CALDERWOOD & HARKNESS LLP 333 SE 2nd Avenue, Suite 4400 Miami, FL 33131

CALDERWOOD & HARKNESS LLP 333 SE 2nd Avenue, Suite 4400 Miami, FL 33131
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
MEMORANDUM
TO: Elaine Forsythe, Responsible Partner; Tiffany Rosenthal, Lead Associate
FROM: Andrew Fitzpatrick, Working Associate
DATE: August 25, 2023
RE: Deposition Outline — Franklin Orde, Account Executive, Tidewater Risk Advisors LLC
MATTER: Verimark Hospitality Group Inc. v. Ironclad Indemnity Corp. et al., Case No. 2022-CA-031547 (Eleventh Judicial Circuit, Miami-Dade County)
ENGAGEMENT NO.: 1021-00003
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I. PURPOSE AND BACKGROUND
This memorandum sets forth the detailed examination outline for the deposition of Franklin Orde, currently scheduled for Monday, August 28, 2023. The outline has been prepared in advance of the deposition to ensure that the examination is comprehensive, strategically organized, and focused on eliciting the testimony most critical to the claims advanced by our client, Verimark Hospitality Group Inc. ("VHG"), in this coverage dispute.
Franklin Orde is an Account Executive at Tidewater Risk Advisors LLC ("Tidewater"), located at 2600 S. Bayshore Drive, Suite 800, Miami, FL 33133. Tidewater has served as VHG's insurance broker of record for the relevant period and continues to serve in that capacity. Orde was the primary point of contact for VHG on the placement, servicing, and renewal of VHG's all-risk property and business-interruption insurance program. In that capacity, Orde was personally responsible for the marketing of VHG's program to the insurance market, the negotiation of policy terms with carriers, the procurement and delivery of binders and final policy forms, and ongoing consultation with VHG's risk management team regarding coverage questions and claims.
Most critically for purposes of this litigation, Orde was the broker who negotiated and effected the July 2022 renewal of all four layers of VHG's property insurance tower, including the Ironclad Indemnity Corporation ("Ironclad") primary layer policy bearing policy number IIC-PRP-2022-07541. The central coverage issue in this case is whether the $15 million named-windstorm business-interruption sub-limit that appeared in the prior-year Ironclad primary policy was deleted during the July 2022 renewal negotiations. VHG contends that the sub-limit was expressly negotiated away during the renewal process at VHG's direction, that Ironclad's underwriting department agreed to the deletion in exchange for an increased premium, and that the binding coverage in effect at the time of Hurricane Callista (September 18, 2022) did not include such a sub-limit. Ironclad, by contrast, asserts that the sub-limit remained in effect for the 2022–2023 policy period and that VHG's business-interruption recovery is therefore capped at $15 million under the primary layer, rather than the full $25 million policy limit.
Orde is the single most important witness on this issue. He participated directly in the renewal negotiations, communicated with Ironclad's underwriting department about the sub-limit deletion, received Ironclad's agreement to delete the sub-limit, and conveyed the results of those negotiations to VHG's Vice President of Risk Management, Sandra Pellegrini. His testimony will be essential both for establishing the facts underlying VHG's coverage position and for supporting VHG's pending motion for partial summary judgment on the windstorm sub-limit issue, which is currently targeted for filing on November 1, 2023. We anticipate seeking a supporting declaration from Orde based on his deposition testimony to accompany that motion.
Orde was subpoenaed via Subpoena Duces Tecum served on June 20, 2023. The subpoena called for the production of all documents relating to the placement and renewal of VHG's property and business-interruption insurance program, including but not limited to all correspondence, emails, file memoranda, internal notes, binders, policy forms, endorsements, premium quotations, marketing submissions, and any other documents relating to communications with Ironclad regarding the named-windstorm sub-limit for the July 1, 2022 through July 1, 2023 policy period. Tidewater produced responsive documents on July 28, 2023, which have been reviewed and incorporated into this outline. Key documents from the Tidewater production are identified in Section III.I below.
A note regarding the strategic significance of this deposition: Orde's testimony is not only essential to the merits of the coverage claim but is also essential to support VHG's pending motion for partial summary judgment on the windstorm sub-limit issue. If Orde provides clear, unequivocal testimony that the sub-limit was deleted during the renewal negotiations, and that testimony is corroborated by documentary evidence, VHG will have a strong foundation for seeking summary adjudication of this issue. We should therefore approach the deposition with an eye toward obtaining testimony that is sufficiently specific and well-documented to withstand a summary judgment challenge.
Defense counsel present at the deposition will likely include Gregory Stanton and/or Meredith Liang of Fendowell Rourke & Stanton LLP, who represent Ironclad Indemnity Corporation and Pinnacle Surplus Lines Inc. in this litigation, and Patricia Kraus and/or Raymond Cho of Delvecchio & Kraus LLP, who represent Montclair Assurance Company and Sovereign Re Ltd. Both defense firms have been active in discovery and should be expected to conduct cross-examination of Orde focused on the areas identified in Section III.L of this outline.
