(USA Herald) – Miami Beach-based Setai Hotel Acquisition LLC is seeking almost $36 million in damages from its insurers, after its property was damaged by Hurricane Irma in September 2017. The hotel reopened its claim after discovering that the extent of the damage went beyond its initial report to its insurers. However, the insurers refused to pay, according to the Setai. Setai’s motion to amend its complaint against Westchester Surplus Lines Insurance Co. was granted by a Florida federal judge last Wednesday.
Allan S. Reiss of Levine & Partners PA, representing Setai, stated that the hotel company will now file a new complaint by April 10 that will “properly reflect the amount of controversy” and adjust for the suit’s move from state to federal court.
The case has had an interesting history, having been originally a state dispute, before moving to the Southern District of Florida in January. The Setai property was covered by six layered insurance policies, with a primary and an excess policy whose exhaustion triggered two further excess policies.
The amended complaint reads, “Defendants failed and refused to adjust the loss, notify Plaintiff of their position on the claim, failed to communicate with one another, and failed and refused, and still fails and refuses, to pay the loss or any part of it.”
The insurers involved in the case include Landmark American Insurance Company, Liberty Surplus Lines Insurance Company, Axis Surplus Insurance Company, Everest Indemnity Insurance Company, Scottsdale Insurance Company, United National Insurance Company and Westchester Surplus Lines Insurance Co.
Some of the insurers argued that Setai’s report of further damage came too late and that the policy did not cover it. Westchester, a subsidiary of Chubb Limited, moved along with Liberty to strike Setai’s accusations of bad faith on the part of the insurers. The insurers’ position was that bad faith claims are immaterial, impertinent, and scandalous under Florida law, as long as the claimant has not proved that the insurers are liable to cover the damage.
Samuel A. Lopez legal news contributor for USA Herald, said, “This case highlights the bad faith conduct of the insurers, who failed and refused to pay the loss or any part of it, despite having an obligation to do so. It also shows the importance of making sure that all damage is reported to insurers as soon as it is discovered. It will be interesting to see how the court deals with the insurers’ arguments that the claim was too late and not covered by the policy.”
The case is being heard in the U.S. District Court for the Southern District of Florida, and Setai Hotel Acquisition LLC is represented by Allan S. Reiss of Levine & Partners PA. Westchester Surplus Lines Insurance Co. is represented by Katelyn N. Lokuta and William Roderick Lewis of Butler Weihmuller Katz Craig LLP. Landmark American Insurance Company is represented by Elizabeth Salinas of Mozley Finlayson Loggins. Liberty Surplus Lines Insurance Company is represented by Christine M. Renella and Jacarri Montez Walker of Zelle LLP. Axis Surplus Insurance Company is represented by A. Grady Williams IV and Rhett Conlon Parker of Phelps Dunbar LLP. Everest Indemnity Insurance Company is represented by Alexis Dominique Lezama and Robert Steven Horwitz of Conroy Simberg.
By Samuel Lopez, Legal News Contributor for USA Herald
