Civil Remedy Notice of Insurer Violations
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Filing Number:     803744
Filing Accepted:  1/27/2025
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Complainant
Last/Business Name *  
GULF COAST REHABILITATION CENTER, INC. (“GCRC”) AND 1937 JENKS, LLC   First Name  
Street Address * 1819 WEAKFISH WAY
City, State Zip * PANAMA CITY BEACH, FL 32408
Email Address * TLD@BEGGSLANE.COM
Complainant Type: * Insured
Insured
Last/Business Name*   GULF COAST REHABILITATION CENTER, INC. (“GCRC”)TFHROUGH 1937 JENKS, LLC   First Name  
Policy # * MKLV10XP002561 Claim #* MXBP99602
Attorney
Attorney is Applicable
Last Name* DIDIER First Name * TERRIE Initial L
Street Address* 501 COMMENDENCIA ST.
City, State Zip* PENSACOLA , FLORIDA 32502
Email Address * TLD@BEGGSLANE.COM
Violation
Insurer Type *   Authorized Insurer Unauthorized Insurer
 
Insurer Name*   EVANSTON INSURANCE COMPANY
NAIC Company Code 35378
 
Name of individual responsible for violation (if any):* SEDGWICK AND MKA
Type of Insurance * Commercial Property & Casualty   
Reason for Notice *
Claim Delay
Unfair Trade Practice
Other : Other
* 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)(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.
626.9541(1)(i)(3)(g) Failing to promptly notify the insured of any additional information necessary for the processing of a claim.
* Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

SPECIFIC POLICY LANGUAGE THAT IS RELEVANT TO THE VIOLATION [Search terms: Consequential Loss – Contamination Cleanup – Debris Removal – Demolition & Increased Cost of Construction – Land improvements – Post Loss Inflation] – Valuation – Definitions – Additional Insureds] I. Declarations A. The Insured LaVie Care Centers LLC DBA Consulate Health care . . . and any other party or interest that the Insured is required by contract or agreement to insure; all hereafter referred to as the “Insured.” [Consulate was required by contract/lease agreement with GCRC to insure it for the loss GCRC sustained by Hurricane Michael. GCRC was required by contract/lease agreement with 1937 Jenks LLC to insure the property for the loss sustained by Hurricane Michael.] D. Limits of Liability In the event of loss or damage insured under this policy, this Insurer shall be liable for its proportional share of $200,000,000 per Occurrence, and its proportional share of the following program per Occurrence and/or policy year Annual Aggregate sublimits of liability excess of policy deductibles. [and listed sublimits, including:] $ 500,000 Claim Preparation Expenses [as defined at VIII, Extensions of Coverage, ¶G, p. 35 of the Policy] $ 5,000,000 Consequential Loss [as defined at III., Property Insured, ¶B.9., p. 15 of the Policy] $ 500,000 Contamination cleanup [as defined at III, Property Insured, ¶B.2., p. 14 of the Policy] $ 5,000,000 Debris Removal and Cost of Cleanup or 25% o the …., whichever is greater [as defined at III., Property Insured, ¶B.1, p. 13 of the Policy] $25,000,000 Demolition & Increased Cost of Construction [as defined at III., Property Insured, ¶B.15, p.16 of the Policy] $ 1,000,000 Land Improvements [as defined at V., Definitions, p. 43 of the Policy] $ 1,000,000 Post Loss Inflation [as defined at I. Declarations, ¶E., p. 8 of the Policy] $ 5,000,000 Rental Value [as defined at V, Time Element, ¶C., p. 21 of the Policy] E. Currency 3. This Policy insures the loss, known as ‘post loss inflation,’ incurred …. III. Property Insured Except as hereinafter excluded, this Policy insures: A. The insurable interest of the Insured in all real and personal property of every kind and description . . . within the Policy territory . . . . B. Additional Coverages 1. Debris Removal and Cost of Clean Up Notwithstanding the provisions of any exclusion contained herein . . ., in the event of physical loss, damage or destruction or property insured by a peril insured by this Policy, this Policy . . . insures: a. … and/or b. . . . . 2. Contamination Cleanup Notwithstanding anything in this Policy to the contrary, this Policy insures costs …. 9. Consequential Loss This Policy Insures: a. Physical loss, damage or destruction of property insured resulting from physical loss, damage or destruction of other property insured at the same “location” by a peril insured by this Policy. b. The reduction in value of undamaged insured articles that are …. 15. Demolition and Increased Cost of Construction In the event of insured loss or damage insured under this policy that causes the enforcement of any law, ordinance and/or governmental directive …. IV. Time Element A. Business Interruption Gross Earnings (excluding ordinary Payroll) . . . . C. Rental Value This Policy insures: 1. ‘Rental value’ loss sustained by the insured . . . . 2. For the purposes of this insurance, ‘rental value’ is defined as the sum of: . . . . If the Insured is both a lessor and a lessee of the same “location,” this Policy insures the loss as described in 2. above . . . . F. Provisions Applicable to “Time Element” Coverage 1. The Period of Recovery a. Applicable to “time element” as defined in Business Interruption Gross Earnings Clause A, Extra Expense Clause B, Rental Value Clause C and . . .: a.