II. DEPOSITION OBJECTIVES
The deposition of Franklin Orde should be structured to accomplish the following nine primary objectives, listed in approximate order of priority:
1. Establish Orde's Role and Relationship with VHG. As a threshold matter, we must confirm that Orde was the lead broker responsible for placing and servicing VHG's property insurance program, including the July 2022 renewal. This establishes Orde's personal knowledge and his authority to negotiate coverage terms on VHG's behalf. We should elicit testimony regarding the scope of his responsibilities, the duration of his relationship with VHG, and his direct involvement in all material aspects of the renewal process.
2. Confirm the Windstorm Sub-Limit Deletion. This is the single most important objective. We must elicit clear, unambiguous testimony that during the July 2022 renewal negotiations, Ironclad's underwriter agreed to delete the $15 million named-windstorm business-interruption sub-limit from the primary layer policy in exchange for an increased premium. Orde's testimony on this point must be specific as to the identity of the Ironclad underwriter who agreed to the deletion, the timing of that agreement, and the form in which the agreement was communicated or memorialized.
3. Document the Communications Chain. We need to identify every written and oral communication between Orde (or any other Tidewater personnel) and Ironclad's underwriting department regarding the sub-limit deletion. This includes emails, telephone calls, in-person meetings, and any other form of communication. For each communication, we should establish the date, participants, substance, and whether any written record exists.
4. Establish the Representations Made to VHG. We must confirm what Orde communicated to Sandra Pellegrini and other VHG personnel about the deletion of the sub-limit. This is important both for establishing VHG's reliance on the broker's representations and for demonstrating that VHG reasonably believed the sub-limit had been removed when it accepted the renewal terms and paid the premium.
5. Identify the Premium Impact. We must confirm that the primary layer premium of $980,000 reflected the removal of the windstorm sub-limit — that is, that the premium was higher than it would have been if the sub-limit had remained in place. This evidence of additional premium consideration supports VHG's position that the deletion was part of the bargained-for exchange and was not merely a preliminary discussion point.
6. Establish the Binder and Policy Issuance Timeline. We need to clarify the sequence of the binder, any interim endorsements, and the final policy form, and to identify whether any discrepancy between the binder terms and the final policy form was identified or communicated to VHG or to Ironclad. This timeline is critical to addressing Ironclad's expected argument that the final policy form controls and that the binder is not the operative contract.
7. Address the Excess Layers. We should confirm Orde's involvement in placing the three excess layers (Pinnacle Surplus Lines Inc., Montclair Assurance Company, and Sovereign Re Ltd.), all of which are follow-form to the Ironclad primary policy, and establish whether the sub-limit deletion was communicated to the excess carriers during the renewal process. This affects the scope of coverage available under the entire $60 million tower.
8. Lay Foundation for Impeachment of Ironclad's Position. We should obtain testimony that directly contradicts Ironclad's assertion that the sub-limit remained in effect for the 2022–2023 policy period. Orde is uniquely positioned to testify about what Ironclad's own underwriting department represented regarding the sub-limit, and any such testimony will be powerful evidence against Ironclad's current coverage defense.
9. Probe for Any Adverse Information. Finally, we should explore whether Orde is aware of any basis for Ironclad's claim that the sub-limit was not deleted, and identify any ambiguity in the policy endorsements that could support Ironclad's position. It is better to learn about any adverse facts during a deposition we control than to be surprised by them at trial or during cross-examination. If there is ambiguity in the final policy form, we need to understand the nature and source of that ambiguity so that we can address it proactively.
III. EXAMINATION TOPICS AND QUESTIONS
The following sections set forth the substantive areas to be covered during the examination, together with suggested questions and lines of inquiry. The questions are organized thematically rather than in strict chronological order, though the examination itself should generally proceed chronologically within each topic area. Tiffany should use her judgment to adjust the order and emphasis based on the witness's demeanor and responses during the deposition.
A. Background and Qualifications
The deposition should open with standard background questions designed to establish Orde's identity, professional qualifications, and foundation of knowledge. These questions also serve the practical purpose of allowing the witness to become comfortable with the deposition process before we move into the substantive areas.
•  Please state your full name for the record.
•  What is your business address?
Expected answer: Tidewater Risk Advisors LLC, 2600 S. Bayshore Drive, Suite 800, Miami, FL 33133.
•  What is your current title at Tidewater Risk Advisors?
Expected answer: Account Executive.
•  How long have you been employed by Tidewater Risk Advisors LLC? When did you join the firm?
•  What was your position when you first joined Tidewater, and how has your role evolved over time?
•  Please describe your current responsibilities as an Account Executive at Tidewater.
•  Do you hold a Florida insurance broker license? What is your license number? Are you licensed in any other states?
•  How many years of experience do you have in commercial property insurance brokerage?
•  Please describe your educational background, including any college or university degrees.
•  Do you hold any professional designations, such as CPCU, ARM, CIC, or any other insurance industry credentials?
•  Approximately how many commercial property insurance accounts do you currently manage or service?
•  What is the approximate range of total insured values for the accounts you service?
•  Have you ever been deposed before? If so, in how many matters, and what were the general subject areas? Were any of those depositions in connection with insurance coverage disputes?
•  Have you ever testified at trial?
•  Have you ever been the subject of any professional disciplinary proceedings related to your insurance broker license?
These foundational questions should be covered efficiently but thoroughly. It is important to establish Orde's credentials and experience level, as this enhances the weight of his subsequent testimony regarding the renewal negotiations and sub-limit deletion. A witness with extensive experience in commercial property insurance brokerage is more credible when testifying about underwriting practices, policy terms, and the significance of specific endorsements.
