155(1)(b)(1)		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.
	626.9541(1)(i)(2)		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.
	626.9541(1)(i)(3)(a)		Failing to adopt and implement standards for the proper investigation of claims.
	626.9541(1)(i)(3)(b)		Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue.
	626.9541(1)(i)(3)(c)		Failing to acknowledge and act promptly upon communications with respect to claims.

* Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

DECLARATIONS PAGE Account ID: 1150935 Name and address of the Insured: Westside Capital LLC, 2000 Ponce de Leon Blvd., Suite 600, Coral Gables, FL 33134 Effective From: 04/16/2024 to 04/16/2025 COMMERCIAL PROPERTY COVERAGE PART Certificate/Policy No. Premium Certain Underwriters at Lloyds, London One Lime Street, London EC3M 7HA c/o Amwins Global Risks Limited, 22 Bishopsgate, London EC2N 4BQ, United Kingdom AMR-81726-01 Indian Harbor Insurance Company 505 Eagleview Blvd., Suite 100; Dept: Regulatory Exton, PA 19341-1120 AMP7545216-00 Old Republic Union Insurance Company 370 North Michigan Avenue Chicago, IL 60601 ORAMPR017287-01 GeoVera Specialty Insurance Company 1455 Oliver Road Fairfield, CA 94534 GVS-39330-01 MS Transverse Specialty Insurance Company 15 Independence Blvd, Suite 430 Warren, NJ 07059 TSAMPR0010039-01 National Fire & Marine Insurance Company 1314 Douglas Street, Suite 1400 Omaha, NE 68131 72AMR307135-01 Spinnaker Specialty Insurance Company 1 Pluckemin Way, Suite 102 Bedminster, NJ 07921 SPI-16324-01 Everest Indemnity Insurance Company 100 Everest Way Warren, New Jersey 07059 AMEI001868-24-00 * * * ENDORSEMENT 1 . . . 2. Replacement Cost Valuation shall apply as regards to Real & Personal Property; Except roof coverings to be Actual Cash Value if originally installed or last fully replaced prior to 2019. * * * ENDORSEMENT 2 . . . 2. Form COMPASS SUP DECL 04 18 "Compass Supplemental Declarations" Section B Sublimits of Liability is amended as follows: Sublimit 24. Ordinance or Law is deleted in its entirety and replaced with the following: 24. Ordinance or Law: a. Coverage A: Included in Building Limit. b. Coverage B: 20% of the scheduled Building value, not to exceed $1,000,000. c. Coverage C: Included with Coverage B. d. Coverage D: Included in the Time Element (if covered). e. Coverage E: Included in the Building Limit. * * * ENDORSEMENT 3 It is understood and agreed that the policy is amended as follows: 1. Item D.1. DEDUCTIBLE on form COMPASS SUP DECL 04 18 "Compass Supplemental Declarations is amended as follows and shall apply as respects Westside Lakeshore, 1300 Lake Howard Dr SW, Winter Haven, FL 33880 Location only : D. DEDUCTIBLE: Each claim for loss or damage under this Policy shall be subject to a per Occurrence deductible amount of: 1. Unless a specific deductible shown below applies for the indicated peril(s). 2. Item D.4.a. on Form COMPASS SUP DECL 04 18 "Compass Supplemental Declarations" is amended as follows and shall apply as respects Westside Lakeshore, 1300 Lake Howard Dr SW, Winter Haven, FL 33880 Location only: a. 5.0% of the TIV at each Location, subject to a minimum deductible of $500,000 any one Occurrence 3. Item D.4.b.1) on Form COMPASS SUP DECL 04 18 "Compass Supplemental Declarations" is amended as follows and shall apply as respects Westside Lakeshore, 1300 Lake Howard Dr SW, Winter Haven, FL 33880 Location only: 4.b. Any loss arising out of a Named Storm (which includes Hurricane): 1) 5% of the TIV at each Location, subject to a minimum deductible of $500,000 any one Occurrence. * * * ENDORSEMENT 4 . . . 2. The total Building Values at Westside Lakeshore, 1300 Lake Howard Dr SW, Winter Haven, FL 33880 are increased to $10,362,834 from $8,884,150. 3. The total Rental Values at Westside Lakeshore, 1300 Lake Howard Dr SW, Winter Haven, FL 33880 are increased to $981,554 from $842,163. 4. Form COMPASS SUP DECL 04 18 "Compass Supplemental Declarations" Section B Sublimits of Liability is amended as follows: b. Sublimit 13. Extended Period of Indemnity is deleted in its entirety and replaced with the following: 13. Extended Period of Indemnity: 365 days * * * SECTION II – COVERED CAUSES OF LOSS A. COVERED CAUSES OF LOSS: This Policy insures against all risks of direct physical loss or damage to Covered Property, except as excluded. * * * SECTION III – COVERED PROPERTY A. COVERED PROPERTY: Unless otherwise excluded, this Policy covers the following property owned by the Insured or in which the Insured has an insurable interest while at the scheduled Locations and within 1,000 feet thereof (except contractor’s equipment shall be per the Policy Coverage Territory): 1. Real and Personal property, including Contractor’s Equipment; * * * SECTION IV – VALUATION Except as otherwise provided in this Paragraph, adjustment of loss or damage under this Policy shall be valued at the cost to repair or replace (whichever is less) at the time and place of the loss with materials of like kind and quality, without deduction for depreciation and obsolescence. The Insured may elect to rebuild on another site, provided that, such