1021-00003 · Verimark Hospitality Group · Discovery/Plaintiff Propounded

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IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA

CIVIL DIVISION

Case No. 2022-CA-031547 Division: Civil Hon. Catherine Embry

VERIMARK HOSPITALITY GROUP INC., a Delaware corporation,

Plaintiff,

IRONCLAD INDEMNITY CORPORATION, a Connecticut corporation; PINNACLE SURPLUS LINES INC., a Texas corporation; MONTCLAIR ASSURANCE COMPANY, a New York corporation; and SOVEREIGN RE LTD., a Bermuda entity,

Defendants.

PLAINTIFF'S FIRST SET OF INTERROGATORIES TO DEFENDANT IRONCLAD INDEMNITY CORPORATION

Plaintiff, VERIMARK HOSPITALITY GROUP INC. ("VHG" or "Plaintiff"), by and through its undersigned counsel, Calderwood & Harkness LLP, and pursuant to Florida Rule of Civil Procedure 1.340, hereby propounds the following Interrogatories upon Defendant IRONCLAD INDEMNITY CORPORATION ("Ironclad" or "Defendant"). Ironclad is required to serve its answers to the following Interrogatories upon Plaintiff's counsel within thirty (30) days after the date of service hereof, in accordance with Fla. R. Civ. P. 1.340(a). All answers shall be made separately, fully, and under oath, and shall be signed by the party or by an officer or agent of the party upon whom the Interrogatories are served.

Date of Service: June 5, 2023

I. DEFINITIONS

As used in these Interrogatories, the following terms shall have the meanings set forth below:

1. "You," "Your," "Defendant," or "Ironclad" shall mean Ironclad Indemnity Corporation (NAIC No. 20537), a Connecticut corporation, including its officers, directors, employees, agents, representatives, adjusters, underwriters, claims professionals, attorneys (to the extent not protected by the attorney-client privilege or work-product doctrine), and any other person or entity acting on its behalf, at its direction, or under its control.

2. "VHG" or "Plaintiff" shall mean Verimark Hospitality Group Inc. (Nasdaq: VMRK), a Delaware corporation, including its officers, directors, employees, agents, and representatives.

3. "Policy" or "Primary Policy" shall mean the all-risk property and business-interruption insurance policy issued by Ironclad to VHG, bearing Policy No. IIC-PRP-2022-07541, for the policy period July 1, 2022 through July 1, 2023, including all endorsements, amendments, riders, binders, certificates, schedules, and declarations pages attached thereto or forming a part thereof.

4. "Hurricane Callista" or "the Storm" shall mean Hurricane Callista, the Category 4 hurricane that made landfall in the Lower Florida Keys (Big Pine Key area) on September 18, 2022, at approximately 1:30 PM EDT, with maximum sustained winds of approximately 145 miles per hour, as reported by the National Hurricane Center.

5. "Claim" or "the Claim" shall mean VHG's claim for property damage and business-interruption losses arising from Hurricane Callista, as submitted to Ironclad on or about September 22, 2022 (initial notice of loss), and supplemented by VHG's sworn statement in proof of loss dated November 15, 2022, in the amount of $60,000,000.

6. "Subject Properties" or "Properties" shall mean the three VHG-owned resort properties that sustained damage from Hurricane Callista, specifically:

(a) Verimark Grand Key Resort, located at Mile Marker 48, Marathon, Florida 33050;

(b) Verimark Harborview Hotel & Conference Center, located at 1400 Estero Boulevard, Fort Myers Beach, Florida 33931; and

7. "Denial" or "Denial Letter" shall mean Ironclad's formal coverage denial letter dated February 3, 2023, in which Ironclad denied VHG's business-interruption claim under the Policy.

8. "Reservation of Rights" or "ROR" shall mean Ironclad's reservation of rights letter dated October 12, 2022, in which Ironclad reserved its right to deny coverage under specified provisions of the Policy.

9. "Document" or "Documents" shall be construed broadly, as that term is used in Fla. R. Civ. P. 1.280 and 1.350, and shall include all writings, drawings, graphs, charts, photographs, audio recordings, video recordings, emails, text messages, instant messages, electronically stored information ("ESI"), phone recordings, voicemail recordings, data compilations from which information can be obtained or translated, and any other tangible or intangible thing on which information is recorded, regardless of the medium upon which it is stored.

10. "Communication" or "Communications" shall mean every manner or means of disclosure, transfer, or exchange of information, whether oral, written, or electronic, including but not limited to letters, memoranda, emails, text messages, instant messages, telephone calls, voicemails, in-person meetings, video conferences, facsimile transmissions, and any other form of transmission or exchange of information between two or more persons.

11. "Person" or "Persons" shall mean any natural person, corporation, partnership, limited liability company, joint venture, association, governmental body or agency, or any other legal entity, however organized or constituted.

12. "Identify" (as to a person) shall mean to state the person's full legal name, job title or position, employer or organizational affiliation, current business address, and current telephone number. If any of the foregoing information is unknown, state the last known information and identify the efforts made to determine the current information.

13. "Identify" (as to a document) shall mean to state the document's date of creation (or the approximate date if the exact date is unknown), author or creator, recipient(s), subject matter or topic, type of document (e.g., letter, email, memorandum, report, spreadsheet), and the present custodian or location of the document. If any of the foregoing information is unknown, so state.

14. "Identify" (as to a communication) shall mean to state the date of the communication (or the approximate date if the exact date is unknown), the persons involved in the communication (including all participants, senders, recipients, and persons copied), the method of communication (e.g., telephone, email, in-person meeting, video conference), and the subject matter discussed during the communication.

15. "Arbor Claims" or "Arbor" shall mean Arbor Claims Services LLC, the independent adjusting firm retained by Ironclad, located at 3300 W. Cypress Street, Suite 400, Tampa, Florida 33607, including all of its employees, agents, and representatives, and including, without limitation, lead adjuster Denise Whitford.

16. "Tidewater" or "Broker" shall mean Tidewater Risk Advisors LLC, VHG's insurance broker of record, located at 2600 S. Bayshore Drive, Suite 800, Miami, Florida 33133, including all of its employees, agents, and representatives, and including, without limitation, account executive Franklin Orde.

17. "Excess Carriers" shall mean, collectively, Pinnacle Surplus Lines Inc. (Policy No. PSL-XS1-2022-3390), Montclair Assurance Company (Policy No. MAC-XS2-2022-09817), and Sovereign Re Ltd. (Policy No. SRL-XS3-2022-5102), together with their respective officers, directors, employees, agents, representatives, and claims professionals.

18. "Named-Windstorm Sub-Limit" or "Windstorm Sub-Limit" shall mean the $15,000,000 sub-limit for named-windstorm business-interruption losses that Ironclad contends applies under the Policy, and which VHG contends was deleted during the July 2022 renewal negotiations and does not appear in the final, binding Policy as issued.

19. "Period of Restoration" shall have the meaning assigned to that term in the Policy, including any applicable endorsements or amendments modifying the definition of that term.

II. INSTRUCTIONS

The following general instructions apply to each Interrogatory set forth below:

Instruction A — General. Each Interrogatory shall be answered separately and fully in writing, under oath, in accordance with Fla. R. Civ. P. 1.340. If Ironclad cannot answer any Interrogatory fully after exercising due diligence to obtain the information necessary to provide a complete answer, Ironclad shall so state and shall answer the Interrogatory to the fullest extent possible, specifying in detail the nature of its inability to provide a complete answer and the efforts made to obtain the information necessary to do so. If Ironclad objects to any Interrogatory, in whole or in part, it shall state the specific grounds for the objection and shall answer the Interrogatory to the extent it is not objectionable.

Instruction B — Continuing Obligation. These Interrogatories are deemed continuing in nature pursuant to Fla. R. Civ. P. 1.280(e). Ironclad is required to supplement its responses promptly upon obtaining additional information or upon learning that any response previously provided was incorrect, incomplete, or is no longer accurate. Such supplemental responses shall be served on Plaintiff's counsel in accordance with the Florida Rules of Civil Procedure.

Instruction C — Privilege. If Ironclad withholds any information responsive to any Interrogatory on the basis of the attorney-client privilege, the work-product doctrine, or any other privilege, Ironclad must provide a privilege log identifying with specificity: (i) the nature of the information withheld; (ii) the privilege or protection asserted; (iii) the factual basis for the assertion of privilege, including the date of the communication or document, the persons involved, and sufficient information to allow Plaintiff to assess the applicability of the claimed privilege; and (iv) whether the privilege has been waived in whole or in part.

Instruction D — Time Period. Unless otherwise specified in a particular Interrogatory, these Interrogatories cover the period from January 1, 2022 through the date of Ironclad's response to these Interrogatories.

