Zurich American Ins. Co. v. Puccini

Third District Court of Appeal
State of Florida
Opinion filed February 6, 2019.
Not final until disposition of timely filed motion for rehearing.
________________
No. 3D17-0690
Lower Tribunal No. 16-6142
________________
Zurich American Insurance Company, a/s/o Lincoln-Drexel
Waserstein, Ltd. and Lincoln Drexel, Ltd.,
Appellant,
vs.
Puccini, LLC d/b/a 5 Napkin Burger,
Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Bronwyn C.
Miller, Judge.
Derrevere Stevens Black and Cozad, and Jon D. Derrevere, and Michael B.
Stevens, and Shirley Jean McEachern and Mary Grecz (West Palm Beach), for
appellant.
Hamilton, Miller & Birthisel, LLP, and Michelle A. Delancy and Melanie
Grant, for appellee.
Before EMAS, C.J., and LOGUE and LINDSEY, JJ.
LINDSEY, J.
Appellant Zurich American Insurance Company (“Zurich”), as subrogee of
Lincoln-Drexel Waserstein, Ltd. and Lincoln Drexel, Ltd. (“Landlord”), appeals the
trial court’s final order dismissing, with prejudice, all of its claims against Appellee
Puccini, LLC. d/b/a 5 Napkin Burger (“Tenant”). Because we find, based on the
written lease agreement as a whole, that Tenant was not an implied co-insured with
Landlord for subrogation purposes, we reverse.
BACKGROUND
This subrogation action arises from Zurich’s attempt to recover money from
Tenant that Zurich paid to Landlord for fire damage sustained to Landlord’s
building. Tenant leased space from Landlord for a restaurant pursuant to a written
lease agreement dated March 1, 2010, for a term of fifteen years and ten months.
On February 7, 2015, a fire ignited in Tenant’s kitchen followed by another fire on
the roof of the building. At the time of the fire, Landlord had a Zurich insurance
policy that covered a portion of the damage. Pursuant to the terms of its policy,
Zurich alleged that it paid Landlord over $2.1 million dollars and that, as a result,
Zurich became subrogated to all of Landlord’s claims against Tenant up to that
amount.
Tenant moved to dismiss Zurich’s subrogation action, asserting that Tenant
was an implied co-insured under the policy. The trial court ultimately agreed and
entered a written order finding, based on various provisions of the lease, that Tenant
2
was an implied co-insured and concluding, as a matter of law, that Zurich was barred
from proceeding with a subrogation action against Tenant. The trial court then
entered a final order dismissing Zurich’s claims against Tenant with prejudice and
without leave to amend. This timely appeal follows.
I. STANDARD OF REVIEW
We review a trial court's order granting a motion to dismiss de novo. Grove
Isle Ass'n v. Grove Isle Assocs., LLLP, 137 So. 3d 1081, 1089 (Fla. 3d DCA 2014)
(citations omitted). “In determining the merits of a motion to dismiss, the trial court
must limit itself to the four corners of the complaint, including any attached or
incorporated exhibits, assuming the allegations in the complaint to be true and
construing all reasonable inferences therefrom in favor of the non-moving party.”
Id. (citations omitted).
Moreover, the interpretation of a lease agreement is a question of law, and the
applicable standard of review is de novo. Leisure Resorts, Inc. v. City of West Palm
Beach, 864 So. 2d 1163, 1166 (Fla. 4th DCA 2003) (citation omitted). In
undertaking review of a lease, an appellate court is permitted to reassess the contract
and reach a different interpretation from that of the trial court. Sugar Cane Growers
Coop. of Fla. v. Pinnock, 735 So. 2d 530, 534 (Fla. 4th DCA 1999). The contract
should be reviewed as a whole and all language given effect, and where the language
is clear and unambiguous, the contract should be enforced as it reads. Id.3
II. ANALYSIS
At issue in this case is the concept of insurance by implication as it relates to
an insurer’s ability to maintain a subrogation action against a tenant who is not
named in the insurance policy. “Generally, when an insurer pays the claim of its
insured, the insurer stands in the shoes of its insured, and the insurer may bring a
subrogation action against the tortfeasor to recover the amounts paid under the
insurance policy.” State Farm Fla. Ins. Co. v. Loo, 27 So. 3d 747, 748 (Fla. 3d DCA
2010). However, an insurer may not maintain a subrogation action against its own
insured, even if the insured’s negligence caused the loss. Id. In the landlord/tenant
context, when a tenant is found to be an implied co-insured with its landlord, the
landlord’s insurer is barred from bringing an action against the tenant in subrogation.