rebuilding does not increase the amount of loss or damage that would otherwise be payable to rebuild at the same site. However, if the property is not repaired, rebuilt or replaced as soon as reasonably possible after the loss or damage, the value of the property will be determined on an Actual Cash Value basis. In the event the Insured elects to have the loss or damage settled on an Actual Cash Value basis, the Insured may still make a claim on a replacement cost basis, provided the Insured notifies the Companies within 180 days after the loss or damage. * * * SECTION V – TIME ELEMENT COVERAGE GROSS EARNINGS This Policy is extended to cover the actual loss sustained by the Insured during the Period of Interruption directly resulting from a Covered Cause of Loss to Covered Property. A. ACTUAL LOSS SUSTAINED: In the event the Insured is prevented from producing goods or from continuing its business operations or services and is unable: 1. To make up lost production within a reasonable period of time (not to be limited to the period during which production is interrupted), or 2. To continue business operations or services, all through the use of any property or service owned or controlled by the Insured, or obtainable from other sources, whether the property or service is at an insured Location or through working extra time or overtime at any other substitute location(s), including any other location(s) acquired for the purpose, then the Companies shall be liable, subject to all other conditions of this Policy not inconsistent herewith, for the actual loss sustained of the following during the Period of Interruption: 1. GROSS EARNINGS less all charges and expenses which do not necessarily continue during the interruption of production or suspension of business operations or services. For the purpose of this coverage, GROSS EARNINGS means: 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 the Insured; c. Plus all other earnings derived from the operation of the business. In determining net sales, in the event of loss hereunder, for mercantile or non-manufacturing operations, any amount recovered under Property Damage policies for loss or damage to or destruction of merchandise shall be included as though the merchandise had been sold to the Insured's regular customers. In determining the amount of loss payable under this coverage, due consideration shall be given to the experience of the business before the Period of Interruption and the probable experience thereafter had no loss occurred, and to the continuation of only those normal charges and expenses, including payroll (subject to the Ordinary Payroll restriction below), that would have existed had no interruption of production or suspension of business operations or services occurred. There is no coverage for any portion of the Insured’s Ordinary Payroll expense, unless a specified number of days for Ordinary Payroll are shown elsewhere and values have been included in the reported Time Element Values. In such case, the Companies will pay Ordinary Payroll for that number of days only. The number of days need not be consecutive, but must fall within the interruption of production or suspension of business operations or services, or fall within the extension of that period, if an extension is provided. Ordinary Payroll means the entire payroll expense for all employees of the Insured except officers, executives, department managers, employees under contract, and other essential employees. 2. EXPENSE TO REDUCE LOSS: Expenses, over and above normal operating expenses, necessarily incurred by the Insured in making up lost production or in reducing loss otherwise payable under this coverage are covered hereunder, but in no event shall these Companies be liable for an amount greater than that for which it would have been liable had the Insured been unable to make up any lost production or to continue any business operations or services. B. PERIOD OF INTERRUPTION: In determining the amount payable under this coverage, the Period of Interruption shall be: 1. The period 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, either: a. normal operations resume; or b. physically damaged buildings and equipment could be repaired or replaced and made ready for operations under the same or equivalent physical and operating conditions that existed prior to such loss or damage, whichever is less. 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. However, the inability to procure destroyed mercantile stock or suitable raw materials and supplies to replace similar stock or materials and supplies physically damaged or destroyed shall not increase the Period of Interruption. 3. For Property under construction: The time period between the anticipated date of substantial completion had no covered loss occurred and the actual date of completion. In calculating the amount of loss, due consideration will be given to the actual experience of the business compiled after substantial completion and start-up. The Period of Interruption does not include any additional time: a. Required for re-staffing or re-training employees; or b. Due to the Insured's inability to resume operations for reasons other than those enumerated in B.2.a. through B.2.c., inclusive, above; or c. Required for making change(s) to the buildings, structures, or equipment for any reason except as provided in the Ordinance or Law coverage, if such coverage is provided by this Policy. C. ADDITIONAL TIME ELEMENT COVERAGES . . . 