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

IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA
CIVIL DIVISION
Case No. 2022-CA-031547
VERIMARK HOSPITALITY GROUP INC., a Delaware corporation,
Plaintiff,
v.
IRONCLAD INDEMNITY CORPORATION, a Connecticut stock insurance company; PINNACLE SURPLUS LINES INC., a Texas surplus-lines insurer; MONTCLAIR ASSURANCE COMPANY, a New York admitted insurance carrier; and SOVEREIGN RE LTD., a Bermuda excess/reinsurance carrier,
Defendants.
___________/
COMPLAINT FOR BREACH OF CONTRACT, DECLARATORY JUDGMENT, AND BAD FAITH
INTRODUCTION
1.  Plaintiff Verimark Hospitality Group Inc. ("VHG" or "Plaintiff"), a publicly traded hospitality and real-estate company listed on the Nasdaq Stock Market under the ticker symbol VMRK, by and through its undersigned counsel, brings this action against its property insurers—Ironclad Indemnity Corporation ("Ironclad"), Pinnacle Surplus Lines Inc. ("Pinnacle"), Montclair Assurance Company ("Montclair"), and Sovereign Re Ltd. ("Sovereign Re") (collectively, "Defendants")—to recover approximately Sixty Million Dollars ($60,000,000) in business-interruption losses sustained when Hurricane Callista, a Category 4 hurricane with sustained winds of approximately 145 miles per hour, devastated VHG's three flagship resort properties located in the Florida Keys and along the Gulf Coast of Florida on September 18, 2022.
2.  Despite VHG's timely notice of loss, its submission of a sworn proof of loss in the amount of $60,000,000, and its full compliance with each and every condition precedent under the applicable insurance policies, Defendants have wrongfully denied, refused to pay, or otherwise failed to honor VHG's valid claims under an all-risk property and business-interruption insurance program that provides $60,000,000 in aggregate limits above a $500,000 per-occurrence deductible. Ironclad, the lead primary carrier, issued a formal denial of VHG's claim on February 3, 2023, asserting four meritless grounds for denial, including reliance on a named-windstorm sub-limit that had been expressly deleted during the July 2022 policy renewal. The remaining Defendants have either followed Ironclad's wrongful denial or refused to acknowledge their payment obligations.
3.  VHG brings this Complaint seeking compensatory damages for breach of contract, declaratory relief establishing Defendants' coverage obligations, and statutory bad-faith damages under Florida Statute § 624.155 against Ironclad and Pinnacle.
THE PARTIES
A. Plaintiff Verimark Hospitality Group Inc.
4.  Plaintiff Verimark Hospitality Group Inc. is a corporation organized and existing under the laws of the State of Delaware. VHG is publicly traded on the Nasdaq Stock Market under the ticker symbol VMRK. VHG's principal place of business and corporate headquarters are located at 1900 Brickell Avenue, Suite 3200, Miami, Florida 33129. VHG's employer identification number is 59-3841276.
5.  VHG operates in the hospitality and real-estate industry and owns and operates luxury resort hotels, boutique hotels, and conference centers throughout the State of Florida. VHG's executive leadership includes Marcus Ellsworth, Chief Executive Officer; Diane Calder, Chief Financial Officer; Nathaniel Driscoll, General Counsel; and Sandra Pellegrini, Vice President of Risk Management.
6.  For its fiscal year ending December 31, 2021, VHG reported total revenue of approximately $412,000,000 and earnings before interest, taxes, depreciation, and amortization ("EBITDA") of approximately $78,000,000. VHG's Florida resort properties represent a substantial portion of the company's revenue and profitability.
7.  At all times relevant to this Complaint, VHG was the named insured and policyholder under the insurance policies at issue in this action.
B. Defendant Ironclad Indemnity Corporation
8.  Defendant Ironclad Indemnity Corporation is a stock insurance company organized and existing under the laws of the State of Connecticut. Ironclad's National Association of Insurance Commissioners ("NAIC") number is 20537. Ironclad's principal office is located at 55 Constitution Boulevard, Hartford, Connecticut 06103.
9.  Ironclad is the lead carrier and issuer of VHG's primary property and business-interruption insurance policy, Policy No. IIC-PRP-2022-07541, which provides a per-occurrence limit of $25,000,000 for business-interruption losses, subject to a $500,000 per-occurrence deductible. Victor Haddon serves as Ironclad's Senior Vice President of Claims.
10.  Upon information and belief, Ironclad is authorized to transact insurance business in the State of Florida, maintains agents and representatives in Florida, and does substantial and continuous business within the State of Florida, including the issuance of property and casualty insurance policies covering properties and risks located in Florida.
C. Defendant Pinnacle Surplus Lines Inc.
11.  Defendant Pinnacle Surplus Lines Inc. is a surplus-lines insurer organized and existing under the laws of the State of Texas. Pinnacle's NAIC number is 38214. Pinnacle's principal office is located at 200 Congress Avenue, Suite 1400, Austin, Texas 78701.
12.  Pinnacle is the issuer of VHG's first excess layer property and business-interruption insurance policy, Policy No. PSL-XS1-2022-3390, which provides $15,000,000 in coverage in excess of the first $25,000,000, attaching above the Ironclad primary layer. The Pinnacle first excess policy is a "follow-form" policy that follows the terms, conditions, and exclusions of the Ironclad primary policy, unless otherwise stated therein.
D. Defendant Montclair Assurance Company
13.  Defendant Montclair Assurance Company is an admitted insurance carrier organized and existing under the laws of the State of New York. Montclair's NAIC number is 15692. Montclair's principal office is located at 1 Liberty Plaza, 38th Floor, New York, New York 10006.
14.  Montclair is the issuer of VHG's second excess layer property and business-interruption insurance policy, Policy No. MAC-XS2-2022-09817, which provides $10,000,000 in coverage in excess of $40,000,000, attaching above the combined limits of the Ironclad primary layer and the Pinnacle first excess layer.
E. Defendant Sovereign Re Ltd.
15.  Defendant Sovereign Re Ltd. is a reinsurer and excess insurance carrier organized and existing under the laws of Bermuda. Sovereign Re's principal office is located at 14 Front Street, Hamilton HM 11, Bermuda.
16.  Sovereign Re is the issuer of VHG's third excess layer property and business-interruption insurance policy, Policy No. SRL-XS3-2022-5102, which provides $10,000,000 in coverage in excess of $50,000,000, attaching above the combined limits of the Ironclad primary layer, the Pinnacle first excess layer, and the Montclair second excess layer.