Here, Zurich seeks to stand in the shoes of its insured, Landlord, to sue Tenant for
any damage to the building that may have been caused by Tenant’s agents or
employees.
In determining whether a landlord’s insurer may pursue a subrogation action
against a negligent tenant, courts have typically adopted one of three views: (1) the
approach set forth in Sutton v. Jondahl, 532 P.2d 478 (Okla. Civ. App. 1975), which
establishes that a tenant is a coinsured of the landlord—and therefore subrogation is
unavailable—absent an express agreement to the contrary; (2) the “anti-Sutton
approach,” which provides a presumption in favor of subrogation and permits an
4
insurer to bring a subrogation action against the tenant absent an express or implied
agreement to the contrary; and (3) the “case-by-case approach.” Loo, 27 So. 3d at
749; see also Am. Family Mut. Ins. Co. v. Auto-Owners Ins. Co., 757 N.W.2d 584,
589-94 (S.D. 2008).
In the case-by-case approach, there is no presumption in favor of or against
subrogation; rather, “the ‘lease as a whole’ is examined ‘in order to ascertain the
intent of the parties as to who should bear the risk of loss for damage to the leased
premises caused by the tenant’s negligence.’” Loo, 27 So. 3d at 750 (quoting Am.
Family, 757 N.W.2d at 592). This Court, along with some of our sister courts, has
adopted the case-by-case approach.1 Id. at 750-51; see also Underwriters of Lloyds
of London v. Cape Publ’ns, Inc., 63 So. 3d 892, 895-96 (Fla. 5th DCA 2011)
(“Although each approach is supported by persuasive policy rationales, this court
1
According to the dissent, our case-by-case approach departs from the majority
view, which is the anti-subrogation approach from Sutton. But see Rausch v.
Allstate Ins. Co., 882 A.2d 801, 814 (Md. 2005) (“The majority of courts, however,
have avoided per se rules and taken a more flexible case-by-case approach, holding
that a tenant's liability to the landlord's insurer for negligence causing a fire depends
on the intent and reasonable expectations of the parties to the lease as ascertained
from the lease as a whole.” (quoting Union Mut. Fire Ins. Co. v. Joerg, 824 A.2d 586(Vt. 2003))). We are, however, bound by our prior cases to follow the case-by-case
approach. Moreover, as articulated by other courts, “[w]e are not particularly
impressed with characterizations of a doctrine as the ‘majority’ or ‘minority’. We
will give due consideration to all decisions of other jurisdictions but will be
persuaded only by the soundness of their reasoning and their consistency with [our
State's] law.” Am. Family, 757 N.W.2d at 594 (alterations in original) (quoting
Koch v. Spann, 92 P.3d 146, 150 n.2 (Or. Ct. App. 2004)).
5
concludes that the parties are in the best position to allocate the risk of loss for fire
damage and, therefore, adopt the case-by-case approach.” (footnote omitted));
Cont'l Ins. Co. v. Kennerson, 661 So. 2d 325, 326-30 (Fla. 1st DCA 1995)
(examining several lease provisions to determine the parties’ intent as to who should
bear the risk of loss for damage caused by tenants’ negligence).
In Loo, the landlord maintained an insurance policy on a rental dwelling unit
it leased to a tenant. 27 So. 3d at 748. During the rental period, a fire occurred at
the premises, and the insurer paid the landlord for the losses. Id. The insurer filed
a subrogation action against the tenant to recover the amounts paid to the landlord,
alleging that the tenant’s negligence caused the fire. Id. The trial court applied the
Sutton doctrine, under which a tenant is an implied co-insured under a landlord’s
policy unless there is an express agreement between the landlord and the tenant to
the contrary. Id. at 748, 753. Because there was no such express agreement, the
trial court granted summary judgement in favor of the tenant, finding it was an
implied co-insured and barring the insurer from suing the tenant in subrogation for
damages caused by the tenant’s negligence. Id. at 748.