B. Relationship with VHG
After establishing Orde's general background, the examination should turn to his specific relationship with VHG. The purpose of this section is to demonstrate that Orde had a long-standing, close working relationship with VHG's risk management team and was intimately familiar with VHG's insurance program, coverage needs, and priorities.
•  When did Tidewater Risk Advisors LLC first become the broker of record for Verimark Hospitality Group Inc.?
•  How long have you personally serviced the VHG account? Were you the primary account executive from the beginning of Tidewater's engagement, or did you take over the account from another broker at the firm?
•  Who are your primary contacts at VHG for insurance matters? Please identify each person by name and title.
Expected answer: Sandra Pellegrini (Vice President, Risk Management); Nathaniel Driscoll (General Counsel); Diane Calder (Chief Financial Officer).
•  Of those contacts, with whom do you interact most frequently regarding VHG's property and business-interruption insurance program?
•  How frequently do you communicate with Sandra Pellegrini? By what means — email, telephone, in-person meetings?
•  Please describe the scope of Tidewater's brokerage services for VHG. Does Tidewater handle all of VHG's insurance needs, or only certain lines?
Probe: Property, casualty, general liability, directors and officers, employment practices liability, cyber, umbrella/excess, other.
•  For purposes of this deposition, I'd like to focus on VHG's all-risk property and business-interruption insurance program. Is that a program you are personally responsible for placing and servicing?
•  Please identify the VHG properties insured under the property/BI program that are at issue in this case.
Expected answer:
(a) Verimark Grand Key Resort, located at Mile Marker 48, Marathon, FL 33050;
(b) Verimark Harborview Hotel & Conference Center, located at 1400 Estero Boulevard, Fort Myers Beach, FL 33931;
(c) Verimark Sunset Shores, located at 7200 Gulf Boulevard, St. Pete Beach, FL 33706.
•  Are there any other VHG properties insured under the same all-risk property and business-interruption program, or are these the only three?
•  What is the approximate total insured value of these three resort properties under the current program?
•  Given that all three properties are located on or near the Florida coast, would you agree that named windstorm exposure is a significant consideration in the design and placement of VHG's property/BI program?
•  What were VHG's general instructions or priorities for the property/BI program? Specifically, did VHG express a desire for full all-risk coverage without sub-limits on named windstorm, given the Florida coastal exposure of its properties?
•  Did Sandra Pellegrini or anyone else at VHG ever communicate to you that elimination of the named-windstorm sub-limit was a priority for VHG?
•  To your knowledge, was the removal of the windstorm sub-limit a significant factor in VHG's decision to pay the premium quoted for the July 2022 renewal?
C. Structure of VHG's Insurance Tower — July 2022 Renewal
This section of the examination should walk through the full structure of VHG's insurance tower as renewed for the July 1, 2022 through July 1, 2023 policy period. The purpose is to establish the complete coverage program in a clear and organized manner, identify each carrier and policy, and confirm the follow-form nature of the excess layers.
•  Mr. Orde, I'd like to walk through the structure of VHG's property and business-interruption insurance program as it was renewed effective July 1, 2022. Can you describe the overall structure of the program?
•  How many layers of coverage are in the program?
•  Let's start from the bottom. What is the primary layer of coverage?
Expected answer: Ironclad Indemnity Corporation, policy number IIC-PRP-2022-07541, with a limit of $25 million and a deductible of $500,000.
•  What is the first excess layer?
Expected answer: Pinnacle Surplus Lines Inc., policy number PSL-XS1-2022-3390, providing $15 million in excess of the $25 million primary layer (i.e., $15 million excess of $25 million).
•  What is the second excess layer?
Expected answer: Montclair Assurance Company, policy number MAC-XS2-2022-09817, providing $10 million in excess of $40 million (i.e., $10 million excess of $40 million).
•  What is the third and final excess layer?
Expected answer: Sovereign Re Ltd., policy number SRL-XS3-2022-5102, providing $10 million in excess of $50 million (i.e., $10 million excess of $50 million).
•  So the total limits of the program, above the $500,000 deductible, are $60 million. Is that correct?
•  What were the annual premiums for each layer of the program for the July 1, 2022 through July 1, 2023 policy period?
•  Was this the same tower structure as the prior policy year, July 1, 2021 through July 1, 2022? Were the same carriers on each layer, or were there changes in carriers, limits, or attachment points at the July 2022 renewal?
•  If there were any changes to the tower structure, please describe them.
•  Turning to the excess layers specifically — are the Pinnacle, Montclair, and Sovereign Re policies all "follow form" to the Ironclad primary policy?
•  What does "follow form" mean in the context of this insurance program? Does it mean that the terms, conditions, definitions, and exclusions of the Ironclad primary policy are incorporated by reference into the excess policies?
•  So if a coverage term in the Ironclad primary policy is modified — for example, if a sub-limit is deleted — would that modification flow through to all three excess layers?
D. The Named-Windstorm Sub-Limit — Prior Policy Year
Before addressing the July 2022 renewal negotiations, the examination should establish the baseline: the existence of the $15 million named-windstorm sub-limit in the prior-year policy, VHG's awareness of and dissatisfaction with that sub-limit, and VHG's instructions to Tidewater to negotiate its removal.