2. RENTAL VALUE: As respects Covered Property held for rental to others, this Policy is extended to cover the loss sustained during the Period of Interruption, but not exceeding the reduction in Rental Value less charges and expenses which do not necessarily continue. Rental Value means the sum of: a. The total anticipated gross rental income from tenant occupancy of the described property as furnished and equipped by the Insured including taxes, rent based on percentage of sales, and other charges paid by tenants in respect of the leased premises; and b. The amount of all charges which, by the terms of a written lease, are the legal obligation of the tenant(s) and which would otherwise be obligations of the Insured; and c. The fair rental value of any portion of such property which is occupied by the Insured. Due consideration will be given to the historic rental expenses prior to the loss and the probable expenses thereafter. . . . 5. CONTINGENT TIME ELEMENT: If direct physical loss or damage to the real or personal property of a direct supplier or direct customer of the Insured is damaged by a Covered Cause of Loss under this Policy, and such damage: a. wholly or partially prevents any direct supplier to the Insured from supplying their goods and/or services to the Insured; or b. wholly or partially prevents any direct customer of the Insured from accepting the Insured's goods and/or services; then this Policy is extended to cover the actual loss sustained by the Insured during the Period of Interruption with respect to such real or personal property. The property of the supplier or customer which sustains loss or damage must be of the type of property which would be Covered Property under this Policy. This coverage applies to the Insured’s direct suppliers or direct customers located in the Policy’s Coverage Territory. . . . 9. EXTENDED PERIOD OF INDEMNITY: Coverage is provided for such additional length of time as is required to restore the Insured's business to the condition that would have existed had no loss occurred, commencing with the later of the following dates: a. the date on which the liability of the Companies 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 elsewhere starting with the later of a. or b. above. This Extended Period of Indemnity does not apply to any Additional Time Element Coverages, except RENTAL VALUE (Par. 2. above) or SOFT COSTS (BUILDER’S RISK) Net Business Income or Net Rental Income (Par. 4.i. above). This additional coverage does not include coverage for any increase in loss due to fines or damages for breach of contract or for late or non-completion of orders, or penalties of any nature. * * * SECTION VIII – POLICY DEFINITIONS S. Hurricane: A hurricane is a storm system that has been declared to be a Hurricane by the National Hurricane Center of the National Weather Service. . . . . . . Y. Occurrence means any one loss, disaster, casualty, incident or series of losses, disasters, casualties or incidents, not otherwise excluded by this Policy and arising out of a single event or originating cause and includes all resultant or concomitant insured losses. The occurrence must occur during the policy period.

* Facts and circumstances giving rise to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

Indian Harbor Insurance Company (the “Insurers”), as part of the group of insurers providing coverage under Account ID 1150935, issued a commercial property policy bearing policy number AMP7545216-00 ( “Policy”) to Westside Lakeshore, LLC (“Lakeshore”). Pursuant to the statement of values, the Policy affords coverage on 1300 Lake Howard Drive SW, Winter Haven, FL 33880 (the “Property”) in the amount of at least $10,362,834 for property damage, at least $250,000 for personal property, and at least $984,554 for business income. It covers the policy period spanning April 16, 2024 to April 16, 2025. On or about October 9, 2024, Hurricane Milton made landfall near Siesta Key, Florida as a category 3 hurricane with wind speeds of at least 120 miles per hour. Hurricane Milton moved in an eastward direction, with the eye of the storm passing just south of Winter Haven and exited into the Atlantic Ocean on October 10, 2024. Hurricane Milton’s winds caused extensive damage (and/or exacerbated prior, covered 2022 hurricane damage) to the Property, including to its windows, doors, roof, and interior (the “Loss”). Lakeshore timely reported the Loss to the Insurers. The Insurers appointed Sedgwick Delegated Authority (“Sedgwick”) as the independent adjusting firm to investigate and adjust the Loss on behalf of the Insurers and assigned file no. CLM46797 (the “Claim”). We refer to Sedgwick and the Insurers