JURISDICTION AND VENUE
17.  This Court has subject matter jurisdiction over this action pursuant to Article V, Section 5 of the Florida Constitution and Florida Statutes § 26.012. The amount in controversy exceeds $30,000, exclusive of interest, costs, and attorneys' fees. This is an action for breach of contract, declaratory judgment, and statutory bad faith arising under Florida law and involving insurance policies that insure properties located within the State of Florida.
18.  This Court has personal jurisdiction over each Defendant. Specifically:
(a) Ironclad Indemnity Corporation is authorized to transact insurance business in the State of Florida; issued a property insurance policy covering properties located in Florida; negotiated and delivered the policy in Miami-Dade County, Florida; and engaged in sufficient minimum contacts with the State of Florida to satisfy due process requirements.
(b) Pinnacle Surplus Lines Inc. issued a surplus-lines insurance policy covering properties located in Florida; is an eligible surplus-lines insurer in the State of Florida; and engaged in sufficient minimum contacts with the State of Florida to satisfy due process requirements.
(c) Montclair Assurance Company issued an excess insurance policy covering properties located in Florida; transacts business in the State of Florida; and engaged in sufficient minimum contacts with the State of Florida to satisfy due process requirements.
(d) Sovereign Re Ltd. issued an excess insurance policy covering properties located in Florida; upon information and belief, engages in systematic and continuous business contacts with the State of Florida, including reinsurance and excess insurance transactions relating to Florida-sited risks; and engaged in sufficient minimum contacts with the State of Florida to satisfy due process requirements.
19.  Venue is proper in Miami-Dade County pursuant to Florida Statutes §§ 47.011 and 47.051 because VHG's principal place of business is located in Miami-Dade County; the insurance policies at issue were negotiated and delivered in Miami-Dade County; and a substantial part of the events and omissions giving rise to VHG's claims occurred in the State of Florida.
20.  The governing law for all four policies at issue is the law of the State of Florida, as specified by the choice-of-law provisions contained in the policies and/or as determined by applicable conflict-of-laws principles.
GENERAL ALLEGATIONS
A. VHG's Insured Properties
1. Verimark Grand Key Resort.  
21.  VHG owns and operates the Verimark Grand Key Resort (the "Grand Key Resort"), a luxury resort and marina located at Mile Marker 48, Marathon, Florida 33050. The Grand Key Resort is situated in the heart of the Florida Keys and is one of VHG's premier hospitality properties.
22.  The Grand Key Resort is a full-service luxury resort comprising 312 guest rooms, along with a deep-water marina, multiple food and beverage outlets, a full-service spa, swimming pools, and associated recreational amenities. The property generates substantial revenue from its ancillary operations, including marina berth rentals, food and beverage sales, spa services, and event hosting.
23.  Prior to Hurricane Callista, the Grand Key Resort maintained a pre-loss average daily rate ("ADR") of $389 per room and an average occupancy rate of 82%. These figures reflect the property's status as a premier destination in the Florida Keys and its strong market position among luxury resort properties in the region.
24.  The Grand Key Resort has been recognized by leading travel publications and industry organizations as one of the top luxury resorts in the Florida Keys and has been a consistent driver of VHG's revenue and profitability.
2. Verimark Harborview Hotel & Conference Center.  
25.  VHG owns and operates the Verimark Harborview Hotel & Conference Center (the "Harborview"), located at 1400 Estero Boulevard, Fort Myers Beach, Florida 33931. The Harborview is a full-service hotel and conference center situated along the Gulf Coast of Florida.
26.  The Harborview comprises 224 guest rooms and a 40,000-square-foot conference and event facility, which hosts corporate meetings, conventions, weddings, and other events throughout the year. The conference facility is a significant revenue driver for the property, generating substantial income in addition to the hotel's room revenue.
27.  Prior to Hurricane Callista, the Harborview maintained a pre-loss ADR of $295 per room and an average occupancy rate of 74%. The property's conference and event business contributed additional significant revenue beyond room sales.
3. Verimark Sunset Shores.  
28.  VHG owns and operates the Verimark Sunset Shores (the "Sunset Shores"), a boutique resort located at 7200 Gulf Boulevard, St. Pete Beach, Florida 33706.
29.  The Sunset Shores is a 186-room boutique resort property situated on the Gulf Coast. Prior to Hurricane Callista, the Sunset Shores maintained a pre-loss ADR of $342 per room and an average occupancy rate of 79%.
30.  While the smallest of VHG's three affected properties by room count, the Sunset Shores commands a premium ADR reflective of its boutique positioning and beachfront location and is an important component of VHG's Florida resort portfolio.
B. VHG's Property Insurance Program
1. The Insurance Tower.  
31.  At all times relevant to this Complaint, VHG maintained a comprehensive all-risk property and business-interruption insurance program for the policy period July 1, 2022 through July 1, 2023. The insurance program was structured as a four-layer tower of insurance with aggregate limits of $60,000,000 above a $500,000 per-occurrence deductible.
32.  The insurance program was placed through VHG's insurance broker of record, Tidewater Risk Advisors LLC ("Tidewater"), through its account executive Franklin Orde. Mr. Orde coordinated the placement of all four layers of coverage and served as the intermediary between VHG and each of the carrier Defendants during the underwriting, negotiation, and renewal process.
33.  The total annual premium for the four-layer insurance program for the 2022-2023 policy year was $1,840,000, which VHG paid in full and on time. The structure of VHG's insurance tower is as follows:
34.  All four policies in the insurance tower are "all-risk" policies that cover physical loss or damage from any cause not specifically excluded, including coverage for business interruption and extra expense resulting from direct physical loss or damage to covered property caused by a covered peril.
35.  The Pinnacle first excess policy, Policy No. PSL-XS1-2022-3390, is a "follow-form" policy that follows the terms, conditions, and exclusions of the Ironclad primary policy, Policy No. IIC-PRP-2022-07541, except as otherwise specifically stated in the Pinnacle policy.
36.  VHG purchased this comprehensive insurance program to protect itself against precisely the type of catastrophic loss that occurred when Hurricane Callista struck its Florida resort properties on September 18, 2022.
2. Key Policy Provisions.  
37.  The Ironclad primary policy provides business-interruption coverage for the "actual loss of business income" sustained by the insured during the "period of restoration" resulting from the necessary suspension of operations caused by direct physical loss or damage to covered property at a covered location, provided the loss or damage is caused by a covered peril.
38.  The "period of restoration" is defined in the Ironclad primary policy as the period of time that begins when operations are necessarily suspended as a result of direct physical loss or damage caused by a covered peril and ends on the date when the property should be repaired, rebuilt, or replaced with reasonable speed and similar quality.