•  Mr. Orde, I'd like to turn to the Ironclad primary policy for the prior policy year — July 1, 2021 through July 1, 2022. Did that policy contain a named-windstorm sub-limit on business-interruption coverage?
•  What was the amount of that sub-limit?
Expected answer: $15 million.
•  Can you explain what that sub-limit meant in practical terms? How did it affect VHG's coverage?
Expected answer: The sub-limit capped VHG's business-interruption recovery for losses arising from named windstorms at $15 million under the primary layer, rather than the full $25 million policy limit. In other words, even though the primary policy provided $25 million in overall coverage, BI losses specifically caused by named windstorms were subject to the lower $15 million ceiling.
•  Was VHG aware of this sub-limit during the prior policy year?
•  Did Sandra Pellegrini or anyone else at VHG raise concerns about the sub-limit during the prior policy year?
•  Did VHG's concerns about the sub-limit arise at any particular time — for example, in connection with a specific storm event or in advance of the 2022 renewal cycle?
•  What specific instructions did VHG give Tidewater regarding the named-windstorm sub-limit in connection with the July 2022 renewal? Did VHG direct Tidewater to negotiate the removal or deletion of the sub-limit?
•  Who at VHG communicated those instructions to you? Was it Sandra Pellegrini?
•  When were those instructions communicated — approximately what date?
•  Were those instructions communicated in writing, such as by email, or verbally?
•  Did you understand that the deletion of the named-windstorm sub-limit was a priority for VHG in the 2022 renewal?
E. July 2022 Renewal Negotiations — The Core Issue
This is the most critical section of the deposition. The examination must elicit detailed, specific testimony regarding the renewal negotiations with Ironclad, the request for deletion of the sub-limit, Ironclad's response, the terms of the agreement, the premium consideration, and the documentary record of the agreement. Tiffany should take her time with this section and build the record methodically. Every factual detail matters here, and the testimony must be sufficiently detailed and specific to withstand scrutiny on summary judgment.
1. Timeline of Renewal Negotiations
•  Mr. Orde, let's talk about the July 2022 renewal process. When did the renewal process for VHG's property/BI program typically begin, relative to the July 1 inception date?
•  So for the July 1, 2022 renewal, would the process have begun approximately 60 to 90 days before inception — that is, in approximately April or May 2022?
•  Can you walk me through the general timeline of the renewal process? What are the typical steps involved?
•  When did you first submit renewal terms to Ironclad for the primary layer?
•  What form did that submission take? Was it a written marketing submission, a renewal application, or something else?
•  Did the submission include specific terms that VHG was requesting for the renewal, including the deletion of the named-windstorm sub-limit?
2. Ironclad Underwriter Identification
•  Who at Ironclad Indemnity Corporation was the underwriter or underwriters with whom you negotiated the terms of the July 2022 renewal?
•  Please provide the full name, title, and office location of each Ironclad underwriter you dealt with on this renewal.
•  Was there a single primary underwriter at Ironclad who had authority to agree to coverage terms, or were there multiple people involved in the decision?
•  How did you typically communicate with the Ironclad underwriter(s) — by email, telephone, in-person meetings, or some combination?
•  How frequently were you in contact with the Ironclad underwriter(s) during the renewal period?
3. Substance of Negotiations Regarding the Sub-Limit
•  Did you specifically request the deletion of the $15 million named-windstorm business-interruption sub-limit during the renewal negotiations?
•  When did you first raise the sub-limit deletion with Ironclad? What was the approximate date?
•  How did you communicate the request — by email, telephone call, or in person?
•  What was Ironclad's initial response to the request to delete the sub-limit?
•  Did Ironclad initially resist the deletion? If so, on what grounds?
•  Were there counter-proposals from Ironclad — for example, did Ironclad propose an increased premium in exchange for the sub-limit deletion?
•  What was the final agreement? Did Ironclad agree to delete the $15 million named-windstorm sub-limit from the primary layer?
•  When was that agreement reached? What was the approximate date?
•  Who at Ironclad communicated the agreement to you? Was it the underwriter you previously identified?
•  How was the agreement communicated to you — by email, telephone call, or otherwise?
•  Was the agreement to delete the sub-limit subject to any conditions or qualifications?
4. Premium Consideration
•  Let's talk about the premium. The annual premium for the Ironclad primary layer for the July 1, 2022 through July 1, 2023 policy period was $980,000. Is that correct?
•  What was the primary layer premium for the prior policy year — July 1, 2021 through July 1, 2022, when the $15 million sub-limit was in place?
•  Was the $980,000 premium for the 2022 renewal higher than the prior-year premium?
•  To what extent did the deletion of the named-windstorm sub-limit contribute to the premium increase? Was it a factor in the premium being set at $980,000?
•  Did Ironclad's underwriter specifically indicate that the premium reflected the removal of the sub-limit — that is, that VHG was paying additional premium in consideration for the deletion?
•  If the sub-limit had remained in place, would you have expected the premium to be lower than $980,000?
•  Was the premium differential between the with-sub-limit and without-sub-limit scenarios discussed during the negotiations? If so, what were the approximate numbers?
5. Form of Agreement — Documentary Record
•  Was the sub-limit deletion memorialized in writing at any point during the renewal negotiations?
•  Please identify every document that reflects or memorializes the agreement to delete the named-windstorm sub-limit. This includes emails, letters, binder confirmations, endorsements, or any other written record.