-d. 6. Loss of Ingress or Egress This Policy insures the “time element” loss sustained during the period of time when, as a result of physical loss . . . . 8. Increased Time to Rebuild In the event reconstruction, restoration, repair or use of property insured is regulated or prohibited by enforcement of any law, ordinance, or regulation . . . this Policy shall pay for any increase in “time element” loss arising out of the additional time required to bring property insured into full compliance with applicable law, ordinance or regulation. V. Definitions Land Improvements: Any alteration to the natural condition of the land at a ‘location’ by grading, landscaping and additions to such land including landscape gardening, pavements, roadways, or similar works, and including the cost of reclaiming, restoring or repairing “land improvements.” VII. Valuation The value of property shall be determined as follows: A. With respect to all property insured . . ., the payment for loss shall be on a ‘replacement cost’ basis. “Replacement cost’ includes . . . . B. If, as a result of physical loss, damage or destruction insured by this Policy reconstruction, restoration, repair or use of property insured is regulated or prohibited by the enforcement of any law, ordinance, or regulation which is in force at the time of the physical loss, damage or destruction, this Policy shall pay for ‘demolition and increased cost of construction’ meaning: . . . . VIII. Extensions of Coverage This Policy insures: G. Claim Preparation Expenses Expenses incurred by the Insured or by the Insured’s representatives including Accountants, Appraisers, Architects, Auditors, Consultants, Engineers, or other such professionals in order to arrive at the loss payable under this Policy in the event of a claim. IX. General Conditions K. Additional Insureds, Loss Payees and Mortgage Holders All third parties have an interest in property insured, as required by lease, contract, or agreement, shall automatically be Additional Insureds hereunder. M. Required by Law Any provisions required by law to be included in policies issued by the insurer shall be deemed to have been included in this Policy. If the provisions of this Policy conflict with the laws of any jurisdiction in which this Policy applies, and if certain provisions are required by law to be stated in this Policy, this Policy shall be read so as to eliminate such conflict or deemed to include such provisions for insured “locations” within such jurisdictions. Endorsement 2 Additional Named Insured’s included but are not limited to: Additional Insureds Facility Name 1937 Jenks Avenue Operations LLC Sea Breeze Health Care
 
* Facts and circumstances giving rise to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

NARRATIVE FOR CIVIL REMEDY NOTICE [Search Terms: Final Construction Documents – Bid – Deadline – Letter – Demolition & Increased Cost of Construction] The named insured under the policy is LaVie Care Centers LLC, k/n/a 1937 Jenks Operations, LLC, and d/b/a Consulate Health Care (“Consulate”). Gulf Coast Rehabilitation Center, Inc. (“GCRC”) and 1937 Jenks, LLC (“Jenks”) (collectively “Insureds”), pursuant to lease agreements, are additional insureds under policies issued by, among others: (1) AmRisc, LLC, which includes three insurers: (a) Certain Underwriters at Lloyds (Policy No. AMR-58799-01), (b) General Security Indemnity Co. of AZ (Policy No. 10T029659-08022-18-01), and (c) United Specialty Insurance Company (Policy No. USI-21021-01). (2) National Fire & Marine Insurance Company (Policy No. 42-XPR-302506-03). (3) Ironshore Insurance Ltd., n/k/a Liberty Specialty Markets Bermuda Ltd. (Policy No. 443296118A). (4) Oil Casualty Insurance Ltd. (Policy No. 443296118A) (same policy as Ironshore). (5) Evanston Insurance Company (Policy No. MKLV10XP002561). Several other Insurers have settled their portions of the claim. All policies were in effect on October 10, 2018, at the time Hurricane Michael destroyed the property at 1937 Jenks Avenue, Panama City, Florida, operating as Sea Breeze Health Care (the Insured Property). Codes and ordinances applicable to the property required that the building be demolished and rebuilt. Previous Civil Remedy Notices have been filed during the lengthy claim process that has been ongoing since the hurricane in 2018: 438725 (6/7/2019); 438733 (6/7/2019); 438736 (6/7/2019); 438740 (6/7/2019); 438744 (6/7/2019); 476775 (2/10/2020); 475784 (2/10/2020); 475790 (2/10/2020); 475839 (2/10/2020); 475841 (2/10/2020); 475848 (2/10/2020). This Civil Remedy Notice concerns actions/inactions since March 2022, when the AmRisc Insurers and National Fire & Marine Insurance Company made certain payments and entered into an Agreement with the Insureds concerning the future handling of the claim. Ironshore, Oil Casualty, and Evanston have been