1021-00003 · Verimark Hospitality Group · Motions Practice

declaration-pellegrini-psj.docx DOCUMENT Antitrust

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

GENERAL JURISDICTION DIVISION

DECLARATION OF SANDRA PELLEGRINI IN SUPPORT OF PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

I, Sandra Pellegrini, pursuant to Section 92.525, Florida Statutes, declare under penalty of perjury that the following is true and correct:

I. DECLARANT IDENTIFICATION

1. My name is Sandra Pellegrini. I am over the age of eighteen and am competent to testify to the matters set forth in this declaration. I serve as Vice President of Risk Management for Verimark Hospitality Group Inc. ("VHG" or the "Company"). My business address is 1900 Brickell Avenue, Suite 3200, Miami, Florida 33129. I have personal knowledge of each of the facts set forth in this declaration and, if called as a witness, could and would competently testify to them. I make this declaration in support of VHG's Motion for Partial Summary Judgment regarding the named-windstorm sub-limit issue in this matter.

II. BACKGROUND AND PROFESSIONAL QUALIFICATIONS

2. I have served as Vice President of Risk Management at VHG since January 2016, a tenure of approximately seven years as of the date of this declaration. Prior to joining VHG, I held risk management positions with two other major hospitality companies operating in the southeastern United States. In my current role, I am responsible for overseeing all aspects of VHG's insurance programs, including the procurement, structuring, and management of property and casualty insurance coverage, commercial general liability insurance, directors and officers liability insurance, and—most relevant to this action—all-risk property insurance and business-interruption coverage for VHG's portfolio of owned and operated resort properties. I report directly to VHG's Chief Financial Officer, Christopher Navarro.

3. My responsibilities include, but are not limited to, the following: the procurement, renewal, and management of all insurance programs maintained by VHG; serving as the direct liaison between VHG and Tidewater Risk Advisors LLC ("Tidewater"), VHG's insurance broker of record, with a principal office located at 2600 South Bayshore Drive, Suite 800, Miami, Florida 33133; reviewing and approving policy terms, endorsements, and sub-limits during each annual renewal cycle; overseeing the preparation and submission of insurance claims; coordinating with outside adjusters and forensic accountants retained in connection with insured losses; and ensuring that VHG's insurance programs are aligned with the Company's risk profile, which includes significant exposure to named windstorms given the geographic concentration of VHG's resort properties along the Florida Gulf Coast and the Florida Keys.

4. I am thoroughly familiar with the specific insurance program at issue in this litigation: the all-risk property and business-interruption insurance tower for the policy period effective July 1, 2022 through July 1, 2023 (the "2022–2023 Policy Year"). This insurance tower consists of a primary layer placed with Defendant Ironclad Indemnity Corporation ("Ironclad") under Policy No. IIC-PRP-2022-07541, and three successive excess layers placed with the remaining Defendants: Pinnacle Surplus Lines Inc. ("Pinnacle") under Policy No. PSL-XS1-2022-3390; Montclair Assurance Company ("Montclair") under Policy No. MAC-XS2-2022-09817; and Sovereign Re Ltd. ("Sovereign Re") under Policy No. SRL-XS3-2022-5102. I was personally involved in the negotiation, renewal, binding, and administration of each of these policies for the 2022–2023 Policy Year, and I had direct oversight of the claims submitted to these carriers following Hurricane Callista.

III. VHG'S INSURANCE TOWER STRUCTURE

5. VHG's all-risk property and business-interruption insurance program for the 2022–2023 Policy Year was structured as a layered insurance tower, a customary arrangement in the hospitality and real estate industries for properties with significant insured values. The structure of the tower was as follows:

(a) Primary Layer — Ironclad Indemnity Corporation (Policy No. IIC-PRP-2022-07541): Per-occurrence limit of Twenty-Five Million Dollars ($25,000,000), subject to a per-occurrence deductible of Five Hundred Thousand Dollars ($500,000). The Ironclad primary policy served as the lead policy in the tower, and its terms, conditions, and definitions governed the follow-form excess layers above it except where expressly modified by the terms of those excess policies.

(b) First Excess Layer — Pinnacle Surplus Lines Inc. (Policy No. PSL-XS1-2022-3390): Per-occurrence limit of Fifteen Million Dollars ($15,000,000), attaching excess of Twenty-Five Million Dollars ($25,000,000). Pinnacle's coverage followed the form of the Ironclad primary policy.

(c) Second Excess Layer — Montclair Assurance Company (Policy No. MAC-XS2-2022-09817): Per-occurrence limit of Ten Million Dollars ($10,000,000), attaching excess of Forty Million Dollars ($40,000,000). Montclair's coverage followed the form of the Ironclad primary policy.

(d) Third Excess Layer — Sovereign Re Ltd. (Policy No. SRL-XS3-2022-5102): Per-occurrence limit of Ten Million Dollars ($10,000,000), attaching excess of Fifty Million Dollars ($50,000,000). Sovereign Re's coverage followed the form of the Ironclad primary policy.

The total aggregate limit of the insurance tower was Sixty Million Dollars ($60,000,000) above the Five Hundred Thousand Dollar ($500,000) per-occurrence deductible, providing VHG with a maximum of Sixty Million Dollars in coverage for any single covered occurrence.

6. The total annual premium paid by VHG for the 2022–2023 Policy Year insurance tower was One Million Eight Hundred Forty Thousand Dollars ($1,840,000), allocated among the four carriers as follows:

VHG paid each premium installment in full and on time throughout the 2022–2023 Policy Year. At no time has any Defendant contended that VHG failed to pay any premium due under the tower.

7. The policies comprising the insurance tower covered "all risks" of direct physical loss of or damage to covered property, including losses arising from named windstorms, and provided coverage for business interruption, loss of business income, and extra expense incurred as a result of covered physical loss or damage at VHG's insured resort properties. The scope of coverage was broad and was intended by VHG to protect against the full range of property and business-interruption risks to which its Florida resort operations were exposed, including—most critically—losses caused by hurricanes and tropical storms.

IV. THE JULY 2022 RENEWAL AND THE WINDSTORM SUB-LIMIT

8. In the prior policy year—July 1, 2021 through July 1, 2022 (the "2021–2022 Policy Year")—the Ironclad primary policy contained a named-windstorm sub-limit of Fifteen Million Dollars ($15,000,000) that applied specifically to business-interruption losses arising from named-windstorm events. I was aware of this sub-limit and had been dissatisfied with it for the entirety of the 2021–2022 Policy Year. My dissatisfaction was grounded in VHG's substantial exposure to hurricane risk: the Company owned and operated three resort properties located directly on or in close proximity to the Florida Gulf Coast and the Florida Keys—regions that are among the most hurricane-prone areas in the United States. A $15,000,000 sub-limit for named-windstorm business-interruption losses was, in my professional judgment, inadequate to protect VHG against the magnitude of business-interruption losses that a major hurricane could inflict on one or more of these properties. I had made the removal of this sub-limit a priority for the upcoming renewal cycle well in advance of the July 2022 renewal date.