39.  As an "all-risk" policy, the Ironclad primary policy covers all risks of direct physical loss or damage to covered property unless specifically excluded. Windstorm is not an excluded peril under the policy. Accordingly, direct physical loss or damage caused by windstorm, including a named hurricane, is a covered peril under the policy.
40.  VHG paid substantial premiums—totaling $1,840,000 for the full tower—for this comprehensive all-risk coverage, and at all times complied with all conditions precedent required under each of the four policies.
3. The Windstorm Sub-Limit Deletion.  
41.  In prior policy years, including the 2021-2022 policy period, the Ironclad primary policy contained a named-windstorm sub-limit of $15,000,000 for business-interruption losses arising from named windstorm events. This sub-limit had the effect of capping business-interruption coverage for named-windstorm losses at $15,000,000, rather than the full $25,000,000 per-occurrence limit available for other covered perils.
42.  During the renewal negotiations for the 2022-2023 policy period, which took place in or about June and July 2022, VHG's insurance broker Franklin Orde of Tidewater Risk Advisors negotiated with Ironclad's underwriting department to delete the named-windstorm sub-limit from the Ironclad primary policy. Mr. Orde, on behalf of VHG, specifically requested the removal of the $15,000,000 named-windstorm sub-limit so that VHG would have the benefit of the full $25,000,000 per-occurrence limit for business-interruption losses arising from named windstorms, including hurricanes.
43.  Ironclad's underwriting department agreed to delete the named-windstorm sub-limit in exchange for an increased premium. VHG agreed to and paid the increased premium of $980,000 for the 2022-2023 policy period—a significant increase over the prior year's premium—with the express understanding and agreement that the named-windstorm sub-limit had been removed and that the full $25,000,000 per-occurrence limit would apply to business-interruption losses caused by named windstorms, including hurricanes. The deletion of the named-windstorm sub-limit is reflected in the broker correspondence and communications between Mr. Orde and Ironclad's underwriting department during the July 2022 renewal process.
C. Hurricane Callista
44.  Hurricane Callista was a powerful Category 4 hurricane that struck the Florida Keys and Gulf Coast of Florida on September 18, 2022. Hurricane Callista was first identified and named by the National Hurricane Center on September 12, 2022, as a tropical storm in the Caribbean Sea. The storm rapidly intensified over the warm waters of the Straits of Florida and was upgraded to a Category 4 hurricane on the Saffir-Veltason Hurricane Wind Scale on September 17, 2022.
45.  Hurricane Callista made landfall as a Category 4 hurricane on September 18, 2022, at approximately 1:30 PM Eastern Daylight Time, in the Lower Florida Keys near Big Pine Key, Monroe County, Florida. At landfall, Hurricane Callista had sustained winds of approximately 145 miles per hour, with higher gusts reported throughout the affected area.
46.  Hurricane Callista generated devastating storm surge in the Florida Keys and along the Gulf Coast. Storm surge heights reached an estimated 8 to 14 feet in Monroe County and 6 to 10 feet in Lee County, causing widespread coastal flooding and catastrophic damage to coastal structures and infrastructure.
47.  In anticipation of Hurricane Callista's landfall, Monroe County issued a mandatory evacuation order on September 16, 2022, and Lee County issued a mandatory evacuation order on September 17, 2022. VHG evacuated all guests and staff from all three affected resort properties in compliance with these evacuation orders and suspended all operations at each property prior to the hurricane's arrival.
48.  All three of VHG's insured resort properties—the Grand Key Resort in Marathon (Monroe County), the Harborview in Fort Myers Beach (Lee County), and the Sunset Shores in St. Pete Beach (Pinellas County)—were located in the direct path of Hurricane Callista and were subject to mandatory evacuation orders. Each of the three properties sustained significant direct physical loss or damage as a result of Hurricane Callista.
D. Damage to VHG Properties and Business Interruption
1. Verimark Grand Key Resort.  
49.  The Grand Key Resort sustained catastrophic wind damage and storm-surge damage from Hurricane Callista. Located at Mile Marker 48 in Marathon, the Grand Key Resort was in the direct path of the hurricane's eye wall and experienced the full force of the storm's sustained winds of approximately 145 miles per hour, as well as devastating storm surge.
50.  The structural damage to the Grand Key Resort was extensive and severe. The storm caused widespread roof destruction, including the complete loss of roofing systems on multiple guest-room buildings and the main resort building. Windows throughout the property suffered catastrophic failures, resulting in massive water intrusion to guest rooms, common areas, and back-of-house facilities. The property's deep-water marina was largely destroyed, with docks, pilings, and marina infrastructure suffering irreparable damage. The resort's mechanical systems, including HVAC, electrical, plumbing, and fire-suppression systems, sustained significant damage from wind and water intrusion.
51.  As a result of the catastrophic damage inflicted by Hurricane Callista, the Grand Key Resort was closed from September 18, 2022 through March 15, 2023—a total period of 178 days. During this entire period, the resort was unable to operate, accept guests, or generate revenue from any of its operations, including guest rooms, marina, food and beverage outlets, spa, and event spaces.
52.  The restoration of the Grand Key Resort required extensive structural repairs, roof replacement, window replacement, remediation of water damage, reconstruction of interior finishes, replacement of mechanical systems, and reconstruction of the marina facilities. The timeline for restoration was affected by the catastrophic nature of the damage, the remote location of the Florida Keys, the widespread devastation to the surrounding infrastructure and community, the limited availability of contractors and building materials in the aftermath of a Category 4 hurricane, and the permitting and regulatory requirements applicable to coastal construction in Monroe County.
53.  VHG's estimated business-interruption loss for the Grand Key Resort is $31,400,000. This figure is calculated based on the property's pre-loss operating performance of 312 rooms at an ADR of $389 and an occupancy rate of 82% over the 178-day closure period, adjusted to include ancillary revenue streams from the marina, food and beverage operations, spa services, and event hosting, and further adjusted for saved expenses that VHG did not incur during the period of interruption.
2. Verimark Harborview Hotel & Conference Center.  
54.  The Harborview Hotel & Conference Center sustained severe wind and water damage from Hurricane Callista. Located at 1400 Estero Boulevard in Fort Myers Beach, the Harborview experienced sustained winds in excess of 100 miles per hour and storm surge of approximately 6 to 10 feet.
55.  The damage to the Harborview was extensive. The roof of the 40,000-square-foot conference facility was substantially destroyed, and the interior of the conference center suffered catastrophic water intrusion and damage, rendering the facility unusable. Guest-room buildings experienced significant roof damage, window failures, and extensive water intrusion, affecting a substantial majority of the hotel's 224 guest rooms. The property's landscaping, exterior structures, parking facilities, and common areas also sustained significant damage.