interchangeably. On or about November 7, 2024, Lakeshore wrote to the Insurers requesting that they promptly begin their investigation of the damage to the Property in order to timely adjust the Claim. In response, and without having commenced their investigation, the Insurers sent Lakeshore a letter stating “[w]e are in receipt of your claim for Hurricane Milton's damage that caused minor impacts reported on November 8th, 2024.” The Insurers’ curious choice of the phrase “minor impacts” prior to conducting any investigation whatsoever marked the start of the Insurers’ campaign aimed at artificially minimizing Lakeshore’s Loss to improve their bottom line. As the Insurers were delaying their investigation, Lakeshore wrote to the Insurers again on November 20, 2024 requesting that they provide a date as soon as possible for an inspection of the Property. Lakeshore also took this opportunity to request an advance payment to mitigate further damage from Hurricane Milton. One-and-a-half months after the Loss (November 21, 2024), and only after Lakeshore’s follow-up, the Insurers performed their first inspection of the Property through Engle Martin. Lakeshore then prepared a data room and gave access to the Insurers so that they could review all of the materials Lakeshore had gathered related to the Loss. Lakeshore also informed the Insurers that, at that moment, it estimated its loss at around $6,950,000. While Lakeshore was completely transparent with the Insurers, the Insurers refused to reciprocate. The Insurers wrote to Lakeshore on November 21, 2024 misrepresenting that Lakeshore’s deductible was 10% of the total insured value. This was a continuation of the Insurers’ attempt at minimizing Lakeshore’s Loss. As Lakeshore noted to the Insurers - pointing out the proper endorsement - the deductible was actually 5%. Thwarted, the Insurers thereafter conceded Lakeshore was correct. This is a particularly concerning misrepresentation, as a less experienced consumer may have not detected the Insurers’ misrepresentation (which would amount to a significantly lower insurance payout than was otherwise due). On November 25, 2024, Lakeshore sent a letter to the Insurers wherein it explained its concern about the manner and pace of Sedgwick’s adjustment of the Claim and re-iterated that the estimated losses were then thought to be around $6,950,000. Lakeshore sought a $1,500,000 advance payment and warned that its residents were becoming impatient and threatening going to the media with complaints. Lakeshore further explained that the advance payment was necessary to mitigate future damage and ameliorate immediate tenant related concerns to prevent lost rent. The Insurers, however, continued to drag their feet. On November 27, 2024, the Insurers wrote to Lakeshore explaining that they were still waiting on the field report from Engle Martin and other supporting documents from Lakeshore relating to the roof. While the Insurers were apparently content to hurry Lakeshore for these documents, they apparently did not require the same haste from their own vendor, Engle Martin. The Insurers issued their first advance payment to Lakeshore. This payment was well short of the amount Lakeshore explained and detailed it needed. The Insurers did not provide a sufficient explanation for their failure to issue the full $1,500,000 advance payment. Rather, they admitted that the size of the payment was dependent on their internal approval threshold limit and not based on Lakeshore’s actual damages and needs. This was a continuation of the Insurers’ strategy of artificially minimizing Lakeshore’s Loss. On December 9, now two months after the Loss, Engle Martin finally issued its inspection report to the Insurers. Lakeshore requested a copy of said report to understand the Insurers’ position, including what further information the Insurers may need in order to get on the same page as Lakeshore. The Insurers, however, refused to provide the report, claiming it as privileged. This is yet another curious statement, as it is not a privileged document by its nature. Unless the Insurers were anticipating litigation even before making a final claim decision in violation of applicable law. And if the Insurers were sincere in their desire to adjust the Claim fairly, they would provide it so that Lakeshore could understand the basis for their decisions. The Insurers’ refusal to do so is yet another example of the Insurers’ strategy of minimizing Lakeshore’s Loss by purposefully withholding relevant information and making the process more difficult and frustrating than it needs to be. Such conduct by the Insurers may, in other cases, lead a less experienced consumer to accept a lower ultimate payment in exchange for closing out a claim and moving on, frustrated by the Insurers’ continuing delay, deception, and obfuscation. On December 11, 2024, Lakeshore sent a second letter to the Insurers again detailing its concerns with the Claim adjustment and providing additional documentation in support of Lakeshore’s claimed Loss, including roofing related proposals, emergency repair invoices, and