This Court reversed, determining that the trial court applied the incorrect legal
standard and instead examined “the terms of the parties’ lease to determine if, as a
matter of law, the parties intended that the tenant would not be held liable for her
negligent acts that damaged the leased premises.” Id. at 751. In Loo, the lease
6
provided that the landlord would repair the premises if damaged by fire “not due to
lessee’s negligence” and prohibited the tenant from keeping materials on the
premises “that might unreasonably increase the danger of fire.” Id. at 752. This
Court, however, noted that nothing in those provisions prevented the landlord from
holding the tenant liable for its negligence, and the landlord never agreed to purchase
insurance for the tenant’s benefit. Id.This Court further relied on three additional factors in Loo in determining that
the tenant was not an implied co-insured under the lease. Id. Specifically, there was
no provision in the parties’ lease (1) that exculpated the tenant from liability for her
own negligence; (2) required the landlord to maintain insurance for the benefit of
the tenant; or (3) shifted to the landlord any loss incurred as a result of the tenant's
negligence. Id. Based on our review of “the lease as a whole,” this Court allowed
the insurer to proceed with its subrogation action against the tenant because the
parties did not intend to limit the tenant’s liability for her negligent acts. Id.(citations omitted).
We begin our examination of the “lease as a whole” in this case with
provisions related to Tenant’s liability to Landlord. Paragraph 41 provides that
“[r]ent shall not be abated and Tenant shall be fully responsible for all repairs and
damages if Premises are partially or totally destroyed by fire or any other casualty
caused by Tenant or its agents.” Not only does Paragraph 41 not exculpate Tenant
7
for its own negligence, it expressly holds it liable. Further, Paragraph 33 eliminates
Landlord’s duty to make repairs to the “structural aspects and elements of the
Building” if such repairs were “occasioned by any intentional or negligent act of
Tenant, its agents, or its employees.”
In addition, the lease contains unilateral provisions that expressly waive
Landlord’s liability and waive Tenant’s right to make a claim against Landlord. See
Cape Publ’ns, 63 So. 3d at 896 (“Applying [the case-by-case] approach to the
commercial lease in this case, we agree . . . that the general provisions requiring [the
tenant] to obtain general liability insurance and indemnify and hold [the landlord]
harmless for its negligence are relevant to determining which party bears the risk of
loss.”). Specifically, Paragraph 9 states: “The Landlord shall not be liable for any
loss or damage to any of Tenant’s personal property or Premises unless directly
caused by the gross negligence or willful misconduct of Landlord . . . nor shall
Landlord be liable for . . . damages incurred or suffered by the Tenant . . . or others
occasioned by . . . fire . . . .” Thus, by its plain language, Paragraph 9 shifts the risk
of loss from Landlord, absent gross negligence or willful misconduct on its part, to
Tenant. Moreover, Paragraphs 24 and 31 require Tenant to indemnify Landlord:
24. INDEMNITY/LIABILITY: Tenant will indemnify
and save Landlord and any mortgagee of the Building
harmless of and from any and all . . . damages . . . arising
from or out of any occurrence in or upon the Premises . . .
.”
...
8
31. TENANT’S RESPONSIBILITIES: . . . Tenant shall be
responsible for, and shall indemnify and hold harmless
Landlord for any and all costs and expenses relating to
such damages, actual or consequential . . . resulting from
Tenant’s failure to properly maintain the Premises and
appurtenances thereto.
(Emphasis added).
The above provisions, when examined to ascertain the intent of the parties as
to who should bear the risk for damage caused by Tenant’s negligence, support
allowing Zurich to proceed with its subrogation claim because Tenant clearly agreed
to bear that risk. See Loo, 27 So. 3d at 750; cf. Kennerson, 661 So. 2d at 330(explaining that the modern trend of authority holds that an “insurer cannot obtain
subrogation against the lessee in the absence of an express agreement or lease
provision establishing the lessee's liability” (emphasis added) (quoting 6A John
A. Appleman & Jean Appleman, Insurance Law and Practice, § 4055 at 77–78
(Supp. 1994))).
We also consider the lease provisions related to the obligation to purchase
insurance. Rather than require Landlord to maintain insurance for the benefit of
Tenant, the lease affirmatively places the burden on Tenant to procure and maintain
insurance for its own benefit and to name Landlord as an additional insured:
25. INSURED LOSS OR DAMAGE: In any event of loss
or damage to the Building, the Premises and/or any
contents, each party shall first exhaust its own insurance
coverage before making any claim against the other party.
As Tenant is obligated to maintain insurance to fully
9
cover all of its losses, in the event Tenant sustains a loss
not fully covered by its own insurance, Tenant
acknowledges that it is self-insured for any uncovered
loss; Tenant expressly waives the right to make any claim
against the Landlord or seek recovery of any damages
from the Landlord or its insurance company arising out of
any loss or incident for which the Tenant should have
maintained its own insurance.
...