56.  As a result of the damage inflicted by Hurricane Callista, the Harborview was closed from September 18, 2022 through January 31, 2023—a total period of 135 days. During this entire period, the hotel and conference center were unable to operate, accept guests, or host conferences and events.
57.  The restoration of the Harborview required substantial roof repairs and replacement, remediation and reconstruction of the conference facility interior, repair of guest rooms, replacement of damaged building systems, and extensive exterior restoration. The restoration timeline was affected by the severity of the damage, contractor availability constraints following a major hurricane, and applicable building-code and permitting requirements.
58.  VHG's estimated business-interruption loss for the Harborview is $18,700,000. This figure is calculated based on the property's pre-loss operating performance of 224 rooms at an ADR of $295 and an occupancy rate of 74% over the 135-day closure period, plus lost conference and event revenue that the property would have generated during the period of interruption, adjusted for saved expenses.
3. Verimark Sunset Shores.  
59.  The Sunset Shores sustained significant but less severe physical damage than the Grand Key Resort and the Harborview. Located at 7200 Gulf Boulevard in St. Pete Beach, the Sunset Shores experienced sustained winds in excess of 80 miles per hour and moderate storm surge.
60.  The property sustained damage to its roof, building envelope, guest rooms, common areas, and exterior structures. While the damage was less catastrophic than at the Grand Key Resort, the Sunset Shores required significant repairs to restore the property to its pre-loss condition and bring it back to full operational capacity.
61.  The Sunset Shores was fully closed from September 18, 2022 through November 30, 2022—a total period of 73 days. After partially reopening on November 30, 2022, the Sunset Shores operated at substantially reduced capacity while restoration work continued. The property did not reach full operational capacity until February 28, 2023.
62.  VHG's estimated business-interruption loss for the Sunset Shores is $9,900,000. This figure is calculated based on the property's pre-loss operating performance of 186 rooms at an ADR of $342 and an occupancy rate of 79% over the 73-day full-closure period, plus the losses attributable to the reduced-capacity period from November 30, 2022 through February 28, 2023, adjusted for saved expenses.
63.  VHG undertook diligent efforts to restore the Sunset Shores as quickly as possible and achieved a partial reopening within 73 days of Hurricane Callista's landfall, demonstrating VHG's commitment to mitigating its business-interruption losses.
4. Total Claimed Loss.  
64.  VHG's total business-interruption loss across all three insured properties resulting from Hurricane Callista is $60,000,000, calculated as follows:
(a) Verimark Grand Key Resort: $31,400,000
(b) Verimark Harborview Hotel & Conference Center: $18,700,000
(c) Verimark Sunset Shores: $9,900,000
Total: $60,000,000
65.  The total claimed loss of $60,000,000 equals the full aggregate limits of VHG's four-layer insurance tower ($60,000,000 in aggregate limits above the $500,000 per-occurrence deductible). After application of the $500,000 deductible, VHG claims $59,500,000 in net insurance proceeds from Defendants.
E. VHG's Compliance with Policy Conditions
66.  VHG submitted timely notice of loss to Ironclad Indemnity Corporation on September 22, 2022—just four days after Hurricane Callista's landfall on September 18, 2022. VHG's notice of loss was submitted in writing by Sandra Pellegrini, VHG's Vice President of Risk Management, and complied with the notice requirements of the Ironclad primary policy.
67.  VHG cooperated fully and completely with Ironclad's investigation of the claim. VHG granted Ironclad and its agents, including Arbor Claims Services LLC ("Arbor Claims"), the independent adjusting firm retained by Ironclad to investigate and adjust the claim, full and unrestricted access to all three affected resort properties for inspection and assessment. Arbor Claims' lead adjuster, Denise Whitford, conducted initial on-site inspections of all three properties beginning on October 5, 2022, and was provided unfettered access to the properties, VHG's management, and all relevant documentation.
68.  VHG submitted a sworn statement in proof of loss to Ironclad in the amount of $60,000,000 on November 15, 2022. The sworn proof of loss was executed by Diane Calder, VHG's Chief Financial Officer, and was prepared with the assistance of VHG's forensic accounting consultants and was supported by detailed schedules and calculations of the business-interruption losses at each of the three affected properties.
69.  VHG provided all requested documentation, financial records, and other information to Ironclad and Arbor Claims throughout the claims process, including but not limited to historical financial statements, revenue reports, occupancy data, booking records, contractor estimates, repair invoices, payroll records, and other documents relevant to the quantification of VHG's business-interruption losses.
70.  VHG took all reasonable and diligent steps to mitigate its losses following Hurricane Callista, including securing the damaged properties immediately after the storm passed, engaging qualified contractors for emergency repairs and stabilization, coordinating with local authorities regarding access and permitting, and reopening properties as quickly as reasonably possible given the extent of the damage and the post-hurricane conditions in the affected communities.
71.  VHG provided timely notice of loss to all excess carriers—Pinnacle, Montclair, and Sovereign Re—in accordance with the respective notice requirements of each excess policy.
72.  VHG has satisfied each and every condition precedent to coverage under each of the four insurance policies at issue in this action. To the extent any Defendant contends that VHG has not satisfied a particular condition precedent, such condition has been waived by the Defendant's conduct or the Defendant is estopped from asserting noncompliance as a defense.
F. Defendants' Wrongful Denial of Coverage
1. Ironclad's Reservation of Rights and Denial.  
73.  On October 12, 2022, approximately three weeks after VHG submitted its notice of loss, Ironclad issued a reservation of rights letter to VHG asserting potential grounds for limiting or denying VHG's business-interruption claim under Policy No. IIC-PRP-2022-07541. The reservation of rights letter was signed by Victor Haddon, Ironclad's Senior Vice President of Claims.
74.  On February 3, 2023—more than four months after VHG submitted its notice of loss and nearly three months after VHG submitted its sworn proof of loss—Ironclad issued a formal denial of VHG's business-interruption claim. The formal denial letter was also signed by Victor Haddon.
75.  Ironclad's denial asserted four purported bases for denying VHG's claim:
(a) Named-Windstorm Sub-Limit. Ironclad contended that the Ironclad primary policy contains a named-windstorm sub-limit of $15,000,000 for business-interruption losses arising from named windstorm events, which would cap Ironclad's exposure at $15,000,000 rather than the full $25,000,000 per-occurrence limit. VHG contends that this sub-limit was expressly deleted during the July 2022 renewal negotiations between VHG's broker Franklin Orde and Ironclad's underwriting department, and that VHG paid an increased premium specifically for the removal of the sub-limit.