Instruction E — Conjunctive/Disjunctive. The terms "and" and "or" shall be construed conjunctively or disjunctively as necessary to make the particular Interrogatory inclusive rather than exclusive. No Interrogatory shall be interpreted to be limited in scope merely because it uses "and" where "or" could also apply, or vice versa.

Instruction F — Singular/Plural. The use of the singular form of any word shall include the plural, and the use of the plural form shall include the singular, as the context may require to give each Interrogatory its broadest intended scope.

III. INTERROGATORIES

INTERROGATORY NO. 1 — Identification of Claims Personnel

Identify each and every person employed by or acting on behalf of Ironclad who was involved in any way in the investigation, evaluation, adjustment, handling, review, or disposition of the Claim, including but not limited to claims adjusters, senior claims adjusters, claims managers, claims supervisors, claims directors, claims vice presidents (including Victor Haddon, SVP Claims, or any successor or designee), in-house counsel, outside counsel, and any outside consultants, independent adjusters, engineers, forensic accountants, or other professionals retained or consulted in connection with the Claim.

For each person identified, state:

(a) the person's full name;

(b) the person's title or position at the time of involvement with the Claim;

(c) a detailed description of the person's job responsibilities with respect to the Claim, including the specific tasks performed and the role the person played in the investigation, evaluation, adjustment, or handling of the Claim;

(d) the dates during which the person was involved with the Claim (including the date involvement began and the date involvement ended, or, if involvement is ongoing, so state); and

(e) the person's current business address and telephone number.

This Interrogatory is intended to encompass, without limitation, the identification of Victor Haddon (Senior Vice President, Claims), any subordinate claims handlers or adjusters, and the engagement of Arbor Claims Services LLC, including lead adjuster Denise Whitford and any other Arbor Claims representatives who participated in the investigation or adjustment of the Claim.

INTERROGATORY NO. 2 — Basis for Reservation of Rights

Describe in detail each and every basis upon which Ironclad issued its reservation of rights letter dated October 12, 2022, including but not limited to each policy provision, exclusion, condition, limitation, sub-limit, or other contractual term relied upon by Ironclad in issuing the reservation of rights.

For each basis stated, identify with specificity the policy language upon which Ironclad relied, including the applicable section number, endorsement number, page number, or other identifying reference within the Policy, and explain the factual and legal reasoning supporting Ironclad's position that the identified provision warranted a reservation of rights. If Ironclad relied upon any facts known at the time the reservation of rights was issued that supported its position, describe those facts in detail.

INTERROGATORY NO. 3 — Basis for Denial of Coverage

Describe in detail each and every basis upon which Ironclad issued its formal coverage denial letter dated February 3, 2023, denying VHG's business-interruption claim under the Policy, including but not limited to:

(a) Ironclad's contention that a Named-Windstorm Sub-Limit of $15,000,000 applies to VHG's business-interruption claim, thereby capping the amount of covered business-interruption losses at $15,000,000 rather than the full policy limit, including the specific policy language upon which Ironclad relies for this contention and all facts supporting Ironclad's position that the sub-limit was in effect during the relevant policy period;

(b) Ironclad's contention that VHG's claimed period of restoration is unreasonable, overstated, or otherwise not recoverable under the Policy, including the specific basis for Ironclad's disagreement with VHG's claimed restoration period and any alternative calculation of the appropriate period of restoration;

(c) Ironclad's contention that the flood exclusion contained in the Policy bars coverage for portions of VHG's claimed losses due to storm surge, including the specific policy language constituting the flood exclusion and the factual basis for Ironclad's determination that portions of VHG's losses were caused by storm surge rather than wind;

(d) Ironclad's contention that the anti-concurrent causation clause contained in the Policy limits or eliminates coverage for VHG's losses, including the specific policy language constituting the anti-concurrent causation clause and the factual and legal basis for Ironclad's application of that clause to the circumstances of this Claim;

(e) Ironclad's contention that VHG failed to mitigate its losses as required by the Policy or by law, including the specific policy provision(s) or legal authority upon which Ironclad relies and the factual basis for Ironclad's contention; and

(f) Any other basis for the denial not specifically enumerated in subparts (a) through (e) above, including any additional policy provisions, exclusions, conditions, limitations, or defenses upon which Ironclad relies, described with the same level of specificity as required by the preceding subparts.

For each basis identified, state the specific policy language relied upon (by section, endorsement, or page number) and identify all facts, documents, analyses, and communications supporting the denial.

INTERROGATORY NO. 4 — Named-Windstorm Sub-Limit: Underwriting History

Describe in detail the underwriting history of the Named-Windstorm Sub-Limit as it pertains to VHG's property and business-interruption insurance program, including:

(a) Whether a Named-Windstorm Sub-Limit existed in any prior policy year in which Ironclad provided coverage to VHG, and if so, for each such prior policy year, state the amount of the sub-limit, the applicable policy number(s), the policy period, and whether VHG or its broker ever requested the deletion or modification of such sub-limit;

(b) All communications between Ironclad's underwriting department (or any person acting on behalf of Ironclad's underwriting department) and Tidewater Risk Advisors LLC (or any other broker, agent, or intermediary acting on behalf of VHG) regarding the Named-Windstorm Sub-Limit during the 2022 renewal process — that is, the underwriting, negotiation, and placement process for the July 1, 2022 through July 1, 2023 policy period — including the date, participants, method, and substance of each such communication;

(c) Whether any Ironclad underwriter or other authorized representative agreed, orally or in writing, to delete, remove, modify, or reduce the Named-Windstorm Sub-Limit at the 2022 renewal, and if so, identify the underwriter or representative who made such agreement, describe in detail the terms of the agreement, and identify all documents reflecting or memorializing such agreement;

(d) Whether the annual premium charged for the Policy for the July 1, 2022 through July 1, 2023 policy period ($980,000 for the primary layer) reflected the presence or absence of the Named-Windstorm Sub-Limit, including whether any portion of the premium was attributed to or calculated based on the inclusion or removal of the sub-limit, and whether any premium adjustment, credit, or surcharge was applied in connection with any change to the sub-limit at the 2022 renewal; and

(e) All endorsements, binders, certificates, policy amendments, coverage confirmations, or other documents relating to the Named-Windstorm Sub-Limit that were issued, drafted, considered, proposed, or discussed during the 2022 renewal process, including any drafts that were circulated but not finalized.

INTERROGATORY NO. 5 — Flood Exclusion and Storm Surge

With respect to Ironclad's assertion that the flood exclusion in the Policy bars coverage for portions of VHG's claimed losses, describe in detail:

(a) Each specific portion of VHG's claimed losses that Ironclad contends is excluded by the flood exclusion, identified by Subject Property, type of loss (e.g., structural damage, contents damage, business-interruption loss), and dollar amount or percentage of the total claim;

(b) For each Subject Property, state the percentage or dollar amount of damage that Ironclad attributes to storm surge or flood as distinguished from wind or other covered perils, and explain the basis for any such allocation, including whether the allocation was made on a property-by-property basis, a room-by-room basis, a floor-by-floor basis, or on some other methodology;

(c) The factual basis for any allocation between wind damage and storm surge or flood damage, including all inspections, site visits, reports, engineering analyses, meteorological analyses, hydrological analyses, photographic evidence, or other evidence relied upon by Ironclad or any person acting on its behalf in making such allocation; and

(d) Whether Ironclad contends that the anti-concurrent causation clause in the Policy applies to bar coverage for losses caused concurrently or in any sequence by wind (a covered peril) and storm surge or flood (an allegedly excluded peril), and if so, identify the specific policy language constituting the anti-concurrent causation clause, describe the legal and factual basis for Ironclad's position that the clause applies to the facts of this Claim, and state whether Ironclad contends that the anti-concurrent causation clause bars all coverage for losses at a given property where both wind and storm surge contributed to the damage, or only a portion of such coverage.

INTERROGATORY NO. 6 — Period of Restoration Analysis

Describe in detail Ironclad's position regarding the appropriate period of restoration for each Subject Property, including:

(a) The specific date on which Ironclad contends the period of restoration began for each Subject Property, and the factual and contractual basis for selecting that date;

(b) The specific date on which Ironclad contends the period of restoration ended (or should have ended) for each Subject Property, and the factual and contractual basis for selecting that date;

(c) The factual basis for Ironclad's contention, if any, that VHG unreasonably delayed restoration at any Subject Property, including any specific acts or omissions by VHG that Ironclad contends constituted unreasonable delay, such as failure to retain contractors in a timely manner, failure to obtain necessary permits, failure to procure building materials, or any other conduct that Ironclad contends prolonged the period of restoration beyond what was reasonably necessary; and

(d) Any analysis, report, estimate, timeline, schedule, or other work product prepared by or on behalf of Ironclad (including by Arbor Claims Services LLC, Graystone Consulting Group LLC, or any other consultant or expert) regarding the reasonable time frame for completion of repairs at each Subject Property, including the date of such analysis or report, the person or entity that prepared it, and the conclusions reached.

