USCA11 Case: 22-12387 Document: 35-1 Date Filed: 05/11/2023 Page: 1 of 9
[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-12387
Non-Argument Calendar
____________________
NEW SOUTH COMMUNICATIONS, INC.,
d.b.a. Florida Keys Media, LLC,
Plaintiff,
ROBERT HOLLADAY,
FLORIDA KEYS MEDIA, LLC,
Plaintiffs-Appellants,
versus
HOUSTON CASUALTY COMPANY,
Defendant-Appellee.
____________________
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2 Opinion of the Court 22-12387
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 4:18-cv-10110-JLK
____________________
Before ROSENBAUM, LAGOA, and BRASHER, Circuit Judges.
PER CURIAM:
This case arises from a commercial property insurance claim
for damage sustained from Hurricane Irma to properties owned by
Appellants Robert Holladay and Florida Keys Media, LLC (“In-
sureds”), and insured by Houston Casualty Company (“Houston”).
In a prior appeal, we determined that Insureds materially breached
the insurance contact by failing to submit a sworn proof of loss.
See New S. Commc’ns, Inc. v. Houston Cas. Co.,
835 F. App’x 405,
412–13 (11th Cir. 2020). But we remanded for the district court to
consider, in accordance with Florida law, whether that breach prej-
udiced Houston. On remand, the district court determined as a
matter of law that Houston suffered prejudice and granted sum-
mary judgment against Insureds. We hold that a genuine dispute
of fact remains as to prejudice, so we vacate and remand for further
proceedings.
I.
Briefly stated, the relevant, and largely undisputed, facts are
as follows. Soon after Hurricane Irma passed through the Florida
Keys in September 2017, Houston received notice of a commercial
property insurance claim at two office buildings that it insured in
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22-12387 Opinion of the Court 3
Sugarloaf Key and Tavernier. Houston retained an independent
adjustment firm to investigate the claim. A preliminary report sent
to Houston in January 2018 included printouts from the county tax
assessor’s office that identified Holladay as the owner of the Sugar-
loaf property and Florida Keys Media as the owner of the Tavernier
property.
Based on a supplemental March 2018 report, Houston issued
a partial denial and determined that the cash value of the covered
loss, minus the deductible, resulted in an adjusted amount of
$52,217.14. That money was never paid out, though, because no
named insured under the policy ever submitted a sworn proof of
loss, as the terms of the policy required. See New South, 835 F.
App’x at 407, 411.
These events led to this breach-of-contract suit against Hou-
ston. Initially, the sole plaintiff was New South Communications,
Inc., a named insured that had submitted the insurance claim for
the two buildings. But “[d]uring discovery, corporate-disclosure
statements revealed that other named insureds on the New South
policy with Houston—Florida Keys Media and Robert Holladay,
individually—owned the two buildings listed in the claim.” Id. at
407. So the complaint was amended to add Florida Keys Media and
Holladay as plaintiffs.
The district court granted summary judgment for Houston
and dismissed the case with prejudice. On appeal, we agreed with
the court that New South lacked standing to sue because it had no
insurable interest in the property. Id. at 410–11. But contrary to
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the court’s ruling, we held that Florida Keys Media and Holladay
had standing and were “real parties in interest to this breach-of-
contract suit,” because they were “named insureds” and “the own-
ers” of the insured properties. Id. at 410. We rejected Houston’s
argument that Florida Keys Media and Holladay could not recover
on the insurance claim submitted by New South, finding it contrary
to the plain terms of the policy. See id.
We then “consider[ed] whether Florida Keys and Holladay
forfeited any potential insurance coverage by failing to comply
with their post-loss obligation, or condition precedent, to file a
proof of loss with Houston.” Id. at 411. Applying the framework
outlined in American Integrity Insurance Co. v. Estrada,
276 So. 3d
905 (Fla. Dist. Ct. App. 2019), which we said would govern if this
case had been filed in state court, we explained that “a total forfei-
ture of coverage because of a failure to comply with post-loss obli-
gations occurs only when the insured’s breach is both material and
prejudicial to the insurer.” 835 F. App’x at 412 & n.6. We con-
cluded that the Insureds materially breached the policy’s proof-of-
loss condition by failing to provide a sworn proof of loss, which
was a condition precedent to suit. Id. at 412–13. But we remanded
for the district court to consider Estrada’s prejudice inquiry in the
first instance, since that decision was issued after the court granted
summary judgment.1 Id. at 413.
1 We rejected the Insureds’ arguments for recovery in excess of $52,217.14,
stating that, “should the Insureds demonstrate on remand that Houston was
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22-12387 Opinion of the Court 5
On remand, Insureds moved for summary judgment with
supporting evidence, and Houston responded in opposition. After
a hearing, the district court denied the Insureds’ motion and en-
tered judgment for Houston. In the court’s view, Insureds failed
to rebut the presumption of prejudice caused by their material
breach. The court reasoned that, without a sworn proof of loss,
Houston risked “paying the wrong party,” which was “among the
types of prejudice the Proof of Loss requirement in the Policy was
intended to avoid.” This appeal followed.
II.
We review de novo a district court’s order granting sum-
mary judgment, construing the evidence and drawing all reasona-
ble inferences in favor of the nonmovants—here, Insureds.2
Westchester Gen. Hosp., Inc. v. Evanston Ins. Co.,
48 F.4th 1298,
1301–02 (11th Cir. 2022). Summary judgment is appropriate if
“there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A
genuine dispute of fact exists, and summary judgment should be
denied, “[i]f reasonable minds could differ on the inferences arising
not prejudiced by their failure to file proof of loss, the Insureds’ recovery for
property damage is limited to $52,217.14.” New S. Commc’ns, Inc. v. Hou-
ston Cas. Co.,
835 F. App’x 405, 412–13 (11th Cir. 2020).
2 The district court effectively granted summary judgment to Houston on its
own motion, making the Insureds “nonmovants” for purposes of our review.
