IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA
GENERAL JURISDICTION DIVISION
CASE NO.: 2022-CA-031547
VERIMARK HOSPITALITY GROUP INC., 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 carrier; and SOVEREIGN RE LTD., a Bermuda excess carrier,
Defendants.
PLAINTIFF'S MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS' MOTION TO DISMISS AND/OR STAY PROCEEDINGS
Filed: April 1, 2023 Before the Honorable Catherine Embry Circuit Court Judge
TABLE OF CONTENTS
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PRELIMINARY STATEMENT
Plaintiff Verimark Hospitality Group Inc. ("VHG" or "Plaintiff") is a publicly traded hospitality company listed on the Nasdaq stock exchange under the ticker symbol "VMRK." VHG is incorporated in Delaware and maintains its principal place of business and corporate headquarters at 1900 Brickell Avenue, Suite 3200, Miami, Florida 33129. VHG owns and operates luxury resort properties throughout the State of Florida, employing hundreds of Floridians and serving as a significant contributor to Florida's tourism economy.
On September 18, 2022, Hurricane Callista — a powerful Category 4 storm — made landfall near Big Pine Key in the Lower Florida Keys, bringing sustained winds of approximately 145 miles per hour and catastrophic storm surge of eight to fourteen feet. Hurricane Callista devastated the southwest coast of Florida, causing billions of dollars in damage to residential and commercial properties alike. VHG's three luxury resort properties — the Verimark Grand Key Resort in Marathon, the Verimark Harborview Hotel & Conference Center in Fort Myers Beach, and the Verimark Sunset Shores in St. Pete Beach — sustained extensive physical damage and were forced to cease or substantially curtail operations for periods ranging from 73 to 178 days.
VHG maintained a comprehensive all-risk property and business-interruption insurance program with a total tower limit of $60 million above a $500,000 deductible, structured across four layers. The primary layer was written by Defendant Ironclad Indemnity Corporation ("Ironclad"), a Connecticut stock insurance company providing $25 million in coverage. The first excess layer was written by Defendant Pinnacle Surplus Lines Inc. ("Pinnacle"), a Texas surplus-lines insurer providing $15 million excess of $25 million on a follow-form basis. The second excess layer was written by Defendant Montclair Assurance Company ("Montclair"), a New York admitted carrier providing $10 million excess of $40 million. The third and final excess layer was written by Defendant Sovereign Re Ltd. ("Sovereign Re"), a Bermuda excess carrier providing $10 million excess of $50 million. VHG paid aggregate annual premiums of $1,840,000 for the protection afforded by this insurance tower.
Despite the clear and unambiguous coverage afforded under these policies, Defendants have denied or reserved rights against approximately $60 million in business-interruption coverage. Ironclad issued a formal denial of coverage on February 3, 2023, relying principally on a purported $15 million named-windstorm sub-limit that VHG contends was expressly deleted during the July 2022 policy renewal. Pinnacle followed Ironclad's denial on February 10, 2023, without conducting any independent investigation. Montclair and Sovereign Re have reserved rights but declined to make any coverage determination, asserting that their respective excess layers are not implicated if the windstorm sub-limit applies.
VHG filed its Complaint on March 1, 2023, in this Court, asserting claims for breach of contract (Count I, against all Defendants), declaratory judgment (Count II, against all Defendants), and statutory bad faith pursuant to Florida Statute § 624.155 (Count III, against Ironclad and Pinnacle). VHG seeks recovery of the full $60 million in business-interruption coverage owed under the policies, together with consequential damages, prejudgment interest, attorneys' fees, and costs.
Defendants now move to dismiss VHG's Complaint and, in the alternative, to stay these proceedings on jurisdictional and procedural grounds. Defendants' motion is without merit. This Court has personal jurisdiction over each Defendant. Venue is proper in Miami-Dade County. The Complaint states viable claims for breach of contract, declaratory judgment, and bad faith. No pending proceeding, forum-selection clause, or other basis exists for a stay. And Defendants' alternative request to stay the bad-faith claim pending resolution of the coverage dispute is inconsistent with well-established Florida law. VHG respectfully urges the Court to deny the motion in its entirety and to permit this case to proceed to discovery and trial on the merits.
VHG is represented in this action by the law firm of Calderwood & Harkness LLP, 333 SE 2nd Avenue, Suite 4400, Miami, Florida 33131, through Elaine Forsythe, Esq. (Responsible Partner), Tiffany Rosenthal, Esq. (Lead Associate), and Andrew Fitzpatrick, Esq. (Working Associate). Defendants Ironclad and Pinnacle are represented by the law firm of Fendowell Rourke & Stanton LLP, through Gregory Stanton, Esq. (Partner), Meredith Liang, Esq. (Senior Associate), and Colin Ashford, Esq. (Junior Associate). Defendants Montclair and Sovereign Re are represented by the law firm of Delvecchio & Kraus LLP, through Patricia Kraus, Esq. (Partner) and Raymond Cho, Esq. (Senior Associate).
STATEMENT OF FACTS
A. The Insured Properties and Hurricane Callista
VHG owns and operates three luxury resort properties in the State of Florida, each of which sustained catastrophic damage from Hurricane Callista and was forced to cease or substantially curtail operations for an extended period. The following is a summary of each property, its pre-loss operating characteristics, the duration of its closure, and the estimated business-interruption loss attributable to Hurricane Callista.
1. Verimark Grand Key Resort — Marathon, Florida
The Verimark Grand Key Resort is located at Mile Marker 48, Marathon, Florida 33050, in Monroe County. The resort is a luxury destination property comprising 312 guest rooms, a full-service marina, multiple restaurants and bars, a spa and fitness center, and extensive meeting and event facilities. Prior to Hurricane Callista, the Grand Key Resort operated at a pre-loss average daily rate ("ADR") of $389 and an average occupancy rate of 82%, reflecting its status as one of the premier hospitality properties in the Florida Keys.
Hurricane Callista struck the Grand Key Resort with devastating force on September 18, 2022. The property sustained severe structural damage from sustained winds of approximately 145 miles per hour, as well as catastrophic flooding from storm surge measured at eight to fourteen feet in Monroe County. The resort's marina was substantially destroyed, guest room buildings suffered extensive roof and envelope damage, and the property's mechanical, electrical, and plumbing systems were rendered inoperable.
As a result, the Grand Key Resort was forced to close entirely on September 18, 2022. The property remained closed through March 15, 2023 — a total of 178 days. During this extended closure, the resort generated no revenue, while VHG continued to incur fixed costs, payroll for essential employees, debt service, and ongoing remediation expenses. VHG estimates the total business-interruption loss attributable to the Grand Key Resort at $31.4 million, representing the largest single component of VHG's aggregate claim.
