IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA
GENERAL JURISDICTION DIVISION
Case No.: 2022-CA-031547
VERIMARK HOSPITALITY GROUP INC.,
Plaintiff,
v.
IRONCLAD INDEMNITY CORPORATION; PINNACLE SURPLUS LINES INC.; MONTCLAIR ASSURANCE COMPANY; and SOVEREIGN RE LTD.,
Defendants.
PLAINTIFF VERIMARK HOSPITALITY GROUP INC.'S SUPPLEMENTAL RESPONSES TO DEFENDANT IRONCLAD INDEMNITY CORPORATION'S FIRST SET OF INTERROGATORIES (NOS. 1 THROUGH 25)
Served: September 20, 2023
Plaintiff Verimark Hospitality Group Inc. ("VHG"), by and through its undersigned counsel, Calderwood & Harkness LLP, hereby serves these Supplemental Responses to Defendant Ironclad Indemnity Corporation's ("Ironclad") First Set of Interrogatories (Nos. 1 through 25), originally propounded on May 15, 2023. VHG states as follows:
These Supplemental Responses are served pursuant to VHG's continuing obligation to supplement discovery responses under the Florida Rules of Civil Procedure, Rules 1.280(f) and 1.340. These Supplemental Responses are based upon additional information obtained through fact discovery conducted between June 1, 2023 and September 30, 2023, including but not limited to depositions taken and expert analysis completed since VHG served its initial responses to Ironclad's First Set of Interrogatories on July 5, 2023. To the extent that any information set forth herein is inconsistent with or supplementary to information provided in VHG's initial responses, these Supplemental Responses shall be deemed to supersede VHG's initial responses. All other responses contained in VHG's initial responses dated July 5, 2023 remain in full force and effect, except as expressly modified herein.
VHG incorporates by reference all general objections stated in VHG's initial responses served July 5, 2023, as if fully set forth herein, including but not limited to objections as to scope, privilege (attorney-client and work product), proportionality under Florida Rule of Civil Procedure 1.280(b)(1), and relevance under Sections 90.401 and 90.402, Florida Statutes. Nothing contained in these Supplemental Responses is intended to, nor shall it be construed to, waive any previously asserted objection, whether general or specific, or any privilege, immunity, or protection from disclosure available to VHG under applicable law.
VHG further reserves the right to supplement or amend these responses as additional information becomes available through the expert discovery phase, which is currently scheduled to close on November 30, 2023, and through any additional fact discovery that may be authorized by the Court. VHG's investigation into the facts and circumstances of the claims and defenses at issue in this action is ongoing, and the information provided herein is based on VHG's current knowledge, understanding, and belief as of the date these Supplemental Responses are served.
GENERAL OBJECTIONS (INCORPORATED BY REFERENCE)
VHG restates and incorporates by reference all general objections set forth in VHG's initial responses to Ironclad's First Set of Interrogatories, served on July 5, 2023, as though fully reproduced herein. Without limiting the generality of the foregoing, VHG specifically preserves and reasserts the following objections:
(a) VHG objects to any interrogatory to the extent it seeks disclosure of communications protected by the attorney-client privilege, including communications between VHG and its counsel of record, Calderwood & Harkness LLP, or any other legal counsel retained by VHG in connection with the claims or defenses at issue in this litigation or in connection with the underlying insurance claims.
(b) VHG objects to any interrogatory to the extent it seeks disclosure of materials protected by the work-product doctrine, including documents, analyses, mental impressions, conclusions, opinions, and legal theories prepared by or for VHG's counsel in anticipation of litigation or for trial.
(c) VHG objects to any interrogatory to the extent it is overly broad, unduly burdensome, or not proportional to the needs of the case, considering the importance of the issues at stake, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.
(d) VHG objects to any interrogatory to the extent it seeks information equally available to Ironclad from its own files, records, and personnel, or from the files, records, and personnel of Arbor Claims Services LLC ("Arbor"), Ironclad's retained independent adjusting firm, and the records of VHG's insurance broker, Tidewater Risk Advisors LLC ("Tidewater"), to the extent such records have been or should have been maintained by Ironclad in the ordinary course of the claims-handling process.
(e) VHG objects to any interrogatory that is compound, conjunctive, or disjunctive to the extent it should be counted as more than one interrogatory under Florida Rule of Civil Procedure 1.340(a).
Subject to and without waiving the foregoing general and specific objections, VHG responds to the individual interrogatories below.
SUPPLEMENTAL RESPONSE TO INTERROGATORY NO. 4
INTERROGATORY NO. 4: Describe in detail all steps taken by VHG to mitigate its business-interruption losses at each of the three insured properties following Hurricane Callista, including but not limited to the identification of all contractors, vendors, or other third parties retained to perform emergency or restoration services, the dates on which such services were commenced and completed, and all costs incurred in connection with such mitigation efforts.
SUPPLEMENTAL RESPONSE:
Subject to and without waiving the general and specific objections set forth above and in VHG's initial responses, VHG supplements its response to Interrogatory No. 4 as follows:
General Mitigation Overview
VHG implemented a comprehensive disaster-recovery and mitigation plan immediately following Hurricane Callista's landfall on September 18, 2022, in the lower Florida Keys. VHG's disaster-recovery plan had been developed and periodically updated in the ordinary course of VHG's business operations as a multi-property hospitality company operating in hurricane-prone coastal markets. Marcus Ellsworth, VHG's Chief Executive Officer, authorized emergency restoration measures within approximately 48 hours of Hurricane Callista's landfall, and Sandra Pellegrini, VHG's Vice President of Risk Management, coordinated mitigation efforts with VHG's property management teams at each of the three affected resort properties. VHG retained emergency restoration contractors at each property within the first week following the storm, notwithstanding the substantial logistical challenges posed by infrastructure damage, mandatory evacuation orders, and widespread power outages across Southwest Florida and the Florida Keys.
VHG's mitigation efforts at each property are described below, supplemented with information obtained through the depositions of Marcus Ellsworth (taken August 7, 2023), Diane Calder (taken August 8, 2023), and Sandra Pellegrini (taken August 14, 2023), as well as the expert report of Dr. Helen Vasquez, CPA, CFF, of Meridian Forensic Economics LLC, served on September 15, 2023.