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6 Opinion of the Court 22-12387
from undisputed facts.” Dean-Mitchell v. Reese,
837 F.3d 1107,
1111 (11th Cir. 2016).
III.
This case is about a policy provision that requires insureds
to submit a “proof of loss” with certain information to the insurer
as a condition precedent to suing the insurer. See New South, 835
F. App’x at 411. Such provisions “enable the insurer to evaluate its
rights and liabilities, to afford it an opportunity to make a timely
investigation, and to prevent fraud and imposition upon it.” Laster
v. U.S. Fid. & Guar. Co.,
293 So. 2d 83, 84 (Fla. Dist. Ct. App. 1974)
(describing notice and proof-of-loss provisions).
Nevertheless, “Florida law abhors forfeiture of insurance
coverage.”3 Estrada, 276 So. 3d at 914. So “policy provisions that
tend to limit or avoid liability are interpreted liberally in favor of
the insured.” Id. (cleaned up). As a result, Estrada concluded, a
total forfeiture of coverage because of a failure to comply with
post-loss obligations occurs only when the insured’s breach is both
material and prejudicial to the insurer. Id.; see New South, 935 F.
App’x at 412.
In the prior appeal, we concluded that the Insureds materi-
ally breached a condition precedent by failing to submit a signed
3 “Since our jurisdiction is grounded in diversity, we apply Florida’s substan-
tive law.” See Westchester Gen. Hosp., Inc. v. Evanston Ins. Co.,
48 F.4th
1298, 1302 (11th Cir. 2022).
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22-12387 Opinion of the Court 7
and sworn proof of loss to Houston. So the only issue is whether
Houston has been prejudiced, which is generally a “question of
fact.” Arguello v People’s Tr. Ins. Co.,
315 So. 3d 35, 41–42 (Fla.
Dist. Ct. App. 2021).
When an insurer establishes that an “insured has failed to
substantially comply with a contractually mandated post-loss obli-
gation, prejudice to the insurer from the insured’s material breach
is presumed, and the burden then shifts to the insured to show that
any breach of post-loss obligations did not prejudice the insurer.”
Estrada, 276 So. 3d at 916. The insured’s burden is consistent with
a nonmovant’s burden in response to a “motion for summary judg-
ment when the movant has met the initial burden of demonstrat-
ing the nonexistence of any genuine issue of material fact.” See
Kramer v. State Farm Fla. Ins. Co.,
95 So. 3d 303, 306–07 (Fla. Dist.
Ct. App. 2012). In other words, the insured bears the burden of
establishing a genuine issue of material fact as to prejudice.
Viewing the evidence in the light most favorable to In-
sureds, a reasonable factfinder could conclude that the material
breach of the proof-of-loss provision did not prejudice Houston.
See Estrada, 276 So. 3d at 916. The evidence shows that the lack of
a signed proof of loss did not affect Houston’s investigation of the
claim or its determination of covered damages. See Laster, 293 So.
2d at 84. In fact, Houston determined that the two properties at
issue suffered $52,217.14 in covered damages, and it was willing to
pay that amount to the proper entity.
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Nevertheless, Houston maintains that it should be absolved
from paying these covered damages because it was “well within its
rights to confirm that the entity seeking payment for the Claim had
an insurable interest in the Property.” It notes that Florida law re-
quires named insureds to have an insurable interest to enforce an
insurance contract, see
Fla. Stat. § 627.405, and that the initial plain-
tiff, New South, lacked such an insurable interest. The district
court agreed that the “risk of paying the wrong party” qualified as
prejudice to the insurer.
We are not persuaded that such a risk was prejudicial as a
matter of law in this case. For starters, Insureds’ ownership of the
properties was not new information to Houston. The record
shows that Houston received ownership information relating to
the two properties in January 2018, before it made its final coverage
decisions. Specifically, a preliminary report prepared for Houston
included printouts from the website of the county tax assessor’s of-
fice that identified the owners of the Sugarloaf and Tavernier prop-
erties as Holladay and Florida Keys Media, respectively. Houston
points out that the tax assessor did not “guarantee” the accuracy of
the information for purposes other than “ad valorem tax pur-
poses,” but Houston fails to explain why it would view this tax in-
formation as unreliable.
Moreover, it appears to be undisputed that the tax records
were accurate and that Florida Keys Media and Holladay owned
the properties. See New South, 835 F. App’x at 410. So as we said
in the prior appeal, they had insurable interests and, as named
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22-12387 Opinion of the Court 9
insureds and plaintiffs, could seek recovery for damages to their
properties in this breach-of-contract suit, even though the insur-
ance claim was submitted by New South only. See id. Although
New South lacked an insurable interest, any real risk of paying the
wrong party has dissipated.
Houston repeats that it “was nonetheless entitled to receive
confirmation from Plaintiffs of their ownership interests on the
date of loss.” True enough, and for that reason we held that the
insureds materially breached the contract. See New South, 835 F.
App’x at 412–13. But “a total forfeiture of coverage because of a
failure to comply with post-loss obligations occurs only when the
insured’s breach is both material and prejudicial to the insurer.” Id.
at 412 (emphasis added). And here, for the reasons explained
above, reasonable minds could differ on whether the breach was
prejudicial to Houston. See Dean-Mitchell,
837 F.3d at 1111.
Accordingly, we vacate the district court’s grant of summary
judgment for Houston and remand for further proceedings con-
sistent with this opinion.
VACATED AND REMANDED.