•  Was a binder issued prior to the policy inception date of July 1, 2022?
•  What was the date of the binder?
•  What did the binder state regarding the named-windstorm sub-limit? Did the binder reflect the deletion of the sub-limit?
•  Who issued the binder — Ironclad directly, or was it issued through Tidewater?
•  When was the final policy form for policy IIC-PRP-2022-07541 issued? What was the approximate date?
•  Was the deletion of the named-windstorm sub-limit reflected in the final policy form and its endorsements?
•  This is an important question, Mr. Orde, so I'd like you to take your time. Does the final issued policy — IIC-PRP-2022-07541 — contain or omit the named-windstorm sub-limit endorsement?
•  If the final policy form contains language that is ambiguous regarding the sub-limit, can you explain the nature of that ambiguity?
•  If there is ambiguous language in the final policy form regarding the sub-limit, what is your understanding of why that ambiguity exists? What were you told by Ironclad's underwriting department about the sub-limit status as reflected in the final policy?
•  Is there a gap or discrepancy between the binder terms and the final policy form with respect to the named-windstorm sub-limit?
•  If so, when did you first become aware of that discrepancy?
•  What did you do when you became aware of the discrepancy, if anything? Did you contact Ironclad's underwriting department to address it?
•  Did Ironclad's underwriting department acknowledge the discrepancy? What was their response?
F. Communications with VHG About the Sub-Limit Deletion
This section addresses what Orde communicated to VHG about the sub-limit deletion, and establishes VHG's reliance on those communications. This is important for two reasons: first, it supports VHG's claim that it reasonably believed the sub-limit had been removed; and second, it may support a reformation claim if the final policy form does not clearly reflect the deletion.
•  What did you communicate to VHG regarding the status of the named-windstorm sub-limit during the July 2022 renewal negotiations?
•  Specifically, what did you tell Sandra Pellegrini about the sub-limit?
•  When did you inform VHG that the sub-limit had been deleted? What was the approximate date?
•  How did you communicate that information — by email, telephone, or in person?
•  Did you provide VHG with any written confirmation that the sub-limit had been deleted?
•  Was VHG provided with a copy of the binder? If so, did the binder reflect the deletion of the sub-limit?
•  Was VHG provided with a copy of the final policy form, including all endorsements? If so, when?
•  Did you review the final policy form with VHG? Did you walk Sandra Pellegrini or anyone else at VHG through the policy terms, including the status of the named-windstorm sub-limit?
•  At any point during or after the renewal process, did you inform VHG that there was any ambiguity, uncertainty, or question about whether the sub-limit had been successfully deleted?
•  Did VHG, to your knowledge, rely on your representations about the sub-limit deletion in accepting the renewal terms and authorizing payment of the $980,000 primary layer premium?
•  Did anyone at VHG ever question you about whether the sub-limit had actually been deleted?
G. Communications with Excess Carriers
Because the three excess layers are follow-form to the Ironclad primary policy, the deletion of the primary sub-limit has implications for the entire tower. This section addresses Orde's communications with the excess carriers about the sub-limit deletion.
•  Did you communicate the deletion of the named-windstorm sub-limit to any of the excess carriers — Pinnacle Surplus Lines, Montclair Assurance, or Sovereign Re — during the July 2022 renewal process?
•  How was the deletion communicated to the excess carriers? Was it included in the renewal submission, or was it communicated separately?
•  Since the excess layers are follow-form to the Ironclad primary, how would the deletion of the primary sub-limit affect coverage under the excess layers? Would the excess layers also provide coverage for named-windstorm BI losses without a sub-limit?
•  Were the excess carriers' premiums affected by the sub-limit deletion? Did the premium for any excess layer change as a result of the deletion?
•  Did any of the excess carriers raise any questions or concerns about the sub-limit deletion?
•  To your knowledge, did any of the excess carriers issue their policies based on the understanding that the named-windstorm sub-limit had been deleted from the primary layer?
H. Post-Loss Communications
This section addresses Orde's involvement and communications after Hurricane Callista struck on September 18, 2022, causing the property damage and business-interruption losses that give rise to VHG's claim.
•  Mr. Orde, were you aware that Hurricane Callista made landfall in Southwest Florida on September 18, 2022, causing significant damage to VHG's insured resort properties?
•  After Hurricane Callista, did you assist VHG with the notice of loss submitted to Ironclad?
•  When was the notice of loss submitted? Was it on or about September 22, 2022?
•  Did you prepare or help prepare the notice of loss? What was your role?
•  Were you involved in or aware of the inspection of VHG's properties conducted by Arbor Claims Services on or about October 5, 2022?
•  Did you have any communications with Ironclad or Arbor Claims Services after the loss regarding the named-windstorm sub-limit?
•  When did you first learn that Ironclad was asserting that the windstorm sub-limit had not been deleted from the primary policy?
•  Did you learn of Ironclad's position in connection with the reservation of rights letter dated October 12, 2022, or did you learn of it earlier through other communications?
•  What was your reaction when you learned that Ironclad was asserting the sub-limit had not been deleted?
•  Did you contact Ironclad's underwriting department to confirm the deletion after learning of Ironclad's position?
•  If so, whom did you contact, and what was said?
•  Did you receive any response from Ironclad's underwriting department? What was their position?