monitoring the progress of the claim through their third-party administrator, Sedgwick, who is the third-party administrator for all Insurers. Ironshore’s and Oil Casualty’s exposures for this claim arise when the total payments to all insureds exceed $25,000,000. Evanston’s exposure for this claim arises when the total payments to all insureds exceed $50,000,000. It is believed that these exposures will be reached based on recent bids received from contractors to rebuild the facility damaged by Hurricane Michael. It is not known to what extent Ironshore, Oil Casualty, and Evanston had input into the letter and associated actions that are at issue in this Civil Remedy Notice. Insurers have been informed from day one and repeatedly throughout this claim that Insureds do not own the property. It is owned by the City of Panama City. Insurers have been informed from day one and repeatedly throughout this claim that Insureds do not intend to rebuild with any upgrades other than what is required by law. Pursuant to the 2022 Agreement with AmRisc and National Fire, Sedgwick has been involved in every phase of the planning process for the reconstruction, reviewing and commenting on the plans with respect to coverage during each phase. Insureds’ architect and/or counsel have addressed those concerns during each phase of the process before moving to the next phase. The Final Construction Documents were provided to Insurers by Insureds’ architect on July 1, 2024, and the architect, as Insurers were aware, began the process of seeking bids. Insurers never mentioned that they wanted to suggest any contractors for bids. On November 13, 2024, four months after receiving the documents, Insurers sent a letter expressing concern that there were betterments in the Final Construction Documents. Violation of §626.9541(1)(i)3.c., Fla. Stat. After consultation with Insureds and their architect, Insureds counsel responded to the November 13 letter on November 25, 2024. Insureds’ letter addressed each concern raised in Insurers’ November 13, letter, many of which had been previously addressed and resolved. For the couple remaining concerns, Insureds agreed to modify the element or provided facts as to why the element was not a betterment. The letter remined Insurers that consultation with Insurers and agreement concerning coverage was obtained during each phase of the process before moving to the next phase. The letter stressed that “TIME IS OF THE ESSENCE because the bids expire sixty (60) days from the date the bids were submitted. In other words, the bids expire January 20, 2025.” The bids were received by Insureds’ architect on November 21, 2024. They were immediately provided to Insurers on November 22, 2024. AFTER the bids were received and a deadline was in place to accept the bids by January 20, 2025, on December 13, 2024, Insurers informed Insureds that they were obtaining other bids for the project, despite the fact the bids received by Insureds were within $50,000 of each other on a $33,000,000 project, strongly suggesting the bids were in-line with industry standard; and despite the fact Insurers never objected to the bidding process put in place by the architect or advising Insureds or their architect that Insurers wanted other contractors to participate in the bids. Violation of §624.155(b)(1), Fla. Stat. and §626.9541(1)(i)3.g. Insureds’ counsel immediately informed Insurers by letter dated December 14, 2024, that if Insurers wanted to obtain bids or wanted to suggest contractors for the bidding process, they should have done so when the bidding process began or certainly before Insureds’ bids were received and a deadline in place to accept those bids. Insureds’ counsel warned Insurers about the ramifications of causing Insureds to lose the bid where estimates in the industry suggested that construction costs may go up as much as 30% after the first of the year. In that same December 14, 2024, letter, Insureds asked for the names of the contractors with whom Insurers were soliciting bids to confirm that those contractors were qualified to bid on the project. No names were provided until January 20, 2025, at 5:06 p.m., the day Insureds’ bids expired, and then only one name was provided. Violation of §626.9541(1)(i)3.c., Fla. Stat. Insurers responded to the December 14, 2024, letter by email on December 16, 2024, falsely alleging that the July 2024 Final Construction Documents were insufficient to determine scope of work for the bids and that they included “betterments.” Violation of §626.9541(i)(2), Fla. Stat. Insureds’ counsel responded by letter on December 17, 2024, noting that the Final Construction Documents provided in July were sufficient for Insurers to determine the scope of work, that those documents included more than 1,000 pages of specifications and 277 drawings. The December 16 letter explained that three of the five Addenda that Insurers alleged changed the scope of work were nothing more than clarifications of the Final Construction Documents as requested by the