a hygienist report. Lakeshore also took the opportunity to explain that it was increasing its request for an advance payment to $3,264,393 and its estimate to $7,666,005 due to the discovery of additional damages stemming from Hurricane Milton (and worsening damage due to Insurers’ failure to adequately adjust the Claim). Lakeshore also explained that several tenants had now broken their leases and vacated the Property due to the unrepaired damages (which the Insurers refused to pay for), such that Lakeshore had now suffered lost rents in the amount of at least $71,857. Lakeshore estimated that the total lost rents stemming from Hurricane Milton may approach $500,000 if the Insurers did not promptly issue the necessary payment to fully repair the Property. The Insurers continued to delay and refused to meaningfully and timely engage with Lakeshore. On December 18, 2024, Lakeshore sent a third letter to the Insurers again detailing its concerns with the Claim adjustment and warning that the Insurers’ failure to issue a significant advance payment risked creating circumstances whereby the tenants would cancel their leases due to unrepaired damage (as a result of the Insurers’ nonpayment). Lakeshore further questioned the Insurers’ undue delay, particularly considering the extensive documentation and access to the Property provided by Lakeshore. On or about December 31, 2024, now almost three months after the Loss, the Insurers issued a second advance payment and conducted its second round of inspections through Envista Forensics, Engle Martin, and LLBC Building Consultants. Several of these inspections were originally scheduled by the Insurers in late January 2025 (in line with the Insurers’ continuous delay), but the Insurers begrudgingly moved them up after Lakeshore’s representatives repeatedly insisted that the Insurers do so. The advance payment was also still short of the initial $1,500,000 request from Lakeshore, and far short of the revised request in the amount of $3,264,293. And once again, the Insurers failed to provide a satisfactory explanation of their underpayment as part of their low-ball payment strategy. On January 9, 2025, Lakeshore sent a fourth letter to the Insurers which attached its engineering report and provided requested lost rent documentation. Lakeshore also further updated its damage estimate and increased the amount of lost rent sought, which was calculated based on lost rent from tenants who had vacated units and others who refused to pay due to the unrepaired damages at the Property. Lakeshore warned these figures would only increase if the Insurers refused to fully reimburse Lakeshore in order to allow it to make the necessary repairs. To date, now more than three months after the Loss, the Insurers have provided no additional payments, final claims decision, estimate, engineering report, or explanation for their underpayments. Nor have the Insurers provided an explanation for their apparent rejection of Lakeshore’s estimate and engineering report. In short, the Insurers have continued to delay resolution of the Claim and have failed to meaningfully engage with Lakeshore. Rather, they have sought only to drag their feet and minimize Lakeshore’s Loss. In the meantime, it is has become significantly more expensive for Lakeshore to purchase the new insurance coverage required by lenders due to the open Claim. Lakeshore believes that that the Insurers understand that delays in adjusting the Claim ultimately create further pressure on Lakeshore (and other consumers in general) which the Insurers intend on using to exhaust Lakeshore into accepting a lower ultimate payment in exchange for closing out the Claim. In light of the above, the Insurers have not attempted in good faith to settle the Claim arising from the Hurricane Milton damage when, under all the circumstances, they could and should have done so had they acted fairly toward Lakeshore and with due regard for its interests in violation of section 624.155(1)(b)(1), Florida Statutes. The Insurers have also engaged in unfair claim settlement practices by making material misrepresentations to Lakeshore for the purpose and with the intent of effecting settlement of its Claim and Loss on less favorable terms than those provided in, and contemplated by, the Policy in violation of section 624.9541(1)(i)(2); failing to adopt and implement standards for the proper investigation of claims in violation of section 626.9541(1)(i)(3)(a); misrepresenting pertinent facts and insurance policy provisions relating to the coverages at issue in violation of section 626.9541(1)(i)(3)(b); failing to acknowledge and act promptly upon communications with respect to claims in violation of section 626.9541(1)(i)(3)(c). Upon information and belief, the Insurers commit the above-listed unfair claim settlement practices with such frequency as to indicate a general business practice. To cure the circumstances giving rise to the violations described in this notice, the Insurers must promptly tender $8,069,040.94 to Lakeshore, minus the applicable deductible and prior payments.