2. Verimark Harborview Hotel & Conference Center — Fort Myers Beach, Florida
The Verimark Harborview Hotel & Conference Center is located at 1400 Estero Boulevard, Fort Myers Beach, Florida 33931, in Lee County. The property comprises 224 guest rooms and a 40,000-square-foot conference and events facility, making it a significant venue for corporate meetings, conventions, and leisure travel on Florida's southwest coast. Prior to Hurricane Callista, the Harborview Hotel operated at a pre-loss ADR of $295 and an average occupancy rate of 74%.
Hurricane Callista's impact on Fort Myers Beach was severe. Although the storm's eye made landfall in the Lower Keys, the outer eyewall and extensive wind field produced sustained tropical-storm-force and hurricane-force winds across Lee County, accompanied by storm surge of six to ten feet. The Harborview Hotel suffered significant damage to its guest room wings, substantial flooding of the conference center's ground-floor facilities, and destruction of landscaping, pool areas, and exterior amenities.
The Harborview Hotel was forced to close on September 18, 2022, and remained closed through January 31, 2023 — a total of 135 days. VHG estimates the total business-interruption loss attributable to the Harborview Hotel at $18.7 million.
3. Verimark Sunset Shores — St. Pete Beach, Florida
The Verimark Sunset Shores is located at 7200 Gulf Boulevard, St. Pete Beach, Florida 33706, in Pinellas County. The property is a 186-room boutique resort offering upscale accommodations on the Gulf of Mexico. Prior to Hurricane Callista, Sunset Shores operated at a pre-loss ADR of $342 and an average occupancy rate of 79%.
While St. Pete Beach is located farther north along the Gulf coast from Hurricane Callista's point of landfall, the storm's expansive wind field produced damaging winds, heavy rainfall, and coastal flooding at the Sunset Shores property. The resort sustained moderate structural damage, significant water intrusion in guest rooms and public areas, and disruption to its beach and pool facilities.
The Sunset Shores was fully closed from September 18, 2022, through November 30, 2022 — a period of 73 days. The property subsequently reopened at substantially reduced capacity in December 2022 and did not return to full operations until approximately February 2023. VHG estimates the total business-interruption loss attributable to Sunset Shores at $9.9 million, accounting for both the full closure period and the extended period of reduced capacity.
Total Claimed Business-Interruption Loss
VHG's aggregate business-interruption loss from Hurricane Callista across all three properties is estimated at $60 million, calculated as follows:
Hurricane Callista
Hurricane Callista was named by the National Hurricane Center ("NHC") on September 12, 2022, as a tropical storm that had formed over the warm waters of the western Caribbean Sea. The storm intensified rapidly, reaching Category 4 strength on the Saffir-Veltason Hurricane Wind Scale by the morning of September 18, 2022. At approximately 1:30 PM EDT on September 18, 2022, Hurricane Callista made landfall near Big Pine Key, Florida, with maximum sustained winds of approximately 145 miles per hour. The storm produced catastrophic storm surge of eight to fourteen feet in Monroe County and six to ten feet in Lee County, along with torrential rainfall and destructive wind gusts throughout southwest Florida.
In advance of Hurricane Callista's anticipated landfall, mandatory evacuation orders were issued by Monroe County on September 16, 2022, and by Lee County on September 17, 2022. VHG's resort properties in Marathon and Fort Myers Beach were subject to these mandatory evacuation orders. VHG evacuated guests and non-essential personnel from all three properties and implemented its hurricane preparedness protocols, including boarding windows, securing loose items, and shutting down building systems.
The devastation wrought by Hurricane Callista was widespread and severe. The storm caused an estimated $42 billion in total insured losses statewide, according to preliminary industry estimates, and was one of the costliest natural disasters in Florida history. VHG's three resort properties were among the thousands of commercial and residential properties that suffered catastrophic damage.
B. The Insurance Program
VHG maintained a comprehensive all-risk property and business-interruption insurance program for the policy period July 1, 2022, through July 1, 2023. The program was structured as a layered insurance tower, comprising a primary policy and three successive excess layers, providing aggregate coverage of $60 million above a $500,000 per-occurrence deductible. The policies were placed through Tidewater Risk Advisors LLC ("Tidewater"), VHG's broker of record, by Franklin Orde, the account executive responsible for the VHG account. Tidewater's offices are located at 2600 S. Bayshore Drive, Suite 800, Miami, Florida 33133.
The insurance tower is structured as follows:
Primary Layer — Ironclad Indemnity Corporation
Ironclad Indemnity Corporation, a Connecticut stock insurance company with its principal office at 55 Constitution Boulevard, Hartford, Connecticut 06103 (NAIC No. 20537), issued the primary all-risk property and business-interruption policy, bearing Policy No. IIC-PRP-2022-07541. The Ironclad primary policy provides coverage with a per-occurrence limit of $25 million, subject to a $500,000 per-occurrence deductible. The annual premium for the Ironclad primary policy is $980,000.
First Excess Layer — Pinnacle Surplus Lines Inc.
Pinnacle Surplus Lines Inc., a Texas-domiciled surplus-lines insurer with its principal office at 200 Congress Avenue, Suite 1400, Austin, Texas 78701 (NAIC No. 38214), issued the first excess policy, bearing Policy No. PSL-XS1-2022-3390. The Pinnacle policy provides coverage of $15 million in excess of the $25 million Ironclad primary layer, for a combined coverage limit of $40 million. The Pinnacle policy is written on a follow-form basis, incorporating the terms, conditions, and exclusions of the underlying Ironclad primary policy unless specifically modified. The annual premium for the Pinnacle policy is $410,000.
Second Excess Layer — Montclair Assurance Company
Montclair Assurance Company, a New York-domiciled admitted carrier with its principal office at 1 Liberty Plaza, 38th Floor, New York, New York 10006 (NAIC No. 15692), issued the second excess policy, bearing Policy No. MAC-XS2-2022-09817. The Montclair policy provides coverage of $10 million in excess of $40 million (i.e., in excess of the combined Ironclad and Pinnacle layers), for a combined coverage limit of $50 million. The annual premium for the Montclair policy is $265,000.
Third Excess Layer — Sovereign Re Ltd.