For context, VHG's actual closure periods were as follows: the Verimark Grand Key Resort was closed for 178 days (September 18, 2022 through March 15, 2023); the Verimark Harborview Hotel & Conference Center was closed for 135 days (September 18, 2022 through January 31, 2023); and the Verimark Sunset Shores experienced 73 days of full closure (September 18, 2022 through November 30, 2022), followed by a period of reduced capacity through February 2023.

INTERROGATORY NO. 7 — Failure to Mitigate

Describe in detail each and every act or omission by VHG that Ironclad contends constitutes a failure to mitigate losses, whether under the terms of the Policy, Florida statutory or common law, or otherwise, including:

(a) The specific steps or measures that Ironclad contends VHG should have taken but failed to take, described with sufficient particularity to enable VHG to understand and respond to Ironclad's contention;

(b) The time frame in which Ironclad contends each such step or measure should have been taken, including the date by which Ironclad contends the action should have been commenced and the date by which it should have been completed;

(c) The estimated reduction in losses, expressed in dollar amounts or as a percentage of the total claimed loss, that Ironclad contends would have resulted from each mitigation measure identified, and the basis for such estimate; and

(d) All documents, data, analyses, reports, expert opinions, or other evidence supporting Ironclad's failure-to-mitigate defense, identified by date, author, and subject matter.

INTERROGATORY NO. 8 — Engagement and Communications with Arbor Claims Services

Describe in detail Ironclad's engagement of Arbor Claims Services LLC as independent adjuster for the Claim, including:

(a) The date on which Arbor Claims Services LLC was retained by Ironclad in connection with the Claim and the identity of the Ironclad employee who authorized or directed the retention;

(b) The scope of Arbor Claims' assignment, including a description of the specific tasks, investigations, inspections, and analyses that Arbor Claims was engaged to perform;

(c) The identity of each Arbor Claims representative assigned to the Claim, including but not limited to lead adjuster Denise Whitford, and for each person identified, state the person's name, title, role in the investigation, and dates of involvement;

(d) Each inspection, investigation, site visit, or other field activity conducted by Arbor Claims at any of the Subject Properties, including the date(s) of each inspection or visit, the specific Subject Property or Properties inspected, and the identity of all persons present or involved, including both Arbor Claims personnel and any other individuals (e.g., VHG representatives, contractors, engineers);

(e) Each report, memorandum, written analysis, estimate, summary, or other written communication prepared by Arbor Claims and provided to Ironclad regarding the Claim, identified by date, title or subject matter, author, and recipient(s); and

(f) Any oral communications between Arbor Claims (including Denise Whitford) and Ironclad claims personnel (including Victor Haddon and any other claims handler) regarding the Claim, identified by date, participants, method of communication, and the subject matter discussed during each communication.

For context, Arbor Claims' initial inspection of the Subject Properties was conducted on or about October 5, 2022.

INTERROGATORY NO. 9 — Communications with Excess Carriers

Identify each and every communication between Ironclad (including its officers, employees, claims personnel, underwriters, agents, and counsel) and any of the Excess Carriers — namely, Pinnacle Surplus Lines Inc., Montclair Assurance Company, and/or Sovereign Re Ltd. — regarding the Claim, VHG, or any coverage issue arising in connection with Hurricane Callista, including:

(a) The date of each communication;

(b) The participants in each communication, identified by name, title, and employer or firm affiliation;

(d) The substance of each communication, including any discussion of coverage positions, coverage analysis, claim evaluation, loss reserves, settlement authority, litigation strategy (to the extent not privileged), or coordination of claims handling.

For context, Pinnacle Surplus Lines Inc. issued a follow-form denial of VHG's claim on February 10, 2023. Montclair Assurance Company and Sovereign Re Ltd. issued reservation of rights letters but have not, to date, issued formal coverage denials.

INTERROGATORY NO. 10 — Communications with Tidewater Risk Advisors

Identify each and every communication between Ironclad (including its underwriters, claims personnel, agents, representatives, and counsel) and Tidewater Risk Advisors LLC (including account executive Franklin Orde and any other Tidewater representative) regarding:

(a) The placement or renewal of the Policy for the July 1, 2022 through July 1, 2023 policy period, including the initial submission, underwriting analysis, quoting, binding, policy issuance, and any post-binding endorsement or amendment;

(b) The Named-Windstorm Sub-Limit, including any discussion, negotiation, request, or agreement regarding the deletion, modification, retention, or reinstatement of the Named-Windstorm Sub-Limit during the 2022 renewal process or at any time during the policy period; and

(c) VHG's Hurricane Callista claim, including any notice of loss, acknowledgment of receipt, claim status updates, reserve notifications, coverage discussions, settlement discussions, or other correspondence or communication relating to the Claim.

For each communication identified, state the date, the participants (identified by name, title, and employer or affiliation), the method of communication, and the substance of the communication.

INTERROGATORY NO. 11 — Ironclad's Loss Calculation

State in detail Ironclad's calculation, estimate, or assessment of VHG's business-interruption losses and property damage losses arising from Hurricane Callista, if any such calculation, estimate, or assessment has been performed, including:

(a) The total dollar amount of business-interruption losses that Ironclad contends is covered under the Policy, if any, broken down by Subject Property and by category of loss (e.g., lost revenue, continuing expenses, extra expense, extended business income);

(b) The total dollar amount that Ironclad contends is excluded, not covered, or otherwise not payable under the Policy, and for each amount so identified, state the specific basis for the exclusion or reduction, including the policy provision relied upon;

(c) Any reserve amount(s) established by Ironclad for the Claim, the date(s) on which reserves were initially set, the date(s) on which reserves were subsequently modified, and the amount of each reserve (including separate identification of any case reserves, loss adjustment expense reserves, and total incurred amounts);

(d) The methodology, data sources, assumptions, and analytical framework used by Ironclad (or any person acting on its behalf, including Arbor Claims Services LLC and Graystone Consulting Group LLC) in calculating or estimating VHG's losses, including any financial models, historical revenue data, occupancy data, average daily rates, or other inputs used in the analysis; and

(e) Whether Ironclad retained any expert, consultant, forensic accountant, or other professional to evaluate VHG's claimed losses, and if so, identify each such person by name, title, and firm affiliation, and describe the scope of engagement, the date of retention, and whether the person has rendered any opinion or prepared any report.

For context, Ironclad is believed to have retained Graystone Consulting Group LLC and its principal, Dr. Warren Birk, as a damages and coverage expert in connection with this matter.

INTERROGATORY NO. 12 — Experts and Consultants

Identify each and every expert, consultant, engineer, forensic accountant, meteorologist, hydrologist, construction estimator, or other professional retained by or on behalf of Ironclad in connection with the Claim or this litigation, including:

(a) The person's full name, professional title, and current business address;

(b) The person's employer or firm affiliation;

(c) The subject matter of the engagement, including a description of the specific tasks, analyses, or opinions requested;

(d) The date on which the person was retained;

(e) The compensation terms, including the hourly rate, flat fee, or other compensation arrangement; and

(f) Whether the person has prepared a written report, and if so, the date of the report and a description of its subject matter.

This Interrogatory is intended to encompass, without limitation, the identification of Arbor Claims Services LLC (including lead adjuster Denise Whitford), Graystone Consulting Group LLC (including Dr. Warren Birk), and any engineering, forensic, meteorological, hydrological, or other experts retained by Ironclad in connection with the investigation, evaluation, adjustment, or defense of the Claim or this litigation.

INTERROGATORY NO. 13 — Affirmative Defenses

For each affirmative defense asserted by Ironclad in its Answer and Affirmative Defenses filed on or about April 15, 2023 (and any subsequent amendments thereto), state in detail the factual basis supporting each such affirmative defense, including:

(a) All facts upon which Ironclad intends to rely in support of each affirmative defense, described with sufficient particularity to enable Plaintiff to understand the factual basis for the defense;

(b) All documents that Ironclad contends support each affirmative defense, identified by date, author, recipient, type, and subject matter; and

(c) All persons known to Ironclad who have knowledge of facts relating to each affirmative defense, identified by name, title, employer, and a description of the subject matter of the person's knowledge.

INTERROGATORY NO. 14 — Policy Issuance and Endorsements

Describe in detail the process by which the Policy (IIC-PRP-2022-07541) was issued for the July 1, 2022 through July 1, 2023 policy period, including:

(a) The date on which the final policy form (including the declarations page and all endorsements) was issued and delivered to VHG or its broker, Tidewater Risk Advisors LLC;

(b) Each endorsement attached to the Policy at inception and each endorsement issued during the policy period, identified by endorsement number, form number (if applicable), effective date, and subject matter or purpose;

(c) Whether any binder, cover note, or certificate of insurance was issued prior to the issuance of the final policy, and if so, state the date of the binder, the terms of the binder as they relate to the Named-Windstorm Sub-Limit and business-interruption coverage generally, and whether the final policy differed from the binder in any material respect; and

(d) The identity of each Ironclad underwriter who participated in the underwriting, review, approval, or issuance of the Policy for the July 1, 2022 through July 1, 2023 policy period, including each person's name, title, and role in the underwriting process.