Comments

User Id		Date Added		Comment
emerchant@berklawfirm.com		03-14-2025		R. Hugh Lumpkin Reed Smith, LLP 200 S. Biscayne Boulevard, Suite 2600 Miami, Florida 33131 Email: HLumpkin@Reedsmith.com Re: Response to Civil Remedy Notice of Insurer Violation Complainant: Westside Lakeshore, LLC Insured: Westside Capital, LLC Account No.: 1150935 Policy No.: AMP7545216-00 Claim No.: 4245766 DFS File No.: 801203 Accepted Date: January 15, 2025 Our File No: 201603.0067 Dear Hugh Lumpkin, We represent Indian Harbor Insurance Company (“Indian Harbor”) in connection with the above-referenced matter. We are in receipt of the Civil Remedy Notice of Insurer Violations (“CRN”), submitted on behalf of your client, Westside Lakeshore, LLC (the “Claimant”) pursuant to the policy issued to Westside Capital, LLC (the “Insured”) . We note the CRN was accepted by the Department of Financial Services on January 15, 2025, with filing number 801203. Please accept this correspondence as Indian Harbor’s response to the CRN. INTRODUCTION As explained herein, no violations of Florida’s statutes or commercial insurance policy number AMP7545216-00 (the “Policy”) have occurred. Indian Harbor entirely denies all violations and inferences alleged by the CRN. As a preliminary matter, the Policy contains an “Arbitration Clause,” which states, in relevant part, as follows: All matters in difference between the Insured and the Companies (hereinafter referred to as “the parties”) in relation to this insurance, including its formation and validity, and whether arising during or after the period of this Insurance, shall be referred to an Arbitration Tribunal in the manner hereinafter set out. * * * The seat of the Arbitration shall be in New York and the Arbitration Tribunal shall apply the law of New York as the proper law of this insurance. See Policy Form COMPASS 04 18, at page 24 of 42. Based on this clear language of the Policy, New York law must be applied to, “all matters in difference,” between the Insured and Indian Harbor. Accordingly, Florida law, including that on which the CRN relies, has no bearing on this matter and, therefore, the CRN is legally deficient on this ground, alone. Where foreign insurers, like Indian Harbor, issues insurance to a Florida resident, or the insurance involves interstate commerce, the insurance falls within the broad reach of the Federal Arbitration Act (“FAA”). See Sims v. Clarendon Nat’l Ins. Co., 336 F. Supp. 2d 1311, 1316 (S.D. Fla. 2004) (“Because the Policy was issued by a foreign corporation to a Florida resident, it involves interstate commerce and the FAA applies.”); Hart v. Orion Ins. Co., 453 F. 2d 1358 (10th Cir. 1971); Kong v. Allied Prof’l Ins. Co., 750 F. 3d 1295 (11th Cir. 2014). As a result, and because the Policy issued by Indian Harbor to the Insured involves interstate commerce, the FAA applies. Furthermore, arbitration requirements under the FAA cannot be preempted by Florida Statutes §624.155 pursuant to the McCarren-Ferguson Act 15 USC §1011 et seq. (“MFA”). This is because: (1) Florida Statute §624.155 is not a statute that, “regulates the business of insurance,” and, therefore, cannot preempt the FAA under the MFA; and (2) the Policy’s arbitration clause is governed by the New York Convention on the Recognition of and Enforcement of Foreign Arbitral Awards (the “Convention” 9 U.S.C.S. §§201-208), which is an international arbitration agreement to which the MFA does not apply. In Corpus Christi Indep. Sch. Dist. v. AMRISC, LLC, 2019 U.S. Dist. LEXIS 78699, 10 (E.D.N.Y. May 9, 2019), the court addressed the same arbitration clause found within the subject Policy. The court determined that statutory bad faith actions fall within the scope of the arbitration clause, because its language dictates only that the parties’ dispute be “in relation to” the Policy’s insurance for the arbitration clause to apply. The Corpus Christi court also noted that because the relationship between the parties (Insured/Insurer) was an insurance relationship, nearly all disputes between the parties would fall under the broad scope of the arbitration agreement. The court further reasoned that, “Where, as here, the agreement between the parties contains a broad arbitration clause…all issues that touch matters within the main agreement [are] to be arbitrated.” Accordingly, the Corpus Christi court went on to specifically hold that the insured’s statutory bad faith claims, “plainly ‘touch matters’ within the insurance agreement.” Id. at 12 (internal citations and quotations omitted). The court in Ytech 180 Units Miami Beach Invs. LLC v. Certain Underwriters at Lloyd's, 359 F. Supp. 3d 1253, 1265 (SD Fla. February 12, 2019) also recently addressed an identical arbitration clause and found that an agreement to arbitrate “all matters in difference…in relation to this insurance” to mean just that. Specifically, regarding the delegation clause within the arbitration agreement, the YTech court found that “…the only reasonable interpretation is that the Parties ‘clear[ly] and unmistakabl[ly]’ agreed to give an arbitrator exclusive authority to resolve any dispute relating to the Policy.” Id. (emphasis in original). See also Certain Underwriters at Lloyd's, London v. Vintage Grand Condo. Ass'n, Inc., 2019 U.S. Dist. LEXIS 22709, at 5 (S.D.N.Y. Feb. 6, 2019) (holding that an identical arbitration clause was "compulsory" and that "any such dispute must be arbitrated. Period. End of story"). As in Corpus Christi and Ytech, Florida law has no bearing on any extra-contractual allegations and/or claims (i.e., “bad faith” claims) raised by the Insured in connection with the Policy as all such claims are governed by the law of New