contractors making the bids. One Addenda was merely to add a $275,000 allowance for Terrazzo flooring in certain areas as was in the original building. The final Addenda included an allowance because the state/county had determined that the site was too low; and the state/county required a site boundary retaining wall. The allowance for the retaining wall was in the amount of $1,100,000. None of these Addenda would have any effect on Insurers’ ability to determine coverage or to seek bids. Further, Insurers were immediately provided copies of the Addenda as they were developed on October 23, 2024, November 11, 2024, November 15, 2024, and November 20, 2024. At this point Insurers had everything they needed to determine coverage and the cost to rebuild to resolve the rebuilding claim. Yet, they did not do so. Violation of §624.155(1)(b)1., Fla. Stat. With respect to “betterments,” there were none. Betterments alleged by Insurers have been addressed at each phase of the project by the architect and/or Insureds’ counsel as those issues were raised. If the Insureds and their architect agreed items could be considered betterments, they were modified; and if they did not agree, the facts were provided to Insurers establishing they were not betterments. Further, the Policy gives the Insured, at its “sole option,” the right to substitute “items, property or materials of like kind and quality,” and such substitution is not considered a ‘betterment.’ Additionally, as provided in the Policy, “without penalty the Insured may expend the amount of any replacement cost recovery within the scope of the Insured’s business subject only to the full amount of the recovery actually being expended in acquiring or constructing [the] building[] or structure[].” In other words, if the Insured makes a saving in one area, it can be expended in another area. However, assuming there were betterments (which is not true), those betterments would be on the construction documents Insurers had been continually reviewing for more than a year, not on the subcontractor bids as alleged by Insurers. Insurers did not need to wait for the Bid Documents, as they alleged, to determine whether any element was covered or a ‘betterment.’ The Final Construction Documents provided the necessary information to determine the cost to rebuild. Violation of §624.155(1)(b)1., Fla. Stat. The December 17, 2024, letter to Insurers reiterated that if Insurers’ delay caused Insureds to lose the bid, Insurers would be responsible for the increase in cost associated with that loss. On January 20, 2025, at 5:06 p.m., the day Insureds’ bids expired, Sedgwick on behalf of Insurers sent a letter to counsel and her clients. The letter advised, “The Insurers have requested that we address concerns related to the final design and construction plans submitted by the Insured, which were received after several years of coordination and prior discussions about the project’s compliance with the policy’s terms.” The letter alleged that the bids raised “questions due to their considerable deviation from independent bids obtained by the Insurers through their expert, MKA.” Violation of §624.155(1)(b)1. §626.9541(1)(i)3.g., Fla. Stat. The letter did not specify how many bids were obtained or the range for those bids. The letter stated that Venue Construction Group LLC has submitted a bid for approximately $19 million. The bids received by the Insureds are in the $32-33 million range. As noted above, Insureds’ bids were ALL provided to Insurers; and those bids deviated approximately only $50,000 from each other. The letter incorrectly alleged that “the Insured’s bids far exceed the limitations set forth in the policy.” Violation of §626.9541(1)(i)2., Fla. Stat. The letter alleged that Venue Construction “is reputable.” The letter did not provide any facts to support that assumption. The Florida Division of Corporations website indicates that Venue Construction has been in existence only since November 13, 2019, barely five years (even though the company’s website boasts that “Venue Construction Group has been a premier provider of top-tier Florida construction services for decades ….”). The website’s “Commercial Construction Services” listing does not list any Category I-1 or I-2 AHCA oversight construction. “Senior Housing” is listed. But Senior Housing is different from Assisted Living (Category I-1) for which the Florida Agency for Healthcare Administration would be involved. Even so, assisted living and nursing homes are entirely different classifications and types of projects under the Florida Building Code and under AHCA Guidelines. The Florida Contractor Licensing Portal indicates that Amit Ghosh is the qualifying agent for the company and that his licensure date is July 20, 2021, just three and a half years ago. From the website, it appears Mr. Gosh’s background is as an asset manager for a real estate private equity firm. According to the website, Mr. Gosh’s partner in the company, William Rodriguez, has been a building contractor for a