Verimark Grand Key Resort (Mile Marker 48, Marathon, FL 33050)
The Verimark Grand Key Resort sustained the most severe damage of VHG's three insured properties due to its proximity to Hurricane Callista's Category 4 landfall near Big Pine Key. The National Weather Service confirmed that Hurricane Callista made landfall with sustained winds of approximately 145 miles per hour, and the National Hurricane Center's post-storm analysis documented storm surge of 8 to 14 feet across Monroe County. The Grand Key Resort's ground-floor guest rooms, lobby and reception areas, restaurant and bar facilities, pool and recreation areas, marina, and associated infrastructure sustained extensive wind and storm-surge damage.
VHG retained emergency water-extraction and structural-stabilization crews by September 22, 2022, four days after Hurricane Callista's landfall. Initial emergency measures included water extraction from all ground-floor spaces, tarping of damaged roof sections, removal of debris from guest areas and common spaces, and securing of the property against further damage and unauthorized access. These emergency measures were undertaken as rapidly as conditions permitted, given that the Monroe County mandatory evacuation order issued on September 16, 2022 was not lifted until September 21, 2022, and that road access to the middle and lower Florida Keys via U.S. Route 1 was severely restricted in the days immediately following landfall.
VHG supplements its initial response with the following information obtained from the deposition of Sandra Pellegrini, taken on August 14, 2023. Ms. Pellegrini testified that VHG engaged three separate general contractors for competitive bidding on the Grand Key Resort restoration work, specifically Coastal Restoration Group Inc., SunBuild Construction LLC, and Keystone Builders of South Florida Inc. (Pellegrini Dep. Tr. 74:12–76:8). Ms. Pellegrini further testified that VHG selected Coastal Restoration Group Inc. as the general contractor because it offered the fastest restoration timeline of the three bidders, with a projected completion date in mid-March 2023, and because it had prior experience with hospitality property restoration in the Florida Keys (Pellegrini Dep. Tr. 77:3–78:22). The selection of the contractor offering the fastest timeline, rather than the lowest cost, is direct evidence of VHG's good-faith efforts to minimize the period of business interruption.
Contractor mobilization for full restoration at the Grand Key Resort commenced in October 2022. However, significant and well-documented delays impacted the restoration timeline, including but not limited to the following: (i) Monroe County permitting backlogs resulting from the county-wide post-hurricane workload, which delayed the issuance of building permits for restoration work by approximately three to four weeks beyond normal processing times; (ii) supply-chain constraints on building materials, particularly hurricane-rated windows and doors, commercial-grade roofing materials, and marine dock components, which were in extreme short supply across the Gulf Coast region in the aftermath of Hurricane Callista; and (iii) difficulty accessing the Florida Keys due to infrastructure damage to U.S. Route 1 and associated bridges, which hampered the transport of materials and equipment to the property.
The Verimark Grand Key Resort reopened on March 15, 2023, following a total closure period of 178 days. VHG's expert, Dr. Helen Vasquez of Meridian Forensic Economics LLC, has analyzed the Grand Key Resort restoration timeline in detail and opines that VHG's mitigation efforts were reasonable and diligent and that no material reduction of the 178-day closure period was feasible given the documented conditions. Dr. Vasquez's opinions are set forth in her expert report served on September 15, 2023, and the bases and reasons for her opinions are described therein.
Verimark Harborview Hotel & Conference Center (1400 Estero Boulevard, Fort Myers Beach, FL 33931)
The Verimark Harborview Hotel & Conference Center sustained significant wind and storm-surge damage. The National Hurricane Center documented storm surge of 6 to 10 feet in Lee County in the area of Fort Myers Beach. The Harborview property's ground-floor spaces, including the main lobby, restaurant, ballroom, and a portion of the conference center, were inundated with storm-surge water, and the upper floors sustained wind damage to the roof, windows, and building envelope.
VHG implemented emergency measures at the Harborview property beginning on September 20, 2022, two days after landfall. Emergency measures included board-up of breached windows and openings, water extraction, initiation of mold-remediation protocols, and removal of damaged furnishings and fixtures from guest rooms and common areas. VHG engaged Rapid Response Environmental LLC to conduct mold assessment and remediation services beginning on September 25, 2022, given the critical importance of addressing mold growth promptly in the warm and humid post-storm environment.
VHG supplements its initial response with the following information obtained from the deposition of Diane Calder, VHG's Chief Financial Officer, taken on August 8, 2023. Ms. Calder testified that VHG expended approximately $2.1 million in extra expenses specifically to accelerate the restoration timeline at the Harborview property, including premium-rate contractor labor (overtime and weekend shifts), expedited shipping of building materials, and the retention of supplemental subcontractor crews to work concurrently on multiple phases of the restoration (Calder Dep. Tr. 112:4–115:19). Ms. Calder further testified that VHG authorized these extraordinary expenditures with the express purpose of reducing the period of business interruption, even though such premium-rate costs significantly exceeded what would have been required under a normal construction schedule (Calder Dep. Tr. 116:2–117:14).
VHG further supplements its response with information from the deposition of Marcus Ellsworth, VHG's CEO, taken on August 7, 2023. Mr. Ellsworth testified that he personally directed VHG's management team to prioritize rapid reopening of the Harborview property and authorized overtime and weekend construction schedules, notwithstanding the increased cost, in order to minimize VHG's business-interruption losses and to fulfill VHG's obligations to mitigate under the policy (Ellsworth Dep. Tr. 88:7–90:3). Mr. Ellsworth testified that he received regular progress reports from the on-site construction manager and intervened personally on at least three occasions to resolve scheduling bottlenecks and secure commitments from subcontractors to maintain the accelerated timeline (Ellsworth Dep. Tr. 91:15–93:22).
The Verimark Harborview Hotel & Conference Center reopened on January 31, 2023, following a total closure period of 135 days. Dr. Vasquez's expert analysis confirms that the 135-day closure period was reasonable and consistent with the scope of damage sustained and the restoration requirements applicable to a full-service hotel and conference center of the Harborview's size, configuration, and quality.
Verimark Sunset Shores (7200 Gulf Boulevard, St. Pete Beach, FL 33706)
The Verimark Sunset Shores property sustained less severe damage than the Grand Key Resort and the Harborview Hotel & Conference Center. The primary damage at the Sunset Shores property was wind-related, including significant roof damage, window breaches on the upper floors, landscaping destruction, and damage to exterior building elements such as balconies and façade components. Storm-surge impact at this property was minimal due to its higher elevation relative to the waterline and its location on the northern edge of Hurricane Callista's storm-surge footprint.