•  Did you provide any written confirmation to VHG or to Calderwood & Harkness LLP regarding the sub-limit deletion after the dispute arose?
•  Have you had any communications with Ironclad's claims department regarding the sub-limit? Specifically, have you had any communications with Victor Haddon of Ironclad's claims department?
•  Have you had any communications with Ironclad's outside counsel, Gregory Stanton of Fendowell Rourke & Stanton LLP, or Meredith Liang of that firm, regarding the sub-limit?
•  If so, please describe the substance of those communications, including the date, participants, and what was discussed.
I. Documents to Reference / Use as Exhibits
The following documents should be assembled and organized in advance of the deposition for potential use as exhibits during the examination. Andrew Fitzpatrick will manage the exhibits during the deposition.
1.  Tidewater's renewal submission to Ironclad (spring/early summer 2022), including any cover letter, marketing submission, or renewal application that references the request to delete the named-windstorm sub-limit.
2.  Emails between Orde and Ironclad underwriter(s) regarding the sub-limit deletion, including any chain of correspondence reflecting the negotiation, counter-proposals, and final agreement.
3.  Binder for policy IIC-PRP-2022-07541, dated on or about July 1, 2022, including all terms and conditions stated in the binder and any reference to the sub-limit.
4.  Final policy form IIC-PRP-2022-07541, including all endorsements, riders, and schedules. Pay particular attention to any endorsement or rider that addresses, references, or purports to impose the named-windstorm sub-limit.
5.  Any endorsement or rider reflecting (or purporting to reflect) the windstorm sub-limit — if the final policy contains such an endorsement, this document should be marked as a separate exhibit so that Orde can testify about the discrepancy between the agreed terms and the endorsement language.
6.  Premium invoices showing the $980,000 primary layer premium for the July 1, 2022 through July 1, 2023 policy period.
7.  Comparison of prior-year premium vs. 2022 renewal premium — to demonstrate the premium increase associated with sub-limit removal. If a formal comparison document does not exist, we should prepare a demonstrative exhibit showing the prior-year premium alongside the 2022 renewal premium.
8.  Communications from Orde to Sandra Pellegrini regarding the renewal terms, including any email, letter, or summary of coverage confirming the deletion of the sub-limit.
9.  Orde's file memoranda or internal notes regarding the VHG renewal, including any contemporaneous notes of telephone calls or meetings with Ironclad's underwriting department.
10.  All documents produced by Tidewater in response to the Subpoena Duces Tecum served June 20, 2023. These documents should be reviewed in full, and any key documents not otherwise listed above should be flagged for potential use as exhibits.
11.  Prior-year Ironclad policy (July 1, 2021 through July 1, 2022), including the named-windstorm sub-limit endorsement, for comparison with the July 2022 renewal policy.
All exhibits should be pre-marked with sequential exhibit stickers before the deposition. Andrew should prepare a master exhibit list with brief descriptions of each document.
J. Orde's Understanding of Other Coverage Issues
While the named-windstorm sub-limit is the central issue in this case, there are several related coverage issues that may arise during the deposition or that may become relevant later in the litigation. This section addresses Orde's understanding of these collateral coverage issues.
•  Period of Restoration: Did you advise VHG on the policy's period-of-restoration provision? Did VHG discuss with you the expected duration of property closures following a major windstorm event? What is your understanding of how the period of restoration is calculated under the Ironclad primary policy?
•  Flood Exclusion: Was the flood exclusion language discussed during the July 2022 renewal process? Did VHG request any modifications to the flood exclusion?
•  Did VHG request any modifications to the anti-concurrent causation clause in the Ironclad primary policy during the 2022 renewal?
•  Did you advise VHG on the interaction between windstorm coverage and the flood exclusion for storm surge? Specifically, did you discuss with VHG how the policy would respond to losses caused by a combination of wind and storm surge during a named windstorm?
•  Were there any changes to the flood exclusion language or the anti-concurrent causation clause at the July 2022 renewal?
•  If so, please describe those changes and the reason they were made.
These questions may not need to be explored in depth during Orde's deposition unless time permits, but they should be asked at a minimum to preserve the record and to identify any additional areas of inquiry for future depositions or discovery.
K. Prior Claims Experience
This section addresses VHG's prior claims history under the property/BI program, including any prior windstorm claims and any prior disputes with carriers in the tower.
•  Has VHG made any prior property or business-interruption claims under the Ironclad primary policy or any other layer of the tower?
•  If so, please describe each prior claim, including the date, the nature of the loss, the carrier(s) involved, and the outcome.
•  Has VHG made any prior windstorm claims under the program? If so, was the named-windstorm sub-limit ever an issue in connection with a prior claim?
•  Have there been any prior disputes between VHG and Ironclad, or between VHG and any other carrier in the tower, regarding coverage under the property/BI program?
•  If so, please describe the nature of those disputes and how they were resolved.
•  Did any prior claims experience inform VHG's decision to seek deletion of the named-windstorm sub-limit at the July 2022 renewal?
L. Potential Adverse Areas / Defense Lines of Questioning to Anticipate
This section identifies the areas where defense counsel is likely to focus their cross-examination of Orde. Understanding these anticipated lines of attack is essential for two purposes: first, to allow Tiffany to address these issues affirmatively during our direct examination (thereby blunting their impact on cross); and second, to prepare for the possibility that defense counsel will elicit testimony on these points that may need to be rehabilitated.