Sovereign Re Ltd., a Bermuda-domiciled excess carrier with its principal office at 14 Front Street, Hamilton HM 11, Bermuda, issued the third and final excess policy, bearing Policy No. SRL-XS3-2022-5102. The Sovereign Re policy provides coverage of $10 million in excess of $50 million (i.e., in excess of the combined Ironclad, Pinnacle, and Montclair layers), for an aggregate tower limit of $60 million. The annual premium for the Sovereign Re policy is $185,000.
The total annual aggregate premium paid by VHG for the entire insurance tower is $1,840,000, reflecting VHG's substantial investment in comprehensive insurance protection for its Florida resort properties. Each of the four policies covers the same schedule of insured properties — the Verimark Grand Key Resort, the Verimark Harborview Hotel & Conference Center, and the Verimark Sunset Shores — all of which are located exclusively in the State of Florida.
C. The Claim and Denial
VHG promptly reported the Hurricane Callista losses to its insurers and cooperated fully with the claims investigation process. The timeline of the claim is as follows:
September 22, 2022: VHG submitted its initial notice of loss to Ironclad, notifying the primary insurer of the catastrophic damage to all three resort properties caused by Hurricane Callista. The notice was submitted within four days of Hurricane Callista's landfall, well within the prompt-notice requirements of the Ironclad primary policy, and during a period when access to the affected properties remained severely limited due to storm damage and ongoing emergency-management restrictions.
October 5, 2022: Ironclad retained Arbor Claims Services LLC ("Arbor"), an independent adjusting firm with offices at 3300 W. Cypress Street, Suite 400, Tampa, Florida 33607, to adjust the Hurricane Callista claim on Ironclad's behalf. Denise Whitford, the lead adjuster assigned by Arbor, conducted on-site inspections of all three insured properties. Ms. Whitford and her team traveled to Marathon, Fort Myers Beach, and St. Pete Beach to assess the physical damage and begin evaluating the business-interruption losses at each location.
October 12, 2022: Ironclad issued a reservation of rights letter to VHG, purporting to reserve its rights to deny coverage on multiple grounds. The reservation of rights letter raised the following issues: (1) the existence of a purported named-windstorm sub-limit of $15 million, which Ironclad contended applied to cap its exposure; (2) disputes regarding the appropriate period of restoration for each property; (3) the concurrent causation doctrine and the flood exclusion, with Ironclad contending that a portion of VHG's losses were caused by flood rather than wind; and (4) VHG's alleged failure to mitigate damages. VHG, through its counsel at Calderwood & Harkness LLP, promptly responded to the reservation of rights letter, disputing each of the bases cited by Ironclad and providing detailed documentation in support of VHG's position.
November 15, 2022: VHG submitted a sworn statement in proof of loss to Ironclad, quantifying VHG's aggregate business-interruption claim at $60 million. The sworn proof of loss was prepared with the assistance of VHG's forensic accounting consultants and was accompanied by extensive supporting documentation, including historical financial data, occupancy and revenue records, profit and loss statements, and forward-looking projections of business-interruption losses for each property.
February 3, 2023: After a claims investigation lasting more than four months, Ironclad issued a formal denial of coverage. The denial letter was signed by Victor Haddon, Ironclad's Senior Vice President of Claims. In the denial letter, Ironclad relied principally on the purported $15 million named-windstorm sub-limit, asserting that VHG's recovery was capped at $15 million regardless of the actual loss amount. Ironclad further raised the flood exclusion and concurrent causation arguments as alternative bases for denial, and disputed the reasonableness of VHG's claimed period of restoration.
VHG contends that the $15 million named-windstorm sub-limit was expressly deleted during the July 2022 policy renewal. During the renewal process, Franklin Orde of Tidewater Risk Advisors negotiated directly with Ironclad's underwriting department to remove the windstorm sub-limit in exchange for an increased premium. VHG's Complaint alleges, on information and belief, that the final policy documents issued by Ironclad erroneously retained the sub-limit language due to an administrative error in Ironclad's policy-issuance process, and that the parties' actual agreement — as reflected in the binder, the broker's placement slip, and contemporaneous communications — deleted the sub-limit. This factual dispute lies at the heart of the coverage controversy and cannot be resolved on a motion to dismiss.
February 10, 2023: Pinnacle followed Ironclad's denial, issuing a coverage denial letter that adopted verbatim the reasoning set forth in Ironclad's February 3, 2023, denial letter. Pinnacle did not conduct any independent investigation of the claim, nor did Pinnacle engage its own adjuster or claims professionals. Instead, Pinnacle relied entirely on its follow-form relationship with the Ironclad primary policy and Ironclad's coverage determination. VHG contends that Pinnacle's rote adoption of Ironclad's denial, without independent analysis, was unreasonable and constitutes bad faith.
Montclair and Sovereign Re: As of the date of this filing, Montclair and Sovereign Re have not issued formal denials of coverage. Both carriers have issued reservation of rights letters, asserting that their respective excess layers would not be reached if the $15 million named-windstorm sub-limit is applied to VHG's claim. Montclair and Sovereign Re have taken the position that they need not make a coverage determination unless and until the underlying layers are exhausted. VHG contends that this position is untenable, as the full $60 million tower is implicated by VHG's losses, and that Montclair and Sovereign Re have a present obligation to participate in the resolution of the coverage dispute.
D. The Complaint
On March 1, 2023, VHG filed its Complaint in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida, bearing Case No. 2022-CA-031547. The Complaint asserts three counts:
Count I — Breach of Contract (Against All Defendants). VHG alleges that all four Defendants breached their respective insurance policies by denying, failing to pay, or unreasonably delaying payment of VHG's $60 million business-interruption claim arising from Hurricane Callista. VHG alleges the existence of valid, binding insurance contracts, VHG's full performance of its obligations under those contracts, Defendants' breach through denial or nonpayment, and resulting damages in the amount of $60 million.
Count II — Declaratory Judgment (Against All Defendants). VHG seeks a judicial declaration pursuant to Chapter 86, Florida Statutes, that the policies provide coverage for Hurricane Callista business-interruption losses without application of a $15 million named-windstorm sub-limit, that the flood exclusion does not bar recovery for wind-driven damage and business interruption caused by Hurricane Callista, and that VHG's period of restoration for each property was reasonable and covered under the policies.
Count III — Statutory Bad Faith (Against Ironclad and Pinnacle). VHG asserts claims for statutory bad faith under Florida Statute § 624.155 against Ironclad and Pinnacle. VHG alleges that Ironclad failed to conduct a good-faith investigation, relied on a disputed and deleted windstorm sub-limit to deny a meritorious claim, and denied $60 million in coverage without a reasonable basis. VHG further alleges that Pinnacle failed to conduct any independent investigation and blindly followed Ironclad's denial. VHG filed a Civil Remedy Notice as required by § 624.155(3)(a), Florida Statutes, and the statutory sixty-day cure period has expired without payment.