VHG commenced emergency repairs at the Sunset Shores property within days of Hurricane Callista's landfall, including tarping of damaged roof sections, boarding up of breached windows, and securing of the property. VHG achieved a partial reopening of the Sunset Shores property on November 30, 2022, 73 days after Hurricane Callista's landfall, with approximately 60% of guest rooms available for occupancy. The remaining guest rooms, located on the upper floors most severely affected by roof and window damage, required additional restoration work that was completed on a floor-by-floor basis. Full guest-room capacity was restored by February 28, 2023.
VHG supplements its initial response with the following information obtained through discovery: VHG produced invoices and contractor schedules demonstrating continuous and uninterrupted restoration activity at the Sunset Shores property throughout both the full-closure and partial-closure periods (Bates range VHG-00008100 through VHG-00009450). These documents establish that VHG maintained an active restoration effort at all times and did not permit any material gaps or delays in the restoration work.
Dr. Vasquez's expert analysis confirms the reasonableness of the Sunset Shores restoration timeline, including VHG's decision to pursue a phased reopening strategy that allowed VHG to resume generating revenue from the available room inventory as quickly as possible while continuing restoration work on the remaining rooms.
Additional Mitigation Measures (All Properties)
In addition to the property-specific mitigation efforts described above, VHG undertook the following mitigation measures applicable to all three insured properties:
(a) Guest Reservation Redirection. VHG's central reservations team, under the direction of VHG's Vice President of Sales and Marketing, redirected guest reservations at the three affected properties to non-affected VHG properties and to partner hotels where possible, in order to preserve customer relationships and minimize revenue loss. VHG maintains reciprocal referral arrangements with several hotel brands and independent properties in non-affected areas of Florida.
(b) Marketing and Reservation System Maintenance. VHG maintained its marketing operations and reservation systems throughout the closure periods at all three properties in order to capture bookings for post-reopening dates. VHG's digital marketing and e-commerce platforms remained fully operational, and VHG conducted targeted marketing campaigns to drive bookings for the anticipated reopening dates.
(c) Preservation of Perishable Inventory and Salvageable Assets. VHG's property management teams preserved perishable food and beverage inventory to the extent feasible and removed salvageable fixtures, equipment, and furnishings from damaged areas of each property to prevent further loss.
(d) Weekly Status Reports to Insurer. As testified by Sandra Pellegrini during her deposition on August 14, 2023, VHG submitted weekly status reports to Ironclad and Arbor Claims Services LLC regarding restoration progress at all three properties throughout the closure and restoration periods (Pellegrini Dep. Tr. 131:8–133:5). These weekly reports, which were produced in VHG's document production (Bates range VHG-00002800 through VHG-00003450), documented the status of restoration work, identified obstacles and delays, and communicated VHG's projected reopening dates.
SUPPLEMENTAL RESPONSE TO INTERROGATORY NO. 7
INTERROGATORY NO. 7: Identify the basis for VHG's calculation of business-interruption losses at each of the three insured properties and provide all supporting data, including but not limited to the methodology used, all assumptions made, all financial data relied upon, and all projections or estimates of revenue, expenses, and net income during the claimed period of interruption.
SUPPLEMENTAL RESPONSE:
Subject to and without waiving the general and specific objections set forth above and in VHG's initial responses, VHG supplements its response to Interrogatory No. 7 as follows:
VHG's initial response identified VHG's total business-interruption claim of $60,000,000, allocated as follows: $31,400,000 attributable to the Verimark Grand Key Resort; $18,700,000 attributable to the Verimark Harborview Hotel & Conference Center; and $9,900,000 attributable to the Verimark Sunset Shores. These amounts were set forth in VHG's sworn statement in proof of loss submitted to Ironclad on November 15, 2022.
VHG supplements its initial response with reference to the expert report of Dr. Helen Vasquez, CPA, CFF, of Meridian Forensic Economics LLC, served on September 15, 2023, which provides a comprehensive, independent quantification and validation of VHG's business-interruption losses. Dr. Vasquez's report, together with its supporting exhibits and schedules, sets forth in detail the methodology, assumptions, data sources, and calculations underlying VHG's claim. VHG refers Ironclad to Dr. Vasquez's full expert report and supporting exhibits for the complete and detailed methodology and data.
Grand Key Resort — $31,400,000
Dr. Vasquez's analysis of business-interruption losses at the Grand Key Resort is based on the following key inputs and assumptions:
• The Grand Key Resort operates 312 guest rooms. The pre-loss average daily rate ("ADR") for the twelve-month period ending September 2022 was $389 per room per night. The pre-loss occupancy rate for the same period was 82%.
• The claimed period of interruption is the 178-day full closure period from September 18, 2022 through March 15, 2023.
• The loss calculation encompasses all categories of revenue generated by the Grand Key Resort, including room revenue, ancillary revenue from the marina, food and beverage operations, spa services, and conference and event revenue. The calculation deducts saved variable expenses during the closure period, including variable labor costs, food and beverage costs of goods sold, utility costs, and other variable operating expenses that were not incurred during the closure.
• Dr. Vasquez's analysis utilized VHG's historical financial data, including audited financial statements for fiscal year 2021 (company-wide revenue of approximately $412 million and EBITDA of approximately $78 million), as well as property-level revenue data, monthly and weekly revenue reports, seasonal occupancy trends, and advance booking data for the Grand Key Resort. Dr. Vasquez also analyzed comparable market data from Bramwell Holdings (formerly Penmark Enterprises) for the Marathon/Florida Keys competitive set to validate occupancy and ADR projections for the claimed period.
• Dr. Vasquez applied seasonal adjustment factors to account for the Grand Key Resort's peak-season revenue patterns, which show significantly higher occupancy and ADR during the October through April period (the claimed closure period encompasses a substantial portion of the high season for the Florida Keys market).
VHG supplements its response with information from the deposition of Diane Calder, VHG's Chief Financial Officer, taken on August 8, 2023. Ms. Calder provided testimony regarding VHG's internal financial projections and budgeted revenue for the Grand Key Resort for the Q4 2022 and Q1 2023 periods (Calder Dep. Tr. 134:10–139:22). Ms. Calder testified that VHG's budgeted revenue for the Grand Key Resort for the period October 2022 through March 2023 was approximately $34.8 million, which supported and was consistent with Dr. Vasquez's loss model (Calder Dep. Tr. 140:1–141:15). Ms. Calder further testified that VHG's budgets are prepared through a rigorous annual budgeting process that incorporates historical performance data, advance booking trends, market intelligence, and property-level management input (Calder Dep. Tr. 126:5–128:18).