9. In or around April to May 2022, as the renewal process for the 2022–2023 Policy Year commenced, I instructed Franklin Orde, the Account Executive at Tidewater Risk Advisors LLC who was responsible for managing the VHG account, to negotiate the removal of the $15,000,000 named-windstorm sub-limit from the Ironclad primary policy as a top priority for the July 2022 renewal. I communicated this instruction to Mr. Orde during multiple telephone conversations and in at least one email communication during this period. I was clear and unambiguous in my direction: the deletion of the windstorm sub-limit was the single most important coverage improvement that VHG sought in the 2022–2023 renewal, and Mr. Orde understood this to be the case.

10. In conveying these instructions, I specifically told Mr. Orde that VHG would be willing to accept a reasonable increase in premium in exchange for the deletion of the named-windstorm sub-limit. I authorized Mr. Orde to communicate this willingness to Ironclad's underwriting department as part of the renewal negotiations. I made clear that VHG viewed the deletion of the sub-limit as a material term of the renewal—one that would directly affect VHG's decision whether to renew with Ironclad or to seek alternative markets for the primary layer. The significance of this issue to VHG was directly tied to the hurricane risk profile of its three Florida resort properties:

(a) Verimark Grand Key Resort, located at Mile Marker 48, Marathon, Florida 33050—a 312-room luxury resort and marina situated in the Florida Keys, one of the most exposed areas in the continental United States for hurricane landfall and storm surge;

(b) Verimark Harborview Hotel & Conference Center, located at 1400 Estero Boulevard, Fort Myers Beach, Florida 33931—a 224-room hotel with a 40,000-square-foot conference facility located on a barrier island in the Gulf of Mexico; and

(c) Verimark Sunset Shores, located at 7200 Gulf Boulevard, St. Pete Beach, Florida 33706—a 186-room boutique resort located on the Gulf Coast of Pinellas County.

Given the coastal and barrier-island locations of these properties, named-windstorm exposure was the single largest peril facing VHG's property and business-interruption insurance program, and any sub-limit applicable to that exposure was of critical importance to the Company's risk management strategy.

11. Following the initiation of renewal negotiations, Mr. Orde reported back to me, in or around May to June 2022, that Ironclad's underwriting department had agreed to delete the $15,000,000 named-windstorm sub-limit for the July 1, 2022 renewal in exchange for an increased premium on the primary layer. Mr. Orde conveyed this information to me during one or more telephone calls and, to the best of my recollection, confirmed it in an email. I understood from Mr. Orde's representations that the agreement to delete the sub-limit was a definitive underwriting decision by Ironclad and that this agreement would be reflected in the renewed policy terms for the 2022–2023 Policy Year.

12. Consistent with the negotiated deletion of the windstorm sub-limit, VHG's premium for the Ironclad primary layer increased from the 2021–2022 Policy Year to the 2022–2023 Policy Year. The total primary-layer premium for the 2022–2023 Policy Year was Nine Hundred Eighty Thousand Dollars ($980,000). I understood that a portion of this premium increase was directly attributable to the deletion of the named-windstorm sub-limit—that is, Ironclad was charging VHG a higher premium in exchange for providing broader coverage without the sub-limit. This was consistent with standard insurance market practice, as the removal of a sub-limit that caps coverage for a high-risk peril in a hurricane-prone geography would be expected to result in an increased premium reflecting the insurer's expanded risk.

13. Based on Mr. Orde's representations regarding Ironclad's agreement, and based on the premium negotiations that reflected the expanded coverage, VHG bound the July 2022 renewal with the understanding and expectation that the named-windstorm sub-limit of $15,000,000 had been deleted from the Ironclad primary policy. VHG entered into the 2022–2023 Policy Year insurance program with the express understanding that the full Twenty-Five Million Dollar ($25,000,000) primary-layer limit was available for named-windstorm business-interruption losses, without reduction by any windstorm sub-limit. This understanding was the basis on which VHG agreed to renew the primary layer with Ironclad and to pay the increased premium.

14. At or around the time of binding the 2022–2023 Policy Year renewal, I received and reviewed the policy binder and summary of coverage documents prepared and provided by Tidewater Risk Advisors. I reviewed these documents carefully, as was my customary practice. The binder and summary of coverage did not reference a named-windstorm sub-limit for business-interruption losses. The absence of any such sub-limit reference in these documents was entirely consistent with VHG's understanding—as communicated to me by Mr. Orde—that the windstorm sub-limit had been removed from the renewed policy. Had the binder or summary of coverage referenced a continued windstorm sub-limit, I would have immediately contacted Mr. Orde to raise an objection, as the deletion of the sub-limit was a material and negotiated term of the renewal.

15. At no time prior to the issuance of Ironclad's reservation of rights letter dated October 12, 2022, did Ironclad Indemnity Corporation, Tidewater Risk Advisors LLC, Franklin Orde, or any other party inform me—or, to the best of my knowledge, inform anyone else at VHG—that the $15,000,000 named-windstorm sub-limit remained in effect for the July 1, 2022 through July 1, 2023 policy period. VHG was first made aware of Ironclad's position that the named-windstorm sub-limit survived the July 2022 renewal only upon receipt of the reservation of rights letter dated October 12, 2022, more than three months after the inception of the 2022–2023 Policy Year and nearly one month after Hurricane Callista made landfall.

V. HURRICANE CALLISTA AND VHG'S CLAIMS SUBMISSION

16. Hurricane Callista was a major Category 4 hurricane on the Saffir-Veltason Hurricane Wind Scale. Hurricane Callista made landfall on September 18, 2022, at approximately 1:30 PM Eastern Daylight Time in the Lower Florida Keys, near Big Pine Key in Monroe County, Florida. At the time of landfall, Hurricane Callista had maximum sustained winds of approximately 145 miles per hour and generated a devastating storm surge of eight to fourteen feet (8–14 feet) in Monroe County and six to ten feet (6–10 feet) in Lee County. Hurricane Callista was one of the most powerful hurricanes to strike the Florida Keys and the southwest Florida Gulf Coast in decades, causing widespread catastrophic damage to residential and commercial properties throughout the affected region.

