The owner of a fire-damaged warehouse in Florida struggles in the fifth circle to revive a claim that a broker and insurer negatively tried to obtain adequate insurance for the warehouse and claimed that the court should have applied another state's law to its summary judgment. The warehouse owner rented the warehouse to a Florida-based producer distributor, who in turn purchased a $ 5 million insurance policy from Alterra American Insurance Co. A fire later led to $ 10 million in damage to the warehouse, which Alterra paid $ 5 million limit.
The warehouse owner then sued the broker and the insurer and tried to get the difference between the policy limit and the actual damage in the warehouse. But a Mississippi court dismissed a suit and found that under the Mississippi law, the owner was missing the sue because it was not a third party recipient of the contract that the tenant made with the broker to obtain insurance for the warehouse.
On appeal the owner claims that Florida law, not the Mississippi law, should apply. According to the Florida Act, negligence can claim that even if the owner was not the recipient of the insurance policy. The notification had rejected the owner's request for it to conduct a legal analysis and apply Florida law to the case.
Although it remains to be seen how the fifth circuit will govern, the case shows the importance of early analysis of which state law should apply to any potential claim, in particular, damages claims, such as negligence, which cannot be determined by a policy provision. It can make the difference in whether a suit survives, and ultimately if a loss is recovered.
The case is Emerald Coast Finest Produce Co. Inc. v. Alterra American Insurance Co. et al. Case number 1