New Trial Because Jury Used Policy That Provides No Coverage to Assess Damages
Post 5255
Read the full article at https://lnkd.in/drG3xH2R, see the video at https://lnkd.in/d6p8e-9p and at https://lnkd.in/dgPsQ3Sn, and at https://zalma.com/blog plus more than 5250 posts.
In Brown & Brown of Florida, Inc. v. Houligan’s Pub & Club, Inc., and Ormond Wine Company, LLC, Nos. 5D2024-2352, 5D2024-2458, Florida Court of Appeals (January 2, 2026) the Court of Appeals was faced with a case of first impression that involved damages from a hurricane that hit the East Coast of Florida almost a decade ago and the extent to which an insurance broker is responsible for paying for such damages.
The jury entered a verdict in favor of the insurance broker on the insured’s claim that it was negligent in failing to procure insurance, but it found in favor of the insured on claims of breach of fiduciary duty and negligent misrepresentation.
The insurance broker does not contest it breached its duties on these two claims, only whether the damages awarded are proper.
FACTS
Brown & Brown of Florida, Inc., an insurance broker, was engaged by Houligan’s Pub & Club, Inc. and Ormond Wine Company, LLC to procure commercial property insurance for their restaurants in Ormond Beach, Florida. Agent Chris Tolland assured the insureds regarding the coverage he would secure, ultimately procuring only Lloyd’s of London policies. In October 2016, Hurricane Matthew caused significant damage to the properties due to sewage intrusion.
The claims made under the Lloyd’s policy were denied, and a court judgment confirmed no coverage for the damages. Subsequently, Houligan’s and Ormond Wine sued Brown & Brown for negligent failure to procure insurance, breach of fiduciary duty, and negligent misrepresentation. After trial, the jury found for Brown & Brown on the negligent procurement count but against them on the breach of fiduciary duty and negligent misrepresentation claims, allocating 60% negligence to Brown & Brown and 40% to the insureds, resulting in substantial monetary judgments.
LEGAL ISSUES
On appeal, Brown & Brown did not dispute the breach of fiduciary duty or the negligent misrepresentation, but challenged the damages awarded.
The central legal issue was whether the measure of damages and causation for breach of fiduciary duty and negligent misrepresentation claims should be governed by precedent which addressed only negligent procurement of insurance. The trial court correctly declined to apply Brown & Brown’s precedent and relied on established principles that appellate decisions are limited to their facts and holdings.
Breach of fiduciary duty and negligent misrepresentation are potentially broader claims that are not necessarily bound to the existence of a specific insurance policy. Florida law recognizes separate causes of action for breach of fiduciary duty and negligent misrepresentation and holds that each is a distinct theory of recovery.
An insurance agent or broker who agrees or undertakes to procure certain insurance coverage owes his principal a duty to do so within a reasonable time. When the agent fails to do so, even if the agent is not to blame for the failure, he may nevertheless become liable for damages if he fails to inform his principal that the requested insurance has not been procured.
Applying this principle, a reasonable jury could find that even if the insurance the plaintiff wanted was unavailable in the marketplace, the insurance broker should have timely notified the plaintiff so that the plaintiff could consider its alternatives.
Brown & Brown persuasively pointed out that the jury’s damage award was largely based on the Lloyd’s policy, which had been held in the prior declaratory judgment litigation to not provide coverage to Houligan’s or Ormond Wine. That determination was affirmed by this Court.
As such, it was error to allow the jury to calculate damages based on a policy that this Court has said does not provide coverage. Because this error is not harmless, the appropriate remedy was to remand this matter for a retrial limited solely to damages without reliance on the Lloyd’s policy. Pre-judgment interest will also have to be recomputed. The Court of Appeals affirmed the trial court as to all other issues.
ZALMA OPINION
An insurance agent or broker promises to provide the insured with the insurance required. Failure to do so can cause damage to the insured and allows it to sue for damages. In this case it could only sue for damages due to breach of fiduciary duty and negligent misrepresentation. The trial court erred in allowing the jury to set damages based on a policy that provided no coverage to the insureds instead of limiting them to breach of fiduciary duty and/or negligent misrepresentation. New trial only on damages.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to my substack at https://barryzalma.substack.com/subscribe
Go to X @bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the InsuranceClaims Library – https://lnkd.in/gwEYk.
Insurance Expert May Not Testify to Speculative and Contains Unsupported Conclusions.
Posted on September 18, 2026 by Barry Zalma
See the full video at and at https://rumble.com/v7fmifw-expert-may-only-testify-to-what-experience-supports.html
In Michele A. Over, and The Estate Of Paul R. Over v. State Farm Mutual Automobile Insurance Company, and State Farm Fire And Casualty Company, Civil Action No. 23-cv-02243-PAB-STV, United States District Court, D. Colorado (September 14, 2026) Michele and Paul Over sued State Farm Fire and State Farm Auto over hail-damage and stolen-vehicle claims.
