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Applying Florida law, the 11th Circuit in Shiloh Christian Center v. Aspen Specialty Ins. Co., 22-11776, has reversed a district court’s grant of summary judgment in favor of an insurer, instead holding that the subjective intent of the parties to exclude named windstorms from a property insurance policy did not trump the plain language of the policy that provided such coverage.
The insured suffered damage from hurricanes in 2016 and 2017 that ripped the roof off its building and caused water and other damage. The 2015 policy originally provided named windstorm coverage, but the insured asked for such coverage to be removed. An endorsement was issued, reduced premium was charged moving forward, and past premiums for such coverage were refunded. In 2016, the policy was renegotiated with the insured, who sought the same coverage as the 2015 policy. However, the policy issued provided named windstorm coverage, despite the insured’s representative scribbling “EX wind” on the application. Notwithstanding the prior policy, the writing on the application, and the request to broker for the 2016 policy to provide the same coverage as the 2015 policy, the 2016 policy did not contain an exclusion for named windstorms. The 2016 policy did contain a litany of other exclusions.
In 2016, Hurricane Matthew struck the insured’s property, and the insurer denied coverage on several grounds, including that the policy excluded damage resulting from a named windstorm.
In 2017, the renewal process repeated itself, and again the property was struck by a hurricane, this time Hurricane Irma, and again the insurer denied coverage, relying, in part, on the named windstorm exclusion that was absent from the language of the 2017 policy just as it had been from the 2016 policy.
The insured sued, claiming it was entitled to coverage, and the district court entered summary judgment in favor of the insurer, stating, “Given the above evidence—e.g., the explicit bargaining to remove named windstorm coverage, the reduced premiums that resulted from that bargaining, and the explicit language in the subsequent policy quotes indicating named windstorm coverage would not be included—there can be no reasonable dispute that the parties intended the policies at issue to exclude named windstorm coverage, and no reasonable jury could find otherwise.” (emphasis in original).
In reversing the district court, a unanimous panel of the 11th Circuit applied the following principle: “the rule applicable to unambiguous policies is ruthlessly straightforward: If the policy’s ‘language is unambiguous, it governs’ – end of story.” (emphasis in original). Relying on the Florida Supreme Court’s decisions in Gov’t Emps. Ins. Co. v. Macedo, 228 So. 3d 1111 (Fla. 2017) and Wash. Nat’l Ins. Corp. v. Ruderman, 117 So. 3d 943 (Fla. 2013), the Court found that Florida law dictates “that facial ambiguities in insurance contracts should be resolved by reference to contra proferentem rather than extrinsic evidence of the parties’ supposed ‘intent.’”
Applying this principle, the Court held that the 2016 policy expressly covered and did not exclude named windstorms and that the district court’s reliance on the extrinsic evidence was erroneous. As to the 2017 policy, the insured conceded that the policy was ambiguous, but the Court held that any ambiguity must be resolved in favor of coverage. The Court thus remanded the matter to the district court, but it did not instruct summary judgment to be entered in favor of the insured because it did not ask for such relief.
Though this decision was resolved against the insurer, it reaffirms an important principle of law that is usually of great aid to insurers: unambiguous policy language is to be applied as written without consideration of extrinsic evidence.