26. TENANT INSURANCE: Tenant shall procure and
maintain in force during the term of this Lease . . . , at
its expense, (a) Fire/Windstorm/Property Insurance
with extended coverage endorsement on Tenant’s fixtures,
equipment, furnishings and other contents of the Premises,
for the full replacement cost of said items; and (b)
Comprehensive Commercial / Public Liability insurance .
. . sufficient to protect against liability for damage claims
. . . arising out of accidents occurring in or around the
Premises in a minimum of $1,000,000.00 for each
person injured; $1,000,000.00 for any one accident and
$1,000,000.00 for property damage; and (c) Plate Glass
Insurance . . . . Such insurance policies shall provide
coverage for Landlord’s contingent liability on such
claims or losses, and shall name Landlord as an
additional insured party. . . . Tenant shall maintain
sufficient insurance to fully protect Tenant from all losses
and damages; Tenant indemnifies and saves Landlord
harmless for any claim for which Tenant was
insurable.
(Emphasis added).
Finally, we consider Paragraph 45, which required Tenant to pay, as
additional rent, seventy percent of the Landlord’s operating expenses, including
10
taxes, insurance premiums, and special assessments.2 Tenant argues, based
primarily on this provision, that it was an implied co-insured under the terms of the
lease because it paid a pro rata share of Landlord’s insurance premiums. Similarly,
the dissent seeks to create a bright-line rule—ignoring the other risk-allocating
provisions in the lease—that a landlord’s insurer cannot sue a tenant in subrogation
if the tenant has paid the majority of the landlord’s insurance premiums. But because
we follow the case-by-case approach, we must examine the lease as a whole to
determine whether the parties intended Tenant to be held liable for damages
resulting from its alleged negligence. See, e.g., Loo, 27 So. 3d at 750.
Here, it is clear that the parties did not intend to shift the risk of loss for
damage caused by Tenant’s negligence to Zurich, Landlord’s insurer. As we have
already explained, the lease explicitly holds Tenant liable for damage caused by its
negligence or the negligence of its agents. There are also provisions holding
Landlord harmless for such damage. In addition, the lease required Tenant to
procure and maintain fire insurance for damage “arising out of accidents occurring
in or around the Premises[,]” and Tenant agreed to name Landlord as an additional
insured. Although the lease required Tenant to pay a percentage of Landlord’s
2
This type of provision is found “[i]n virtually all commercial leases . . . .” 49 Am.
Jur. 2d Landlord and Tenant § 358. The purpose is to assure “that the landlord will
actually receive the lease's stated profits, that is, an amount or rent ‘net’ of the cost
of taxes, operating expenses, and the like.” Id.
11
operating costs, including any insurance premiums, nothing in that provision
explicitly required Landlord to purchase fire insurance or to name Tenant as an
insured under the policy.
According to the dissent, this case is “remarkably similar” to Kennerson, a
case in which the First District held that an insurer was not entitled to subrogation
from the tenants. However, a careful reading of Kennerson reveals that the lease
provisions there are markedly different from the provisions here. Although the
tenants in Kennerson paid a pro rata share of the fire insurance, the court did not rely
on that fact alone. Instead, the court considered the lease as a whole. For instance,
the lease in Kennerson provided that “damage caused by fire ‘shall be repaired by
and at the expense of [landlord].’” 661 So. 2d at 328. Moreover, the parties agreed
that the tenant “would be excused even from paying rent for damaged premises while
[the landlord] applied insurance proceeds . . . to effect repairs.” Id. Finally, the lease
in Kennerson had “no provision making [tenant] liable for damages its negligence
might cause.” Id. at 329.
Here, in contrast, the parties agreed that Tenant would be “fully responsible”
for damage caused by fire, and Landlord had no obligation to make repairs
“occasioned by any intentional or negligent act of Tenant, its agents, or its
employees.” Further, the parties explicitly agreed that Tenant would be liable for
damages caused by its negligence, that it would maintain its own fire insurance for
12
damage claims “arising out of accidents occurring in or around the Premises[,]” and
that Landlord would be held harmless for such damage claims. Thus, unlike in
Kennerson, the risk-allocating provisions in this case do not evidence the parties’
intent to shift the risk of loss from a negligent tenant to the landlord’s insurer;
instead, the clear intent of the parties was that Tenant or Tenant’s insurer would bear
the risk of loss due to damage resulting from Tenant’s negligence.3
Finally, we address the dissent’s contention that our case-by-case approach
“runs afoul of the economic realities underlying these sorts of provisions in a lease
. . . .” 4 This policy argument is similar to one that formed the basis of the Sutton
decision. In holding that there should be a presumption against subrogation, the
Sutton court explained that its anti-subrogation approach “is derived from a
recognition of a relational reality, namely, that both landlord and tenant have an
3
The risk-allocating provisions in this case also distinguish it from Cape
Publications. There, the Fifth District found—based on the landlords’ express
agreement to purchase insurance and tenant’s payment of a pro rata share of the
premium—that the parties intended that the risk of loss be borne by the landlords’
insurer. Cape Publ’ns, 63 So. 3d at 896. However, the court, in its case-by-case
approach, never mentions any provisions in the lease explicitly holding the tenant
liable for damage resulting from its own negligence.