York. Next, even if Florida law applied to the instant matter, the CRN’s lack of specificity fails to comply with Florida law; thus, the CRN should be rejected and returned, on these grounds, as well. Contrary to the instructions of the CRN form, the CRN fails to, “identify the person or persons representing the insurer who are most responsible for/knowledgeable of the facts giving rise to the allegations in this notice.” Furthermore, the CRN provides a laundry list of Policy provisions that the Insured claims Indian Harbor violated, without presenting supporting, factual allegations to substantiate its claim. Florida’s CRN form instructs complainants, in relevant part, as follows, “To enable the insurer to investigate and resolve your claim, describe the facts and circumstances giving rise to the insurer’s violation as you understand them at this time.” As explained further, below, the CRN falls short of these instructions and merely asserts allegations that are inconsistent with the actual circumstances surrounding this matter. Accordingly, Indian Harbor wholly denies the CRN’s allegations, state all inferences suggested by the CRN’s allegations are without merit, and denies all such inferences in their entirety. Furthermore, under Florida law, a CRN which is vague, or written in general terms, fails to satisfy the specificity requirement of the statute. See Heritage Corp. of South Fla., 580 F. Supp. 2d at 1300; 316, Inc., 625 F. Supp. 2d at 1193; see also Rousso, 2010 WL 7367059 at 3-6; Valenti v. Unum Life Ins. Co. of America, 2006 WL 1627276 (M.D. Fla. 2006); Julien v. United Prop. & Cas. Ins. Co., 311 So. 3d 875 (Fla. 4th DCA 2021). Indian Harbor denies all allegations of statutory violations, acts of bad faith, and improper claim handling. Indian Harbor always has, and always will, work in good faith to diligently investigate, evaluate, adjust, and resolve all claims, including the Insured’s, in full accordance with the Policy and applicable law. Furthermore, as explained herein, Indian Harbor has always handled the Insured’s claim honestly, properly, in good faith, and with full regard for the Insured’s interests. BACKGROUND The Policy provided certain insurance coverage, in pertinent part, for the commercial building located at: 1300 Lake Howard Dr. SW, Winter Haven, Florida 33880 (the “Property”), during the one-year term commencing April 16, 2024, subject to the Policy’s terms, conditions, limitations, exclusions, endorsements, and applicable deductibles. The Property was originally constructed in 1985, and is used as an apartment building/complex. Furthermore, the Property contains a 5% TIV, or $586,969.40, in regard to the subject loss. Indian Harbor is one of multiple insurers participating in the contract with several, not joint, liability limited to its participation amount in the Contract Allocation Endorsement. We note the correct claim number for this matter is 4245766 and the CRN it misidentifies the claim number as “CLM46797.” On November 8, 2024, nearly a month after the alleged loss, Indian Harbor received first notice of the Insured’s claim for damages reportedly sustained by the Property, on or about October 9, 2024, due to Hurricane Milton. The claim was handled by Sedgwick Delegated Authority (“SDA”), on behalf of the insurers subscribing to the Policy. In its November 8, 2024 correspondence, SDA acknowledged receipt of the Insured’s claim. This letter requested a preliminary list of information from the Insured and advised that additional information may be needed as the investigation progressed. Shortly thereafter, the insurers subscribing to the Policy (hereinafter, “Insurers”) retained field adjusters, Robert Carr and David Alvarez, of Engle Martin (“Engle Martin”), a building consultant, Karl Robinson, of LLBC Building Consultants (“LLBC”), and a structural engineer, Luke Griffin, P.E. of Envista Forensics (“Envista”) to inspect the Property and evaluate the damage claimed. Additionally, Jeffery Williams, of Matson, Driscoll & Damico Forensic Accountants (“MDD”), was retained in order to evaluate the Insured’s claim for loss of business income. From the beginning, Engle Martin made numerous attempts to contact the Insured to conduct an inspection of the Property. However, the Insured did not return Engle Martin’s telephone calls and messages until November 20, 2024, at which time Engle Martin coordinated their inspection of the Property for November 21, 2024, the following day. On November 27, 2024, the Insured returned SDA’s telephone call and SDA clarified the Policy’s deductible with the Insured’s representative. After the telephone call, SDA sent correspondence memorializing the conversation, which reflected that the Insured’s prior, yet still active, Hurricane Ian claim was being reviewed to rule out any duplicate claim and damage previously paid and/or not covered by the Policy. This correspondence further clarified the 5% deductible, advised it was securing an advance payment, and requested the correct address to send the advanced payment. Shortly thereafter, in correspondence dated December 3, 2024, SDA advised of an advanced payment of $250,000 while it continued the investigation of the Insured’s claim. On December 10, 2024, Engle Martin requested additional information to support the Insured’s claim, as the documents received at that time amounted to a total cost of $208,850. This correspondence further requested additional information to support the Insured’s claim, which included costs associated with temporary repairs, roof replacement, façade paint, water restoration, interior repairs, HVAC repairs, electrical repairs, elevator and equipment repairs, exterior window and door