1. Final Policy Form vs. Binder. Defense counsel will almost certainly probe whether the sub-limit deletion was definitively reflected in the final policy form or whether it remained in a draft or interim status. Ironclad's position appears to be that the binder is not the operative contract and that the final policy form — which may contain the sub-limit endorsement — controls the coverage. We should be prepared for detailed questioning about the distinction between the binder and the final policy, and Orde should be asked about his understanding of the legal effect of the binder under Florida law.
2. Preliminary vs. Binding Communications. Defense counsel may suggest that Orde's communications with Ironclad's underwriting department regarding the sub-limit deletion were preliminary and non-binding — that is, that the underwriter's agreement to delete the sub-limit was tentative or conditional, and that the deletion was never finalized. We should affirmatively establish that the agreement was definitive and unconditional.
3. Record-Keeping and Documentation. Defense counsel may question Orde's record-keeping practices and probe whether he has contemporaneous written documentation of the agreement to delete the sub-limit, or whether he is relying primarily on memory. If Orde's testimony is based largely on recollection rather than documents, defense counsel will attempt to undermine his credibility. We should identify and introduce as many contemporaneous documents as possible to corroborate Orde's testimony.
4. Broker Error Theory. Defense counsel may attempt to shift blame to Tidewater for any ambiguity in the final policy form. The argument would be that if the sub-limit was not clearly deleted in the final policy, it is because Tidewater failed to follow through on the negotiation or failed to review the final policy form carefully — i.e., that the problem is broker error, not insurer misconduct. This theory could have implications for VHG's claim against Ironclad (by suggesting that VHG's remedy lies against its broker rather than its insurer) and could also expose Tidewater to a potential E&O claim.
5. Tidewater's E&O Exposure. Related to the broker error theory, defense counsel may ask whether Tidewater has notified its own professional liability (errors and omissions) insurer of a potential claim arising from this coverage dispute. This is a sensitive area. We should anticipate this line of questioning and consider whether to instruct the witness not to answer on relevance or privilege grounds, depending on the circumstances.
6. Orde's Potential Bias. Defense counsel may suggest that Orde has a personal interest in testifying that the sub-limit was deleted because, if it was not, Orde's failure to secure the deletion would constitute a professional error that could expose him and Tidewater to liability. This potential bias should be addressed head-on during our examination if possible.
We should prepare Tiffany to address each of these areas during direct examination so that they are not raised for the first time on cross. Where possible, we should elicit Orde's testimony on these points before defense counsel has the opportunity to frame them adversely.
IV. KEY TESTIMONY WE NEED FROM THIS WITNESS
To summarize, the following are the essential pieces of testimony that must be obtained from Franklin Orde during this deposition:
1. Unequivocal Confirmation of the Deletion. We need Orde to testify, clearly and without qualification, that Ironclad's underwriter agreed to delete the $15 million named-windstorm business-interruption sub-limit during the July 2022 renewal negotiations. This testimony must be specific enough to withstand summary judgment scrutiny — i.e., it must identify the Ironclad underwriter who agreed, the date of the agreement, the manner in which the agreement was communicated, and any conditions attached.
2. Identification of Specific Communications. We need Orde to identify the specific emails, telephone calls, and/or meetings in which the deletion was discussed and agreed upon, including dates, participants, and substance. Contemporaneous written communications (particularly emails) are the most valuable evidence and should be identified and introduced as exhibits.
3. Confirmation of Premium Consideration. We need Orde to confirm that VHG paid an increased premium of $980,000 for the primary layer that reflected the removal of the sub-limit. This establishes that the deletion was part of the bargained-for exchange and was supported by consideration. We should also establish the prior-year premium for comparison purposes to quantify the premium differential attributable to the deletion.
4. Confirmation of Representations to VHG. We need Orde to testify that he communicated to Sandra Pellegrini and/or other VHG personnel that the sub-limit had been deleted, and that VHG accepted the renewal terms and paid the premium in reliance on those representations. This supports VHG's reasonable expectations argument and any potential estoppel or reformation claim.
5. Testimony Regarding Any Policy-Form Discrepancy. If the final issued policy contains ambiguous language regarding the sub-limit, Orde's testimony about what was agreed and what Ironclad's underwriter represented will be critical to establishing that the policy should be reformed or interpreted to reflect the parties' actual agreement. Orde's testimony on this point must be detailed and must address both the nature of the ambiguity and the reason it exists (e.g., administrative error in the policy issuance process, delay in issuing the correct endorsement, etc.).
6. Foundation for the Declaration. Ultimately, the testimony obtained at this deposition will form the basis for a declaration to be filed in support of VHG's motion for partial summary judgment on the windstorm sub-limit issue, targeted for November 1, 2023. The deposition testimony must be sufficiently clear, specific, and well-documented to support a declaration that will withstand opposition and survive any challenge to its sufficiency.
V. LOGISTICAL NOTES
The following logistical details should be confirmed and finalized before the deposition:
•  Deposition Date: Monday, August 28, 2023.
•  Location: To be confirmed. The deposition will likely be held at one of two locations: (a) Tidewater Risk Advisors LLC offices, 2600 S. Bayshore Drive, Suite 800, Miami, FL 33133; or (b) Calderwood & Harkness LLP Miami office, 333 SE 2nd Avenue, Suite 4400, Miami, FL 33131. Confirm the location with Tidewater and opposing counsel no later than August 25, 2023.