(b) Period of Restoration. Ironclad argued that VHG's claimed periods of restoration at each of the three properties were excessive and unreasonable. Ironclad contended that the repairs at each property "could have been completed with reasonable speed" in a timeframe substantially shorter than the actual restoration periods and that VHG unreasonably delayed the restoration of its properties. Ironclad did not identify any specific unreasonable actions or delays by VHG, nor did Ironclad account for the well-documented challenges of restoring properties in the aftermath of a Category 4 hurricane.
(c) Concurrent Causation / Flood Exclusion. Ironclad asserted that portions of the damage at the Grand Key Resort resulted from storm surge, which Ironclad characterized as "flood," and invoked the policy's flood exclusion and anti-concurrent causation clause to exclude all damage that was concurrently caused by wind (a covered peril) and storm surge (which Ironclad characterized as an excluded flood peril). Ironclad's application of the anti-concurrent causation clause is contrary to Florida law and the plain language of the policy.
(d) Failure to Mitigate. Ironclad alleged that VHG failed to take reasonable steps to reduce the period of business interruption and minimize its losses. This allegation is unsupported by the facts and is contradicted by VHG's extensive and documented mitigation efforts.
76.  A copy of Ironclad's formal coverage denial letter dated February 3, 2023 is attached hereto as Exhibit C.
2. Pinnacle's Denial.  
77.  On February 10, 2023—one week after Ironclad's formal denial—Pinnacle Surplus Lines Inc. issued its own denial of VHG's claim under the first excess layer policy, Policy No. PSL-XS1-2022-3390. Pinnacle's denial stated that, as a follow-form carrier, Pinnacle adopted and incorporated each of Ironclad's four bases for denial.
78.  Pinnacle refused to make any payment under its $15,000,000 first excess layer. Pinnacle did not conduct its own independent investigation of VHG's claim, did not retain its own independent adjuster, and did not independently evaluate the merits of Ironclad's denial before following that denial. Pinnacle's denial was, in effect, a rubber stamp of Ironclad's wrongful coverage position.
3. Montclair and Sovereign Re.  
79.  Montclair Assurance Company issued a reservation of rights letter but did not issue a formal denial of VHG's claim. Instead, Montclair took the position that its second excess layer of $10,000,000, attaching at $40,000,000, would not be reached given the named-windstorm sub-limit of $15,000,000 asserted by Ironclad. Montclair has refused to acknowledge its payment obligations under Policy No. MAC-XS2-2022-09817 and has failed and refused to pay any portion of VHG's claim.
80.  Sovereign Re Ltd. similarly issued a reservation of rights letter and took the position that its third excess layer of $10,000,000, attaching at $50,000,000, would not be reached. Sovereign Re has refused to acknowledge its payment obligations under Policy No. SRL-XS3-2022-5102 and has failed and refused to pay any portion of VHG's claim.
81.  Both Montclair and Sovereign Re have, in substance, aligned themselves with Ironclad's denial by refusing to acknowledge or pay their coverage obligations, notwithstanding VHG's submission of a valid claim that exceeds the full aggregate limits of the four-layer insurance tower.
4. Wrongfulness of Denial.  
82.  Each of the grounds asserted by Defendants for denying, limiting, or refusing to pay VHG's business-interruption claim is meritless and contrary to the plain language of the insurance policies and the law of the State of Florida. Specifically:
(a) The named-windstorm sub-limit of $15,000,000 was deleted from the Ironclad primary policy at the July 2022 renewal, as confirmed by the broker correspondence and communications between Franklin Orde of Tidewater Risk Advisors and Ironclad's underwriting department, and as evidenced by the increased premium of $980,000 negotiated and paid by VHG specifically for the removal of the sub-limit. Ironclad's reliance on a sub-limit that its own underwriting department agreed to delete is without basis.
(b) VHG's periods of restoration at each property—178 days at the Grand Key Resort, 135 days at the Harborview, and 73 days (full closure) at the Sunset Shores—were reasonable under the circumstances, taking into account the catastrophic nature of the hurricane damage, the physical condition of the properties following a Category 4 hurricane, the limited availability of qualified contractors and building materials in the aftermath of a major hurricane, the widespread devastation to surrounding infrastructure and communities, and the permitting and regulatory requirements applicable to coastal construction in the affected counties.
(c) The flood exclusion does not apply to storm-surge damage caused by a named windstorm. Under Florida law, storm surge caused by a named hurricane is not "flood" within the meaning of the policy's flood exclusion. Moreover, even if portions of the Grand Key Resort damage were attributable to storm surge, the efficient proximate cause of the loss was wind—a covered peril under the all-risk policy. Florida's efficient proximate cause doctrine requires coverage where a covered peril is the predominant or efficient proximate cause of the loss, and Ironclad's invocation of the anti-concurrent causation clause is unenforceable under Florida law to the extent it attempts to override the efficient proximate cause doctrine.
(d) VHG took extensive and reasonable steps to mitigate its losses following Hurricane Callista, including securing damaged properties, engaging contractors for emergency repairs, coordinating with local authorities, and reopening properties as quickly as reasonably possible. Ironclad's allegation that VHG failed to mitigate is factually unsupported.
83.  Defendants' wrongful denial and refusal to pay VHG's valid insurance claims has caused VHG to suffer significant financial harm, including the inability to recover the business-interruption losses to which VHG is entitled under the policies for which VHG paid substantial premiums.
COUNT I
BREACH OF CONTRACT — IRONCLAD INDEMNITY CORPORATION
84.  VHG re-alleges and incorporates by reference all of the foregoing allegations set forth in paragraphs 1 through 83 as if fully set forth herein.
85.  Ironclad issued all-risk property and business-interruption insurance policy, Policy No. IIC-PRP-2022-07541, to VHG for the policy period July 1, 2022 through July 1, 2023. The policy provides a per-occurrence limit of $25,000,000 for business-interruption losses, subject to a $500,000 per-occurrence deductible.
86.  VHG and Ironclad entered into a valid and binding insurance contract. VHG paid the required annual premium of $980,000 for the 2022-2023 policy period, and Ironclad accepted VHG's premium payment.
87.  Hurricane Callista constitutes a covered occurrence under the Ironclad primary policy. The direct physical loss and damage sustained by VHG's three insured resort properties was caused by a windstorm—a peril that is not excluded under the all-risk policy. The business-interruption losses sustained by VHG resulted from the necessary suspension of operations caused by direct physical loss or damage to covered property at covered locations caused by a covered peril.
88.  VHG sustained business-interruption losses of $60,000,000 as a result of Hurricane Callista across its three insured resort properties, which exceeds Ironclad's $25,000,000 per-occurrence policy limit.