17. In advance of Hurricane Callista's landfall, mandatory evacuation orders were issued by the relevant county authorities. Monroe County, Florida issued a mandatory evacuation order on September 16, 2022, applicable to all residents and visitors in the Florida Keys, including Marathon. Lee County, Florida issued a mandatory evacuation order on September 17, 2022, applicable to coastal areas including Fort Myers Beach. Pinellas County, Florida also issued evacuation orders for barrier islands and flood-prone areas. VHG complied with all applicable evacuation orders and evacuated all guests, employees, and staff from its three resort properties in advance of Hurricane Callista's landfall on September 18, 2022. VHG prioritized the safety of its guests and personnel and incurred significant costs in facilitating evacuations, securing property, and protecting valuable assets to the extent possible under the circumstances.

18. All three VHG resort properties sustained catastrophic damage from Hurricane Callista, including wind damage, storm-surge inundation, flooding, debris impact, and extensive structural and infrastructure damage. The resulting property closures and reduced operations were as follows:

(a) Verimark Grand Key Resort (Mile Marker 48, Marathon, Florida 33050): This 312-room luxury resort and marina sustained the most severe damage of the three properties due to its proximity to the storm's landfall location. The property suffered catastrophic storm-surge inundation, extensive wind damage to structures and landscaping, and near-total destruction of the marina facilities. The resort was fully closed from September 18, 2022 through March 15, 2023—a total of one hundred seventy-eight (178) days of complete closure. During this period, VHG was unable to generate any revenue from the Grand Key Resort, and the Company incurred substantial extra expenses in connection with debris removal, emergency stabilization, and restoration efforts.

(b) Verimark Harborview Hotel & Conference Center (1400 Estero Boulevard, Fort Myers Beach, Florida 33931): This 224-room hotel with a 40,000-square-foot conference facility sustained extensive damage from storm surge and high winds. The ground-floor conference facilities were completely inundated, electrical and mechanical systems were destroyed, and the property suffered significant structural damage. The Harborview Hotel was fully closed from September 18, 2022 through January 31, 2023—a total of one hundred thirty-five (135) days of complete closure. VHG lost all revenue from the property during the closure period and incurred substantial extra expense in remediation and rebuilding.

(c) Verimark Sunset Shores (7200 Gulf Boulevard, St. Pete Beach, Florida 33706): This 186-room boutique resort, though located further from the storm's landfall, nonetheless sustained significant wind and water damage. The resort was fully closed from September 18, 2022 through November 30, 2022—a period of seventy-three (73) days. Following the full closure, the property operated at substantially reduced capacity through February 2023 due to ongoing repairs to damaged guest rooms and public areas. Sunset Shores did not return to full operational capacity until February 28, 2023.

19. VHG submitted its initial notice of loss to Ironclad Indemnity Corporation on September 22, 2022, four days after Hurricane Callista made landfall. This notice was submitted promptly following the storm, as soon as VHG personnel were able to access the damaged properties, conduct preliminary assessments, and compile sufficient information to provide meaningful notice to the carrier. VHG also provided contemporaneous notice to the excess carriers—Pinnacle, Montclair, and Sovereign Re—in accordance with the notice provisions of their respective policies.

20. On November 15, 2022, VHG submitted its sworn statement in proof of loss to Ironclad Indemnity Corporation. The proof of loss documented VHG's total claimed business-interruption losses of Sixty Million Dollars ($60,000,000) across the three resort properties, exclusive of the $500,000 per-occurrence deductible. The breakdown of claimed business-interruption losses by property was as follows:

These loss figures were prepared with the assistance of VHG's retained forensic accounting firm and were calculated based on historical revenue data, forward-looking booking data, occupancy projections, seasonal adjustment factors, and extra expense documentation. The total claimed business-interruption loss of $60,000,000 equaled the full limits of VHG's insurance tower.

VI. IRONCLAD'S RESERVATION OF RIGHTS AND DENIAL

21. On October 12, 2022, Ironclad Indemnity Corporation issued a reservation of rights letter addressed to VHG. Among the several bases stated in the reservation of rights letter was the assertion that a named-windstorm sub-limit of Fifteen Million Dollars ($15,000,000) applied to VHG's business-interruption claim under the Ironclad primary policy for the 2022–2023 Policy Year. Specifically, Ironclad's reservation of rights letter stated that the named-windstorm sub-limit set forth in Endorsement No. 17 to the Ironclad primary policy remained in effect for the 2022–2023 Policy Year and capped VHG's business-interruption recovery for named-windstorm losses at $15,000,000, rather than the full $25,000,000 primary-layer limit.

22. I was surprised and alarmed by this assertion. Ironclad's position that the named-windstorm sub-limit remained in effect was directly contrary to VHG's understanding of the July 2022 renewal terms, as those terms had been communicated to me by Franklin Orde of Tidewater Risk Advisors throughout the renewal process. At no time during the renewal negotiations, at the time of binding, or at any point prior to receipt of the reservation of rights letter had I been told—by Ironclad, by Tidewater, or by anyone else—that the $15,000,000 named-windstorm sub-limit would remain in the renewed policy. Upon receipt of the reservation of rights letter, I immediately contacted Mr. Orde to discuss the matter and to confirm VHG's understanding of the agreed-upon renewal terms.

23. Mr. Orde confirmed to me, during our telephone conversation following receipt of the reservation of rights letter, that the named-windstorm sub-limit had been negotiated for deletion during the renewal process and that Ironclad's underwriting department had agreed to the deletion as part of the terms for the July 1, 2022 renewal. Mr. Orde expressed his own surprise at Ironclad's assertion in the reservation of rights letter and indicated that he would review his files and correspondence to locate the supporting documentation of Ironclad's agreement to delete the sub-limit. Mr. Orde's confirmation in this conversation was consistent with everything he had communicated to me during the April through June 2022 renewal period.

24. On February 3, 2023, Ironclad Indemnity Corporation issued a formal denial of coverage letter to VHG. In its denial, Ironclad again asserted the named-windstorm sub-limit of $15,000,000 as one of four stated bases for denying or limiting coverage for VHG's business-interruption claim. Ironclad's denial letter stated that, under the sub-limit, VHG's business-interruption recovery for losses caused by Hurricane Callista was capped at $15,000,000 under the primary policy, regardless of the actual magnitude of VHG's losses. On February 10, 2023, Pinnacle Surplus Lines Inc. issued its own denial letter, following the form of Ironclad's denial and adopting Ironclad's stated bases, including the windstorm sub-limit assertion, as the basis for denying excess coverage.

VII. VHG'S RELIANCE ON DELETION OF THE SUB-LIMIT

25. VHG relied on the deletion of the $15,000,000 named-windstorm sub-limit in making critical business decisions regarding its insurance program for the 2022–2023 Policy Year. Had VHG known that the windstorm sub-limit remained in effect—contrary to Mr. Orde's representations and contrary to VHG's understanding of the renewal terms—VHG would have sought alternative or additional coverage to protect against named-windstorm business-interruption losses. Specifically, VHG would have explored options including purchasing a separate windstorm excess policy, seeking a different primary carrier willing to provide coverage without a windstorm sub-limit, or restructuring the insurance tower to ensure adequate named-windstorm protection for its Florida resort properties. VHG's reliance on the deletion of the sub-limit was reasonable and was based on the express representations of its broker of record, the negotiated renewal terms, the increased premium paid by VHG, and the absence of any sub-limit reference in the binding documents.