Harborview Hotel & Conference Center — $18,700,000
Dr. Vasquez's analysis of business-interruption losses at the Harborview Hotel & Conference Center is based on the following key inputs and assumptions:
• The Harborview Hotel & Conference Center operates 224 guest rooms and a 22,000-square-foot conference and event center. The pre-loss ADR was $295 per room per night, and the pre-loss occupancy rate was 74%.
• The claimed period of interruption is the 135-day full closure period from September 18, 2022 through January 31, 2023.
• The loss calculation includes a substantial conference-center revenue component. VHG produced supplemental documentation in its document production showing 17 confirmed group bookings and conferences that were canceled or relocated during the closure period (Bates range VHG-00010200 through VHG-00011850). These group bookings represented contractual commitments for room blocks, meeting-room rentals, catering and banquet services, and ancillary event services.
• Dr. Vasquez's report quantifies lost conference and banquet revenue based on historical booking data, contractual commitments evidenced by signed group booking agreements and banquet event orders, and the Harborview's historical capture rate for conference and event revenue relative to room revenue.
Sunset Shores — $9,900,000
Dr. Vasquez's analysis of business-interruption losses at the Sunset Shores property is based on the following key inputs and assumptions:
• The Sunset Shores property operates 186 guest rooms. The pre-loss ADR was $342 per room per night, and the pre-loss occupancy rate was 79%.
• The claimed period of interruption includes the 73-day full closure period from September 18, 2022 through November 30, 2022, as well as the subsequent reduced-capacity period from December 1, 2022 through February 28, 2023, during which approximately 40% of guest rooms remained unavailable.
• Dr. Vasquez calculated losses during both the full-closure and partial-closure periods, accounting for the phased reopening. During the partial-closure period, Dr. Vasquez calculated the incremental revenue loss attributable to the unavailable room inventory by comparing actual revenue generated during the partial-closure period to projected revenue at full capacity.
Revision and Refinement of Loss Calculations
Dr. Vasquez's expert report refines certain assumptions in VHG's original sworn statement in proof of loss submitted on November 15, 2022. Specifically, Dr. Vasquez applied updated seasonal adjustment factors based on a more granular analysis of weekly occupancy and ADR patterns, and she refined certain saved-expense deductions based on VHG's actual cost data during the closure periods, which became available after VHG submitted its proof of loss. Notwithstanding these refinements, Dr. Vasquez's total loss calculation confirms that VHG's aggregate business-interruption losses across all three properties exceed $60 million. VHG's total claim remains $60,000,000, which represents the aggregate limit of VHG's property/business-interruption insurance tower and is therefore the maximum recoverable amount under the policies at issue.
VHG refers Ironclad to Dr. Vasquez's full expert report, including all supporting exhibits, schedules, and appendices (served September 15, 2023), for the detailed methodology, data sources, calculations, and supporting analysis.
SUPPLEMENTAL RESPONSE TO INTERROGATORY NO. 9
INTERROGATORY NO. 9: Identify the period of restoration VHG claims for each of the three insured properties and the factual basis for each such period, including the date on which VHG contends the period of restoration commenced and the date on which VHG contends the period of restoration ended, and all facts supporting VHG's contention that the claimed periods of restoration were reasonable.
SUPPLEMENTAL RESPONSE:
Subject to and without waiving the general and specific objections set forth above and in VHG's initial responses, VHG supplements its response to Interrogatory No. 9 as follows:
VHG supplements its initial response with information obtained from the depositions of Marcus Ellsworth (August 7, 2023), Diane Calder (August 8, 2023), Sandra Pellegrini (August 14, 2023), and Franklin Orde of Tidewater Risk Advisors LLC (August 28, 2023), as well as the expert analyses of Dr. Helen Vasquez, CPA, CFF, of Meridian Forensic Economics LLC, and Jeffrey Caldwell, PE, of Caldwell Engineering Associates Inc., both of whose expert reports were served on September 15, 2023.
Period of Restoration — Policy Definition
The Ironclad primary policy (Policy No. IIC-PRP-2022-07541) defines the "period of restoration" as the period of time that "[c]ommences with the date of direct physical loss or damage caused by or resulting from any Covered Cause of Loss" and "[e]nds on the date when the property at the described premises should be repaired, rebuilt or replaced with reasonable speed and similar quality." VHG contends that the "period of restoration" for each property encompasses the entire period during which VHG's operations were interrupted as a direct result of the physical damage caused by Hurricane Callista, through the date on which VHG actually completed repairs and resumed operations, because VHG's actual restoration timelines were reasonable and consistent with the scope of damage sustained.
Grand Key Resort — 178 Days (September 18, 2022 – March 15, 2023)
VHG claims a period of restoration of 178 days for the Grand Key Resort, commencing on September 18, 2022, the date of Hurricane Callista's landfall and the date on which the property sustained direct physical loss or damage, and ending on March 15, 2023, the date on which the Grand Key Resort reopened for business following completion of restoration.
VHG supplements the factual basis for this claimed period of restoration as follows:
Jeffrey Caldwell, PE, of Caldwell Engineering Associates Inc., VHG's forensic engineering expert, conducted a detailed analysis of the structural damage sustained by the Grand Key Resort and the scope of restoration work required. Mr. Caldwell's expert report, served on September 15, 2023, concludes that the scope of wind and storm-surge damage at the Grand Key Resort, including damage to the structural framing, roofing system, building envelope, electrical and mechanical systems, marina facilities, and interior finishes, required a minimum restoration period of approximately 170 to 185 days given the extent and complexity of the damage. Mr. Caldwell's analysis is based on his on-site inspection of the property conducted on November 2, 2022, his review of construction documents, contractor schedules, permitting records, and his professional engineering judgment regarding reasonable construction timelines for work of this scope and complexity.
The following additional factors impacted the reasonable speed of restoration and support the reasonableness of the 178-day restoration period:
(a) The Monroe County mandatory evacuation order issued on September 16, 2022 was not lifted until September 21, 2022, which delayed post-storm access to the property by at least three days.
(b) Post-hurricane permitting delays in Monroe County were significant and well-documented. The Monroe County Building Department experienced an unprecedented volume of permit applications in the weeks and months following Hurricane Callista, resulting in processing delays of approximately three to four weeks beyond normal timeframes. These delays were beyond VHG's control.