•  Examining Attorney: Tiffany Rosenthal (Lead Associate) will conduct the direct examination of Orde. Andrew Fitzpatrick will serve as second-chair and will be responsible for managing the exhibits, tracking the outline, monitoring objections, and taking contemporaneous notes of testimony for the post-deposition summary.
•  Estimated Duration: 3 to 4 hours. Given the importance of this witness and the number of topics to be covered, we should plan for a full day if necessary, but should aim to complete the examination efficiently.
•  Court Reporter: A certified court reporter must be arranged. Confirm the reporter has been retained and will be present at the deposition location by 9:00 a.m. on August 28, 2023.
•  Videographer: We recommend that this deposition be videotaped for potential trial use. Given the importance of Orde's testimony to the central coverage issue, video testimony may be highly effective at trial, particularly if Orde is not available to testify live. Confirm that a videographer has been retained and coordinate with the court reporter.
•  Orde's Counsel: Confirm whether Tidewater Risk Advisors LLC has retained separate counsel to represent Orde at the deposition, or whether Orde will appear without personal counsel. Tidewater is a non-party witness served by subpoena, and there is no obligation for Tidewater to retain counsel for Orde's deposition. However, given the potential E&O implications discussed in Section III.L above, it is possible that Tidewater has consulted with counsel. If Orde appears with personal counsel, that counsel's identity and role should be noted on the record at the outset of the deposition.
•  Notice to Opposing Counsel: Confirm that proper notice of the deposition has been served on all parties in accordance with the Florida Rules of Civil Procedure.
VI. CROSS-REFERENCE TO OTHER DEPOSITIONS
The following depositions have been completed or are scheduled, and their testimony should be reviewed in advance of the Orde deposition to identify areas of consistency, potential contradiction, and opportunities for corroboration:
Victor Haddon Deposition (July 10, 2023). Victor Haddon is Ironclad Indemnity Corporation's claims representative assigned to the VHG claim. Haddon's deposition testimony should be reviewed carefully for any statements regarding what the Ironclad claims department understood about the status of the named-windstorm sub-limit at the time of the Hurricane Callista loss. In particular, review Haddon's testimony for any admissions regarding communications between Ironclad's claims department and Ironclad's underwriting department about the sub-limit deletion. If Haddon acknowledged that the underwriting department had agreed to delete the sub-limit, or expressed uncertainty about whether the sub-limit was in effect, that testimony could be used to corroborate Orde's account and to impeach Ironclad's current litigation position. Note any specific transcript pages and lines for potential use at the Orde deposition.
Denise Whitford Deposition (July 24, 2023). Denise Whitford is the claims adjuster at Arbor Claims Services who conducted the inspection of VHG's properties on or about October 5, 2022. Whitford may have been provided instructions or information by Ironclad regarding the sub-limit in connection with her adjustment of the claim. Review Whitford's deposition testimony for any references to the sub-limit, including whether she was instructed to apply the sub-limit in her loss calculations or whether the sub-limit issue was flagged by Ironclad's claims department.
Sandra Pellegrini Deposition (August 14, 2023). Sandra Pellegrini is VHG's Vice President of Risk Management and Orde's primary contact at VHG. Pellegrini's deposition testimony should be reviewed for her account of what Orde communicated to her about the sub-limit deletion, when she learned of the deletion, and the extent to which VHG relied on Orde's representations in accepting the renewal terms and paying the premium. It is essential that Orde's and Pellegrini's testimony on these points be consistent. Any discrepancies should be identified in advance and addressed during the Orde deposition.
Post-Deposition Summary & Key Admissions Memorandum. Following the completion of all fact depositions, a comprehensive memorandum should be prepared consolidating all favorable admissions obtained across all witnesses. The target date for completion of this memorandum is September 5, 2023. The memorandum will serve as the foundation for the partial summary judgment motion and the supporting declaration from Orde.
This memorandum is protected by the attorney-client privilege and the work product doctrine. It has been prepared by counsel in anticipation of litigation and for the purpose of providing legal advice. It is not to be disclosed to any person outside the litigation team without the express authorization of the Responsible Partner.
PREPARED BY:
________________________________________
Andrew Fitzpatrick Working Associate Calderwood & Harkness LLP 333 SE 2nd Avenue, Suite 4400 Miami, FL 33131 Telephone: (305) 555-7200
Email: afitzpatrick@calderwoodharkness.com
Date: August 25, 2023
cc: Litigation File (1021-00003)
Layer | Carrier | Policy Number | Limit | Attachment | Annual Premium
Primary | Ironclad Indemnity Corp. | IIC-PRP-2022-07541 | $25,000,000 | $500,000 deductible | $980,000
1st Excess | Pinnacle Surplus Lines Inc. | PSL-XS1-2022-3390 | $15,000,000 | $25,000,000 | $410,000
2nd Excess | Montclair Assurance Co. | MAC-XS2-2022-09817 | $10,000,000 | $40,000,000 | $265,000
3rd Excess | Sovereign Re Ltd. | SRL-XS3-2022-5102 | $10,000,000 | $50,000,000 | $185,000
Total | $60,000,000 | $1,840,000