On September 27, 2021, Judge Jose Martinez of the U.S. District Court for the Southern District of Florida granted summary judgment in favor of Scottsdale Insurance Company in LMP Holdings Inc. v. Scottsdale Ins. Co., case no. 20-24099. The case arose out of a Hurricane Irma claim reported more than two years after the storm.

The insured, LMP Holdings, Inc., owned a commercial property located in Miami. The insured claimed the property sustained damage from Hurricane Irma, which struck South Florida on September 10, 2017. The insured’s handyman and one of the insured’s officers inspected the property the day after the storm. The handyman noticed punctures on the roof, which he patched, and a panel from one of the air conditioner units on the roof that had come off. The insured’s officer noticed extensive water damage in the storage room and some water damage in the office reception area.

The insured began to notice other issues over time. In the months following the storm, the insured had further problems with the air conditioner, a water stain appeared on the ceiling tile, and the insured began to notice rot and deterioration damage. However, the insured did not report a claim to Scottsdale until December 10, 2019, approximately two years and three months after the storm. Scottsdale denied coverage for the loss, and the insured filed suit.

Under Florida law, late notice creates a rebuttable presumption of prejudice to the insurer. When the undisputed factual record establishes that notice is so late that no reasonable juror could find it timely, Florida courts will deem the notice untimely as a matter of law. Courts have held that a period of even six months or less is not considered “prompt” notice.

Here, the insured waited 27 months after first noticing damage to the property to report it, and accordingly, as a matter of law, the insured’s notice was untimely. The court held that, regardless of whether the insured believed the damages would not exceed the deductible, prompt notice is not excused because an insured might not be aware of the full extent of damage or that the damage would exceed the deductible.

Therefore, the burden shifted to the insured to put forth evidence to rebut the presumption of prejudice that arose from the insured’s failure to provide prompt notice. The court noted that while the insured alleged Scottsdale failed to set forth any evidence that it was prejudiced by the late reporting, it was not Scottsdale’s burden to do so.

The court held that the insured failed to meet its burden, as the only evidence the insured proffered to rebut the presumption of prejudice was that both parties’ experts gave different opinions as to the causation of the damages sustained. Further, the insured undertook several repairs prior to filing its claim with Scottsdale, so Scottsdale was prejudiced by not being able to inspect the property prior to those repairs and by not participating in the repair of the damages.

The court found that the insured failed to proffer any evidence that an earlier inspection, and in particular, one conducted before the repairs were made, would not have impacted the investigation. Accordingly, the court granted summary judgment in favor of Scottsdale.

The decision provides further support for insurers in relying on a late notice defense when a claim is reported long after the date of loss.