New Late Notice Case

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*April 30, 2014 Update: Click here to see all of the late notice cases that came out since this post.*

In Yacht Club on the Intracoastal Condominium Association, Inc. v. Lexington Ins. Co., the Southern District of Florida looked at a few important late notice issues and determined that the insured breached the prompt notice provision as a matter of law.

The insured filed the claim for Hurricane Wilma damages arising on October 24, 2005. The insured argued that it waited to report the claim because it did not understand the extent of the damages until they later manifested. The insured reported the claim on May 21, 2010.

As indicated above, the insured argued that it did not realize the extent of the damages until they later manifested. Consistent with several cases rejecting that argument, the Court did not allow this argument to preclude a summary judgment finding that the insured’s notice was not prompt.

Then came the real issue that has been going different directions in the local Florida DCAs: whether the insured could present a fact issue as to whether it could overcome the presumption of prejudice. The insured presented evidence that its expert could determine that the hurricane caused the damage. Furthermore, the insured presented evidence that even the insurer’s experts issued some conclusions about the damage. Putting them together, the insured argued that the jury should decide whether this evidence is enough to overcome the presumption of prejudice.

The Southern District granted summary judgment for the insurer as a matter of law. The Court acknowledged that some experts reached some conclusions; however, the Court granted summary judgment because the experts undoubtedly would have been able to reach more accurate conclusions if the insured would have promptly reported the damage.

The rationale is powerful and correctly explains why these issues should be for the Court rather than the jury. Simply presenting expert opinions that some conclusions can be drawn should not destroy an insurance company’s right to have a claim reported quicker than 4 and a half years after the hurricane.

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