INTERROGATORY NO. 15 — Prior Claims History

State whether VHG (or any predecessor in interest, affiliate, subsidiary, or related entity) has submitted any prior claim to Ironclad for property damage or business-interruption losses under any prior policy issued by Ironclad, and if so, for each such prior claim:

(a) The date(s) on which the claim was submitted, including the date of the notice of loss and the date of any proof of loss;

(b) The nature of the claim, including the event or occurrence giving rise to the claim and a general description of the losses claimed;

(d) The disposition of the claim, including whether it was paid, denied, partially paid, settled, or otherwise resolved, and if paid or settled, the amount paid; and

(e) The policy number(s) under which each such claim was submitted.

INTERROGATORY NO. 16 — Persons with Knowledge

Identify each person whom Ironclad believes has knowledge of facts relevant to this action, including facts relating to any claim or defense asserted by any party. For each person identified, state:

(a) The person's full name, title or position, employer or affiliation, and current business address;

(b) A description of the subject matter(s) of the person's knowledge, described with sufficient specificity to enable Plaintiff to assess the nature and scope of the person's relevant knowledge; and

(c) Whether the person is currently employed by Ironclad, and if the person was formerly employed by Ironclad, state the dates of employment and the person's last known contact information.

INTERROGATORY NO. 17 — Joint Defense or Common Interest Arrangements

State whether Ironclad has entered into any joint defense agreement, common interest agreement, information-sharing agreement, or any similar arrangement or understanding with any of the Excess Carriers or their respective counsel — including, without limitation, the law firm of Fendowell Rourke & Stanton LLP and/or the law firm of Delvecchio & Kraus LLP — in connection with this action, the Claim, or any matter relating to VHG's Hurricane Callista losses. If so, state:

(a) The date on which each such agreement or arrangement was entered into or became effective;

(b) The parties to each such agreement or arrangement, identified by name and the capacity in which they participate; and

(c) The general terms and scope of each such agreement or arrangement, including the subject matter covered by the agreement and the nature of the cooperative activities contemplated, without disclosing the substance of any communications protected by the attorney-client privilege or work-product doctrine.

For context, it is Plaintiff's understanding that Fendowell Rourke & Stanton LLP represents both Ironclad and Pinnacle Surplus Lines Inc. in this action pursuant to a joint defense arrangement.

INTERROGATORY NO. 18 — Bad Faith Claim Handling

Describe each and every step taken by Ironclad to investigate, evaluate, analyze, and process the Claim between the date of VHG's initial notice of loss (September 22, 2022) and the date of Ironclad's formal coverage denial (February 3, 2023), in chronological order, including:

(a) The dates and nature of each investigative step, including but not limited to receipt and review of VHG's notice of loss, assignment of the Claim to a claims handler, retention of independent adjusters, inspections of the Subject Properties, review of the Policy, review of the proof of loss, retention of experts, and any other investigative or analytical activity;

(b) The persons involved in each such step, identified by name, title, and employer or affiliation;

(c) The information obtained at each step, including a description of the findings, conclusions, data, or other information gathered;

(d) The basis on which Ironclad determined to deny coverage rather than pay or partially pay the Claim, including the identity of the person(s) who made or approved the decision to deny coverage, the date on which the decision was made, and the specific reasons for the denial; and

(e) Whether Ironclad considered making any partial payment on the Claim, including any payment of undisputed amounts, pending resolution of disputed coverage issues, and if Ironclad did consider making a partial payment, describe the circumstances of such consideration, the amount considered, and the reasons for ultimately declining to make any partial payment.

INTERROGATORY NO. 19 — Premium Calculations

Describe in detail how the annual premium of $980,000 for the primary layer of the Policy was calculated for the July 1, 2022 through July 1, 2023 policy period, including:

(a) The rating factors, rating methodologies, actuarial models, proprietary pricing tools, catastrophe models, and other analytical tools or inputs used by Ironclad in determining the premium;

(b) Whether the premium as calculated and charged reflected the presence or absence of a Named-Windstorm Sub-Limit, and if so, the specific impact that the inclusion or exclusion of the Named-Windstorm Sub-Limit had on the premium calculation;

(c) Any premium increase, decrease, credit, surcharge, or adjustment associated with the deletion, modification, or retention of the Named-Windstorm Sub-Limit at the 2022 renewal, identified by amount and the reason for the adjustment; and

(d) Any comparison between the premium charged for the 2021–2022 policy year and the premium charged for the 2022–2023 policy year, including the total premium for each year, the reasons for any difference in premium between the two years, and whether any change in coverage terms (including any change to the Named-Windstorm Sub-Limit) contributed to the premium difference.

For context, the total annual premium for VHG's entire insurance tower (primary and excess layers) was $1,840,000, of which $980,000 was attributable to the primary layer underwritten by Ironclad.

INTERROGATORY NO. 20 — Damage to Specific Properties

For each of the three Subject Properties (Verimark Grand Key Resort, Verimark Harborview Hotel & Conference Center, and Verimark Sunset Shores), state:

(a) Ironclad's assessment of the cause(s) of physical damage sustained by the property as a result of Hurricane Callista, distinguishing among damage caused by wind, damage caused by storm surge or flood, damage caused by rain infiltration, and damage caused by any other cause, and for each cause identified, state the estimated dollar amount or percentage of total damage attributed to that cause;

(b) Whether Ironclad contends that any portion of the physical damage at any Subject Property did not result from Hurricane Callista, and if so, identify the portion of damage that Ironclad contends was pre-existing, attributable to deferred maintenance, or otherwise not caused by the Storm, and state the factual basis for such contention;

(c) The storm surge levels recorded, measured, or estimated at each Subject Property location, including the source of such data (e.g., USGS high-water marks, NOAA tide gauge data, post-storm survey data, engineering estimates), and whether Ironclad contends that storm surge at any Subject Property exceeded the levels reported by VHG or governmental agencies; and

(d) Whether Ironclad contends that any civil authority order, including mandatory evacuation orders issued by Monroe County on September 16, 2022 and by Lee County on September 17, 2022, affected the coverage analysis under the Policy, and if so, describe in detail how such civil authority orders affect Ironclad's position on coverage, including whether Ironclad contends that any portion of VHG's business-interruption loss attributable to civil authority action is or is not covered under the Policy.

For context, storm surge levels resulting from Hurricane Callista were measured at approximately 8 to 14 feet in Monroe County and approximately 6 to 10 feet in Lee County.

— END OF INTERROGATORIES —

Respectfully submitted,

CALDERWOOD & HARKNESS LLP Counsel for Plaintiff Verimark Hospitality Group Inc. 333 SE 2nd Avenue, Suite 4400 Miami, Florida 33131

By: ________

Elaine Forsythe, Esq. Florida Bar No. 0098471 eforsythe@calderwoodharkness.com

Tiffany Rosenthal, Esq. Florida Bar No. 0112389 trosenthal@calderwoodharkness.com

Telephone: (305) 555-7200 Facsimile: (305) 555-7201

Date: June 5, 2023

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing Plaintiff's First Set of Interrogatories to Defendant Ironclad Indemnity Corporation was served on this 5th day of June, 2023, via the Florida Courts E-Filing Portal and electronic mail upon the following counsel of record:

Gregory Stanton, Esq. Meredith Liang, Esq. Colin Ashford, Esq. Fendowell Rourke & Stanton LLP 280 Trumbull Street, Suite 2200 Hartford, Connecticut 06103 and 101 E. Kennedy Boulevard, Suite 3900 Tampa, Florida 33602 gstanton@bracewellrourke.com mliang@bracewellrourke.com cashford@bracewellrourke.com Counsel for Defendant Ironclad Indemnity Corporation and Defendant Pinnacle Surplus Lines Inc.

Patricia Kraus, Esq. Raymond Cho, Esq. Delvecchio & Kraus LLP 425 Park Avenue, 20th Floor New York, New York 10022 pkraus@delvecchiokraus.com rcho@delvecchiokraus.com Counsel for Defendants Montclair Assurance Company and Sovereign Re Ltd.