The Complaint seeks recovery of $60 million in business-interruption coverage, consequential damages, prejudgment interest at the applicable statutory rate, attorneys' fees and costs pursuant to Florida Statute § 627.428 and other applicable provisions, and such other relief as the Court deems just and proper.
ARGUMENT
I. THIS COURT HAS JURISDICTION OVER ALL DEFENDANTS
Defendants' motion challenges this Court's personal jurisdiction over one or more of the Defendants. As set forth below, this Court has both specific personal jurisdiction and, in several instances, general jurisdiction over each Defendant. Each Defendant purposefully availed itself of the privilege of conducting insurance business in Florida by issuing a policy covering Florida properties, collecting premiums for Florida risk coverage, and undertaking coverage obligations that are performable in the State of Florida. The exercise of personal jurisdiction over each Defendant comports with Florida's long-arm statute and the Due Process Clause of the Fourteenth Amendment to the United States Constitution.
Florida's long-arm statute, Section 48.193, Florida Statutes, provides a comprehensive framework for the exercise of personal jurisdiction over nonresident defendants. Section 48.193(1)(a) establishes specific jurisdiction over any person who, among other things, operates, conducts, engages in, or carries on a business or business venture in Florida (§ 48.193(1)(a)(1)); commits a tortious act within Florida (§ 48.193(1)(a)(2)); or breaches a contract in Florida by failing to perform acts required by the contract to be performed in Florida (§ 48.193(1)(a)(7)). Additionally, Section 48.193(2) provides for general jurisdiction over any defendant who is engaged in substantial and not isolated activity within Florida.
To satisfy due process, the exercise of specific jurisdiction requires that (1) the nonresident defendant have minimum contacts with the forum state, (2) the plaintiff's claims arise from or are related to those contacts, and (3) the exercise of jurisdiction be reasonable and not offend traditional notions of fair play and substantial justice. See Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945); Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-75 (1985); Venetian Salami Co. v. Parthenais, 554 So. 2d 499, 502 (Fla. 1989). Each Defendant readily satisfies this standard.
A. Ironclad Indemnity Corporation Is Subject to Personal Jurisdiction in Florida. Ironclad Indemnity Corporation is a Connecticut-domiciled stock insurance company with its principal office at 55 Constitution Boulevard, Hartford, Connecticut 06103 (NAIC No. 20537). Ironclad is authorized to transact insurance business in the State of Florida and is subject to the regulatory authority of the Florida Office of Insurance Regulation. Ironclad's authorization to transact insurance in Florida alone subjects it to the general jurisdiction of Florida courts. See § 48.193(2), Fla. Stat.; Wendt v. Horowitz, 822 So. 2d 1252, 1260 (Fla. 2002).
Even if the Court were to analyze jurisdiction under the more limited specific jurisdiction framework, Ironclad's contacts with Florida are more than sufficient to support the exercise of personal jurisdiction. Ironclad issued Policy No. IIC-PRP-2022-07541, a comprehensive all-risk property and business-interruption insurance policy, covering three luxury resort properties located exclusively in the State of Florida. The scheduled properties — the Verimark Grand Key Resort in Marathon, the Verimark Harborview Hotel & Conference Center in Fort Myers Beach, and the Verimark Sunset Shores in St. Pete Beach — are all situated within the territorial boundaries of Florida. Not a single insured property is located outside the State.
Ironclad collected an annual premium of $980,000 from VHG for the privilege of insuring these Florida properties against the very risks that materialized when Hurricane Callista struck. The insured peril — a Category 4 hurricane — occurred entirely within the State of Florida. The physical damage to VHG's properties occurred in Florida. The business-interruption losses resulted from the closure of Florida resort operations. The entire claim adjustment process took place in Florida: Ironclad retained Arbor Claims Services LLC, an independent adjusting firm headquartered in Tampa, Florida, at 3300 W. Cypress Street, Suite 400, Tampa, Florida 33607, to inspect the damaged properties and evaluate the losses. Arbor's lead adjuster, Denise Whitford, traveled to Marathon, Fort Myers Beach, and St. Pete Beach — all in Florida — to conduct her inspections and compile her reports. Ironclad's coverage determination directly impacted VHG, a corporation headquartered in Miami, Florida, with respect to losses sustained at Florida properties.
Further underscoring Ironclad's deep connections to Florida, Ironclad's own outside counsel in this action — the law firm of Fendowell Rourke & Stanton LLP — maintains a Tampa office at 101 E. Kennedy Boulevard, Suite 3900, Tampa, Florida 33602. The selection of Florida-based counsel reflects Ironclad's own recognition that Florida is the natural and appropriate forum for this dispute.
Under these circumstances, Ironclad purposefully availed itself of the privilege of conducting insurance activities in the State of Florida within the meaning of the long-arm statute and the Due Process Clause. Ironclad's contacts with Florida are not random, fortuitous, or attenuated; they are deliberate, sustained, and directly related to the claims asserted in VHG's Complaint. The exercise of personal jurisdiction over Ironclad comports with traditional notions of fair play and substantial justice. See Burger King Corp., 471 U.S. at 474-75; Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 631 (11th Cir. 1996); Shands Teaching Hosp. & Clinics, Inc. v. Beech St. Corp., 899 So. 2d 1222, 1228 (Fla. 1st DCA 2005).
Defendants' motion does not — and cannot — identify any unfairness or inconvenience that would result from Ironclad's defense of this action in Florida. Ironclad issued a policy covering Florida risks, collected premiums from a Florida insured, adjusted the claim through a Florida-based adjuster, and retained Florida-based defense counsel. Ironclad should not be permitted to collect nearly $1 million in annual premiums for the insurance of Florida properties and then argue that it cannot reasonably be called to account for its coverage obligations in a Florida court.
B. Pinnacle Surplus Lines Inc. Is Subject to Personal Jurisdiction in Florida. Pinnacle Surplus Lines Inc. is a Texas-domiciled surplus-lines insurer with its principal office at 200 Congress Avenue, Suite 1400, Austin, Texas 78701 (NAIC No. 38214). Pinnacle issued a follow-form excess policy, Policy No. PSL-XS1-2022-3390, providing $15 million in excess coverage above the $25 million Ironclad primary layer, for the same three Florida resort properties insured under the Ironclad primary policy.
