Americas Leading Finance, LLC v. Qbe Seguros De Puerto Rico
KLCE202400718
| Tribunal De Apelaciones De Pue... | Sep 5, 2024Background
- Americas Leading Finance, LLC (ALF) sued QBE Seguros de Puerto Rico (Optima) for breach of contract, seeking over $2 million plus attorney fees, after denial of insurance coverage related to business interruption and extra expenses following hurricanes Irma and María.
- ALF alleged that due to the hurricanes, it had to cease operations and rent alternate offices, claiming loss of income and extraordinary expenses under an insurance policy with a “Utility Services – Time Element” endorsement.
- Optima countered that the claimed losses stemmed not from the policy-covered risks, but from a collapse in the market for car loans due to the hurricanes, as auto dealers (ALF’s primary business partners) were not operating regardless of ALF’s own facilities or utilities.
- The trial court eventually granted summary judgment for Optima, dismissing ALF's complaint with prejudice, concluding ALF did not meet its evidentiary burden to activate coverage.
- The trial court also found ALF acted temerariously by pursuing the litigation without sufficient evidence, awarding $10,000 in attorney’s fees to Optima and approving a reduced amount of other litigation costs.
- ALF appealed both the merits ruling and the award of costs and fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ALF proved coverage under the policy | Proved utility interruption = coverage | Must show interruption and specific loss | ALF failed to prove loss of income tied to interruption |
| Burden of proof over coverage | Optima must prove exclusion applies | ALF must prove claim within contract | ALF has initial burden; no exclusion relied upon here |
| Propriety of attorney's fees for temerity | ALF did not act temerariously | ALF prolonged case despite no evidence | Fees proper; ALF insisted without necessary evidence |
| Reasonableness of litigation costs awarded | Some costs/expert fees excessive | Costs and reduced expert fees reasonable | No abuse of discretion; awards upheld |
Key Cases Cited
- Rivera Matos v. ELA, 204 D.P.R. 1010 (P.R. 2020) (insured must first prove claim is covered; insurer proves exclusions)
- Roldán Flores v. M. Cuebas, 199 D.P.R. 664 (P.R. 2018) (mere allegations cannot defeat summary judgment; evidentiary standards)
- Torres Vélez v. Soto Hernández, 189 D.P.R. 972 (P.R. 2013) (attorney’s fees appropriate for temerity/frivolous litigation)