26. The windstorm sub-limit issue is material to the amount of VHG's recovery in this litigation. If the $15,000,000 named-windstorm sub-limit were applied to business-interruption losses arising from Hurricane Callista, VHG's recovery under the Ironclad primary policy would be reduced by Ten Million Dollars ($10,000,000)—from the full $25,000,000 primary-layer limit to the $15,000,000 sub-limit for business-interruption losses caused by the named windstorm. This reduction would, in turn, affect the attachment points and available coverage under the excess layers, potentially reducing VHG's total recovery across the insurance tower by a corresponding amount. The windstorm sub-limit is therefore one of the central disputes in this litigation and is the subject of VHG's Motion for Partial Summary Judgment.

27. VHG paid a total premium of $980,000 for the Ironclad primary layer for the 2022–2023 Policy Year, an amount that reflected, and was understood by VHG to reflect, the broader coverage afforded by the deletion of the windstorm sub-limit. The premium increase from the prior policy year was consistent with and attributable in part to the deletion of the sub-limit—a coverage enhancement that would be expected, in the normal course of insurance underwriting, to command additional premium given VHG's hurricane-exposed Florida property portfolio. VHG would not have agreed to the increased premium had VHG known that the windstorm sub-limit remained in effect, as the premium increase would not have been justified by the coverage actually provided.

VIII. DOCUMENTS REVIEWED AND REFERENCED

28. In connection with the preparation of this declaration, I have reviewed the following documents, each of which I am familiar with from my role as Vice President of Risk Management at VHG and my direct involvement in the matters described herein:

(a) The Ironclad Indemnity Corporation primary policy, Policy No. IIC-PRP-2022-07541, for the policy period July 1, 2022 through July 1, 2023, including all endorsements, schedules, and amendments thereto;

(b) The policy binder and summary of coverage prepared and provided by Tidewater Risk Advisors LLC at or around the time of binding the 2022–2023 Policy Year renewal;

(c) Correspondence between me and Franklin Orde of Tidewater Risk Advisors LLC regarding the July 2022 renewal, including email communications and memoranda documenting the renewal negotiations and the agreed-upon terms;

(d) Ironclad Indemnity Corporation's reservation of rights letter dated October 12, 2022;

(e) Ironclad Indemnity Corporation's formal denial of coverage letter dated February 3, 2023;

(f) VHG's sworn statement in proof of loss dated November 15, 2022, submitted to Ironclad Indemnity Corporation in connection with VHG's claim for business-interruption losses arising from Hurricane Callista.

IX. CONCLUSION AND VERIFICATION

29. Based on my personal knowledge and my direct involvement in the July 2022 renewal process for VHG's all-risk property and business-interruption insurance program, I declare that VHG understood, and was expressly told by its broker of record, Franklin Orde of Tidewater Risk Advisors LLC, that the $15,000,000 named-windstorm sub-limit applicable to business-interruption losses was deleted from the Ironclad Indemnity Corporation primary policy as part of the July 1, 2022 renewal. VHG paid an increased premium for the 2022–2023 Policy Year that reflected this deletion. VHG bound the renewal and made business decisions in reliance on the understanding that the full $25,000,000 primary-layer limit would be available for named-windstorm business-interruption losses without reduction by any sub-limit. Ironclad's assertion that the named-windstorm sub-limit survived the renewal is inconsistent with the agreed-upon renewal terms as communicated to VHG by its broker, inconsistent with the binding documents reviewed by VHG, and inconsistent with the premium paid by VHG.

30. I declare under penalty of perjury under the laws of the State of Florida that the foregoing is true and correct. I have read this declaration in its entirety and affirm that each statement contained herein is based on my personal knowledge and is accurate to the best of my information and belief.

Executed on November 1, 2023, at Miami, Florida.

________________________________________

Sandra Pellegrini Vice President, Risk Management Verimark Hospitality Group Inc. 1900 Brickell Avenue, Suite 3200 Miami, Florida 33129

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 1st day of November 2023, a true and correct copy of the foregoing Declaration of Sandra Pellegrini in Support of Plaintiff's Motion for Partial Summary Judgment was filed with the Clerk of Court for the Eleventh Judicial Circuit of Florida, Miami-Dade County, in Case No. 2022-CA-031547, before the Honorable Catherine Embry, and served via the Florida Courts E-Filing Portal and by electronic mail upon the following counsel of record:

Gregory Stanton, Esq. Fendowell Rourke & Stanton LLP 280 Trumbull Street, Suite 2200 Hartford, Connecticut 06103 Counsel for Defendants Ironclad Indemnity Corporation and Pinnacle Surplus Lines Inc.

Patricia Kraus, Esq. Delvecchio & Kraus LLP 425 Park Avenue, 20th Floor New York, New York 10022 Counsel for Defendants Montclair Assurance Company and Sovereign Re Ltd.

CALDERWOOD & HARKNESS LLP

By: ________

Elaine Forsythe, Esq. Florida Bar No. 0987654 Tiffany Rosenthal, Esq. Florida Bar No. 1123456 333 SE 2nd Avenue, Suite 4400 Miami, Florida 33131 Telephone: (305) 555-7800 Facsimile: (305) 555-7801 eforsythe@calderwoodharkness.com trosenthal@calderwoodharkness.com

Counsel for Plaintiff Verimark Hospitality Group Inc.

VERIMARK HOSPITALITY GROUP INC.,

Plaintiff,

Case No. 2022-CA-031547

Hon. Catherine Embry

IRONCLAD INDEMNITY CORPORATION; PINNACLE SURPLUS LINES INC.; MONTCLAIR ASSURANCE COMPANY; and SOVEREIGN RE LTD.,

Defendants.