89.  VHG complied with all conditions precedent to coverage under the Ironclad primary policy, including providing timely notice of loss on September 22, 2022; submitting a sworn statement in proof of loss in the amount of $60,000,000 on November 15, 2022; fully cooperating with Ironclad's investigation; and taking all reasonable steps to mitigate its losses.
90.  Ironclad breached the insurance contract by wrongfully denying VHG's business-interruption claim on February 3, 2023, and by failing and refusing to pay the policy limits of $25,000,000 (less the $500,000 deductible) owed to VHG under the terms of the policy.
91.  Each of the four purported bases for denial asserted by Ironclad is meritless and does not provide a legitimate ground for denial of VHG's claim, as set forth in detail in paragraphs 82 and 83 above.
92.  As a direct and proximate result of Ironclad's breach of the insurance contract, VHG has suffered damages in an amount not less than $24,500,000 (the $25,000,000 per-occurrence policy limit less the $500,000 per-occurrence deductible), plus pre-judgment interest at the applicable statutory rate from the date payment was due, post-judgment interest, and attorneys' fees and costs as permitted by Florida law, including but not limited to Florida Statutes § 627.428.
93.  A copy of the Ironclad primary policy (excerpts) is attached hereto as Exhibit A and incorporated herein by reference.
COUNT II
BREACH OF CONTRACT — PINNACLE SURPLUS LINES INC.
94.  VHG re-alleges and incorporates by reference all of the foregoing allegations set forth in paragraphs 1 through 93 as if fully set forth herein.
95.  Pinnacle issued a first excess property and business-interruption insurance policy, Policy No. PSL-XS1-2022-3390, to VHG for the policy period July 1, 2022 through July 1, 2023. The policy provides $15,000,000 in coverage in excess of the first $25,000,000, attaching above the Ironclad primary layer.
96.  VHG and Pinnacle entered into a valid and binding insurance contract. VHG paid the required annual premium of $410,000 for the 2022-2023 policy period, and Pinnacle accepted VHG's premium payment.
97.  The Pinnacle first excess policy follows the form of the Ironclad primary policy. Accordingly, Hurricane Callista constitutes a covered occurrence under the Pinnacle policy for the same reasons it constitutes a covered occurrence under the Ironclad primary policy. The direct physical loss and damage sustained by VHG's three insured resort properties was caused by a windstorm—a covered peril under the follow-form policy.
98.  VHG's total business-interruption losses of $60,000,000 exceed the combined limits of the Ironclad primary layer ($25,000,000) and the Pinnacle first excess layer ($15,000,000), totaling $40,000,000 in combined limits. VHG's losses are sufficient to exhaust both the Ironclad primary layer and the full $15,000,000 Pinnacle first excess layer.
99.  VHG complied with all conditions precedent to coverage under the Pinnacle first excess policy, including providing timely notice of loss in accordance with the policy's requirements.
100.  Pinnacle breached the insurance contract by following Ironclad's wrongful denial on February 10, 2023, and by failing and refusing to pay the full $15,000,000 first excess layer owed to VHG under the terms of the policy.
101.  Pinnacle's decision to mechanically adopt Ironclad's denial without conducting its own independent investigation of VHG's claim does not relieve Pinnacle of its contractual obligations. As an insurer that issued a policy to VHG and accepted VHG's premium, Pinnacle has an independent obligation to honor valid claims under its policy.
102.  As a direct and proximate result of Pinnacle's breach of the insurance contract, VHG has suffered damages in an amount not less than $15,000,000, plus pre-judgment interest at the applicable statutory rate from the date payment was due, post-judgment interest, and attorneys' fees and costs as permitted by Florida law.
103.  A copy of Pinnacle's first excess policy is incorporated herein by reference.
COUNT III
BREACH OF CONTRACT — MONTCLAIR ASSURANCE COMPANY
104.  VHG re-alleges and incorporates by reference all of the foregoing allegations set forth in paragraphs 1 through 103 as if fully set forth herein.
105.  Montclair issued a second excess property and business-interruption insurance policy, Policy No. MAC-XS2-2022-09817, to VHG for the policy period July 1, 2022 through July 1, 2023. The policy provides $10,000,000 in coverage in excess of $40,000,000, attaching above the combined limits of the Ironclad primary layer ($25,000,000) and the Pinnacle first excess layer ($15,000,000).
106.  VHG and Montclair entered into a valid and binding insurance contract. VHG paid the required annual premium of $265,000 for the 2022-2023 policy period, and Montclair accepted VHG's premium payment.
107.  Hurricane Callista constitutes a covered occurrence under the Montclair second excess policy. The direct physical loss and damage sustained by VHG's insured resort properties was caused by a windstorm—a covered peril under the policy.
108.  VHG's total business-interruption losses of $60,000,000 exceed the $40,000,000 attachment point of the Montclair policy by $20,000,000, which exceeds Montclair's $10,000,000 policy limit. Accordingly, VHG's losses are sufficient to exhaust the full $10,000,000 Montclair second excess layer.
109.  VHG complied with all conditions precedent to coverage under the Montclair second excess policy, including providing timely notice of loss in accordance with the policy's requirements.
110.  Montclair breached the insurance contract by reserving its rights, asserting that its second excess layer would not be reached based on the named-windstorm sub-limit asserted by Ironclad, and by failing and refusing to pay the full $10,000,000 second excess layer owed to VHG under the terms of the policy.
111.  Montclair's reliance on the named-windstorm sub-limit asserted by Ironclad is misplaced. As set forth above, the named-windstorm sub-limit was deleted from the Ironclad primary policy during the July 2022 renewal, and the full per-occurrence limits of each policy in the tower apply to VHG's Hurricane Callista losses. VHG's total losses of $60,000,000 are more than sufficient to reach and exhaust the Montclair second excess layer.
112.  As a direct and proximate result of Montclair's breach of the insurance contract, VHG has suffered damages in an amount not less than $10,000,000, plus pre-judgment interest at the applicable statutory rate from the date payment was due, post-judgment interest, and attorneys' fees and costs as permitted by Florida law.
113.  A copy of Montclair's second excess policy is incorporated herein by reference.
COUNT IV
BREACH OF CONTRACT — SOVEREIGN RE LTD.
114.  VHG re-alleges and incorporates by reference all of the foregoing allegations set forth in paragraphs 1 through 113 as if fully set forth herein.