By: ________

Elaine Forsythe, Esq. Florida Bar No. 0098471

IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA
CIVIL DIVISION
Case No. 2022-CA-031547 Division: Civil Hon. Catherine Embry
VERIMARK HOSPITALITY GROUP INC., a Delaware corporation,
Plaintiff,
v.
IRONCLAD INDEMNITY CORPORATION, a Connecticut corporation; PINNACLE SURPLUS LINES INC., a Texas corporation; MONTCLAIR ASSURANCE COMPANY, a New York corporation; and SOVEREIGN RE LTD., a Bermuda entity,
Defendants.
_
PLAINTIFF'S FIRST SET OF INTERROGATORIES TO DEFENDANT IRONCLAD INDEMNITY CORPORATION
_
Plaintiff, VERIMARK HOSPITALITY GROUP INC. ("VHG" or "Plaintiff"), by and through its undersigned counsel, Calderwood & Harkness LLP, and pursuant to Florida Rule of Civil Procedure 1.340, hereby propounds the following Interrogatories upon Defendant IRONCLAD INDEMNITY CORPORATION ("Ironclad" or "Defendant"). Ironclad is required to serve its answers to the following Interrogatories upon Plaintiff's counsel within thirty (30) days after the date of service hereof, in accordance with Fla. R. Civ. P. 1.340(a). All answers shall be made separately, fully, and under oath, and shall be signed by the party or by an officer or agent of the party upon whom the Interrogatories are served.
Date of Service: June 5, 2023
I. DEFINITIONS
As used in these Interrogatories, the following terms shall have the meanings set forth below:
1. "You," "Your," "Defendant," or "Ironclad" shall mean Ironclad Indemnity Corporation (NAIC No. 20537), a Connecticut corporation, including its officers, directors, employees, agents, representatives, adjusters, underwriters, claims professionals, attorneys (to the extent not protected by the attorney-client privilege or work-product doctrine), and any other person or entity acting on its behalf, at its direction, or under its control.
2. "VHG" or "Plaintiff" shall mean Verimark Hospitality Group Inc. (Nasdaq: VMRK), a Delaware corporation, including its officers, directors, employees, agents, and representatives.
3. "Policy" or "Primary Policy" shall mean the all-risk property and business-interruption insurance policy issued by Ironclad to VHG, bearing Policy No. IIC-PRP-2022-07541, for the policy period July 1, 2022 through July 1, 2023, including all endorsements, amendments, riders, binders, certificates, schedules, and declarations pages attached thereto or forming a part thereof.
4. "Hurricane Callista" or "the Storm" shall mean Hurricane Callista, the Category 4 hurricane that made landfall in the Lower Florida Keys (Big Pine Key area) on September 18, 2022, at approximately 1:30 PM EDT, with maximum sustained winds of approximately 145 miles per hour, as reported by the National Hurricane Center.
5. "Claim" or "the Claim" shall mean VHG's claim for property damage and business-interruption losses arising from Hurricane Callista, as submitted to Ironclad on or about September 22, 2022 (initial notice of loss), and supplemented by VHG's sworn statement in proof of loss dated November 15, 2022, in the amount of $60,000,000.
6. "Subject Properties" or "Properties" shall mean the three VHG-owned resort properties that sustained damage from Hurricane Callista, specifically:
(a) Verimark Grand Key Resort, located at Mile Marker 48, Marathon, Florida 33050;
(b) Verimark Harborview Hotel & Conference Center, located at 1400 Estero Boulevard, Fort Myers Beach, Florida 33931; and
(c) Verimark Sunset Shores, located at 7200 Gulf Boulevard, St. Pete Beach, Florida 33706.
7. "Denial" or "Denial Letter" shall mean Ironclad's formal coverage denial letter dated February 3, 2023, in which Ironclad denied VHG's business-interruption claim under the Policy.
8. "Reservation of Rights" or "ROR" shall mean Ironclad's reservation of rights letter dated October 12, 2022, in which Ironclad reserved its right to deny coverage under specified provisions of the Policy.
9. "Document" or "Documents" shall be construed broadly, as that term is used in Fla. R. Civ. P. 1.280 and 1.350, and shall include all writings, drawings, graphs, charts, photographs, audio recordings, video recordings, emails, text messages, instant messages, electronically stored information ("ESI"), phone recordings, voicemail recordings, data compilations from which information can be obtained or translated, and any other tangible or intangible thing on which information is recorded, regardless of the medium upon which it is stored.
10. "Communication" or "Communications" shall mean every manner or means of disclosure, transfer, or exchange of information, whether oral, written, or electronic, including but not limited to letters, memoranda, emails, text messages, instant messages, telephone calls, voicemails, in-person meetings, video conferences, facsimile transmissions, and any other form of transmission or exchange of information between two or more persons.
11. "Person" or "Persons" shall mean any natural person, corporation, partnership, limited liability company, joint venture, association, governmental body or agency, or any other legal entity, however organized or constituted.
12. "Identify" (as to a person) shall mean to state the person's full legal name, job title or position, employer or organizational affiliation, current business address, and current telephone number. If any of the foregoing information is unknown, state the last known information and identify the efforts made to determine the current information.
13. "Identify" (as to a document) shall mean to state the document's date of creation (or the approximate date if the exact date is unknown), author or creator, recipient(s), subject matter or topic, type of document (e.g., letter, email, memorandum, report, spreadsheet), and the present custodian or location of the document. If any of the foregoing information is unknown, so state.
14. "Identify" (as to a communication) shall mean to state the date of the communication (or the approximate date if the exact date is unknown), the persons involved in the communication (including all participants, senders, recipients, and persons copied), the method of communication (e.g., telephone, email, in-person meeting, video conference), and the subject matter discussed during the communication.
15. "Arbor Claims" or "Arbor" shall mean Arbor Claims Services LLC, the independent adjusting firm retained by Ironclad, located at 3300 W. Cypress Street, Suite 400, Tampa, Florida 33607, including all of its employees, agents, and representatives, and including, without limitation, lead adjuster Denise Whitford.
16. "Tidewater" or "Broker" shall mean Tidewater Risk Advisors LLC, VHG's insurance broker of record, located at 2600 S. Bayshore Drive, Suite 800, Miami, Florida 33133, including all of its employees, agents, and representatives, and including, without limitation, account executive Franklin Orde.
17. "Excess Carriers" shall mean, collectively, Pinnacle Surplus Lines Inc. (Policy No. PSL-XS1-2022-3390), Montclair Assurance Company (Policy No. MAC-XS2-2022-09817), and Sovereign Re Ltd. (Policy No. SRL-XS3-2022-5102), together with their respective officers, directors, employees, agents, representatives, and claims professionals.
18. "Named-Windstorm Sub-Limit" or "Windstorm Sub-Limit" shall mean the $15,000,000 sub-limit for named-windstorm business-interruption losses that Ironclad contends applies under the Policy, and which VHG contends was deleted during the July 2022 renewal negotiations and does not appear in the final, binding Policy as issued.
19. "Period of Restoration" shall have the meaning assigned to that term in the Policy, including any applicable endorsements or amendments modifying the definition of that term.
II. INSTRUCTIONS
The following general instructions apply to each Interrogatory set forth below:
Instruction A — General. Each Interrogatory shall be answered separately and fully in writing, under oath, in accordance with Fla. R. Civ. P. 1.340. If Ironclad cannot answer any Interrogatory fully after exercising due diligence to obtain the information necessary to provide a complete answer, Ironclad shall so state and shall answer the Interrogatory to the fullest extent possible, specifying in detail the nature of its inability to provide a complete answer and the efforts made to obtain the information necessary to do so. If Ironclad objects to any Interrogatory, in whole or in part, it shall state the specific grounds for the objection and shall answer the Interrogatory to the extent it is not objectionable.
Instruction B — Continuing Obligation. These Interrogatories are deemed continuing in nature pursuant to Fla. R. Civ. P. 1.280(e). Ironclad is required to supplement its responses promptly upon obtaining additional information or upon learning that any response previously provided was incorrect, incomplete, or is no longer accurate. Such supplemental responses shall be served on Plaintiff's counsel in accordance with the Florida Rules of Civil Procedure.
Instruction C — Privilege. If Ironclad withholds any information responsive to any Interrogatory on the basis of the attorney-client privilege, the work-product doctrine, or any other privilege, Ironclad must provide a privilege log identifying with specificity: (i) the nature of the information withheld; (ii) the privilege or protection asserted; (iii) the factual basis for the assertion of privilege, including the date of the communication or document, the persons involved, and sufficient information to allow Plaintiff to assess the applicability of the claimed privilege; and (iv) whether the privilege has been waived in whole or in part.
Instruction D — Time Period. Unless otherwise specified in a particular Interrogatory, these Interrogatories cover the period from January 1, 2022 through the date of Ironclad's response to these Interrogatories.
Instruction E — Conjunctive/Disjunctive. The terms "and" and "or" shall be construed conjunctively or disjunctively as necessary to make the particular Interrogatory inclusive rather than exclusive. No Interrogatory shall be interpreted to be limited in scope merely because it uses "and" where "or" could also apply, or vice versa.
Instruction F — Singular/Plural. The use of the singular form of any word shall include the plural, and the use of the plural form shall include the singular, as the context may require to give each Interrogatory its broadest intended scope.
III. INTERROGATORIES