As a surplus-lines insurer that has written coverage on Florida risks, Pinnacle is subject to Florida's surplus-lines regulatory framework, including the requirements of Part VIII of Chapter 626, Florida Statutes. Florida law imposes specific regulatory obligations on surplus-lines insurers that place coverage on Florida risks, including compliance with filing, taxation, and solvency requirements. Pinnacle's participation in the Florida surplus-lines market constitutes the transaction of insurance business in Florida within the meaning of the long-arm statute. See § 48.193(1)(a)(1), Fla. Stat.
Pinnacle collected an annual premium of $410,000 from VHG for the coverage of Florida-located properties. Pinnacle's coverage obligations under Policy No. PSL-XS1-2022-3390 are performable in Florida, as the policy requires Pinnacle to indemnify VHG for covered losses at Florida properties, and VHG's principal place of business — where any indemnification payment would be received — is in Miami, Florida. These contacts are directly related to VHG's claims, which arise from Pinnacle's denial of coverage for Hurricane Callista losses at the insured Florida properties.
Moreover, Pinnacle's denial of coverage on February 10, 2023, directly impacted VHG, a Florida-headquartered company, with respect to business-interruption losses at Florida properties. Pinnacle's follow-form adoption of Ironclad's denial, without independent investigation, constitutes an act or omission within the scope of the long-arm statute that gives rise to VHG's breach of contract and bad-faith claims. The exercise of personal jurisdiction over Pinnacle is consistent with due process for the same reasons applicable to Ironclad: Pinnacle purposefully availed itself of the Florida insurance market by writing excess coverage on Florida risks, collected premiums for that coverage, and undertook obligations that are performable in Florida. See Internet Solutions Corp. v. Marshall, 39 So. 3d 1201, 1206 (Fla. 2010).
Pinnacle cannot reasonably claim surprise or unfairness at being required to defend this action in Florida. Pinnacle voluntarily entered the Florida surplus-lines market, insured Florida properties, and collected Florida premiums. It should be held to answer for its coverage obligations in the forum where those obligations arise.
C. Montclair Assurance Company Is Subject to Personal Jurisdiction in Florida. Montclair Assurance Company is a New York-domiciled admitted carrier with its principal office at 1 Liberty Plaza, 38th Floor, New York, New York 10006 (NAIC No. 15692). Montclair issued Policy No. MAC-XS2-2022-09817, providing $10 million in excess coverage attaching at $40 million (i.e., excess of the combined Ironclad primary and Pinnacle first excess layers) for the same three Florida resort properties.
Montclair collected an annual premium of $265,000 for the coverage of Florida-located properties. Montclair's coverage obligations are performable in Florida. Montclair purposefully availed itself of the privilege of conducting insurance business in Florida by issuing a policy covering Florida properties, participating in an insurance program brokered by a Florida-based broker (Tidewater Risk Advisors LLC, Miami, Florida), and agreeing to indemnify a Florida-headquartered insured for losses at Florida properties.
Montclair participated in the claim adjustment process by reviewing the Arbor Claims Services reports and engaging in correspondence with VHG and the other carriers regarding coverage for the Hurricane Callista losses. Montclair issued its own reservation of rights letter, which was directed to VHG at its Miami, Florida, headquarters. These contacts are directly related to VHG's claims and satisfy the minimum contacts requirement for specific personal jurisdiction under both the long-arm statute and the Due Process Clause.
The exercise of jurisdiction over Montclair is reasonable and consistent with fair play and substantial justice. All of the insured properties are in Florida, the insured is headquartered in Florida, the loss event occurred in Florida, and Florida law governs the policy. Montclair will not suffer any meaningful burden from litigating in Florida, particularly given that all relevant evidence — the insured properties, the damage, the broker, the adjuster — is located in Florida. See Autonation, Inc. v. Gagne, 67 So. 3d 1107, 1112 (Fla. 4th DCA 2011).
D. Sovereign Re Ltd. Is Subject to Personal Jurisdiction in Florida. Sovereign Re Ltd. is a Bermuda-domiciled excess carrier with its principal office at 14 Front Street, Hamilton HM 11, Bermuda. Sovereign Re issued Policy No. SRL-XS3-2022-5102, providing $10 million in excess coverage attaching at $50 million for the same three Florida resort properties. Sovereign Re collected an annual premium of $185,000 for the coverage of these Florida-located properties.
Although Sovereign Re is domiciled outside the United States, this Court may properly exercise personal jurisdiction over Sovereign Re under Florida's long-arm statute. Section 48.193(1)(a)(1), Florida Statutes, extends specific jurisdiction to any person who "[o]perates, conducts, engages in, or carries on a business or business venture" in Florida or has an agent who does so. Section 48.193(1)(a)(7) extends jurisdiction to any person who "[b]reaches a contract in this state by failing to perform acts required by the contract to be performed in this state."
Sovereign Re purposefully directed its activities toward the State of Florida by issuing a policy that insures three luxury resort properties located exclusively in Florida. Sovereign Re subscribed to an insurance program that was brokered by Tidewater Risk Advisors LLC, a Florida-based insurance broker located in Miami, Florida. Sovereign Re agreed to coverage obligations that are performable in Florida — specifically, the obligation to indemnify a Florida insured for covered business-interruption losses at Florida properties upon exhaustion of the underlying layers. Sovereign Re collected premiums of $185,000 annually for this Florida risk coverage.
These contacts are sufficient to establish specific personal jurisdiction under the long-arm statute and the Due Process Clause. Sovereign Re's issuance of a policy covering Florida properties, through a Florida broker, for a Florida insured, constitutes purposeful availment of the Florida forum. Sovereign Re could reasonably anticipate being haled into a Florida court to answer for its coverage obligations related to a loss event — Hurricane Callista — that occurred entirely within the State of Florida. See Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 112 (1987) (plurality opinion); J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 882 (2011) (Kennedy, J., plurality opinion); Walden v. Fiore, 571 U.S. 277, 284 (2014).
Importantly, Sovereign Re's counsel — the law firm of Delvecchio & Kraus LLP — has appeared in this action on Sovereign Re's behalf. Sovereign Re has not contested service of process. Sovereign Re's appearance in this action and its failure to challenge service of process further support this Court's exercise of jurisdiction. Any argument that Sovereign Re lacks sufficient contacts with Florida to be subject to personal jurisdiction is belied by Sovereign Re's own voluntary decision to insure Florida properties, collect Florida premiums, and participate in the Florida insurance market.
International comity does not require a different result. As discussed more fully in Section III.D below, comity considerations do not warrant deference to a Bermuda forum where all insured properties, the insured's headquarters, the insurance broker, the independent adjuster, and the loss event are located in Florida.
