New Trial Because Jury Used Policy That Provides No Coverage to Assess Damages
Post 5255
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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.
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Happy Law Day
ZIFL – Volume 30, Issue 9 – May 1, 2026
Read the full article at https://www.linkedin.com/pulse/zalmas-insurance-fraud-letter-may-1-2026-barry-zalma-esq-cfe-2tywc, see the video at at and at https://zalma.com/blog plus more than 5300 posts.
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
ZIFL – Volume 30, Issue 9 – May 1, 2026
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year and is written by Barry Zalma.
DOJ Creates National Fraud Enforcement Division
Will the Feds Take on Insurance Fraud? Possibly as Part of a National Anti-Fraud Effort
On April 7, 2026, the Acting Attorney General, Todd Blanche, issued a memorandum establishing the Department of Justice National Fraud Enforcement Division (NFED). The memo describes an ambitious, but perhaps redundant, vision for this ...
When Abalone Died As a Result of Multiple Causes The Efficient Proximate Cause Requires Payment
Post number 5345
Read the full article at https://www.linkedin.com/pulse/efficient-proximate-cause-doctrine-saves-claim-barry-zalma-esq-cfe-yndlc, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.
In American Abalone Farms, LLC v. Star Insurance Company et al., H052643, California Court of Appeals, Sixth District (April 27, 2026) the Court of Appeals dealt with an insurance coverage issue that required application of the efficient proximate cause doctrine.
FACTS
American Abalone Farms, LLC ("American Abalone" ) operates an aquaculture farm in Santa Cruz County, California, raising abalone in tanks. In August 2020, the CZU Lightning Complex Fires led to a prolonged power outage and road closures near the farm. As a result, the farm’s water pumps failed, causing the death of most of the ...
Breach of a Specific Condition Precedent Is a Complete Defense
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In United Services Automobile Association and State Farm Mutual Automobile Insurance Company v. Anthony Wenzell, 2026 CO 25 (Colo. Apr. 27, 2026) Anthony Wenzell was rear-ended in a car accident. He had a significant prior 2014 accident that required back surgery.
Wenzell claimed underinsured-motorist (UIM) benefits under three policies: (1) the tortfeasor’s liability policy, (2) his own primary UIM policy with State Farm, and (3) an excess UIM policy issued by USAA (under his brother’s policy, which contained an “other insurance” clause making USAA’s coverage excess over any collectible insurance).
After receiving the claims, both USAA and State Farm repeatedly requested that Wenzell execute comprehensive medical-release authorizations so they could obtain his full medical records and ...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
What Must be Done after Notice of a Claim is Received by the Insurer
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A first party property policy does not insure property: it insures a person, partnership, corporation or other entity against the risk of loss of the property. Before an insured can make a claim for indemnity under a policy of first party property insurance the insured must prove that there was damage to property the risk of loss of which was insured by the policy. The obligation imposed on the insured ...