number of years. But his portfolio includes only “retail shopping centers, office buildings, and multifamily developments.” It includes nothing about construction subject to AHCA oversight—Category I-2 (Institutional, Skilled Nursing Facility, Hospital, etc.) or even Category 1-1 (Assisted Living). The website says Mr. Rodriguez was the “Lead Project Manager at Mercedes Homes” for 20 years. It appears Mercedes was strictly a home builder. Research reveals that Mercedes Homes filed for bankruptcy in 2009 (citing between 5,000 and 10,000 creditors) and ceased operation in 2012. Venue Construction’s lack of appropriate experience for this type of project is also revealed in its bid response. It is not clear whether Sedgwick or MKA provided Venue or any of the Insurers’ bidders with the complete thousands of pages of bid documents and the five addenda to those documents or whether Sedgwick or MKA advised the bidders to include substitutions. Just a quick review by Insureds’ architect of Venue Construction’s bid reveals the following significant deficiencies: • The bid response does not indicate in the box provided whether the five addenda were reviewed and incorporated into the bid. • The bid response does not include a cost for performance and payment bonds. • The bid response does not include a cost for insurance. • The bid response does not include the cost of permitting. • The project staffing and general labor in the bid response does not align with the Final Construction Documents. • The exterior envelop warranty is not included in the bid. • The cost for low voltage equipment is not included in the bid. • The retaining wall allowance is not included in the bid. • The Terrazzo flooring allowance is not included in the bid. • No pricing provided by roof consultant as per Final Construction Documents. Consultation with the roof consultant was required by the Final Construction Documents. • ICF and Hollow Core Plank appear to be missing from the bid. In addition to the above specific omissions in Venue Construction’s bid, there are significant questions about when and how this and any other bids were obtained by Insurers. Insureds’ architect was not given the opportunity to vet these bidders for their competency to complete this difficult project that requires not only compliance with the building codes but also knowledge about AHCA regulations, requirements, and procedures for nursing homes. The bids obtained by Insurers were not provided under seal to Insureds and their architect as required by the bid form. It is not clear whether this omission was demanded by Insurers or the requirement was simply ignored by the bidders. Further, the significant difference between the Venue Construction bid (as compared to all other bids received by Insureds) in addition to the problems noted above makes the Venue Construction bid very suspect. It is of concern that Venue Construction might attempt to make up the difference in its bid compared to all other bidders through change orders, increasing the cost. The January 20,2025, letter also misrepresented the Policy’s Demolition & Increased Cost of Construction provision, incorrectly alleging its $25 million sublimit provides the entire amount available under the policy for the rebuilding project. The letter also incorrectly stated that the Insurers remained liable for only $18,598,332 of that $25 million because they had paid their proportionate share of $5 million pursuant to the non-cash agreement and $1,401,668 had already been paid toward code-related rebuilding. Violation of §§626.9541(1)(i)2. And 626.9541(1)(i)3.b., Fla. Stat. Demolition & Increased Cost of Construction is “Additional Coverage” that includes (i) the value of the undamaged elements, (ii) the cost of demolishing the undamaged elements, and (iii) the increased cost to replace both the damaged and undamaged elements due to code requirements. It does not include the cost to replace the elements damaged by Hurricane Michael, which falls under the Policy’s $200M Policy limit. The Policy also provides additional coverage with respect to rebuilding for Consequential Loss ($5 million), Debris removal and Cost of Clean Up ($5 million), Land Improvements ($1 million), and Post Loss Inflation ($1 million). Rental Value and Business Personal Property are not currently involved in the dispute. Insurers can correct their bad-faith handling of the reconstruction by paying their proportionate shares of the $32,865,000 bid proposal plus any increase in cost that will be incurred since the date the bid was lost, January 20, 2025, due to Insurers’ failure to timely and properly adjust this claim, minus applicable payments already made. This is not a settlement offer. It does not include the amount due for the coverages listed in the above paragraph, architectural or engineering fees, bad faith damages, or attorneys’ fees. This notice is being given pursuant to section 624.155(3)(b)5., Florida Statutes, to perfect the right to pursue the civil remedy authorized by section 624.155.
