Nearly a decade after Hurricane Matthew churned up the Florida coast, a legal battle over sewage damage at a popular local restaurant chain has taken another twist.
On Friday, Florida’s Fifth District Court of Appeals handed down a ruling that confirmed an insurance broker breached its duty to Houligan’s Pub & Club and Ormond Wine Company. However, the court threw out the million-dollar jury award, ordering a new trial to figure out exactly how much the broker actually owes.
The dispute dates back to October 2016, when Hurricane Matthew impacted Volusia County. In the aftermath of the storm, nasty sewage backed up through the floor drains of the Ormond Beach venues, causing massive damage. The restaurant owners turned to their insurance policy, underwritten by Lloyd’s of London, expecting the cleanup to be covered.
READ: SBA Drops Hammer On Minnesota: 6,900 Borrowers Suspended In $400M Fraud Probe
It wasn’t. Lloyd’s denied the claim, and a court later backed them up, ruling the specific policy didn’t cover that type of water damage.
Left with the bill, the restaurants sued their insurance broker, Brown & Brown of Florida, Inc. They argued that the broker’s agent, Chris Tolland, had made negligent misrepresentations and failed his fiduciary duty by not securing the right coverage—or at least telling them it wasn’t available.
A Volusia County jury agreed. While they didn’t blame Brown & Brown for failing to find the insurance (if it didn’t exist in the marketplace), they did find the broker at fault for misleading the clients. The jury awarded Houligan’s and Ormond Wine over $1.5 million in damages combined.
Brown & Brown appealed, arguing they shouldn’t be on the hook for damages if the insurance policy didn’t exist to begin with.
In the January 2 opinion, Judge Scott Makar rejected the broker’s attempt to dodge liability. Writing for the panel, Makar noted that even if the specific coverage wasn’t available in the marketplace, a broker still has a duty to be honest.
READ: Knives, Sunglasses, And A Polaroid: Florida Keys Car Break-In Takes A Dangerous Turn
“A reasonable jury could find that even if the insurance… was unavailable in the marketplace, [the broker] should have timely notified [the client] so that [the client] could consider its alternatives,” Makar wrote, citing a recent precedent.
Basically, the court ruled that an insurance professional can’t mislead a business owner about coverage, even if that coverage is hard to find.
However, the broker scored a significant victory on the price tag. The appellate court found that the jury calculated the $1.5 million payout based on the terms of the Lloyd’s of London policy—the same policy that courts previously said didn’t cover the sewage loss.
Because the damages were calculated using a policy that didn’t apply, the appeals court reversed the monetary award.
The case now heads back to the trial court. Brown & Brown remains liable for the bad advice and breach of duty, but a new jury will have to decide how much that mistake is actually worth in cold, hard cash.
Please make a small donation to the Tampa Free Press to help sustain independent journalism. Your contribution enables us to continue delivering high-quality, local, and national news coverage.
Sign up: Subscribe to our free newsletter for a curated selection of top stories delivered straight to your inbox.