Carrier	Layer	Annual Premium
Ironclad Indemnity Corporation	Primary ($25M)	$980,000
Pinnacle Surplus Lines Inc.	1st Excess ($15M xs $25M)	$410,000
Montclair Assurance Company	2nd Excess ($10M xs $40M)	$265,000
Sovereign Re Ltd.	3rd Excess ($10M xs $50M)	$185,000
Total	$1,840,000
Property	Claimed BI Loss
Verimark Grand Key Resort (Marathon, FL)	$31,400,000
Verimark Harborview Hotel & Conference Center (Fort Myers Beach, FL)	$18,700,000
Verimark Sunset Shores (St. Pete Beach, FL)	$9,900,000
Total Claimed Business-Interruption Loss	$60,000,000

IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA
GENERAL JURISDICTION DIVISION
DECLARATION OF SANDRA PELLEGRINI IN SUPPORT OF PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT
I, Sandra Pellegrini, pursuant to Section 92.525, Florida Statutes, declare under penalty of perjury that the following is true and correct:
I. DECLARANT IDENTIFICATION
1. My name is Sandra Pellegrini. I am over the age of eighteen and am competent to testify to the matters set forth in this declaration. I serve as Vice President of Risk Management for Verimark Hospitality Group Inc. ("VHG" or the "Company"). My business address is 1900 Brickell Avenue, Suite 3200, Miami, Florida 33129. I have personal knowledge of each of the facts set forth in this declaration and, if called as a witness, could and would competently testify to them. I make this declaration in support of VHG's Motion for Partial Summary Judgment regarding the named-windstorm sub-limit issue in this matter.
II. BACKGROUND AND PROFESSIONAL QUALIFICATIONS
2. I have served as Vice President of Risk Management at VHG since January 2016, a tenure of approximately seven years as of the date of this declaration. Prior to joining VHG, I held risk management positions with two other major hospitality companies operating in the southeastern United States. In my current role, I am responsible for overseeing all aspects of VHG's insurance programs, including the procurement, structuring, and management of property and casualty insurance coverage, commercial general liability insurance, directors and officers liability insurance, and—most relevant to this action—all-risk property insurance and business-interruption coverage for VHG's portfolio of owned and operated resort properties. I report directly to VHG's Chief Financial Officer, Christopher Navarro.
3. My responsibilities include, but are not limited to, the following: the procurement, renewal, and management of all insurance programs maintained by VHG; serving as the direct liaison between VHG and Tidewater Risk Advisors LLC ("Tidewater"), VHG's insurance broker of record, with a principal office located at 2600 South Bayshore Drive, Suite 800, Miami, Florida 33133; reviewing and approving policy terms, endorsements, and sub-limits during each annual renewal cycle; overseeing the preparation and submission of insurance claims; coordinating with outside adjusters and forensic accountants retained in connection with insured losses; and ensuring that VHG's insurance programs are aligned with the Company's risk profile, which includes significant exposure to named windstorms given the geographic concentration of VHG's resort properties along the Florida Gulf Coast and the Florida Keys.
4. I am thoroughly familiar with the specific insurance program at issue in this litigation: the all-risk property and business-interruption insurance tower for the policy period effective July 1, 2022 through July 1, 2023 (the "2022–2023 Policy Year"). This insurance tower consists of a primary layer placed with Defendant Ironclad Indemnity Corporation ("Ironclad") under Policy No. IIC-PRP-2022-07541, and three successive excess layers placed with the remaining Defendants: Pinnacle Surplus Lines Inc. ("Pinnacle") under Policy No. PSL-XS1-2022-3390; Montclair Assurance Company ("Montclair") under Policy No. MAC-XS2-2022-09817; and Sovereign Re Ltd. ("Sovereign Re") under Policy No. SRL-XS3-2022-5102. I was personally involved in the negotiation, renewal, binding, and administration of each of these policies for the 2022–2023 Policy Year, and I had direct oversight of the claims submitted to these carriers following Hurricane Callista.
III. VHG'S INSURANCE TOWER STRUCTURE
5. VHG's all-risk property and business-interruption insurance program for the 2022–2023 Policy Year was structured as a layered insurance tower, a customary arrangement in the hospitality and real estate industries for properties with significant insured values. The structure of the tower was as follows:
(a) Primary Layer — Ironclad Indemnity Corporation (Policy No. IIC-PRP-2022-07541): Per-occurrence limit of Twenty-Five Million Dollars ($25,000,000), subject to a per-occurrence deductible of Five Hundred Thousand Dollars ($500,000). The Ironclad primary policy served as the lead policy in the tower, and its terms, conditions, and definitions governed the follow-form excess layers above it except where expressly modified by the terms of those excess policies.
(b) First Excess Layer — Pinnacle Surplus Lines Inc. (Policy No. PSL-XS1-2022-3390): Per-occurrence limit of Fifteen Million Dollars ($15,000,000), attaching excess of Twenty-Five Million Dollars ($25,000,000). Pinnacle's coverage followed the form of the Ironclad primary policy.
(c) Second Excess Layer — Montclair Assurance Company (Policy No. MAC-XS2-2022-09817): Per-occurrence limit of Ten Million Dollars ($10,000,000), attaching excess of Forty Million Dollars ($40,000,000). Montclair's coverage followed the form of the Ironclad primary policy.
(d) Third Excess Layer — Sovereign Re Ltd. (Policy No. SRL-XS3-2022-5102): Per-occurrence limit of Ten Million Dollars ($10,000,000), attaching excess of Fifty Million Dollars ($50,000,000). Sovereign Re's coverage followed the form of the Ironclad primary policy.
The total aggregate limit of the insurance tower was Sixty Million Dollars ($60,000,000) above the Five Hundred Thousand Dollar ($500,000) per-occurrence deductible, providing VHG with a maximum of Sixty Million Dollars in coverage for any single covered occurrence.
6. The total annual premium paid by VHG for the 2022–2023 Policy Year insurance tower was One Million Eight Hundred Forty Thousand Dollars ($1,840,000), allocated among the four carriers as follows:
VHG paid each premium installment in full and on time throughout the 2022–2023 Policy Year. At no time has any Defendant contended that VHG failed to pay any premium due under the tower.
7. The policies comprising the insurance tower covered "all risks" of direct physical loss of or damage to covered property, including losses arising from named windstorms, and provided coverage for business interruption, loss of business income, and extra expense incurred as a result of covered physical loss or damage at VHG's insured resort properties. The scope of coverage was broad and was intended by VHG to protect against the full range of property and business-interruption risks to which its Florida resort operations were exposed, including—most critically—losses caused by hurricanes and tropical storms.
IV. THE JULY 2022 RENEWAL AND THE WINDSTORM SUB-LIMIT