(c) Documented supply-chain shortages for hurricane-rated windows, commercial roofing materials, and marine dock components affected the Grand Key Resort restoration timeline. These shortages were industry-wide and resulted from the massive demand for building materials across the hurricane-affected region.
(d) Limited contractor availability in the Florida Keys following Hurricane Callista constrained VHG's ability to engage additional subcontractor crews to accelerate the restoration timeline. Qualified contractors with experience in hospitality property restoration and familiarity with the unique construction requirements applicable to the Florida Keys were in extremely high demand.
VHG disputes Ironclad's position, asserted in its February 3, 2023 denial letter, that repairs at the Grand Key Resort "could have been completed" in fewer than 178 days. VHG notes that Ironclad's independent adjuster, Denise Whitford of Arbor Claims Services LLC, in her deposition on July 24, 2023, acknowledged that she did not conduct a day-by-day restoration timeline analysis and instead relied on general industry estimates rather than property-specific engineering assessments to estimate a reasonable restoration period (Whitford Dep. Tr. 156:14–159:7). Ms. Whitford further acknowledged that she is not a licensed engineer and that she did not retain or consult with a forensic engineer in formulating her estimate of a reasonable restoration period for the Grand Key Resort (Whitford Dep. Tr. 160:2–161:19).
Harborview Hotel & Conference Center — 135 Days (September 18, 2022 – January 31, 2023)
VHG claims a period of restoration of 135 days for the Harborview Hotel & Conference Center, commencing on September 18, 2022 and ending on January 31, 2023.
VHG supplements the factual basis for this claimed period of restoration as follows:
The Harborview Hotel & Conference Center's 22,000-square-foot conference center required specialized restoration work that extended the overall restoration timeline beyond the period that would have been required for the hotel guest rooms alone. The conference center's acoustic treatments, audiovisual systems, HVAC systems (including dedicated air handling units for the ballroom and meeting rooms), and specialized interior finishes required procurement of specialty materials and engagement of specialized subcontractors, contributing materially to the restoration timeline. Mr. Caldwell's forensic engineering report addresses the scope and complexity of the conference center restoration in detail.
Lee County permitting and inspection backlogs contributed to restoration delays at the Harborview property, similar to the Monroe County permitting delays experienced at the Grand Key Resort. Lee County's Building Department experienced post-hurricane processing delays that extended the permitting timeline by approximately two to three weeks beyond normal processing times.
Dr. Vasquez's analysis confirms that the 135-day closure period was reasonable and consistent with the scope of damage documented by Caldwell Engineering Associates Inc. and the restoration requirements applicable to a property of the Harborview's size and complexity.
Sunset Shores — 73 Days Full Closure (September 18 – November 30, 2022) Plus Partial Closure Through February 28, 2023
VHG claims a period of restoration that includes the 73-day full closure from September 18, 2022 through November 30, 2022, and a subsequent partial-closure period from December 1, 2022 through February 28, 2023, during which approximately 40% of guest rooms remained unavailable due to ongoing restoration work.
VHG supplements the factual basis for this claimed period of restoration as follows:
VHG's phased reopening approach at the Sunset Shores property was dictated by the availability of contractor crews and the need to remediate roof and window damage on a floor-by-floor basis. The restoration work progressed sequentially from the lower floors to the upper floors, allowing VHG to reopen restored floors while continuing restoration work on the remaining floors. This approach was adopted specifically to minimize the period of total business interruption and to begin generating revenue from available room inventory as quickly as possible.
VHG's decision to pursue a partial reopening on November 30, 2022, with approximately 60% of rooms available, demonstrates VHG's affirmative mitigation efforts to minimize the interruption period. VHG could have elected to keep the entire property closed until all rooms were restored, which would have simplified property management operations during the restoration period but would have extended the period of complete business interruption.
Rebuttal of Ironclad's Unreasonable-Delay Argument
VHG supplements its response with the following information addressing Ironclad's contention that VHG's restoration timelines were unreasonably prolonged:
Victor Haddon, Ironclad's Senior Vice President of Claims, testified during his deposition on July 10, 2023 that Ironclad did not retain its own engineering expert to independently assess a reasonable restoration timeline for any of the three insured properties prior to issuing its denial letter on February 3, 2023 (Haddon Dep. Tr. 203:8–205:14). Mr. Haddon acknowledged that Ironclad relied solely on Arbor Claims Services LLC's general assessment in forming its position regarding the reasonableness of VHG's restoration timelines and did not obtain an independent property-specific engineering or construction analysis (Haddon Dep. Tr. 206:1–207:22).
Dr. Vasquez's analysis demonstrates that VHG's actual restoration timelines at all three properties were at or below industry benchmarks for Category 4 hurricane damage to comparable hospitality properties, as documented by published industry data and Dr. Vasquez's analysis of restoration timelines for comparable hotel properties affected by recent major hurricanes in the Gulf Coast region.
SUPPLEMENTAL RESPONSE TO INTERROGATORY NO. 11
INTERROGATORY NO. 11: Identify all persons with knowledge of the facts underlying VHG's business-interruption claim, including the full name, title or position, employer or affiliation, and a description of the subject matter of the knowledge possessed by each such person.
SUPPLEMENTAL RESPONSE:
Subject to and without waiving the general and specific objections set forth above and in VHG's initial responses, VHG supplements its response to Interrogatory No. 11 as follows:
VHG supplements its initial identification of persons with knowledge to include the following individuals, in addition to those identified in VHG's initial responses:
VHG Personnel.
Marcus Ellsworth, Chief Executive Officer, Verimark Hospitality Group Inc. — Mr. Ellsworth has knowledge of executive-level decisions regarding the closure and reopening of each of the three insured properties, authorization of emergency and accelerated restoration measures, communications with VHG's insurance carriers regarding the claims, and VHG's overall disaster-recovery strategy. Mr. Ellsworth was deposed on August 7, 2023.
Diane Calder, Chief Financial Officer, Verimark Hospitality Group Inc. — Ms. Calder has knowledge of VHG's financial data, including historical and projected revenue, operating expenses, and profitability at each of the three insured properties; the calculation and documentation of business-interruption losses; extra expenses incurred during the closure and restoration periods; VHG's budgeting and financial planning processes; and VHG's insurance premium payments. Ms. Calder was deposed on August 8, 2023.