4
Under the dissent’s approach, almost every commercial lease is transformed into
an insurance policy providing coverage for negligent tenants because virtually all
commercial leases require the payment of operating expenses. See supra note 2.
This is not the law in Florida. Were it, insurance companies would find themselves
on the hook for damages caused by negligent tenants whom they have never met
much less had the opportunity to assess and assign risk in calculating the amount of
the premium being charged to their landlords under the landlords’ own policies of
insurance.
13
insurable interest in the rented premises—the former owns the fee and the latter has
a possessory interest.” 532 P.2d at 482. But we do not follow the Sutton approach,
and we agree with other courts that have taken the case-by-case approach that
“courts have no business adding insureds to an insurance policy in order to achieve
their perception of good public policy.” Rausch, 882 A.2d at 815 (citing 56 Assocs.
ex rel. Paolino v. Frieband, 89 F. Supp. 2d 189, 193 (D.R.I. 2000)); see also Am.
Family, 757 N.W.2d at 591 (“The insurer has a right to choose whom it will insure
and did not choose to insure the lessees . . . .” (quoting 6A, J.A. Appleman, Insurance
Law and Practice § 4055 at 78 (2005))).
III. CONCLUSION
Based on our review of the lease as a whole, and in light of this Court’s
decision in Loo, we conclude that Tenant is not an implied co-insured under Zurich’s
policy, and therefore, Zurich may proceed with its subrogation action against
Tenant. Accordingly, because we find the trial court erred in concluding that Tenant
was an implied co-insured with Landlord under its policy with Zurich and in
dismissing Zurich’s subrogation action against Tenant, we reverse and remand for
further proceedings consistent with this opinion.
Reversed and remanded.
EMAS, C.J., concurs.
14
3D17-0690 Zurich American Insurance Company v Puccini
Logue, J. (dissenting)
The issue in this case is whether a landlord’s insurer can bring a subrogation
action against a tenant whose alleged negligence caused fire damage to the rented
building when, under the lease, the tenant paid the majority of the premiums for the
landlord’s fire insurance. Until this case, the answer in Florida was no, a tenant who
paid the insurer’s premiums could not be sued in subrogation by the insurer. Because
the majority opinion departs from well-established Florida law and the modern
trends across the country, I respectfully dissent.
The crucial provisions of the lease specify that (1) in addition to other rent,
the tenant will pay 70% of the landlord’s expenses including “premiums for all
insurance applicable to the Building,” which premiums for the first year of the lease
were agreed to be $20,654.45; (2) the tenant will pay any increased premiums for
the landlord’s building insurance caused by the tenant’s use; and (3) “[i]n the event
of loss or damage to the Building, the Premises and/or any contents, each party shall
first exhaust its own insurance coverage before making any claim against the other
party.” Taken together, these lease provisions indicate that the “parties plainly
agreed to shift the risk of fire damage to an insurance company.” Cont’l Ins. Co. v.
Kennerson, 661 So. 2d 325, 328 (Fla. 1st DCA 1995).
15
Kennerson is remarkably similar to this case. In Kennerson, a landlord’s
insurer sued a tenant in subrogation for allegedly causing the fire that damaged the
rental property. The lease at issue in Kennerson, like the one at issue here, required
the tenant to pay “in addition to the rent elsewhere provided herein, as additional
rent hereunder, its pro rata share of all costs of fire and extended coverage insurance
for the shopping center.” Id. at 326. Because the tenant was paying the premiums
for the landlord’s fire insurance, the court held that the landlord’s insurer could not
sue the tenant in subrogation. The First District concluded:
a landlord’s insurer cannot exercise any right of
subrogation against a merely negligent tenant to recover
money paid the landlord under a fire insurance policy,
where the landlord has agreed to bear the expense of
repairing fire damage and has assumed responsibility for
procuring fire insurance, the cost of which the tenant has
agreed to bear and has in fact borne.