INTERROGATORY NO. 1 — Identification of Claims Personnel
Identify each and every person employed by or acting on behalf of Ironclad who was involved in any way in the investigation, evaluation, adjustment, handling, review, or disposition of the Claim, including but not limited to claims adjusters, senior claims adjusters, claims managers, claims supervisors, claims directors, claims vice presidents (including Victor Haddon, SVP Claims, or any successor or designee), in-house counsel, outside counsel, and any outside consultants, independent adjusters, engineers, forensic accountants, or other professionals retained or consulted in connection with the Claim.
For each person identified, state:
(a) the person's full name;
(b) the person's title or position at the time of involvement with the Claim;
(c) a detailed description of the person's job responsibilities with respect to the Claim, including the specific tasks performed and the role the person played in the investigation, evaluation, adjustment, or handling of the Claim;
(d) the dates during which the person was involved with the Claim (including the date involvement began and the date involvement ended, or, if involvement is ongoing, so state); and
(e) the person's current business address and telephone number.
This Interrogatory is intended to encompass, without limitation, the identification of Victor Haddon (Senior Vice President, Claims), any subordinate claims handlers or adjusters, and the engagement of Arbor Claims Services LLC, including lead adjuster Denise Whitford and any other Arbor Claims representatives who participated in the investigation or adjustment of the Claim.
INTERROGATORY NO. 2 — Basis for Reservation of Rights
Describe in detail each and every basis upon which Ironclad issued its reservation of rights letter dated October 12, 2022, including but not limited to each policy provision, exclusion, condition, limitation, sub-limit, or other contractual term relied upon by Ironclad in issuing the reservation of rights.
For each basis stated, identify with specificity the policy language upon which Ironclad relied, including the applicable section number, endorsement number, page number, or other identifying reference within the Policy, and explain the factual and legal reasoning supporting Ironclad's position that the identified provision warranted a reservation of rights. If Ironclad relied upon any facts known at the time the reservation of rights was issued that supported its position, describe those facts in detail.
INTERROGATORY NO. 3 — Basis for Denial of Coverage
Describe in detail each and every basis upon which Ironclad issued its formal coverage denial letter dated February 3, 2023, denying VHG's business-interruption claim under the Policy, including but not limited to:
(a) Ironclad's contention that a Named-Windstorm Sub-Limit of $15,000,000 applies to VHG's business-interruption claim, thereby capping the amount of covered business-interruption losses at $15,000,000 rather than the full policy limit, including the specific policy language upon which Ironclad relies for this contention and all facts supporting Ironclad's position that the sub-limit was in effect during the relevant policy period;
(b) Ironclad's contention that VHG's claimed period of restoration is unreasonable, overstated, or otherwise not recoverable under the Policy, including the specific basis for Ironclad's disagreement with VHG's claimed restoration period and any alternative calculation of the appropriate period of restoration;
(c) Ironclad's contention that the flood exclusion contained in the Policy bars coverage for portions of VHG's claimed losses due to storm surge, including the specific policy language constituting the flood exclusion and the factual basis for Ironclad's determination that portions of VHG's losses were caused by storm surge rather than wind;
(d) Ironclad's contention that the anti-concurrent causation clause contained in the Policy limits or eliminates coverage for VHG's losses, including the specific policy language constituting the anti-concurrent causation clause and the factual and legal basis for Ironclad's application of that clause to the circumstances of this Claim;
(e) Ironclad's contention that VHG failed to mitigate its losses as required by the Policy or by law, including the specific policy provision(s) or legal authority upon which Ironclad relies and the factual basis for Ironclad's contention; and
(f) Any other basis for the denial not specifically enumerated in subparts (a) through (e) above, including any additional policy provisions, exclusions, conditions, limitations, or defenses upon which Ironclad relies, described with the same level of specificity as required by the preceding subparts.
For each basis identified, state the specific policy language relied upon (by section, endorsement, or page number) and identify all facts, documents, analyses, and communications supporting the denial.
INTERROGATORY NO. 4 — Named-Windstorm Sub-Limit: Underwriting History
Describe in detail the underwriting history of the Named-Windstorm Sub-Limit as it pertains to VHG's property and business-interruption insurance program, including:
(a) Whether a Named-Windstorm Sub-Limit existed in any prior policy year in which Ironclad provided coverage to VHG, and if so, for each such prior policy year, state the amount of the sub-limit, the applicable policy number(s), the policy period, and whether VHG or its broker ever requested the deletion or modification of such sub-limit;
(b) All communications between Ironclad's underwriting department (or any person acting on behalf of Ironclad's underwriting department) and Tidewater Risk Advisors LLC (or any other broker, agent, or intermediary acting on behalf of VHG) regarding the Named-Windstorm Sub-Limit during the 2022 renewal process — that is, the underwriting, negotiation, and placement process for the July 1, 2022 through July 1, 2023 policy period — including the date, participants, method, and substance of each such communication;
(c) Whether any Ironclad underwriter or other authorized representative agreed, orally or in writing, to delete, remove, modify, or reduce the Named-Windstorm Sub-Limit at the 2022 renewal, and if so, identify the underwriter or representative who made such agreement, describe in detail the terms of the agreement, and identify all documents reflecting or memorializing such agreement;
(d) Whether the annual premium charged for the Policy for the July 1, 2022 through July 1, 2023 policy period ($980,000 for the primary layer) reflected the presence or absence of the Named-Windstorm Sub-Limit, including whether any portion of the premium was attributed to or calculated based on the inclusion or removal of the sub-limit, and whether any premium adjustment, credit, or surcharge was applied in connection with any change to the sub-limit at the 2022 renewal; and
(e) All endorsements, binders, certificates, policy amendments, coverage confirmations, or other documents relating to the Named-Windstorm Sub-Limit that were issued, drafted, considered, proposed, or discussed during the 2022 renewal process, including any drafts that were circulated but not finalized.
INTERROGATORY NO. 5 — Flood Exclusion and Storm Surge
With respect to Ironclad's assertion that the flood exclusion in the Policy bars coverage for portions of VHG's claimed losses, describe in detail:
(a) Each specific portion of VHG's claimed losses that Ironclad contends is excluded by the flood exclusion, identified by Subject Property, type of loss (e.g., structural damage, contents damage, business-interruption loss), and dollar amount or percentage of the total claim;
(b) For each Subject Property, state the percentage or dollar amount of damage that Ironclad attributes to storm surge or flood as distinguished from wind or other covered perils, and explain the basis for any such allocation, including whether the allocation was made on a property-by-property basis, a room-by-room basis, a floor-by-floor basis, or on some other methodology;
(c) The factual basis for any allocation between wind damage and storm surge or flood damage, including all inspections, site visits, reports, engineering analyses, meteorological analyses, hydrological analyses, photographic evidence, or other evidence relied upon by Ironclad or any person acting on its behalf in making such allocation; and
(d) Whether Ironclad contends that the anti-concurrent causation clause in the Policy applies to bar coverage for losses caused concurrently or in any sequence by wind (a covered peril) and storm surge or flood (an allegedly excluded peril), and if so, identify the specific policy language constituting the anti-concurrent causation clause, describe the legal and factual basis for Ironclad's position that the clause applies to the facts of this Claim, and state whether Ironclad contends that the anti-concurrent causation clause bars all coverage for losses at a given property where both wind and storm surge contributed to the damage, or only a portion of such coverage.
INTERROGATORY NO. 6 — Period of Restoration Analysis
Describe in detail Ironclad's position regarding the appropriate period of restoration for each Subject Property, including:
(a) The specific date on which Ironclad contends the period of restoration began for each Subject Property, and the factual and contractual basis for selecting that date;
(b) The specific date on which Ironclad contends the period of restoration ended (or should have ended) for each Subject Property, and the factual and contractual basis for selecting that date;
(c) The factual basis for Ironclad's contention, if any, that VHG unreasonably delayed restoration at any Subject Property, including any specific acts or omissions by VHG that Ironclad contends constituted unreasonable delay, such as failure to retain contractors in a timely manner, failure to obtain necessary permits, failure to procure building materials, or any other conduct that Ironclad contends prolonged the period of restoration beyond what was reasonably necessary; and
(d) Any analysis, report, estimate, timeline, schedule, or other work product prepared by or on behalf of Ironclad (including by Arbor Claims Services LLC, Graystone Consulting Group LLC, or any other consultant or expert) regarding the reasonable time frame for completion of repairs at each Subject Property, including the date of such analysis or report, the person or entity that prepared it, and the conclusions reached.