The operative dispute concerned State Farm Auto’s motion to exclude or limit opinions from plaintiffs’ insurance-industry expert, Aaron Castillo. Castillo.
Law
The proponent of expert testimony must establish by a preponderance of the evidence that an expert is qualified and that the opinions are helpful, sufficiently grounded, and reliably derived and applied. Experience-based opinions must explain how the...
150 Months in Prison for Tax Fraud
Post 4846
Posted on September 17, 2026 by Barry Zalma
See the full video at https://lnkd.in/g8rh3JBX and https://lnkd.in/gmkdy-9C, In United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
In United States Of America v. Thomas Addaquay, United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
Thomas Addaquay controlled United Consolidated Accounting and Business Services (UC), nominally a check-cashing business.
The government proved a three-stage tax-refund scheme that converted the resulting refund checks into usable funds through ...
Major Fraud Perpetrator Asserts Fifth Amendment Privilege to Avoid Prosecution
Post 5489
Posted on September 14, 2026 by Barry Zalma
Fraudster Refuses to Answer Questions About His Alleged Fraud
See the full video at https://lnkd.in/gvicAMDr and at https://lnkd.in/gvicAMDr
In Great American Insurance Co. v. Gemstone Property Management, LLC, et al., No. 23-cv-9100 (LJL), United States District Court, S.D. New York (September 8, 2026) Great American Insurance Company alleged that it was defrauded through a scheme in which Subin Associates, LLP recruited individuals to stage construction-site injuries, arranged unnecessary medical treatment and litigation funding, and pursued fraudulent personal-injury claims.
Luis Manuel Garcia Salcedo, resulted in a $6 million settlement. Non-party Jose Hernandez allegedly worked as an assistant manager at Subin, operated Hernandez Associates, and owned litigation-funding companies that shared office space with Subin and provided services to its clients.
After Great American ...
Theft of Confidential Information
Post 4581
Posted on November 12, 2026 by Barry Zalma
In People Center, Inc. v. Deel, Inc., et al., No. 25-cv-02576-CRB (LJC), United States District Court, N.D. California (November 7, 2026) People Center, doing business as Rippling, and Deel compete in payroll and human-resource management software. Rippling alleges that Deel and its executives recruited Rippling employee Keith O’Brien, based in Ireland, to disclose confidential information and trade secrets.
THE IRISH SUIT
Rippling sued O’Brien in Ireland and Deel in the United States. O’Brien subsequently retained separate counsel, supplied an affidavit describing the alleged espionage, and entered into a Cooperation Agreement with Rippling. In exchange for his cooperation, Rippling agreed to provide financial assistance, indemnification, and conditional dismissal of the Irish proceedings. The agreement also permitted renewed proceedings or a monetary judgment upon a material breach.
The Irish proceedings against O’Brien were dismissed...
A Proposed Amended Complaint That Includes New Factual Allegations to Remedy Pleading Deficiencies
Posted on November 11, 2026 by Barry Zalma
After Dismissal Fraud Victim May Amend Complaint After Dismissal
Post 4580
If A Proposed Amendment Is Not Clearly Futile, Then Denial Of Leave To Amend Is Improper
In John Hancock Life & Health Insurance Company v. Caring Connections LLC, Arthur Feldheim, and Blime a/k/a Vera Feldheim, Civ. No. 25-7574 (MAS)(JBD), United States District Court, D. New Jersey (November 6, 2026) John Hancock sued Caring Connections LLC, Arthur Feldheim, and Blime a/k/a Vera Feldheim on June 5, 2025, asserting thirteen claims, including fraud, breach of contract, and aiding and abetting fraud.
On March 26, 2026, this Court entered an order granting Caring Connections’ motion to dismiss and granting in part and denying in part the Feldheims’ motion to dismiss. The dismissed claims were dismissed without prejudice, and John Hancock timely sought leave to amend.
They also argued that the New ...
Is Exhaustion Required to Seek Declaratory Relief From an Excess Insurer?
Post 4578
Posted on November 9, 2026 by Barry Zalma
In Fox Paine & Company, LLC, et al. v. Twin City Fire Insurance Company et al., S287404, 593 P.3d 832, 593 P.3d 838, 346 Cal.Rptr.3d 541, Supreme Court of California, (July 27, 2026) the Supreme Court noted that Insurance is sometimes procured in a series of layers, with an insured acquiring a primary insurance policy that provides an initial layer of coverage for loss or liability and an excess insurance policy or policies that provide additional coverage in the event the underlying coverage is exhausted. Usually, the first layer of coverage must be exhausted before the excess layers are available to the insured.
Exhaustion
Fox and Paine’s investment-firm dispute generated extensive litigation and competing insurance claims. Their insurance tower consisted of a $10 million primary policy and four $10 million excess layers.
The Fox Parties alleged that insurers paid their rivals, withheld information,...