8. In the prior policy year—July 1, 2021 through July 1, 2022 (the "2021–2022 Policy Year")—the Ironclad primary policy contained a named-windstorm sub-limit of Fifteen Million Dollars ($15,000,000) that applied specifically to business-interruption losses arising from named-windstorm events. I was aware of this sub-limit and had been dissatisfied with it for the entirety of the 2021–2022 Policy Year. My dissatisfaction was grounded in VHG's substantial exposure to hurricane risk: the Company owned and operated three resort properties located directly on or in close proximity to the Florida Gulf Coast and the Florida Keys—regions that are among the most hurricane-prone areas in the United States. A $15,000,000 sub-limit for named-windstorm business-interruption losses was, in my professional judgment, inadequate to protect VHG against the magnitude of business-interruption losses that a major hurricane could inflict on one or more of these properties. I had made the removal of this sub-limit a priority for the upcoming renewal cycle well in advance of the July 2022 renewal date.
9. In or around April to May 2022, as the renewal process for the 2022–2023 Policy Year commenced, I instructed Franklin Orde, the Account Executive at Tidewater Risk Advisors LLC who was responsible for managing the VHG account, to negotiate the removal of the $15,000,000 named-windstorm sub-limit from the Ironclad primary policy as a top priority for the July 2022 renewal. I communicated this instruction to Mr. Orde during multiple telephone conversations and in at least one email communication during this period. I was clear and unambiguous in my direction: the deletion of the windstorm sub-limit was the single most important coverage improvement that VHG sought in the 2022–2023 renewal, and Mr. Orde understood this to be the case.
10. In conveying these instructions, I specifically told Mr. Orde that VHG would be willing to accept a reasonable increase in premium in exchange for the deletion of the named-windstorm sub-limit. I authorized Mr. Orde to communicate this willingness to Ironclad's underwriting department as part of the renewal negotiations. I made clear that VHG viewed the deletion of the sub-limit as a material term of the renewal—one that would directly affect VHG's decision whether to renew with Ironclad or to seek alternative markets for the primary layer. The significance of this issue to VHG was directly tied to the hurricane risk profile of its three Florida resort properties:
(a) Verimark Grand Key Resort, located at Mile Marker 48, Marathon, Florida 33050—a 312-room luxury resort and marina situated in the Florida Keys, one of the most exposed areas in the continental United States for hurricane landfall and storm surge;
(b) Verimark Harborview Hotel & Conference Center, located at 1400 Estero Boulevard, Fort Myers Beach, Florida 33931—a 224-room hotel with a 40,000-square-foot conference facility located on a barrier island in the Gulf of Mexico; and
(c) Verimark Sunset Shores, located at 7200 Gulf Boulevard, St. Pete Beach, Florida 33706—a 186-room boutique resort located on the Gulf Coast of Pinellas County.
Given the coastal and barrier-island locations of these properties, named-windstorm exposure was the single largest peril facing VHG's property and business-interruption insurance program, and any sub-limit applicable to that exposure was of critical importance to the Company's risk management strategy.
11. Following the initiation of renewal negotiations, Mr. Orde reported back to me, in or around May to June 2022, that Ironclad's underwriting department had agreed to delete the $15,000,000 named-windstorm sub-limit for the July 1, 2022 renewal in exchange for an increased premium on the primary layer. Mr. Orde conveyed this information to me during one or more telephone calls and, to the best of my recollection, confirmed it in an email. I understood from Mr. Orde's representations that the agreement to delete the sub-limit was a definitive underwriting decision by Ironclad and that this agreement would be reflected in the renewed policy terms for the 2022–2023 Policy Year.
12. Consistent with the negotiated deletion of the windstorm sub-limit, VHG's premium for the Ironclad primary layer increased from the 2021–2022 Policy Year to the 2022–2023 Policy Year. The total primary-layer premium for the 2022–2023 Policy Year was Nine Hundred Eighty Thousand Dollars ($980,000). I understood that a portion of this premium increase was directly attributable to the deletion of the named-windstorm sub-limit—that is, Ironclad was charging VHG a higher premium in exchange for providing broader coverage without the sub-limit. This was consistent with standard insurance market practice, as the removal of a sub-limit that caps coverage for a high-risk peril in a hurricane-prone geography would be expected to result in an increased premium reflecting the insurer's expanded risk.
13. Based on Mr. Orde's representations regarding Ironclad's agreement, and based on the premium negotiations that reflected the expanded coverage, VHG bound the July 2022 renewal with the understanding and expectation that the named-windstorm sub-limit of $15,000,000 had been deleted from the Ironclad primary policy. VHG entered into the 2022–2023 Policy Year insurance program with the express understanding that the full Twenty-Five Million Dollar ($25,000,000) primary-layer limit was available for named-windstorm business-interruption losses, without reduction by any windstorm sub-limit. This understanding was the basis on which VHG agreed to renew the primary layer with Ironclad and to pay the increased premium.
14. At or around the time of binding the 2022–2023 Policy Year renewal, I received and reviewed the policy binder and summary of coverage documents prepared and provided by Tidewater Risk Advisors. I reviewed these documents carefully, as was my customary practice. The binder and summary of coverage did not reference a named-windstorm sub-limit for business-interruption losses. The absence of any such sub-limit reference in these documents was entirely consistent with VHG's understanding—as communicated to me by Mr. Orde—that the windstorm sub-limit had been removed from the renewed policy. Had the binder or summary of coverage referenced a continued windstorm sub-limit, I would have immediately contacted Mr. Orde to raise an objection, as the deletion of the sub-limit was a material and negotiated term of the renewal.
15. At no time prior to the issuance of Ironclad's reservation of rights letter dated October 12, 2022, did Ironclad Indemnity Corporation, Tidewater Risk Advisors LLC, Franklin Orde, or any other party inform me—or, to the best of my knowledge, inform anyone else at VHG—that the $15,000,000 named-windstorm sub-limit remained in effect for the July 1, 2022 through July 1, 2023 policy period. VHG was first made aware of Ironclad's position that the named-windstorm sub-limit survived the July 2022 renewal only upon receipt of the reservation of rights letter dated October 12, 2022, more than three months after the inception of the 2022–2023 Policy Year and nearly one month after Hurricane Callista made landfall.
V. HURRICANE CALLISTA AND VHG'S CLAIMS SUBMISSION
16. Hurricane Callista was a major Category 4 hurricane on the Saffir-Veltason Hurricane Wind Scale. Hurricane Callista made landfall on September 18, 2022, at approximately 1:30 PM Eastern Daylight Time in the Lower Florida Keys, near Big Pine Key in Monroe County, Florida. At the time of landfall, Hurricane Callista had maximum sustained winds of approximately 145 miles per hour and generated a devastating storm surge of eight to fourteen feet (8–14 feet) in Monroe County and six to ten feet (6–10 feet) in Lee County. Hurricane Callista was one of the most powerful hurricanes to strike the Florida Keys and the southwest Florida Gulf Coast in decades, causing widespread catastrophic damage to residential and commercial properties throughout the affected region.