Comments
User Id Date Added Comment
tld@beggslane.com 10-19-2025 The parties have resolved their differences related to this CRN.
kking@zinoberdiana.com 03-27-2025 March 27, 2025 Via E-Mail (TLD@beggslane.com) Terrie L. Didier, Esquire Beggs & Lane 501 Commendencia Street Pensacola, Florida 32502 Re: Civil Remedy Notice Filing No. 803744, Accepted Date January 27, 2025 Claimants: Gulf Coast Rehabilitation Center, Inc. (“GCRC”) and 1937 Jenks, LLC Insured: 1937 Jenks Avenue Operations, LLC (fn*1) Claim Number: MXBP99602 Policy Number: MKLV10XP002561 Date of Loss: October 10, 2018 (As Reported) Property: 1937 Jenks Avenue, Panama City, Florida 32405 Dear Ms. Didier: Please accept this response on behalf of Evanston Insurance Company (“Evanston”) to the Civil Remedy Notice of Insurer Violations (“CRN”) for Filing Number 803744 (the “Notice”) that was filed on behalf of Gulf Coast Rehabilitation Center, Inc. (“GCRC”) and 1937 Jenks, LLC (the “Claimants”) for the Commercial Property Policy Number MKLV10XP002561 (the “Policy”). The Notice alleges wrongdoing by Evanston in relation to a claim for damages resulting from Hurricane Michael on or about October 10, 2018 to the insured property located at 1937 Jenks Avenue, Panama City, Florida 32405 (the “Property”). The Department accepted the Notice on January 27, 2025, and thus this response is timely. As stated by the Florida Supreme Court, the purpose of a CRN filed pursuant to Section 624.155, Florida Statutes, is to put the insurer on notice of an alleged violation, the circumstances surrounding same and indicate the details of the alleged violation to provide an insurer with 60 days to “cure” the alleged claim defects. See Talat Enterprises, Inc. v. Aetna Casualty and Surety Co., 753 So. 2d 1278, 1283-4 (Fla. 2000). This is so that the insurer is provided an opportunity to resolve a first-party coverage dispute and otherwise avoid litigation. Id.; see also Lane v. Westfield Ins. Co., 862 So. 2d 744 (Fla. 5th DCA 2003). Further, a Notice must be sufficiently specific to provide the insurer with an opportunity to cure the alleged violations. This would include identifying the specific policy provision(s) at issue, citing specific language of the statutory provision(s) the insurer allegedly violated, and specifically identifying what actions the insurer must take to remedy the alleged violations. Heritage Corp. of South Florida v. National Union Fire Ins. Co. of Pittsburg, PA, 580 F. Supp. 2d 1294, 1299-1300 (S.D. Fla. 2008); see also Rousso v. Liberty Surplus Ins. Corp., 2010 U.S. Dist. LEXIS 82328 (S.D. Fla. Aug. 13, 2010). Evanston categorically denies any and all wrongdoing, including any violation to Florida law. Specifically, Evanston denies any violation of Florida Statute Section 624.155, or any subparts thereof, including its Ethical Requirements as stated in 4-220.201. Further, Evanston is confident the following explanation of the Policy’s terms and conditions will satisfy any inquiry by the Department regarding its conduct and demonstrate Evanston has always acted in the utmost good faith towards its insureds, such that its actions during the course of the subject claim do not amount to alleged “bad faith.” Evanston issued a Commercial Property Policy to the Additional Insured, 1937 Jenks Avenue Operations, LLC (“Insured”), for the Policy period of May 1, 2018 to May 1, 2019, which provides excess insurance coverage for the Property subject to the Policy’s express terms, provisions, limitations, exceptions, endorsements, exclusions, sublimits and conditions contained therein. Pursuant to the Policy’s Declarations, Evanston provides excess insurance coverage only when coverage for a loss exceeds the layer limit of $50,000,000.00 up to $100,000,000.00. (fn*2) Accordingly, the Insured must first exhaust the full limits of liability of $50,000,000.00 with its insurance carrier(s) under the primary and underlying policies prior to coverage and/or liability being ripe under Evanston’s Policy. Note that that the Policy provides, in pertinent part, as follows: I. DECLARATIONS C. PREMIUM, POLICY TERM, INSURER AND PARTICIPATION STEP DOWN / DROP DOWN (applicable to excess policies only) In determining the amount of any loss or damage for which this policy is excess, the total loss caused by any combination of loss or damage, all of which are insured against under the primary policy or underlying policy, shall be used even though such loss or damage is not insured against under this excess policy. 1) Any recoveries made under the primary or underlying policy shall first apply to loss or damage not insured against by this policy. Upon exhaustion of the primary or underlying policy limits, this policy shall apply in excess of the amount attributed to the primary or underlying policy as respects loss or damage insured hereunder subject to the limit of this policy. 