Certain Underwriters at LLoyd's of London, UK subscribing to Policy No. B1230AP56189A14 v. Fire & Life Safety America, Inc.
6:16-cv-00258
M.D. Fla.Jul 18, 2017Background
- Loss Event: On December 3, 2014 a coupling failed in the 13th-floor stairwell of Ocean Walk Resort’s South Tower, flooding Wyndham-owned timeshare units. Fire & Life Safety America (Fire Safety) later replaced the failed coupling.
- Contractual arrangement: Wyndham paid assessments to Ocean Walk; Ocean Walk admitted it agreed to provide maintenance, service, and inspections of the South Tower wet-pipe sprinkler system (NFPA 25 duties).
- Inspections history: Fire Safety performed quarterly inspections in 2014 but, per the complaint and Ocean Walk’s deemed admissions, no NFPA-25-compliant annual inspection occurred in 2014.
- Insurance/subrogation: Plaintiff (Certain Underwriters at Lloyd’s) paid Wyndham’s insurance claim (~$3M+) and sued Ocean Walk (and originally Fire Safety) in subrogation for negligence and breach of contract; claims against Fire Safety were voluntarily dismissed.
- Cross-motions: During discovery both parties moved for summary judgment. The court granted summary judgment for Ocean Walk on negligence and granted partial summary judgment for Plaintiff on contract duty and breach, but denied summary judgment on causation/damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of contract delegating inspection/maintenance duty | Ocean Walk agreed (admitted in pleading) to provide all maintenance, service, and inspections for the sprinkler system in exchange for assessments. | Any delegation of NFPA 25 duties must be in writing; no written delegation exists. | Court: Contract exists as a matter of law based on Ocean Walk’s admission; NFPA 25 does not impose a writing requirement for delegation via management contract. |
| Breach of contract | Ocean Walk failed to procure the required NFPA-25 annual inspection in 2014. | (No meaningful dispute presented on breach in opposition.) | Court: Breach established as a matter of law (deemed admission and expert testimony that inspection was untimely). |
| Causation / Damages from the breach | Timely 2014 annual inspection would have detected corrosion and led to replacement of the failed coupling, preventing the flood. | There is triable dispute: inspectors’ reports and expert affidavit show corrosion may not have been detected on prior inspections and an inspector may not have recommended replacement, so causation is factual. | Court: Causation is a factual question; summary judgment denied on whether damages resulted from the breach—issue for jury. |
| Negligence claim viability | NFPA 25 and failure to inspect/supports a tort duty independent of contract. | Plaintiffs’ tort allegations are indistinguishable from the contract claim; no independent tort duty exists. | Court: Negligence barred; negligence claim dismissed because duty arises from contractual relationship and no independent tort alleged. |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standards) (1986) (movant’s and nonmovant’s burdens on summary judgment)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment standards) (1986) (genuine dispute where reasonable jury could return verdict for nonmoving party)
- United States v. Four Parcels of Real Prop. in Green & Tuscaloosa Ctys., 941 F.2d 1428 (11th Cir. 1991) (movant options when nonmovant bears burden)
- Tiara Condo. Ass’n, Inc. v. Marsh & McLennan Cos., 110 So.3d 399 (Fla. 2013) (contract v. tort boundary; tort must be independent of contract)
- Elec. Sec. Sys. Corp. v. S. Bell Tel. & Tel. Co., 482 So.2d 518 (Fla. 3d DCA 1986) (breach of contract alone does not create tort without additional independent tortious conduct)
- Rollins, Inc. v. Butland, 951 So.2d 860 (Fla. 2d DCA 2006) (elements for breach of contract recovery)