17. In advance of Hurricane Callista's landfall, mandatory evacuation orders were issued by the relevant county authorities. Monroe County, Florida issued a mandatory evacuation order on September 16, 2022, applicable to all residents and visitors in the Florida Keys, including Marathon. Lee County, Florida issued a mandatory evacuation order on September 17, 2022, applicable to coastal areas including Fort Myers Beach. Pinellas County, Florida also issued evacuation orders for barrier islands and flood-prone areas. VHG complied with all applicable evacuation orders and evacuated all guests, employees, and staff from its three resort properties in advance of Hurricane Callista's landfall on September 18, 2022. VHG prioritized the safety of its guests and personnel and incurred significant costs in facilitating evacuations, securing property, and protecting valuable assets to the extent possible under the circumstances.
18. All three VHG resort properties sustained catastrophic damage from Hurricane Callista, including wind damage, storm-surge inundation, flooding, debris impact, and extensive structural and infrastructure damage. The resulting property closures and reduced operations were as follows:
(a) Verimark Grand Key Resort (Mile Marker 48, Marathon, Florida 33050): This 312-room luxury resort and marina sustained the most severe damage of the three properties due to its proximity to the storm's landfall location. The property suffered catastrophic storm-surge inundation, extensive wind damage to structures and landscaping, and near-total destruction of the marina facilities. The resort was fully closed from September 18, 2022 through March 15, 2023—a total of one hundred seventy-eight (178) days of complete closure. During this period, VHG was unable to generate any revenue from the Grand Key Resort, and the Company incurred substantial extra expenses in connection with debris removal, emergency stabilization, and restoration efforts.
(b) Verimark Harborview Hotel & Conference Center (1400 Estero Boulevard, Fort Myers Beach, Florida 33931): This 224-room hotel with a 40,000-square-foot conference facility sustained extensive damage from storm surge and high winds. The ground-floor conference facilities were completely inundated, electrical and mechanical systems were destroyed, and the property suffered significant structural damage. The Harborview Hotel was fully closed from September 18, 2022 through January 31, 2023—a total of one hundred thirty-five (135) days of complete closure. VHG lost all revenue from the property during the closure period and incurred substantial extra expense in remediation and rebuilding.
(c) Verimark Sunset Shores (7200 Gulf Boulevard, St. Pete Beach, Florida 33706): This 186-room boutique resort, though located further from the storm's landfall, nonetheless sustained significant wind and water damage. The resort was fully closed from September 18, 2022 through November 30, 2022—a period of seventy-three (73) days. Following the full closure, the property operated at substantially reduced capacity through February 2023 due to ongoing repairs to damaged guest rooms and public areas. Sunset Shores did not return to full operational capacity until February 28, 2023.
19. VHG submitted its initial notice of loss to Ironclad Indemnity Corporation on September 22, 2022, four days after Hurricane Callista made landfall. This notice was submitted promptly following the storm, as soon as VHG personnel were able to access the damaged properties, conduct preliminary assessments, and compile sufficient information to provide meaningful notice to the carrier. VHG also provided contemporaneous notice to the excess carriers—Pinnacle, Montclair, and Sovereign Re—in accordance with the notice provisions of their respective policies.
20. On November 15, 2022, VHG submitted its sworn statement in proof of loss to Ironclad Indemnity Corporation. The proof of loss documented VHG's total claimed business-interruption losses of Sixty Million Dollars ($60,000,000) across the three resort properties, exclusive of the $500,000 per-occurrence deductible. The breakdown of claimed business-interruption losses by property was as follows:
These loss figures were prepared with the assistance of VHG's retained forensic accounting firm and were calculated based on historical revenue data, forward-looking booking data, occupancy projections, seasonal adjustment factors, and extra expense documentation. The total claimed business-interruption loss of $60,000,000 equaled the full limits of VHG's insurance tower.
VI. IRONCLAD'S RESERVATION OF RIGHTS AND DENIAL
21. On October 12, 2022, Ironclad Indemnity Corporation issued a reservation of rights letter addressed to VHG. Among the several bases stated in the reservation of rights letter was the assertion that a named-windstorm sub-limit of Fifteen Million Dollars ($15,000,000) applied to VHG's business-interruption claim under the Ironclad primary policy for the 2022–2023 Policy Year. Specifically, Ironclad's reservation of rights letter stated that the named-windstorm sub-limit set forth in Endorsement No. 17 to the Ironclad primary policy remained in effect for the 2022–2023 Policy Year and capped VHG's business-interruption recovery for named-windstorm losses at $15,000,000, rather than the full $25,000,000 primary-layer limit.
22. I was surprised and alarmed by this assertion. Ironclad's position that the named-windstorm sub-limit remained in effect was directly contrary to VHG's understanding of the July 2022 renewal terms, as those terms had been communicated to me by Franklin Orde of Tidewater Risk Advisors throughout the renewal process. At no time during the renewal negotiations, at the time of binding, or at any point prior to receipt of the reservation of rights letter had I been told—by Ironclad, by Tidewater, or by anyone else—that the $15,000,000 named-windstorm sub-limit would remain in the renewed policy. Upon receipt of the reservation of rights letter, I immediately contacted Mr. Orde to discuss the matter and to confirm VHG's understanding of the agreed-upon renewal terms.
23. Mr. Orde confirmed to me, during our telephone conversation following receipt of the reservation of rights letter, that the named-windstorm sub-limit had been negotiated for deletion during the renewal process and that Ironclad's underwriting department had agreed to the deletion as part of the terms for the July 1, 2022 renewal. Mr. Orde expressed his own surprise at Ironclad's assertion in the reservation of rights letter and indicated that he would review his files and correspondence to locate the supporting documentation of Ironclad's agreement to delete the sub-limit. Mr. Orde's confirmation in this conversation was consistent with everything he had communicated to me during the April through June 2022 renewal period.
24. On February 3, 2023, Ironclad Indemnity Corporation issued a formal denial of coverage letter to VHG. In its denial, Ironclad again asserted the named-windstorm sub-limit of $15,000,000 as one of four stated bases for denying or limiting coverage for VHG's business-interruption claim. Ironclad's denial letter stated that, under the sub-limit, VHG's business-interruption recovery for losses caused by Hurricane Callista was capped at $15,000,000 under the primary policy, regardless of the actual magnitude of VHG's losses. On February 10, 2023, Pinnacle Surplus Lines Inc. issued its own denial letter, following the form of Ironclad's denial and adopting Ironclad's stated bases, including the windstorm sub-limit assertion, as the basis for denying excess coverage.