E. Venue Is Proper in Miami-Dade County. Venue is proper in Miami-Dade County under Section 47.011, Florida Statutes, which provides that actions at law may be brought in the county where the defendant resides, where the cause of action accrued, or where the property in litigation is located. Additionally, Section 47.051, Florida Statutes, provides that suit against a foreign corporation doing business in Florida may be brought in any county where the corporation has an agent or transacts its customary business, or in the county where the cause of action accrued.
VHG's principal place of business and corporate headquarters are located in Miami-Dade County, at 1900 Brickell Avenue, Suite 3200, Miami, Florida 33129. VHG's corporate decisions regarding the insurance program, the submission of the claim, and the management of business-interruption losses at all three resort properties were made from its Miami headquarters. The cause of action accrued in Florida — specifically, the denial of insurance coverage for Hurricane Callista losses at Florida properties — and VHG resides in Miami-Dade County for purposes of the venue statute.
Miami-Dade County is also a convenient and appropriate venue for this action. The insurance program was placed through Tidewater Risk Advisors LLC, which is located in Miami-Dade County at 2600 S. Bayshore Drive, Suite 800, Miami, Florida 33133. Key witnesses, including VHG's corporate officers, financial personnel, and insurance procurement team, are based at VHG's Miami headquarters. Documents related to the insurance placement, the claim submission, and VHG's business-interruption losses are maintained in Miami.
Defendants have not identified any basis for challenging venue in Miami-Dade County, and their motion should be denied on this ground as well.
II. THE COMPLAINT STATES VIABLE CLAIMS FOR RELIEF
Defendants contend that VHG's Complaint fails to state claims upon which relief may be granted. This contention is without merit. Under Florida's notice-pleading standard, a complaint need only provide the defendant with fair notice of the claims asserted and the grounds upon which they rest. See Anderson v. Harborline Enterprises Hotels Corp., 202 So. 3d 846, 850 (Fla. 2016); Fla. R. Civ. P. 1.110(b). A motion to dismiss for failure to state a claim should be granted only if, accepting all well-pleaded factual allegations as true and drawing all reasonable inferences in favor of the plaintiff, it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief. See Iglesia Cristiana La Casa Del Señor, Inc. v. L.M., 783 So. 2d 353, 357 (Fla. 3d DCA 2001).
VHG's Complaint readily satisfies this standard with respect to each of the three counts asserted.
A. Count I — Breach of Contract Is Adequately Pleaded. Count I of VHG's Complaint asserts a claim for breach of contract against all four Defendants. Under Florida law, the elements of a breach of contract claim are: (1) the existence of a valid and enforceable contract; (2) a material breach of that contract; and (3) damages resulting from the breach. See Abbottott Labs., Inc. v. Gen. Elec. Capital, 765 So. 2d 737, 740 (Fla. 5th DCA 2000); Beck v. Pemberton Capital Markets, 175 F.3d 913, 914 (11th Cir. 1999) (applying Florida law).
VHG's Complaint alleges each of these elements with specificity and particularity that exceeds what is required under Florida's notice-pleading standard.
Existence of Valid Contracts. The Complaint alleges the existence of four valid, binding insurance contracts — Policy No. IIC-PRP-2022-07541 (Ironclad), Policy No. PSL-XS1-2022-3390 (Pinnacle), Policy No. MAC-XS2-2022-09817 (Montclair), and Policy No. SRL-XS3-2022-5102 (Sovereign Re) — collectively providing $60 million in all-risk property and business-interruption coverage for the policy period July 1, 2022, through July 1, 2023. The Complaint identifies each policy by number, identifies each carrier, describes the coverage limits and layering structure, and alleges the payment of aggregate annual premiums of $1,840,000.
VHG's Performance. The Complaint alleges that VHG fully performed its obligations under the policies. Specifically, VHG (a) paid all premiums when due, totaling $1,840,000 annually; (b) provided timely notice of loss to Ironclad on September 22, 2022, within four days of Hurricane Callista's landfall; (c) submitted a sworn statement in proof of loss on November 15, 2022, quantifying VHG's aggregate business-interruption claim at $60 million; and (d) cooperated fully with Arbor Claims Services LLC's inspection and adjustment of the claim, including providing access to all three insured properties and furnishing extensive financial documentation.
Defendants' Breach. The Complaint alleges that Defendants breached their respective policies by denying or failing to pay VHG's $60 million business-interruption claim. Ironclad issued a formal denial of coverage on February 3, 2023. Pinnacle followed Ironclad's denial on February 10, 2023. Montclair and Sovereign Re have reserved rights but have failed to make any coverage determination or payment, despite VHG's submission of a sworn proof of loss more than four months prior.
Damages. The Complaint alleges that VHG has sustained damages in the amount of $60 million, representing the aggregate business-interruption losses at VHG's three Florida resort properties as a result of Hurricane Callista.
Defendants' principal argument for dismissal of the breach of contract claim is that VHG's recovery is limited by the $15 million named-windstorm sub-limit in the Ironclad primary policy, and that the claim is further barred by the flood exclusion and concurrent causation doctrine. These arguments fail for a fundamental reason: they raise factual disputes that cannot be resolved on a motion to dismiss.
The Complaint specifically alleges that the $15 million named-windstorm sub-limit was deleted during the July 2022 policy renewal through negotiations between Franklin Orde of Tidewater Risk Advisors and Ironclad's underwriting department. Whether the sub-limit was in fact deleted, and whether the final policy documents accurately reflect the parties' agreement, are quintessential questions of fact that must be resolved through discovery and, ultimately, at trial. On a motion to dismiss, the Court must accept VHG's factual allegations as true. VHG alleges that the sub-limit was deleted; therefore, for purposes of this motion, the sub-limit does not apply.
Similarly, Defendants' invocation of the flood exclusion and concurrent causation doctrine raises factual questions regarding the cause of VHG's losses — specifically, the relative contributions of wind versus flood to the damage at each property. These are fact-intensive inquiries that require expert analysis and cannot be resolved on the pleadings. The Complaint alleges that Hurricane Callista's Category 4 winds caused catastrophic damage to VHG's properties, resulting in extended closures and business-interruption losses. These allegations are sufficient to state a claim for breach of contract at the pleading stage.
Defendants' argument regarding the period of restoration is similarly premature. The Complaint alleges specific closure periods for each property — 178 days for the Grand Key Resort, 135 days for the Harborview Hotel, and 73 days of full closure plus additional months of reduced capacity for Sunset Shores — and alleges that these periods were reasonable and necessary. Whether the periods of restoration claimed by VHG are in fact reasonable is a factual question for discovery and trial, not a basis for dismissal.