2) If there is any other excess insurance insuring the property insured hereunder for loss or damage insured against in the primary or underlying policy but not insured by this policy, this policy shall then allocate any loss recoveries made under the primary or underlying policy in the same proportion as the amount of loss or damage insured against by this policy bears to the combined total loss. Upon exhaustion of the primary or underlying policy limits, this policy shall apply in excess of the amount attributed to the primary or underlying policy as respects loss or damage insured hereunder subject to the limit of this policy. 3) Sub-Paragraph 2. above shall not apply, however, when the amount of loss attributed to loss or damage insured under the primary or underlying policy, but not insured under this policy, exceed the total amount of insurance provided by the primary and excess coverages with respect to said loss or damage. In this situation, any recoveries made under the primary or underlying policy shall first apply to loss or damage not insured by this policy. Upon exhaustion of the primary or underlying policy limits, this policy shall apply in excess of the amount attributed to the primary or underlying policy as respects loss or damage insured hereunder subject to the limit of this policy. IX. GENERAL CONDITIONS A. OTHER INSURANCE 3. Other Insurance If there is any other insurance that would apply in the absence of this Policy, this Policy shall apply only after such insurance whether collectible or not. In no event shall this Policy apply as contributing insurance. Notably, on February 17, 2025, Claimants’ counsel sent correspondence to Liberty Specialty Markets Agency Limited, one of the Insured’s primary insurance carriers, which outlined that the Insured has received approximately $31,734,356.33 in policy benefits from its insurers to date. As the Insured has not yet exhausted the $50,000,000.00 requirement with the primary and underlying carriers/policies for the loss that occurred on or about October 10, 2018 in order to reach Evanston’s layer. As such, Evanston is not presently liable for the Claimants’ damages, if any, under the Policy’s clear and unambiguous terms and conditions. Given that Evanston’s coverage layer has not been implicated, the contentions outlined in the Claimants’ Notice alleging that Evanston did not settle the claim in good faith and/or failed to timely adjust the claim, and that Evanston now must pay its proportionate share of the Claimants’ bid proposal as outlined in the Notice, are wholly without merit and otherwise legally deficient. See Cammarata v. State Farm Florida Ins. Co., 152 So.3d 606 (Fla. 4th DCA 2014) (holding where the insurer’s liability for coverage and the extent of damages have not been determined in any form, an insurer’s liability for the underlying claim and the extent of damages must be determined before a bad faith action becomes ripe). Further, the “cure” set forth in the Notice seeks that Evanston pay its: “…proportionate shares of the $32,865,000 bid proposal plus any increase in cost that will be incurred since the bid was lost…”. This “cure” is illusory and seeks payment from Evanston that is not available under the Policy as Evanston’s layer does not attach until payment exceeds $50,000,000.00. Notwithstanding the foregoing, the allegations raised in the Claimants’ Notice are otherwise factually inaccurate. The Notice alleges, in part, that insurers, including Evanston, caused numerous delays with respect to the Claimants securing and/or accepting construction bids for the rebuild of the Property, and that due to these delays, the associated rebuild costs will increase. As the Claimants are aware, Evanston was not a party to any communications concerning the bids (as its coverage layer has not yet been implicated), and therefore, Evanston did not and could not cause any delays in the Claimants securing the bids or otherwise addressing any issues with the contents of the bids. Further, the Claimants assert numerous statutory violations, all of which one typically finds in virtually all CRNs regardless of the facts and circumstances of the individual case. Evanston denies each and every allegation of statutory or code violation individually as follows: Fla. Stat. § 624.155(1)(b)(1): Denied. The allegation is without merit, as the Claimants’ bad faith claim against Evanston is not yet ripe. Evanston is not contractually obligated to indemnify the Claimants and/or settle the claim until such time that the Insured exhausts the full limits of liability of $50,000,000.00 with the primary and underlying insurance carrier(s). Fla. Stat. § 626.9541(1)(i)(2): Denied. The allegation is without merit, as the Claimants’ bad faith claim against Evanston is not yet ripe. Notwithstanding, at no time has Evanston ever made any misrepresentations to the Claimants or any other person having an interest in the proceeds payable under the Insured’s Policy. Furthermore, the Claimants failed to allege any factual support or offer any evidence that Evanston has made material misrepresentations. As discussed herein, Evanston has not