115.  Sovereign Re issued a third excess property and business-interruption insurance policy, Policy No. SRL-XS3-2022-5102, to VHG for the policy period July 1, 2022 through July 1, 2023. The policy provides $10,000,000 in coverage in excess of $50,000,000, attaching above the combined limits of all underlying layers (the Ironclad primary layer at $25,000,000, the Pinnacle first excess layer at $15,000,000, and the Montclair second excess layer at $10,000,000).
116.  VHG and Sovereign Re entered into a valid and binding insurance contract. VHG paid the required annual premium of $185,000 for the 2022-2023 policy period, and Sovereign Re accepted VHG's premium payment.
117.  Hurricane Callista constitutes a covered occurrence under the Sovereign Re third excess policy. The direct physical loss and damage sustained by VHG's insured resort properties was caused by a windstorm—a covered peril under the policy.
118.  VHG's total business-interruption losses of $60,000,000 exhaust the $50,000,000 attachment point of the Sovereign Re policy and reach the full $10,000,000 policy limit. Accordingly, VHG's losses are sufficient to exhaust the full $10,000,000 Sovereign Re third excess layer.
119.  VHG complied with all conditions precedent to coverage under the Sovereign Re third excess policy, including providing timely notice of loss in accordance with the policy's requirements.
120.  Sovereign Re breached the insurance contract by reserving its rights, asserting that its third excess layer would not be reached, and by failing and refusing to pay the full $10,000,000 third excess layer owed to VHG under the terms of the policy.
121.  Sovereign Re's reliance on the named-windstorm sub-limit asserted by Ironclad is misplaced. The named-windstorm sub-limit was deleted during the July 2022 renewal, and VHG's total losses of $60,000,000 are sufficient to reach and exhaust each and every layer of the insurance tower, including the Sovereign Re third excess layer.
122.  As a direct and proximate result of Sovereign Re's breach of the insurance contract, VHG has suffered damages in an amount not less than $10,000,000, plus pre-judgment interest at the applicable statutory rate from the date payment was due, post-judgment interest, and attorneys' fees and costs as permitted by Florida law.
123.  A copy of Sovereign Re's third excess policy is incorporated herein by reference.
COUNT V
DECLARATORY JUDGMENT — ALL DEFENDANTS
124.  VHG re-alleges and incorporates by reference all of the foregoing allegations set forth in paragraphs 1 through 123 as if fully set forth herein.
125.  VHG brings this count for declaratory relief pursuant to Chapter 86 of the Florida Statutes, the Uniform Declaratory Judgment Act.
126.  A bona fide, actual, present, and practical need exists for a judicial declaration of the respective rights and obligations of VHG and Defendants under the four insurance policies at issue in this action—the Ironclad primary policy (IIC-PRP-2022-07541), the Pinnacle first excess policy (PSL-XS1-2022-3390), the Montclair second excess policy (MAC-XS2-2022-09817), and the Sovereign Re third excess policy (SRL-XS3-2022-5102).
127.  There exists a bona fide, actual, and justiciable dispute between VHG and Defendants regarding the following issues, among others:
(a) Whether the named-windstorm sub-limit of $15,000,000 was deleted from the Ironclad primary policy at the July 2022 renewal, and if so, whether the full $25,000,000 per-occurrence limit applies to Hurricane Callista business-interruption losses without the application of any windstorm sub-limit;
(b) Whether VHG's claimed periods of restoration at each property—178 days at the Grand Key Resort, 135 days at the Harborview Hotel & Conference Center, and 73 days of full closure (plus the reduced-capacity period through February 28, 2023) at the Sunset Shores—are reasonable and covered under the applicable policies;
(c) Whether the flood exclusion and/or anti-concurrent causation clause contained in the Ironclad primary policy (and incorporated by reference in the Pinnacle follow-form policy) bars or limits coverage for storm-surge damage at the Grand Key Resort or any other insured property;
(d) Whether VHG satisfied its duty to mitigate its business-interruption losses following Hurricane Callista; and
(e) Whether the full $60,000,000 tower of insurance responds to VHG's Hurricane Callista business-interruption losses, such that each Defendant is obligated to pay its respective policy limits to VHG.
128.  The dispute between VHG and Defendants is not moot, theoretical, or academic. Defendants have denied, refused to pay, or failed to acknowledge their obligations to pay VHG's valid insurance claims, and VHG has a substantial and immediate interest in obtaining a judicial determination of Defendants' coverage obligations.
129.  VHG seeks a judicial declaration as follows:
(a) That the named-windstorm sub-limit of $15,000,000 was deleted from the Ironclad primary policy, Policy No. IIC-PRP-2022-07541, effective July 1, 2022, and that no named-windstorm sub-limit applies to VHG's Hurricane Callista business-interruption claim;
(b) That the full per-occurrence limits of each policy in VHG's four-layer insurance tower apply to VHG's Hurricane Callista business-interruption losses without the application of any windstorm sub-limit;
(c) That the flood exclusion contained in the Ironclad primary policy does not apply to storm-surge damage caused by Hurricane Callista, a named windstorm; and, in the alternative, that under Florida's efficient proximate cause doctrine, wind (a covered peril) was the efficient proximate cause of the loss and coverage is therefore required;
(d) That VHG's periods of restoration at each of the three affected properties were reasonable under the circumstances;
(e) That VHG fulfilled its duty to mitigate its business-interruption losses following Hurricane Callista; and
(f) That each Defendant is obligated to pay its respective policy limits in full, as follows: Ironclad—$24,500,000 (net of the $500,000 deductible); Pinnacle—$15,000,000; Montclair—$10,000,000; Sovereign Re—$10,000,000; for a total of $59,500,000 (net of the $500,000 deductible).
130.  VHG is entitled to an award of attorneys' fees and costs pursuant to the Florida Declaratory Judgment Act, Chapter 86 of the Florida Statutes.
COUNT VI
BAD FAITH — IRONCLAD INDEMNITY CORPORATION
(Florida Statute § 624.155)
131.  VHG re-alleges and incorporates by reference all of the foregoing allegations set forth in paragraphs 1 through 130 as if fully set forth herein.
132.  Under Florida Statute § 624.155, an insurer may be held liable for damages when it fails to attempt in good faith to settle a claim when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for the insured's interests.
133.  Ironclad acted in bad faith in its handling, investigation, evaluation, and denial of VHG's business-interruption claim under Policy No. IIC-PRP-2022-07541. Ironclad's bad-faith conduct includes, but is not limited to, the following:
(a) Ironclad issued a reservation of rights letter on October 12, 2022 asserting potential application of a named-windstorm sub-limit of $15,000,000—a sub-limit that Ironclad's own underwriting department had agreed to delete during the July 2022 renewal negotiations. Ironclad's assertion of a sub-limit that it knew, or should have known, had been deleted demonstrates a lack of good faith in the handling of VHG's claim.