Under Florida's liberal notice-pleading standard, VHG's breach of contract claim is more than adequately pleaded. The motion to dismiss Count I should be denied.
B. Count II — Declaratory Judgment Is Properly Brought. Count II of VHG's Complaint seeks a declaratory judgment pursuant to Chapter 86, Florida Statutes, resolving the coverage disputes between VHG and its insurers. Specifically, VHG seeks a declaration that: (1) the policies provide coverage for Hurricane Callista business-interruption losses without application of a $15 million named-windstorm sub-limit; (2) the flood exclusion does not bar recovery for wind-driven damage and business interruption caused by Hurricane Callista; and (3) VHG's period of restoration for each property was reasonable and is covered under the policies.
Florida's Declaratory Judgment Act, Chapter 86, Florida Statutes, provides a well-established mechanism for the resolution of insurance-coverage disputes. Section 86.011, Florida Statutes, provides that "[c]ircuit courts within their respective jurisdictions shall have jurisdiction to declare rights, status, and other equitable or legal relations whether or not further relief is or could be claimed." The Florida Supreme Court has repeatedly recognized that declaratory judgment actions are an appropriate vehicle for resolving disputes between insureds and their insurers regarding the scope and application of coverage. See Higgins v. State Farm Fire & Cas. Co., 894 So. 2d 5, 10 (Fla. 2004); Allstate Ins. Co. v. Kaklamanos, 843 So. 2d 885, 890 (Fla. 2003).
A bona fide, actual, present controversy exists between VHG and its insurers. VHG contends that its $60 million business-interruption claim is fully covered under the policies. Defendants contend that the claim is subject to a $15 million windstorm sub-limit, is partially barred by the flood exclusion, and is further limited by disputes regarding the period of restoration. This controversy is not hypothetical, speculative, or contingent; it is an actual dispute regarding the scope of insurance coverage that has resulted in the denial of a $60 million claim.
Defendants argue that the declaratory judgment claim is duplicative of the breach of contract claim and should therefore be dismissed. This argument is incorrect. Florida law is clear that the existence of an adequate alternative remedy, such as an action for breach of contract, does not bar declaratory relief. See Columbia Cas. Co. v. Zimmerman, 62 So. 3d 38, 43 (Fla. 2d DCA 2011) ("The availability of another remedy does not preclude declaratory relief."). The declaratory judgment vehicle serves a distinct purpose: it allows the Court to resolve the coverage questions that underlie the breach of contract dispute and to establish the parties' rights and obligations under the policies with finality and clarity.
Moreover, the declaratory judgment action may provide broader relief than the breach of contract claim alone. For example, a declaratory judgment establishing that the windstorm sub-limit was deleted will bind all four Defendants and resolve the coverage framework for all layers of the insurance tower, including the excess layers written by Montclair and Sovereign Re. The declaratory judgment action is thus a particularly efficient mechanism for resolving the multi-party, multi-layer coverage dispute presented in this case.
The Court has discretion to entertain declaratory judgment actions, and it should exercise that discretion here. The coverage questions at issue are squarely within the Court's jurisdiction and are appropriate for declaratory resolution. The motion to dismiss Count II should be denied.
C. Count III — Bad Faith Is Adequately Pleaded Against Ironclad and Pinnacle. Count III of VHG's Complaint asserts claims for statutory bad faith under Florida Statute § 624.155 against Defendants Ironclad and Pinnacle. Section 624.155(1)(b), Florida Statutes, creates a civil cause of action against an insurer that has failed to attempt in good faith to settle claims 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. The statute provides a powerful enforcement mechanism to ensure that insurers honor their coverage obligations promptly and in good faith.
VHG's bad-faith claim against Ironclad is well-founded. The Complaint alleges that Ironclad failed to conduct a good-faith investigation of VHG's Hurricane Callista claim. Despite retaining Arbor Claims Services to adjust the claim, Ironclad issued a formal denial on February 3, 2023, after a perfunctory investigation that failed to address VHG's contention that the named-windstorm sub-limit was deleted during the July 2022 renewal. The Complaint alleges that Ironclad's reliance on the disputed windstorm sub-limit — which VHG contends was deleted through negotiations between VHG's broker and Ironclad's underwriting department — was unreasonable and demonstrates a failure to give due regard to VHG's interests. Ironclad denied a meritorious $60 million claim without a reasonable basis, in violation of its statutory obligation to act in good faith.
VHG's bad-faith claim against Pinnacle is equally well-pleaded. The Complaint alleges that Pinnacle issued its coverage denial on February 10, 2023 — just seven days after Ironclad's denial — by adopting verbatim the reasoning set forth in Ironclad's denial letter. Pinnacle did not conduct any independent investigation of VHG's claim. Pinnacle did not engage its own adjuster, review the Arbor Claims Services reports independently, or evaluate the merits of VHG's contention that the windstorm sub-limit was deleted. Instead, Pinnacle relied entirely on its follow-form relationship with the Ironclad primary policy to justify a wholesale adoption of Ironclad's coverage determination. A follow-form excess insurer does not discharge its good-faith obligations by blindly following the primary insurer's denial without independent analysis. Pinnacle's failure to conduct any independent investigation constitutes bad faith under § 624.155.
As required by Florida Statute § 624.155(3)(a), VHG filed a Civil Remedy Notice with the Department of Financial Services, providing Ironclad and Pinnacle with the requisite statutory notice of VHG's bad-faith claims and the opportunity to cure. The statutory sixty-day cure period has expired without any payment or offer of settlement from either Ironclad or Pinnacle. VHG has therefore satisfied all statutory prerequisites to the assertion of its bad-faith claims.
Defendants argue that the bad-faith claim is premature because the underlying coverage dispute between VHG and its insurers has not been resolved. This argument is contrary to established Florida law. The Florida Legislature amended § 624.155 to permit the simultaneous filing of breach of contract and bad-faith claims, and Florida courts have consistently held that an insured may assert bad-faith claims in the same action as its coverage claims. See Blanchard v. Brightmoor Indemnity Co., 575 So. 2d 1289, 1291 (Fla. 1991); QBE Ins. Corp. v. Chalfonte Condo. Apartment Ass'n, 94 So. 3d 541, 548 (Fla. 2012). The filing of a Civil Remedy Notice and the expiration of the cure period are the sole statutory prerequisites to the assertion of a bad-faith claim, and VHG has satisfied both.
The motion to dismiss Count III should be denied.