VII. VHG'S RELIANCE ON DELETION OF THE SUB-LIMIT
25. VHG relied on the deletion of the $15,000,000 named-windstorm sub-limit in making critical business decisions regarding its insurance program for the 2022–2023 Policy Year. Had VHG known that the windstorm sub-limit remained in effect—contrary to Mr. Orde's representations and contrary to VHG's understanding of the renewal terms—VHG would have sought alternative or additional coverage to protect against named-windstorm business-interruption losses. Specifically, VHG would have explored options including purchasing a separate windstorm excess policy, seeking a different primary carrier willing to provide coverage without a windstorm sub-limit, or restructuring the insurance tower to ensure adequate named-windstorm protection for its Florida resort properties. VHG's reliance on the deletion of the sub-limit was reasonable and was based on the express representations of its broker of record, the negotiated renewal terms, the increased premium paid by VHG, and the absence of any sub-limit reference in the binding documents.
26. The windstorm sub-limit issue is material to the amount of VHG's recovery in this litigation. If the $15,000,000 named-windstorm sub-limit were applied to business-interruption losses arising from Hurricane Callista, VHG's recovery under the Ironclad primary policy would be reduced by Ten Million Dollars ($10,000,000)—from the full $25,000,000 primary-layer limit to the $15,000,000 sub-limit for business-interruption losses caused by the named windstorm. This reduction would, in turn, affect the attachment points and available coverage under the excess layers, potentially reducing VHG's total recovery across the insurance tower by a corresponding amount. The windstorm sub-limit is therefore one of the central disputes in this litigation and is the subject of VHG's Motion for Partial Summary Judgment.
27. VHG paid a total premium of $980,000 for the Ironclad primary layer for the 2022–2023 Policy Year, an amount that reflected, and was understood by VHG to reflect, the broader coverage afforded by the deletion of the windstorm sub-limit. The premium increase from the prior policy year was consistent with and attributable in part to the deletion of the sub-limit—a coverage enhancement that would be expected, in the normal course of insurance underwriting, to command additional premium given VHG's hurricane-exposed Florida property portfolio. VHG would not have agreed to the increased premium had VHG known that the windstorm sub-limit remained in effect, as the premium increase would not have been justified by the coverage actually provided.
VIII. DOCUMENTS REVIEWED AND REFERENCED
28. In connection with the preparation of this declaration, I have reviewed the following documents, each of which I am familiar with from my role as Vice President of Risk Management at VHG and my direct involvement in the matters described herein:
(a) The Ironclad Indemnity Corporation primary policy, Policy No. IIC-PRP-2022-07541, for the policy period July 1, 2022 through July 1, 2023, including all endorsements, schedules, and amendments thereto;
(b) The policy binder and summary of coverage prepared and provided by Tidewater Risk Advisors LLC at or around the time of binding the 2022–2023 Policy Year renewal;
(c) Correspondence between me and Franklin Orde of Tidewater Risk Advisors LLC regarding the July 2022 renewal, including email communications and memoranda documenting the renewal negotiations and the agreed-upon terms;
(d) Ironclad Indemnity Corporation's reservation of rights letter dated October 12, 2022;
(e) Ironclad Indemnity Corporation's formal denial of coverage letter dated February 3, 2023;
(f) VHG's sworn statement in proof of loss dated November 15, 2022, submitted to Ironclad Indemnity Corporation in connection with VHG's claim for business-interruption losses arising from Hurricane Callista.
IX. CONCLUSION AND VERIFICATION
29. Based on my personal knowledge and my direct involvement in the July 2022 renewal process for VHG's all-risk property and business-interruption insurance program, I declare that VHG understood, and was expressly told by its broker of record, Franklin Orde of Tidewater Risk Advisors LLC, that the $15,000,000 named-windstorm sub-limit applicable to business-interruption losses was deleted from the Ironclad Indemnity Corporation primary policy as part of the July 1, 2022 renewal. VHG paid an increased premium for the 2022–2023 Policy Year that reflected this deletion. VHG bound the renewal and made business decisions in reliance on the understanding that the full $25,000,000 primary-layer limit would be available for named-windstorm business-interruption losses without reduction by any sub-limit. Ironclad's assertion that the named-windstorm sub-limit survived the renewal is inconsistent with the agreed-upon renewal terms as communicated to VHG by its broker, inconsistent with the binding documents reviewed by VHG, and inconsistent with the premium paid by VHG.
30. I declare under penalty of perjury under the laws of the State of Florida that the foregoing is true and correct. I have read this declaration in its entirety and affirm that each statement contained herein is based on my personal knowledge and is accurate to the best of my information and belief.
Executed on November 1, 2023, at Miami, Florida.
________________________________________
Sandra Pellegrini Vice President, Risk Management Verimark Hospitality Group Inc. 1900 Brickell Avenue, Suite 3200 Miami, Florida 33129
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 1st day of November 2023, a true and correct copy of the foregoing Declaration of Sandra Pellegrini in Support of Plaintiff's Motion for Partial Summary Judgment was filed with the Clerk of Court for the Eleventh Judicial Circuit of Florida, Miami-Dade County, in Case No. 2022-CA-031547, before the Honorable Catherine Embry, and served via the Florida Courts E-Filing Portal and by electronic mail upon the following counsel of record:
Gregory Stanton, Esq. Fendowell Rourke & Stanton LLP 280 Trumbull Street, Suite 2200 Hartford, Connecticut 06103 Counsel for Defendants Ironclad Indemnity Corporation and Pinnacle Surplus Lines Inc.
Patricia Kraus, Esq. Delvecchio & Kraus LLP 425 Park Avenue, 20th Floor New York, New York 10022 Counsel for Defendants Montclair Assurance Company and Sovereign Re Ltd.
CALDERWOOD & HARKNESS LLP
By: ________
Elaine Forsythe, Esq. Florida Bar No. 0987654 Tiffany Rosenthal, Esq. Florida Bar No. 1123456 333 SE 2nd Avenue, Suite 4400 Miami, Florida 33131 Telephone: (305) 555-7800 Facsimile: (305) 555-7801 eforsythe@calderwoodharkness.com trosenthal@calderwoodharkness.com
Counsel for Plaintiff Verimark Hospitality Group Inc.
VERIMARK HOSPITALITY GROUP INC.,
Plaintiff,
Case No. 2022-CA-031547
v.
Hon. Catherine Embry
IRONCLAD INDEMNITY CORPORATION; PINNACLE SURPLUS LINES INC.; MONTCLAIR ASSURANCE COMPANY; and SOVEREIGN RE LTD.,
Defendants.
Carrier | Layer | Annual Premium
Ironclad Indemnity Corporation | Primary ($25M) | $980,000
Pinnacle Surplus Lines Inc. | 1st Excess ($15M xs $25M) | $410,000
Montclair Assurance Company | 2nd Excess ($10M xs $40M) | $265,000
Sovereign Re Ltd. | 3rd Excess ($10M xs $50M) | $185,000
Total | $1,840,000
Property | Claimed BI Loss
Verimark Grand Key Resort (Marathon, FL) | $31,400,000
Verimark Harborview Hotel & Conference Center (Fort Myers Beach, FL) | $18,700,000
Verimark Sunset Shores (St. Pete Beach, FL) | $9,900,000
Total Claimed Business-Interruption Loss | $60,000,000