Nathaniel Driscoll, General Counsel, Verimark Hospitality Group Inc. — Mr. Driscoll has knowledge of communications with VHG's outside counsel, communications with VHG's insurance carriers and broker, the submission of VHG's proof of loss, and the negotiation and review of VHG's insurance policies. VHG notes that certain communications involving Mr. Driscoll are subject to the attorney-client privilege and/or work-product protection, and VHG's identification of Mr. Driscoll as a person with knowledge is not intended to waive any applicable privilege or protection.
Sandra Pellegrini, Vice President of Risk Management, Verimark Hospitality Group Inc. — Ms. Pellegrini has knowledge of VHG's insurance program design and procurement, communications with Tidewater Risk Advisors LLC regarding the placement and renewal of VHG's property/business-interruption insurance program, notice-of-loss procedures, coordination of mitigation and restoration efforts at all three insured properties, and the preparation and submission of weekly status reports to Ironclad and Arbor Claims Services LLC. Ms. Pellegrini was deposed on August 14, 2023.
Property-Level General Managers. The general managers at each of the three insured resort properties have knowledge of the day-to-day operations, damage sustained, restoration activities, and reopening timelines at their respective properties. These individuals were identified by name in VHG's initial responses and in documents produced in VHG's document production.
Third-Party Witnesses.
Franklin Orde, Account Executive, Tidewater Risk Advisors LLC — Mr. Orde has knowledge of the placement, negotiation, and renewal of VHG's property/business-interruption insurance program, including the July 2022 renewal of the Ironclad primary policy, representations made to VHG regarding coverage terms, and the negotiation with Ironclad's underwriting department regarding the deletion of the named-windstorm sub-limit at the July 2022 renewal. Mr. Orde was deposed on August 28, 2023. Tidewater Risk Advisors LLC is located at 2600 S. Bayshore Drive, Suite 800, Miami, FL 33133.
Victor Haddon, Senior Vice President of Claims, Ironclad Indemnity Corporation — Mr. Haddon has knowledge of Ironclad's claims-handling process with respect to VHG's Hurricane Callista claim, including the basis for Ironclad's reservation of rights letter issued October 12, 2022, the basis for Ironclad's formal denial letter issued February 3, 2023, Ironclad's communications with Arbor Claims Services LLC regarding the adjustment of VHG's claim, and Ironclad's coverage positions. Mr. Haddon was deposed on July 10, 2023.
Denise Whitford, Lead Independent Adjuster, Arbor Claims Services LLC — Ms. Whitford has knowledge of the October 5, 2022 property inspection conducted at VHG's three insured properties, Arbor's damage assessment and loss adjustment, Arbor's communications with Ironclad regarding VHG's claim, and Arbor's analysis of VHG's claimed restoration periods and loss calculations. Ms. Whitfield was deposed on July 24, 2023.
Expert Witnesses.
Dr. Helen Vasquez, CPA, CFF, Meridian Forensic Economics LLC — Dr. Vasquez has been retained as a forensic accounting and damages expert to quantify VHG's business-interruption losses at each of the three insured properties. Dr. Vasquez's expert report was served on September 15, 2023. Dr. Vasquez's deposition is currently scheduled for October 16, 2023. Meridian Forensic Economics LLC is located at 1000 Brickell Avenue, Suite 1600, Miami, FL 33131.
Jeffrey Caldwell, PE, Caldwell Engineering Associates Inc. — Mr. Caldwell has been retained as a forensic engineering expert to opine on the causation and scope of property damage at each of the three insured properties, including the differentiation between wind damage and storm-surge damage, the structural and systems damage caused by Hurricane Callista, and reasonable restoration timelines for the repair and restoration of each property. Mr. Caldwell's expert report was served on September 15, 2023. Caldwell Engineering Associates Inc. is located at 4800 N. Federal Highway, Suite 300, Fort Lauderdale, FL 33308.
VHG reserves the right to supplement this response as additional persons with knowledge are identified through the remaining course of discovery.
SUPPLEMENTAL RESPONSE TO INTERROGATORY NO. 14
INTERROGATORY NO. 14: Describe VHG's understanding of the named-windstorm sub-limit provisions in the Ironclad primary policy (Policy No. IIC-PRP-2022-07541), including whether VHG contends that any such sub-limit was modified or deleted at the July 2022 policy renewal, and identify all facts supporting VHG's contention.
SUPPLEMENTAL RESPONSE:
Subject to and without waiving the general and specific objections set forth above and in VHG's initial responses, VHG supplements its response to Interrogatory No. 14 as follows:
VHG supplements its initial response with deposition testimony and documentary evidence obtained during fact discovery.
VHG contends that the $15,000,000 named-windstorm sub-limit that appeared in the prior policy year (Policy No. IIC-PRP-2021-06892, policy period July 1, 2021 – July 1, 2022) was deleted at the July 2022 renewal of the Ironclad primary policy (Policy No. IIC-PRP-2022-07541, policy period July 1, 2022 – July 1, 2023). VHG contends that, following the July 2022 renewal, the Ironclad primary policy provides per-occurrence coverage of $25,000,000 for all covered causes of loss, including named-windstorm perils, without any sub-limit applicable to named-windstorm business-interruption losses.
The supplemental factual basis for VHG's contention is as follows:
Deposition of Franklin Orde (August 28, 2023). Mr. Orde, VHG's account executive at Tidewater Risk Advisors LLC and the broker responsible for placing and renewing VHG's property/business-interruption insurance program, testified that during the July 2022 renewal negotiations, he specifically negotiated with Ironclad's underwriting department for the deletion of the $15,000,000 named-windstorm sub-limit (Orde Dep. Tr. 52:3–54:18). Mr. Orde testified that the deletion of the sub-limit was a priority for VHG at the 2022 renewal because VHG's risk management team, led by Sandra Pellegrini, had concluded that the sub-limit provided inadequate coverage for VHG's Florida coastal properties and presented an unacceptable gap in VHG's insurance program (Orde Dep. Tr. 55:1–56:14). Mr. Orde testified that he received confirmation from Ironclad's underwriter, whose name he identified as Karen Schaefer, that the named-windstorm sub-limit would be removed from the policy in exchange for an increased premium (Orde Dep. Tr. 57:8–59:22). Mr. Orde further testified that he communicated this confirmation to VHG and that the final policy premium reflected the increased cost associated with the deletion of the sub-limit (Orde Dep. Tr. 60:1–61:10).