III. DEFENDANTS' REQUEST FOR A STAY IS WITHOUT MERIT
In the alternative to dismissal, Defendants request that the Court stay these proceedings. Defendants identify no cognizable basis for a stay, and their request should be denied.
A court may exercise its inherent authority to stay proceedings in certain limited circumstances, such as when a related proceeding is pending in another forum, when the parties have agreed to arbitration or another alternative dispute resolution mechanism, or when a stay would promote judicial economy and avoid duplicative litigation. See Kling v. Walgreens of Lake Cnty., Inc., 183 So. 3d 1224, 1226 (Fla. 5th DCA 2016). None of these circumstances is present here.
A. There Is No Pending Related Proceeding Warranting a Stay. Defendants have identified no pending arbitration, appraisal, or other proceeding that would justify staying this litigation. This is the only action pending between the parties regarding VHG's Hurricane Callista business-interruption claim. No parallel litigation is pending in any other state or federal court.
No appraisal clause in the Ironclad primary policy has been invoked by either party. The Ironclad primary policy contains an appraisal provision that allows either party to demand appraisal of disputed amounts, but neither VHG nor Ironclad has invoked this provision. In any event, the disputes in this case are not limited to the amount of loss — they extend to fundamental coverage questions, including whether the named-windstorm sub-limit applies, whether the flood exclusion bars recovery, and whether the period of restoration claimed by VHG is reasonable. Appraisal is not an appropriate mechanism for resolving coverage disputes, as distinguished from disputes over the amount of a covered loss. See State Farm Fire & Cas. Co. v. Licea, 685 So. 2d 1285, 1288 (Fla. 1996).
No arbitration agreement exists among the parties. None of the four insurance policies contains a mandatory arbitration clause, and neither VHG nor any Defendant has invoked arbitration. There is simply no pending alternative proceeding that would justify staying this Court's exercise of jurisdiction.
B. The Policies Do Not Contain Mandatory Forum-Selection Clauses Requiring a Different Forum. Defendants have not identified any mandatory forum-selection clause in any of the four policies that would require this dispute to be litigated in a forum other than the Florida courts. A careful review of each policy confirms the absence of any such clause.
Ironclad's primary policy (Policy No. IIC-PRP-2022-07541) does not contain a mandatory forum-selection clause. The policy is silent on choice of forum, reflecting the parties' expectation that any dispute would be resolved in the courts of the state where the insured properties are located and where the insured is headquartered — Florida.
Pinnacle's follow-form excess policy (Policy No. PSL-XS1-2022-3390) incorporates the terms, conditions, and exclusions of the underlying Ironclad primary policy unless specifically modified. Because the Ironclad primary policy contains no mandatory forum-selection clause, none exists under the Pinnacle follow-form policy.
Montclair's excess policy (Policy No. MAC-XS2-2022-09817) is entirely silent on the question of forum selection. The policy contains no provision directing disputes to any particular court or jurisdiction.
Sovereign Re's excess policy (Policy No. SRL-XS3-2022-5102) contains a jurisdiction clause, but the clause is permissive, not mandatory. A permissive jurisdiction clause merely identifies a court or courts in which the parties consent to jurisdiction; it does not require exclusive litigation in any particular forum. See Global Satellite Commc'n Co. v. Sudovia, 849 So. 2d 466, 469 (Fla. 4th DCA 2003) (distinguishing mandatory and permissive forum-selection clauses). Sovereign Re's permissive clause does not require dismissal or transfer of this action, and it does not preclude VHG from bringing suit in a Florida court that otherwise has jurisdiction.
In the absence of a mandatory forum-selection clause, Defendants have no contractual basis for requiring VHG to litigate in any forum other than this Court.
C. No Basis Exists for Abstention or Forum Non Conveniens. Defendants' suggestion that this Court should decline jurisdiction on grounds of abstention or forum non conveniens is meritless. This case has an overwhelming nexus to the State of Florida, and no alternative forum would be more convenient or appropriate.
All three of VHG's insured properties are located in Florida — in Marathon (Monroe County), Fort Myers Beach (Lee County), and St. Pete Beach (Pinellas County). VHG is headquartered in Miami, Florida (Miami-Dade County). VHG's insurance broker, Tidewater Risk Advisors LLC, is based in Miami, Florida. The independent adjuster retained by Ironclad to inspect the properties — Arbor Claims Services LLC — is headquartered in Tampa, Florida. The events giving rise to VHG's claim — Hurricane Callista's landfall and the resulting damage to VHG's properties — occurred entirely within the State of Florida. The mandatory evacuation orders were issued by Florida counties. The closures of VHG's resort properties occurred in Florida. The business-interruption losses were sustained in Florida.
Florida is the overwhelming center of gravity for this dispute. Every material event — the issuance of policies covering Florida properties, the payment of premiums, the occurrence of the insured peril, the inspection and adjustment of the claim, the denial of coverage, and the accrual of business-interruption losses — occurred in or is connected to the State of Florida. Litigating this dispute in any other forum — whether Hartford, Connecticut (Ironclad's domicile), Austin, Texas (Pinnacle's domicile), New York, New York (Montclair's domicile), or Hamilton, Bermuda (Sovereign Re's domicile) — would impose unnecessary hardship on VHG and key witnesses, including VHG's corporate officers, the broker, the adjuster, and potential fact witnesses at the three resort properties.
Moreover, Florida law governs the insurance policies and the disputes at issue in this case. The insured properties are located in Florida. The insured is headquartered in Florida. The policies were placed through a Florida broker for the coverage of Florida risks. Florida has the most significant relationship to the policies and the parties, and Florida's strong public interest in regulating insurance coverage for properties within its borders supports the exercise of jurisdiction by this Court. See Brightmoor Indemnity Co. v. Roach, 945 So. 2d 1160, 1163 (Fla. 2006).
The doctrine of forum non conveniens has no application here. That doctrine applies only when there exists an adequate alternative forum that is substantially more convenient for the parties and witnesses. See Kinney Sys., Inc. v. Continental Ins. Co., 674 So. 2d 86, 90 (Fla. 1996). No such alternative forum exists. Florida is the most convenient, most appropriate, and indeed the only logical forum for the resolution of this dispute.
D. Sovereign Re's Bermuda Domicile Does Not Warrant a Stay or Dismissal. Defendants suggest that the presence of Sovereign Re — a Bermuda-domiciled entity — as a Defendant warrants either a stay or dismissal of this action on grounds of international comity or inconvenience. This argument is without merit.
Sovereign Re voluntarily entered the Florida insur