(b) Ironclad retained Arbor Claims Services LLC and its lead adjuster Denise Whitford to conduct an independent adjustment of VHG's claim, but then relied selectively on the independent adjustment to support its coverage denial while ignoring or minimizing substantial evidence supporting the validity and amount of VHG's claim.
(c) Ironclad asserted the flood exclusion and concurrent causation defense as a basis for denying coverage at the Grand Key Resort without a reasonable factual or legal basis for doing so, and in contravention of Florida's efficient proximate cause doctrine and established Florida case law regarding the treatment of storm-surge damage in the context of named-windstorm losses.
(d) Ironclad issued a formal denial of VHG's claim on February 3, 2023 when Ironclad knew, or in the exercise of reasonable diligence should have known, that VHG's business-interruption claim was covered under the plain terms of the policy and that the asserted grounds for denial were meritless.
(e) Ironclad asserted that VHG unreasonably delayed restoration of its properties despite the well-documented and widely recognized challenges of restoring resort properties in the aftermath of a Category 4 hurricane, including limited contractor availability, disrupted supply chains, widespread community devastation, and complex permitting requirements for coastal construction.
(f) Ironclad failed to conduct a fair, thorough, and objective investigation of VHG's claim, and instead approached the claim with an outcome-oriented perspective designed to identify grounds for denial rather than to determine coverage.
(g) Ironclad engaged in a pattern of delay, denial, and defense tactics designed to avoid its contractual obligations to its insured and to pressure VHG into accepting a settlement far below the value of its valid claim.
134.  Ironclad's conduct, taken individually and collectively, constitutes bad faith in violation of Florida Statute § 624.155 and the common law duty of good faith and fair dealing owed by an insurer to its insured.
135.  VHG has complied with all conditions precedent to bringing a bad-faith claim under Florida Statute § 624.155, including providing the requisite Civil Remedy Notice pursuant to Florida Statute § 624.155(3)(a). VHG filed a Civil Remedy Notice with the Florida Department of Financial Services, providing Ironclad with the required sixty (60) day cure period, and Ironclad failed to cure its violations within the cure period.
136.  As a direct and proximate result of Ironclad's bad faith, VHG has suffered damages including, but not limited to, the full amount of the insurance claim that Ironclad wrongfully denied, consequential damages arising from the denial of coverage, attorneys' fees and costs incurred in pursuing this action, and any other damages permitted by Florida Statute § 624.155 and Florida law.
COUNT VII
BAD FAITH — PINNACLE SURPLUS LINES INC.
(Florida Statute § 624.155)
137.  VHG re-alleges and incorporates by reference all of the foregoing allegations set forth in paragraphs 1 through 136 as if fully set forth herein.
138.  Under Florida Statute § 624.155, an insurer may be held liable for damages when it fails to attempt in good faith to settle a claim when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for the insured's interests.
139.  Pinnacle acted in bad faith in its handling of VHG's business-interruption claim under Policy No. PSL-XS1-2022-3390. Specifically, Pinnacle mechanically followed Ironclad's wrongful denial on February 10, 2023 without conducting its own independent investigation, analysis, or evaluation of VHG's claim.
140.  As a follow-form carrier that issued a separate and independent insurance policy to VHG and accepted VHG's premium payment, Pinnacle had an independent duty to its insured to evaluate coverage in good faith. Pinnacle was required to independently assess the merits of VHG's claim and determine whether coverage existed under its first excess policy, rather than blindly adopting and incorporating another carrier's coverage denial.
141.  Pinnacle failed to evaluate VHG's claim on the merits. Pinnacle did not retain its own independent adjuster, did not independently review the policy provisions at issue, did not independently assess the validity of the named-windstorm sub-limit assertion, and did not independently evaluate whether the flood exclusion, anti-concurrent causation clause, period of restoration, or mitigation defenses asserted by Ironclad had any applicability to VHG's claim under the follow-form policy. Instead, Pinnacle rubber-stamped Ironclad's wrongful denial in its entirety.
142.  Pinnacle's wholesale adoption of Ironclad's denial without independent analysis constitutes a failure to attempt in good faith to settle VHG's claim and a breach of Pinnacle's duty of good faith and fair dealing owed to VHG as its insured.
143.  VHG has complied with all conditions precedent to bringing a bad-faith claim against Pinnacle under Florida Statute § 624.155, including providing the requisite Civil Remedy Notice pursuant to Florida Statute § 624.155(3)(a). VHG filed a Civil Remedy Notice with the Florida Department of Financial Services, providing Pinnacle with the required sixty (60) day cure period, and Pinnacle failed to cure its violations within the cure period.
144.  As a direct and proximate result of Pinnacle's bad faith, VHG has suffered damages including, but not limited to, the full amount of the insurance claim that Pinnacle wrongfully denied, consequential damages arising from the denial of coverage, attorneys' fees and costs incurred in pursuing this action, and any other damages permitted by Florida Statute § 624.155 and Florida law.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff Verimark Hospitality Group Inc. respectfully requests that this Court enter judgment in its favor and against Defendants, jointly and severally where applicable, as follows:
1.  On Count I (Breach of Contract — Ironclad Indemnity Corporation), compensatory damages against Ironclad in an amount not less than Twenty-Four Million Five Hundred Thousand Dollars ($24,500,000), representing the $25,000,000 per-occurrence policy limit less the $500,000 per-occurrence deductible, plus pre-judgment and post-judgment interest at the applicable statutory rates;
2.  On Count II (Breach of Contract — Pinnacle Surplus Lines Inc.), compensatory damages against Pinnacle in an amount not less than Fifteen Million Dollars ($15,000,000), representing the full first excess layer policy limit, plus pre-judgment and post-judgment interest at the applicable statutory rates;
3.  On Count III (Breach of Contract — Montclair Assurance Company), compensatory damages against Montclair in an amount not less than Ten Million Dollars ($10,000,000), representing the full second excess layer policy limit, plus pre-judgment and post-judgment interest at the applicable statutory rates;
4.  On Count IV (Breach of Contract — Sovereign Re Ltd.), compensatory damages against Sovereign Re in an amount not less than Ten Million Dollars ($10,000,000), representing the full third excess layer policy limit, plus pre-judgment and post-judgment interest at the applicable statutory rates;
5.  On Count V (Declaratory Judgment — All Defendants), a declaratory judgment as set forth in paragraphs 129(a) through (f) above, including declarations that the named-windstorm sub-limit was deleted, that the full per-occurrence limits of each policy apply, that the flood exclusion does not bar coverage, that VHG's periods of restor