made any material misrepresentations and the Claimants have not alleged or stated as to who, what, or when any alleged misrepresentations took place or occurred or the details about said misrepresentations. To the extent that the Claimants do not agree with Evanston’s position, in that coverage is not yet available under the Policy until such time that the Insured exhausts the full limits of liability of $50,000,000.00 with the primary and underlying insurance carrier(s), it in no way arises to the unsubstantiated allegations that Evanston made any material misrepresentations regarding the claim. Fla. Stat. § 626.9541(1)(i)(3)(b): Denied. The allegation is without merit, as the Claimants’ bad faith claim against Evanston is not yet ripe. Notwithstanding, at no time has Evanston ever made any misrepresentations to the Claimants or any other person having an interest in the proceeds payable under the Insured’s Policy. Furthermore, the Claimants failed to allege any factual support or offer any evidence that Evanston has made misrepresentations. As discussed herein, Evanston has not made any misrepresentations of the facts or regarding the Policy and the Claimants have not alleged or stated as to who, what, or when any alleged misrepresentations took place or occurred or the details about said misrepresentations. To the extent that the Claimants do not agree with Evanston’s position, in that coverage is not yet available under the Policy until such time that the Insured exhausts the full limits of liability of $50,000,000.00 with the primary and underlying insurance carrier(s), it in no way arises to the unsubstantiated allegations that Evanston misrepresented the facts of the claim and/or Policy provisions. Fla. Stat. § 626.9541(1)(i)(3)(c): Denied. The allegation is without merit, as the Claimants’ bad faith claim against Evanston is not yet ripe. Notwithstanding, Evanston has, at all times, acknowledged and acted promptly to communications from the Claimants and/or its representatives. To the extent that the Claimants do not agree with Evanston’s position, in that coverage is not yet available under the Policy until such time that the Insured exhausts the full limits of liability of $50,000,000.00 with the primary and underlying insurance carrier(s), it in no way arises to the unsubstantiated allegations that Evanston acted untimely in communications with the Claimants. Fla. Stat. § 626.9541(1)(i)(3)(g): Denied. The allegation is without merit, as the Claimants’ bad faith claim against Evanston is not yet ripe. Notwithstanding, Evanston has, at all times, acknowledged and acted promptly to communications from the Claimants and/or its representatives, including when it needed pertinent information from the Claimants and/or their representatives. To the extent that the Claimants do not agree with Evanston’s position, in that coverage is not yet available under the Policy until such time that the Insured exhausts the full limits of liability of $50,000,000.00 with the primary and underlying insurance carrier(s), it in no way arises to the unsubstantiated allegations that Evanston failed to promptly notify the Insured of any additional information needed to investigate the claim. Evanston desires to resolve this matter with the Claimants amicably, if at all possible. At the same time, please be advised that by sending this letter, Evanston does not waive, but rather expressly reserves the right to raise any and all available objections and defenses to this matter and to the Notice. Please also be advised that the subject Policy issued by Evanston is governed by the Policy’s terms, conditions and exclusions together with any endorsements. This letter does not waive any such provisions of the Policy. Similarly, any action taken by or on behalf of Evanston or its authorized representative(s), whether in the past or future, to investigate the alleged loss, to adjust any claim or request for payment, or in any other way related to or arising out of the subject claim or loss, shall not waive any terms, conditions, or any other provisions of the Policy. Should you or your client have any questions regarding the contents of this letter, please feel free to contact me at your convenience. Respectfully submitted, RIVERO & KELLY, PLLC Kelsey C. King, Esquire Michael J. Rivero, Esquire kking@riverokelly.com mrivero@riverokelly.com cc: Evanston Insurance Company fn*1 - The Notice incorrectly states the Insured(s) as: “Gulf Coast Rehabilitation Center, Inc. (“GCRC”)Tfhrough 1937 Jenks, LLC.” The correct Insured is 1937 Jens Avenue Operations, LLC. fn*2 - Evanston’s participation in the excess insurance coverage for the layer limit of $50,000,000.00 up to $100,000,000.00 is set forth in the table provided and is subject to the Policy’s express terms, provisions, limitations, exceptions, endorsements, exclusions, sublimits, and conditions contained therein.
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.

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