repairs/replacements, and loss of rents. Notably. The Insured had not provided the pertinent information requested by MDD. The request for this additional information was further memorialized the following day by SDA under a reservation of rights. Nonetheless, that same day, the Insured sent correspondence requesting an immediate, advanced payment totaling $3,264,393.03, more than double its previously requested advance payment, and advised of an estimated reserve requirement totaling $7,716,005.00. This letter notably attached the Insured’s advanced payment estimate, summary estimate of damage, total estimate of damage, temporary repair summary, industrial hygienist report, contractor repair estimate, loss of rents, and miscellaneous documents, which were not entirely responsive to Engle Martin and SDA’s request for additional information. The Insured’s correspondence further requested Engle Martin’s report so that it could review Engle Martin’s findings. The Insured was advised that this information would not be produced. LLBC attempted to coordinate its inspection of the Property and contacted the Insured’s representative on December 10, 2024 and requested to be able perform its inspection on December 12, 2024, but received no response. On December 12, 2024 LLBC e-mailed and spoke to the Insured’s representative and advised it would like to inspect the Property that afternoon. However, the Insured never spoke to LLBC again on that day and did not respond to LLBC’s attempts to coordinate an inspection on December 13, 2024 the following day. The Insured did not respond to LLBC’s attempts to coordinate an inspection until December 16, 2024, wherein LLBC advised its calendar was full. Nonetheless, LLBC worked to coordinate the inspection as quickly as possible. LLBC and Envista subsequently inspected the Property in late December and early January, dates that accommodated the Insured’s request. On December 30, 2024, an additional advance payment of $750,000 was issued to the insured, for a total advance payment of $1,000,000. Notably, the $1,000,000 was issued after factoring the $586,969.40 deductible, for a total advance consideration of $1,586,969.40, while SDA continued its investigation of the claim. Thereafter, the Insured’s representative sent additional correspondence dated January 9, 2025, which demanded immediate payment for property damage totaling $7,795,755.13 less depreciation, less the deductible, and less the $1,000,000 already issued by the Insurers. In correspondence dated January 14, 2025 Indian Harbor responded to the Insured’s December 11, 2024 request for advanced payment advising that Indian Harbor was continuing its investigation, advised of the $15,000 mold limitation, requested the Insured’s Sworn Statement in Proof of Loss (“SSPOL”), which the Insured failed to provide, and advised of some of the confusion caused by the Insured contacting multiple individuals that were not involved with the claim. In response, the Insured filed the subject CRN the following day. As the investigation was ongoing, Indian Harbor sent correspondence responding to the Insured’s January 9, 2025 letter demanding $7,795,755.13 for property damage and $273,285.81 for lost rents. This correspondence requested the Insured’s examination under oath (“EUO”) in accordance with the Policy, and tentatively set the Insured’s EUO for March 4, 2025. CONCLUSION As can be gleaned from the above, the CRN’s allegations are contrary to the actual facts surrounding Indian Harbor’s handling of the instant claim. Despite the CRN’s assertions, Indian Harbor, as well as all others subscribing to the Policy, promptly and properly adjusted the Insured’s claim by way of a thorough investigation of the subject loss with the aid of qualified, licensed professionals. As evidenced by the claim history described herein, Indian Harbor always acted fairly and honestly towards the Insured, with due regard for the Insured’s interests. Upon receiving notice of the Insured’s claim, Indian Harbor promptly began its comprehensive investigation and adjustment of the reported loss, which, to date, has yielded advanced payments to the Insured, totaling $1,000,000. Moreover, Indian Harbor is continuing to work with the Insured towards an amicable resolution and adjustment of this matter. Accordingly, based on the actual facts and circumstances surrounding the Insured’s claim, the CRN’s allegations are simply unfounded, unsubstantiated, and meritless. Although this response is meant to be comprehensive, it is based upon the limited and vague allegations asserted within the CRN, along with the information Indian Harbor received, to date. Accordingly, this response is not necessarily exhaustive and should not preclude Indian Harbor from later asserting additional reasons and explanations to evidence why the CRN is legally deficient. Further, neither this response, nor any action by Indian Harbor, should be construed as a waiver of any rights, privileges, or defenses available under the Policy or the law; rather, Indian Harbor expressly reserves all rights, privileges, and defenses available under the Policy and/or the law. We trust this correspondence adequately addresses the matters raised in the CRN; however, please do not hesitate to contact the undersigned, should you have any questions, concerns, or requests for additional information concerning this matter. Sincerely, /s/ Evelyn M. Merchant Evelyn M. Merchant, Esq. cc: Florida Department of Financial Services Bureau of Consumer Assistance Civil Remedy Section Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0322

Acknowledgement
*	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.

DFS-10-363
Rev. 10/14/2008