Id. at 330.
When examining a commercial transaction, a court must consider the
economic realities that informed the bargain between the parties. Under the
majority’s reading of the lease, the tenant is essentially required to obtain two fire
insurance policies to insure the same building from the same risk of loss. The tenant
must pay the premiums for a fire policy to protect the landlord from the tenant’s
negligence, and it must pay the premiums for a second fire policy to protect himself
from his own (the tenant’s) negligence. This reading makes no economic sense from
16
the perspective of either the landlord or the tenant: it increases the economic rent to
the tenant with no corresponding benefit to the landlord.
Because it runs afoul of the economic realities underlying these sorts of
provisions in a lease, the majority’s reading of the lease runs contrary to the modern
trend of authority that bars subrogation against a tenant contractually obligated to
pay a landlord’s insurance premiums. The majority of courts that have considered
this issue have held that such provisions are properly read to indicate the parties’
agreement to shift the risk of a fire loss from the parties to the insurance carrier. See
id. at 330-31 & n.1 (citing the great weight of authority from numerous jurisdictions
supporting the proposition that a landlord’s insurer had no right of subrogation
against the tenant that either directly or indirectly paid its premiums).
The majority attempts to distinguish Kennerson by focusing on lease
provisions other than those relied upon by Kennerson and the majority of
jurisdictions. The crucial lease provision in Kennerson, which was the express basis
for its holding, is substantively the same as the crucial provision here. It required the
tenant to pay the landlord’s fire insurance premiums, but did not require the landlord
and tenant to be named as co-insureds for the fire insurance. Id. at 328.5
5
The addendum to paragraph 15 of the lease deals with fire insurance. Admittedly,
paragraph 10 of the lease, which concerned general liability insurance for tort claims
by third parties, required the landlord and tenant to be named as co-insureds. The
Kennerson opinion expressly points out, however, that paragraph 10 “contrasts with
the addendum to paragraph 15” in this regard. Id. The opinion further notes that the
17
The Fifth District reached a result similar to Kennerson in Underwriters of
Lloyds of London v. Cape Publications, Inc., 63 So. 3d 892, 896 (Fla. 5th DCA
2011). In Cape Publications, the Fifth District held that
[t]he lease expressly provides that the [landlord]
would purchase a property and casualty insurance policy,
which undisputedly covered fire damage on the
commercial building. The parties further agreed that [the
tenant’s] rent included its pro rata share of the premium.
These specific provisions . . . plainly indicate that the
parties intended the risk of loss be borne by the
[landlord’s] insurer.
Id.The majority’s attempt to distinguish Cape Publications is also unpersuasive.
Whether or not the lease at issue here “expressly” provided that fire insurance be
purchased, the lease “expressly” provided the tenant must pay fire insurance
premiums, thereby clearly and unequivocally indicating the intent of the parties that
the risk of fire loss be borne by the landlord’s insurer whose premiums were being
paid by the tenant.
State Farm Florida Insurance Co. v. Loo, 27 So. 3d 747 (Fla. 3d DCA 2010),
the main case relied upon by the majority, is not controlling because the tenant in
that case did not pay the premiums for the fire insurance, as occurred here. In fact,
“agreement to carry general liability insurance constitutes additional protection that
would apply in circumstances involving liability to injured third parties not at issue
here.” Id. at 328 n.2 (emphasis added) (citations and quotations omitted).
18
the court in Loo distinguished Kennerson on this basis while still approving the way
Kennerson “relied on lease provisions requiring the landlord to bear the expense of
repairing any fire damage and to procure fire insurance on the property, the cost of
which the tenant has agreed to bear and has in fact borne.” Id. at 753 (citations and
quotations omitted).
The majority suggests I am taking a legal position whereby “every
commercial lease is transformed into an insurance policy providing coverage for
negligent tenants.” But that is of course the case for any commercial lease where the
tenants are paying fire insurance premiums for a policy to protect the building from
their own negligence. In the final analysis, I merely submit that we follow the rather
unremarkable and well-established law that an insurance company cannot bring an
action in subrogation against a tenant for a fire loss covered by fire insurance for
which the tenant pays the premiums. See Kennerson, 661 So. 2d at 330; Cape
Publ’ns., 63 So. 3d at 894-96; Loo, 27 So. 3d at 752-53.
For these reasons, I think the trial court was correct. I would uphold the trial
court’s final order of dismissal.
19