Deposition of Sandra Pellegrini (August 14, 2023). Ms. Pellegrini testified that Tidewater Risk Advisors informed VHG that the named-windstorm sub-limit had been successfully deleted at the July 2022 renewal (Pellegrini Dep. Tr. 98:3–99:15). Ms. Pellegrini further testified that VHG's understanding, based on representations from its broker of record, was that the renewed policy provided full $25,000,000 per-occurrence coverage for named-windstorm business-interruption losses without any sub-limit (Pellegrini Dep. Tr. 100:2–101:8). Ms. Pellegrini testified that VHG relied on this understanding in its risk management planning and in its decision to maintain the existing insurance program structure rather than pursuing alternative risk-transfer mechanisms (Pellegrini Dep. Tr. 101:12–102:20).
Deposition of Victor Haddon (July 10, 2023). Mr. Haddon, Ironclad's Senior Vice President of Claims, acknowledged uncertainty regarding the underwriting file documentation of the named-windstorm sub-limit at the July 2022 renewal (Haddon Dep. Tr. 178:4–180:11). Mr. Haddon testified that he was not personally involved in the July 2022 renewal underwriting process and that he did not review the underwriting file until after VHG submitted its Hurricane Callista claim (Haddon Dep. Tr. 180:15–182:3). Mr. Haddon was unable to testify to the specific terms of the July 2022 underwriting negotiation or to identify the underwriter responsible for the VHG account at the time of the renewal (Haddon Dep. Tr. 182:7–183:19).
Broker Correspondence. Broker correspondence produced by Tidewater Risk Advisors LLC pursuant to subpoena duces tecum served on June 20, 2023 (Bates range TRA-00000150 through TRA-00000285) includes emails between Franklin Orde and Ironclad's underwriting department reflecting the negotiation and agreement to delete the named-windstorm sub-limit at the July 2022 renewal. These emails include a June 15, 2022 email from Mr. Orde to Karen Schaefer at Ironclad requesting the deletion of the sub-limit, a June 22, 2022 email from Ms. Schaefer indicating Ironclad's willingness to delete the sub-limit subject to a premium increase, and a June 30, 2022 email from Mr. Orde confirming VHG's acceptance of the increased premium and Ms. Schaefer's confirmation that the sub-limit would be removed from the renewed policy.
VHG's annual premium of $980,000 for the Ironclad primary layer for the July 2022 – July 2023 policy period reflects the increased premium associated with the deletion of the named-windstorm sub-limit. The prior policy year premium for the Ironclad primary layer was $820,000, representing a $160,000 increase attributable, in substantial part, to the deletion of the sub-limit. VHG's total annual premium across all four layers of its property/business-interruption insurance tower for the July 2022 – July 2023 policy period was $1,840,000.
VHG further contends that, to the extent there is any ambiguity in the policy endorsements concerning the named-windstorm sub-limit — including any failure by Ironclad to issue a clear endorsement deleting the sub-limit notwithstanding the parties' agreement to do so — such ambiguity must be construed against Ironclad as the drafter of the policy under well-established principles of Florida insurance law. See, e.g., Swire Pac. Holdings, Inc. v. Glenrock Assurance Ins. Co., 845 So. 2d 161, 165 (Fla. 2003) ("Insurance contracts are construed in accordance with the plain language of the policy, and any ambiguities are construed against the insurer and in favor of coverage.").
SUPPLEMENTAL RESPONSE TO INTERROGATORY NO. 17
INTERROGATORY NO. 17: Describe in detail any extra expenses incurred by VHG during the period of restoration at each of the three insured properties, including the nature of each such expense, the amount incurred, the date(s) on which the expense was incurred, and the identity of all vendors or service providers to whom payment was made.
SUPPLEMENTAL RESPONSE:
Subject to and without waiving the general and specific objections set forth above and in VHG's initial responses, VHG supplements its response to Interrogatory No. 17 as follows:
VHG supplements its initial response with additional detail obtained from the deposition testimony of Diane Calder, VHG's Chief Financial Officer (August 8, 2023), and from the expert report of Dr. Helen Vasquez of Meridian Forensic Economics LLC, served on September 15, 2023.
Total extra expenses incurred across the three insured properties during the respective periods of restoration include, but are not limited to, the following categories:
(a) Emergency Restoration and Water-Extraction Services. VHG incurred costs for emergency water-extraction, debris removal, and structural stabilization services at all three properties immediately following Hurricane Callista. These services were engaged within days of the storm's landfall and continued through the initial emergency phase of the restoration at each property.
(b) Temporary Generator and Power-Supply Costs. VHG incurred costs for temporary generator rental, fuel, and associated electrical work to maintain essential building systems (security, fire suppression, refrigeration, and limited lighting) at all three properties during the extended grid-power outage that affected Southwest Florida and the Florida Keys following Hurricane Callista.
(c) Premium-Rate Contractor Labor and Expedited Materials Procurement. As described in VHG's supplemental response to Interrogatory No. 4 above, VHG incurred substantial premium-rate costs for contractor labor (overtime, weekend, and holiday work) and for expedited shipping and procurement of building materials in order to accelerate the restoration timelines at all three properties, and particularly at the Harborview Hotel & Conference Center, where approximately $2.1 million in extra expenses were incurred for this purpose.
(d) Guest Relocation Costs. VHG incurred costs associated with redirecting guest reservations to partner hotels and other non-affected VHG properties, including rate differentials, transportation assistance, and administrative costs.
(e) Security Services During Closure Periods. VHG retained third-party security firms to provide 24-hour security services at each of the three properties during the closure periods in order to protect the properties, salvageable assets, and ongoing restoration work from theft, vandalism, and unauthorized access.
(f) Mold Remediation. VHG incurred costs for professional mold assessment, testing, and remediation services at the Grand Key Resort and the Harborview Hotel & Conference Center, where storm-surge inundation created conditions conducive to mold growth.
(g) Temporary Office and Administrative Space. VHG incurred costs for temporary office space for displaced property management staff from the three affected properties, allowing VHG's management teams to continue operating and coordinating restoration efforts during the closure periods.
The aggregate amount of extra expenses incurred across all three properties is quantified in Dr. Vasquez's expert report. Dr. Vasquez's loss model nets extra expenses and saved expenses (i.e., variable operating expenses not incurred during the closure periods) against the gross business-interruption revenue loss to arrive at VHG's total claim of $60,000,000. The specific methodology for calculating net extra expenses is described in detail in Dr. Vasquez's report.