For context, VHG's actual closure periods were as follows: the Verimark Grand Key Resort was closed for 178 days (September 18, 2022 through March 15, 2023); the Verimark Harborview Hotel & Conference Center was closed for 135 days (September 18, 2022 through January 31, 2023); and the Verimark Sunset Shores experienced 73 days of full closure (September 18, 2022 through November 30, 2022), followed by a period of reduced capacity through February 2023.
INTERROGATORY NO. 7 — Failure to Mitigate
Describe in detail each and every act or omission by VHG that Ironclad contends constitutes a failure to mitigate losses, whether under the terms of the Policy, Florida statutory or common law, or otherwise, including:
(a) The specific steps or measures that Ironclad contends VHG should have taken but failed to take, described with sufficient particularity to enable VHG to understand and respond to Ironclad's contention;
(b) The time frame in which Ironclad contends each such step or measure should have been taken, including the date by which Ironclad contends the action should have been commenced and the date by which it should have been completed;
(c) The estimated reduction in losses, expressed in dollar amounts or as a percentage of the total claimed loss, that Ironclad contends would have resulted from each mitigation measure identified, and the basis for such estimate; and
(d) All documents, data, analyses, reports, expert opinions, or other evidence supporting Ironclad's failure-to-mitigate defense, identified by date, author, and subject matter.
INTERROGATORY NO. 8 — Engagement and Communications with Arbor Claims Services
Describe in detail Ironclad's engagement of Arbor Claims Services LLC as independent adjuster for the Claim, including:
(a) The date on which Arbor Claims Services LLC was retained by Ironclad in connection with the Claim and the identity of the Ironclad employee who authorized or directed the retention;
(b) The scope of Arbor Claims' assignment, including a description of the specific tasks, investigations, inspections, and analyses that Arbor Claims was engaged to perform;
(c) The identity of each Arbor Claims representative assigned to the Claim, including but not limited to lead adjuster Denise Whitford, and for each person identified, state the person's name, title, role in the investigation, and dates of involvement;
(d) Each inspection, investigation, site visit, or other field activity conducted by Arbor Claims at any of the Subject Properties, including the date(s) of each inspection or visit, the specific Subject Property or Properties inspected, and the identity of all persons present or involved, including both Arbor Claims personnel and any other individuals (e.g., VHG representatives, contractors, engineers);
(e) Each report, memorandum, written analysis, estimate, summary, or other written communication prepared by Arbor Claims and provided to Ironclad regarding the Claim, identified by date, title or subject matter, author, and recipient(s); and
(f) Any oral communications between Arbor Claims (including Denise Whitford) and Ironclad claims personnel (including Victor Haddon and any other claims handler) regarding the Claim, identified by date, participants, method of communication, and the subject matter discussed during each communication.
For context, Arbor Claims' initial inspection of the Subject Properties was conducted on or about October 5, 2022.
INTERROGATORY NO. 9 — Communications with Excess Carriers
Identify each and every communication between Ironclad (including its officers, employees, claims personnel, underwriters, agents, and counsel) and any of the Excess Carriers — namely, Pinnacle Surplus Lines Inc., Montclair Assurance Company, and/or Sovereign Re Ltd. — regarding the Claim, VHG, or any coverage issue arising in connection with Hurricane Callista, including:
(a) The date of each communication;
(b) The participants in each communication, identified by name, title, and employer or firm affiliation;
(c) The method of communication (e.g., letter, email, telephone call, video conference, in-person meeting); and
(d) The substance of each communication, including any discussion of coverage positions, coverage analysis, claim evaluation, loss reserves, settlement authority, litigation strategy (to the extent not privileged), or coordination of claims handling.
For context, Pinnacle Surplus Lines Inc. issued a follow-form denial of VHG's claim on February 10, 2023. Montclair Assurance Company and Sovereign Re Ltd. issued reservation of rights letters but have not, to date, issued formal coverage denials.
INTERROGATORY NO. 10 — Communications with Tidewater Risk Advisors
Identify each and every communication between Ironclad (including its underwriters, claims personnel, agents, representatives, and counsel) and Tidewater Risk Advisors LLC (including account executive Franklin Orde and any other Tidewater representative) regarding:
(a) The placement or renewal of the Policy for the July 1, 2022 through July 1, 2023 policy period, including the initial submission, underwriting analysis, quoting, binding, policy issuance, and any post-binding endorsement or amendment;
(b) The Named-Windstorm Sub-Limit, including any discussion, negotiation, request, or agreement regarding the deletion, modification, retention, or reinstatement of the Named-Windstorm Sub-Limit during the 2022 renewal process or at any time during the policy period; and
(c) VHG's Hurricane Callista claim, including any notice of loss, acknowledgment of receipt, claim status updates, reserve notifications, coverage discussions, settlement discussions, or other correspondence or communication relating to the Claim.
For each communication identified, state the date, the participants (identified by name, title, and employer or affiliation), the method of communication, and the substance of the communication.
INTERROGATORY NO. 11 — Ironclad's Loss Calculation
State in detail Ironclad's calculation, estimate, or assessment of VHG's business-interruption losses and property damage losses arising from Hurricane Callista, if any such calculation, estimate, or assessment has been performed, including:
(a) The total dollar amount of business-interruption losses that Ironclad contends is covered under the Policy, if any, broken down by Subject Property and by category of loss (e.g., lost revenue, continuing expenses, extra expense, extended business income);
(b) The total dollar amount that Ironclad contends is excluded, not covered, or otherwise not payable under the Policy, and for each amount so identified, state the specific basis for the exclusion or reduction, including the policy provision relied upon;
(c) Any reserve amount(s) established by Ironclad for the Claim, the date(s) on which reserves were initially set, the date(s) on which reserves were subsequently modified, and the amount of each reserve (including separate identification of any case reserves, loss adjustment expense reserves, and total incurred amounts);
(d) The methodology, data sources, assumptions, and analytical framework used by Ironclad (or any person acting on its behalf, including Arbor Claims Services LLC and Graystone Consulting Group LLC) in calculating or estimating VHG's losses, including any financial models, historical revenue data, occupancy data, average daily rates, or other inputs used in the analysis; and
(e) Whether Ironclad retained any expert, consultant, forensic accountant, or other professional to evaluate VHG's claimed losses, and if so, identify each such person by name, title, and firm affiliation, and describe the scope of engagement, the date of retention, and whether the person has rendered any opinion or prepared any report.
For context, Ironclad is believed to have retained Graystone Consulting Group LLC and its principal, Dr. Warren Birk, as a damages and coverage expert in connection with this matter.
INTERROGATORY NO. 12 — Experts and Consultants
Identify each and every expert, consultant, engineer, forensic accountant, meteorologist, hydrologist, construction estimator, or other professional retained by or on behalf of Ironclad in connection with the Claim or this litigation, including:
(a) The person's full name, professional title, and current business address;
(b) The person's employer or firm affiliation;
(c) The subject matter of the engagement, including a description of the specific tasks, analyses, or opinions requested;
(d) The date on which the person was retained;
(e) The compensation terms, including the hourly rate, flat fee, or other compensation arrangement; and
(f) Whether the person has prepared a written report, and if so, the date of the report and a description of its subject matter.
This Interrogatory is intended to encompass, without limitation, the identification of Arbor Claims Services LLC (including lead adjuster Denise Whitford), Graystone Consulting Group LLC (including Dr. Warren Birk), and any engineering, forensic, meteorological, hydrological, or other experts retained by Ironclad in connection with the investigation, evaluation, adjustment, or defense of the Claim or this litigation.
INTERROGATORY NO. 13 — Affirmative Defenses
For each affirmative defense asserted by Ironclad in its Answer and Affirmative Defenses filed on or about April 15, 2023 (and any subsequent amendments thereto), state in detail the factual basis supporting each such affirmative defense, including:
(a) All facts upon which Ironclad intends to rely in support of each affirmative defense, described with sufficient particularity to enable Plaintiff to understand the factual basis for the defense;
(b) All documents that Ironclad contends support each affirmative defense, identified by date, author, recipient, type, and subject matter; and
(c) All persons known to Ironclad who have knowledge of facts relating to each affirmative defense, identified by name, title, employer, and a description of the subject matter of the person's knowledge.
INTERROGATORY NO. 14 — Policy Issuance and Endorsements
Describe in detail the process by which the Policy (IIC-PRP-2022-07541) was issued for the July 1, 2022 through July 1, 2023 policy period, including:
(a) The date on which the final policy form (including the declarations page and all endorsements) was issued and delivered to VHG or its broker, Tidewater Risk Advisors LLC;
(b) Each endorsement attached to the Policy at inception and each endorsement issued during the policy period, identified by endorsement number, form number (if applicable), effective date, and subject matter or purpose;
(c) Whether any binder, cover note, or certificate of insurance was issued prior to the issuance of the final policy, and if so, state the date of the binder, the terms of the binder as they relate to the Named-Windstorm Sub-Limit and business-interruption coverage generally, and whether the final policy differed from the binder in any material respect; and
(d) The identity of each Ironclad underwriter who participated in the underwriting, review, approval, or issuance of the Policy for the July 1, 2022 through July 1, 2023 policy period, including each person's name, title, and role in the underwriting process.
INTERROGATORY NO. 15 — Prior Claims History
State whether VHG (or any predecessor in interest, affiliate, subsidiary, or related entity) has submitted any prior claim to Ironclad for property damage or business-interruption losses under any prior policy issued by Ironclad, and if so, for each such prior claim:
(a) The date(s) on which the claim was submitted, including the date of the notice of loss and the date of any proof of loss;
(b) The nature of the claim, including the event or occurrence giving rise to the claim and a general description of the losses claimed;
(c) The amount of the claim as stated in the proof of loss or as otherwise quantified;
(d) The disposition of the claim, including whether it was paid, denied, partially paid, settled, or otherwise resolved, and if paid or settled, the amount paid; and
(e) The policy number(s) under which each such claim was submitted.
INTERROGATORY NO. 16 — Persons with Knowledge
Identify each person whom Ironclad believes has knowledge of facts relevant to this action, including facts relating to any claim or defense asserted by any party. For each person identified, state:
(a) The person's full name, title or position, employer or affiliation, and current business address;
(b) A description of the subject matter(s) of the person's knowledge, described with sufficient specificity to enable Plaintiff to assess the nature and scope of the person's relevant knowledge; and
(c) Whether the person is currently employed by Ironclad, and if the person was formerly employed by Ironclad, state the dates of employment and the person's last known contact information.
INTERROGATORY NO. 17 — Joint Defense or Common Interest Arrangements
State whether Ironclad has entered into any joint defense agreement, common interest agreement, information-sharing agreement, or any similar arrangement or understanding with any of the Excess Carriers or their respective counsel — including, without limitation, the law firm of Fendowell Rourke & Stanton LLP and/or the law firm of Delvecchio & Kraus LLP — in connection with this action, the Claim, or any matter relating to VHG's Hurricane Callista losses. If so, state:
(a) The date on which each such agreement or arrangement was entered into or became effective;
(b) The parties to each such agreement or arrangement, identified by name and the capacity in which they participate; and
(c) The general terms and scope of each such agreement or arrangement, including the subject matter covered by the agreement and the nature of the cooperative activities contemplated, without disclosing the substance of any communications protected by the attorney-client privilege or work-product doctrine.
For context, it is Plaintiff's understanding that Fendowell Rourke & Stanton LLP represents both Ironclad and Pinnacle Surplus Lines Inc. in this action pursuant to a joint defense arrangement.
INTERROGATORY NO. 18 — Bad Faith Claim Handling
Describe each and every step taken by Ironclad to investigate, evaluate, analyze, and process the Claim between the date of VHG's initial notice of loss (September 22, 2022) and the date of Ironclad's formal coverage denial (February 3, 2023), in chronological order, including:
(a) The dates and nature of each investigative step, including but not limited to receipt and review of VHG's notice of loss, assignment of the Claim to a claims handler, retention of independent adjusters, inspections of the Subject Properties, review of the Policy, review of the proof of loss, retention of experts, and any other investigative or analytical activity;
(b) The persons involved in each such step, identified by name, title, and employer or affiliation;
(c) The information obtained at each step, including a description of the findings, conclusions, data, or other information gathered;
(d) The basis on which Ironclad determined to deny coverage rather than pay or partially pay the Claim, including the identity of the person(s) who made or approved the decision to deny coverage, the date on which the decision was made, and the specific reasons for the denial; and
(e) Whether Ironclad considered making any partial payment on the Claim, including any payment of undisputed amounts, pending resolution of disputed coverage issues, and if Ironclad did consider making a partial payment, describe the circumstances of such consideration, the amount considered, and the reasons for ultimately declining to make any partial payment.
INTERROGATORY NO. 19 — Premium Calculations
Describe in detail how the annual premium of $980,000 for the primary layer of the Policy was calculated for the July 1, 2022 through July 1, 2023 policy period, including:
(a) The rating factors, rating methodologies, actuarial models, proprietary pricing tools, catastrophe models, and other analytical tools or inputs used by Ironclad in determining the premium;
(b) Whether the premium as calculated and charged reflected the presence or absence of a Named-Windstorm Sub-Limit, and if so, the specific impact that the inclusion or exclusion of the Named-Windstorm Sub-Limit had on the premium calculation;
(c) Any premium increase, decrease, credit, surcharge, or adjustment associated with the deletion, modification, or retention of the Named-Windstorm Sub-Limit at the 2022 renewal, identified by amount and the reason for the adjustment; and
(d) Any comparison between the premium charged for the 2021–2022 policy year and the premium charged for the 2022–2023 policy year, including the total premium for each year, the reasons for any difference in premium between the two years, and whether any change in coverage terms (including any change to the Named-Windstorm Sub-Limit) contributed to the premium difference.
For context, the total annual premium for VHG's entire insurance tower (primary and excess layers) was $1,840,000, of which $980,000 was attributable to the primary layer underwritten by Ironclad.
INTERROGATORY NO. 20 — Damage to Specific Properties
For each of the three Subject Properties (Verimark Grand Key Resort, Verimark Harborview Hotel & Conference Center, and Verimark Sunset Shores), state:
(a) Ironclad's assessment of the cause(s) of physical damage sustained by the property as a result of Hurricane Callista, distinguishing among damage caused by wind, damage caused by storm surge or flood, damage caused by rain infiltration, and damage caused by any other cause, and for each cause identified, state the estimated dollar amount or percentage of total damage attributed to that cause;
(b) Whether Ironclad contends that any portion of the physical damage at any Subject Property did not result from Hurricane Callista, and if so, identify the portion of damage that Ironclad contends was pre-existing, attributable to deferred maintenance, or otherwise not caused by the Storm, and state the factual basis for such contention;
(c) The storm surge levels recorded, measured, or estimated at each Subject Property location, including the source of such data (e.g., USGS high-water marks, NOAA tide gauge data, post-storm survey data, engineering estimates), and whether Ironclad contends that storm surge at any Subject Property exceeded the levels reported by VHG or governmental agencies; and
(d) Whether Ironclad contends that any civil authority order, including mandatory evacuation orders issued by Monroe County on September 16, 2022 and by Lee County on September 17, 2022, affected the coverage analysis under the Policy, and if so, describe in detail how such civil authority orders affect Ironclad's position on coverage, including whether Ironclad contends that any portion of VHG's business-interruption loss attributable to civil authority action is or is not covered under the Policy.
For context, storm surge levels resulting from Hurricane Callista were measured at approximately 8 to 14 feet in Monroe County and approximately 6 to 10 feet in Lee County.
— END OF INTERROGATORIES —
Respectfully submitted,
CALDERWOOD & HARKNESS LLP Counsel for Plaintiff Verimark Hospitality Group Inc. 333 SE 2nd Avenue, Suite 4400 Miami, Florida 33131
By: ________
Elaine Forsythe, Esq. Florida Bar No. 0098471 eforsythe@calderwoodharkness.com
Tiffany Rosenthal, Esq. Florida Bar No. 0112389 trosenthal@calderwoodharkness.com
Telephone: (305) 555-7200 Facsimile: (305) 555-7201
Date: June 5, 2023
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing Plaintiff's First Set of Interrogatories to Defendant Ironclad Indemnity Corporation was served on this 5th day of June, 2023, via the Florida Courts E-Filing Portal and electronic mail upon the following counsel of record:
Gregory Stanton, Esq. Meredith Liang, Esq. Colin Ashford, Esq. Fendowell Rourke & Stanton LLP 280 Trumbull Street, Suite 2200 Hartford, Connecticut 06103 and 101 E. Kennedy Boulevard, Suite 3900 Tampa, Florida 33602 gstanton@bracewellrourke.com mliang@bracewellrourke.com cashford@bracewellrourke.com Counsel for Defendant Ironclad Indemnity Corporation and Defendant Pinnacle Surplus Lines Inc.
Patricia Kraus, Esq. Raymond Cho, Esq. Delvecchio & Kraus LLP 425 Park Avenue, 20th Floor New York, New York 10022 pkraus@delvecchiokraus.com rcho@delvecchiokraus.com Counsel for Defendants Montclair Assurance Company and Sovereign Re Ltd.
By: ________
Elaine Forsythe, Esq. Florida Bar No. 0098471

IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA

CIVIL DIVISION

I. DEFINITIONS

II. INSTRUCTIONS

III. INTERROGATORIES

CERTIFICATE OF SERVICE

Record

Parties

Dates

Amounts