Insured Makes Sufficient Claim For Actual Cash Value Payment

    The court denied, in part, the insurer’s motion for summary judgment that argued the insured made an insufficient showing of entitlement to Actual Cash Value (ACV) payments under the policy. RR Restoration, LLC v. Empire Indem. Ins. Co., 2023 U.S. Dist. LEXIS 129388 (M.D. Fla. July 16, 2023).

    Amblewood Condominium suffered damage from Hurricane Irma. Amblewood held a property policy with Empire that covered nine buildings, which with a separate insurance limit, premium and deductible. 

    A week after Hurricane Irma hit, Amblewood filed a claim for property damage. Two years later, Amblewood assiigned its rights under the policy to RR Restoration. As assignee, RR Restoration submitted nine anticipated repair estimates, one for each damaged building. The estimated cost for all nine repairs totalled $5.7 million. Each invoice was for repairs not yet made. Empire responded that submission of anticipated repairs alone did not trigger the Replacement cost provision under the policy, explaining that the policy did not cover anticipated repair costs. RR Restoration filed a complaint for breach of contract. Empire moved for summary judgment.

    The policy provided Replacement Cost Value for the full cost of repair or replacement without deduction for depreciation if an insured actually replaced or repaired the damage property. ACV recognised that the insurer was entitled to deduct reasonable depreciation from the value of a loss. The purpose of ACV was to place the insured back in the position she enjoyed prior to loss. Empire argued that RR Restoration could not establish a breach of the policy because the claim was based solely on RCV and no repairs were ever made. 

    Because there was no genuine issue of material fact that no actual repairs were made under the plain language of the policy, there was no breach of the policy. Therefore, Empire was entitled to summary judgment with respect to any claim for RCV damages.

    RR Restoration argued that a jury could return a verdict for it on the issue of whether an ACV claim was asserted because the estimates attached to the complaint and submitted pre-suit necessarily included the ACV amount as the ACV was derived specifically from RCV. An exhibit to the complaint included a line item, marked “ACV” and an associated dollar amount. The complaint stated that “by failing to make complete payment to Plaintiff for the reasonable services rendered or to be rendered in connection with the Claim, Defendant breached the Policy.” The court held that this allegation, along with the “ACV” noted in the estimates that were attached to the complaint, along with the summary judgment record before the court, created a genuine issue of material fact as to whether ACV damages were requested by Plaintiff pre-suit. 

    Empire argued that the estimates did not apply depreciation. The policy, however, did not require the claimant to include depreciation as its initial proof of loss and did not explain that depreciation was an element of a claim for ACV. Empire’s interpretation would add a new term to the policy, which the court could not do. RR Restoration’s failure to include depreciation in its estimates did not support a finding for summary judgment in Empire’s favor.