Ms. Calder testified during her deposition on August 8, 2023 that VHG maintained detailed contemporaneous records of all extra expenses incurred during the closure and restoration periods at each property, including invoices, receipts, purchase orders, and payment records (Calder Dep. Tr. 148:5–150:12). Ms. Calder confirmed that these records were produced to Ironclad in VHG's document production at Bates range VHG-00004500 through VHG-00006200 (Calder Dep. Tr. 150:15–151:8). VHG refers Ironclad to these produced documents for the specific dates, amounts, and vendor identities associated with each category of extra expense.
SUPPLEMENTAL RESPONSE TO INTERROGATORY NO. 19
INTERROGATORY NO. 19: Describe the cause or causes of damage at each of the three insured properties and state whether VHG contends that flood or storm surge caused any portion of the physical damage at any of the three properties.
SUPPLEMENTAL RESPONSE:
Subject to and without waiving the general and specific objections set forth above and in VHG's initial responses, VHG supplements its response to Interrogatory No. 19 as follows:
VHG supplements its initial response with reference to the forensic engineering expert report of Jeffrey Caldwell, PE, of Caldwell Engineering Associates Inc., served on September 15, 2023. Mr. Caldwell conducted on-site inspections of all three insured properties, reviewed meteorological data, construction documents, and available photographic and video documentation of the damage, and applied accepted forensic engineering methodologies to assess the cause and extent of damage at each property.
Grand Key Resort
Mr. Caldwell's analysis concludes that the predominant cause of physical damage at the Grand Key Resort was wind. Hurricane Callista made landfall as a Category 4 hurricane with sustained winds of approximately 145 miles per hour in the vicinity of Big Pine Key, and the Grand Key Resort, located at Mile Marker 48 in Marathon, was within the zone of most intense wind impact. Mr. Caldwell identified extensive wind-caused damage to the roofing system, building envelope, windows and doors, structural framing connections, and mechanical and electrical systems throughout the property.
Mr. Caldwell's analysis acknowledges that storm surge of 8 to 14 feet in Monroe County caused additional damage to the Grand Key Resort's ground-floor spaces and marina facilities. However, Mr. Caldwell concludes that the wind damage was the efficient proximate cause of the structural damage that necessitated the 178-day closure period. Mr. Caldwell further opines that the wind damage and the storm-surge damage at the Grand Key Resort were concurrent with and inseparable from each other, as the combination of extreme wind and storm surge acted together during Hurricane Callista's passage over the property. In many areas of the property, it is not possible to disaggregate the damage attributable to wind from the damage attributable to storm surge, because both forces acted simultaneously on the same structural elements.
VHG contends that under Florida law, the efficient proximate cause doctrine applies to the determination of coverage for the Grand Key Resort losses and that wind — an indisputably covered peril under the Ironclad primary policy — was the efficient proximate cause of the loss. VHG disputes Ironclad's assertion, set forth in its February 3, 2023 denial letter, that the flood exclusion in the Ironclad primary policy bars coverage for any portion of the Grand Key Resort losses. VHG's legal position on this issue is set forth in detail in VHG's briefing and in VHG's pending motion for partial summary judgment on the coverage issues.
Harborview Hotel & Conference Center
Mr. Caldwell's analysis concludes that the damage at the Harborview Hotel & Conference Center was caused by a combination of wind and storm surge. The National Hurricane Center documented storm surge of 6 to 10 feet in the Lee County area encompassing Fort Myers Beach. Mr. Caldwell identified substantial wind-caused damage to the roofing system, upper-floor windows and building envelope, and structural components, as well as storm-surge damage to ground-floor spaces, including the lobby, restaurant, and portions of the conference center.
Mr. Caldwell concludes that wind damage was the primary driver of the closure period, as the roofing and upper-floor damage required the most extensive and time-consuming restoration work. Storm-surge damage, while significant, was secondary to and concurrent with the wind damage. As with the Grand Key Resort, VHG contends that the efficient proximate cause of the Harborview losses was wind, a covered peril.
Sunset Shores. Mr. Caldwell's analysis concludes that the damage at the Sunset Shores property was predominantly wind-caused. The primary damage mechanisms were roof damage, window breaches on the upper floors, and destruction of exterior building elements and landscaping. Mr. Caldwell found minimal storm-surge impact at the Sunset Shores property due to its higher ground elevation relative to the waterline and its geographic location on the northern periphery of Hurricane Callista's storm-surge footprint.
VHG disputes Ironclad's concurrent-causation and flood-exclusion defenses as applied to all three insured properties. VHG's detailed legal analysis of these issues is set forth in its summary judgment briefing and is incorporated herein by reference. VHG reserves all rights to present additional causation evidence and legal arguments in connection with dispositive motions and at trial.
SUPPLEMENTAL RESPONSE TO INTERROGATORY NO. 22
INTERROGATORY NO. 22: Identify all insurance policies and all sources of coverage available to VHG for losses arising from Hurricane Callista, including the identity of each insurer, the policy number, the type of coverage, the policy limits, any applicable deductibles or self-insured retentions, the policy period, and the annual premium for each such policy.
SUPPLEMENTAL RESPONSE:
Subject to and without waiving the general and specific objections set forth above and in VHG's initial responses, VHG supplements its response to Interrogatory No. 22 as follows:
VHG identifies the following insurance policies constituting its property/business-interruption insurance tower applicable to Hurricane Callista losses, all sharing a common policy period of July 1, 2022 through July 1, 2023:
The total aggregate limit of VHG's property/business-interruption insurance tower is $60,000,000, above the $500,000 per-occurrence deductible applicable under the Ironclad primary policy. The total annual premium paid by VHG across all four layers for the July 2022 – July 2023 policy period is $1,840,000.
All four policies provide "all risks" coverage for direct physical loss of or damage to covered property, including business-interruption coverage and extra-expense coverage. Pinnacle Surplus Lines Inc.'s first excess layer (Policy No. PSL-XS1-2022-3390) is written on a follow-form basis with the Ironclad primary policy, meaning that the terms, conditions, and exclusions of the Pinnacle policy follow the Ironclad primary policy except as otherwise specifically stated in the Pinnacle policy. VHG refers Ironclad to the policies themselves, copies of which have been produced in this litigation, for the complete terms and conditions of each layer.
VHG's broker of record for the pro