IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA
GENERAL JURISDICTION DIVISION
JOINT STIPULATION OF DISMISSAL WITH PREJUDICE
The Parties to this action — Plaintiff Verimark Hospitality Group Inc. ("VHG" or "Plaintiff") and Defendants Ironclad Indemnity Corporation ("Ironclad"), Pinnacle Surplus Lines Inc. ("Pinnacle"), Montclair Assurance Company ("Montclair"), and Sovereign Re Ltd. ("Sovereign Re") (collectively, "Defendants," and together with Plaintiff, the "Parties") — by and through their respective undersigned counsel of record, hereby stipulate and agree to the dismissal of this action with prejudice, upon the terms and for the reasons set forth below.
The Parties represent to the Court that they have reached and executed a comprehensive Settlement Agreement and Mutual Release, dated December 19, 2023 (the "Settlement Agreement"), which fully resolves all disputes, claims, counterclaims, and controversies between and among the Parties in this action. In accordance with the terms of the Settlement Agreement, the Parties now jointly request that the Court dismiss this action in its entirety, with prejudice, as to all Parties and all claims asserted or that could have been asserted herein.
This Joint Stipulation of Dismissal with Prejudice is filed pursuant to Florida Rule of Civil Procedure 1.420(a)(1)(B), which provides that an action may be dismissed by the filing of a stipulation of dismissal signed by all parties who have appeared in the action. The Parties respectfully request that the Court enter the accompanying Proposed Order of Dismissal, a copy of which is submitted herewith for the Court's convenience.
RECITALS
A. Commencement of Action. On March 1, 2023, Plaintiff Verimark Hospitality Group Inc. filed its Complaint in this action, asserting claims for breach of contract (Counts I through IV), declaratory judgment (Count V), and bad faith pursuant to Section 624.155, Florida Statutes (Counts VI through IX), arising from Defendants' alleged failure and refusal to pay business-interruption insurance coverage for losses sustained by Plaintiff's resort and hospitality properties located in Miami-Dade County, Monroe County, and Broward County, Florida, as a result of Hurricane Callista, which made landfall in the Florida Keys on September 18, 2022, as a Category 4 hurricane. Plaintiff's Complaint alleged that Defendants, as insurers and reinsurers under a layered tower of commercial property and casualty insurance policies, wrongfully denied, delayed, and underpaid Plaintiff's claims for business-interruption losses, civil-authority losses, and related extra expenses totaling in excess of Forty-Seven Million Dollars ($47,000,000.00).
B. Defendants' Responsive Pleadings. On April 15, 2023, each of the Defendants filed their respective Answers and Affirmative Defenses to the Complaint. Among other things, Defendants denied coverage and asserted various affirmative defenses, including but not limited to the applicability of windstorm sub-limits, anti-concurrent-causation provisions, late-notice defenses, failure to mitigate, and certain policy exclusions. No counterclaims were asserted by Defendants; however, Defendants reserved the right to seek declaratory relief regarding the scope and applicability of the insurance policies at issue.
C. Discovery and Motions Practice. Following the filing of responsive pleadings, the Parties engaged in extensive fact and expert discovery over a period of approximately seven months. Discovery included the exchange of tens of thousands of pages of documents, including underwriting files, claims files, loss-adjustment reports, engineering and forensic reports, financial records, and corporate communications. The Parties also took the depositions of seventeen fact witnesses and six expert witnesses, including forensic accountants, meteorological experts, and insurance-coverage experts. Expert reports were exchanged pursuant to the Court's Case Management Order entered on May 12, 2023.
At the time of the settlement, cross-motions for partial summary judgment were pending before the Court and had been fully briefed. Specifically, on November 1, 2023, Plaintiff filed its Motion for Partial Summary Judgment Re: Windstorm Sub-Limit, arguing that Defendants' reliance on a Fifteen Million Dollar ($15,000,000.00) windstorm sub-limit was inapplicable to Plaintiff's business-interruption claims as a matter of contract interpretation. On November 15, 2023, Defendants filed their Cross-Motion for Partial Summary Judgment, arguing that the windstorm sub-limit applied to cap coverage for all hurricane-related losses, including business-interruption losses. The motions were set for hearing on January 19, 2024. In addition, several discovery motions and motions in limine remained pending on the Court's docket at the time of settlement.
D. Mediation and Settlement. On November 20, 2023, the Court entered an Order referring this matter to mediation, directing the Parties to complete mediation on or before December 31, 2023. On December 4 and 5, 2023, the Parties participated in a two-day mediation session before the Honorable Richard Mendelson (Ret.) of Keystone Dispute Resolution Inc., located at 200 South Biscayne Boulevard, Suite 3100, Miami, Florida 33131. All Parties appeared at the mediation through duly authorized corporate representatives and counsel of record, and all Parties participated in the mediation in good faith.
On December 5, 2023, at the conclusion of the second day of mediation, the Parties reached an agreement in principle to settle all claims and disputes in this action. The Parties thereafter negotiated and executed the definitive Settlement Agreement and Mutual Release, which was fully executed by all Parties as of December 19, 2023. The specific financial terms and other material provisions of the Settlement Agreement are confidential and shall not be disclosed in this filing or any other public filing. The Settlement Agreement has been fully performed by all Parties as of the date of this Stipulation, or will be performed in accordance with its terms.
OPERATIVE STIPULATION PROVISIONS
NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual agreements set forth herein and in the Settlement Agreement and Mutual Release, the Parties hereby stipulate and agree as follows:
1. Dismissal of All Claims. All of Plaintiff's claims against all Defendants — including without limitation each and every count asserted in the Complaint filed on March 1, 2023 (Counts I through IX), and any and all claims, causes of action, demands, or requests for relief that were or could have been asserted by Plaintiff against any or all Defendants in this action arising from, related to, or in connection with the insurance policies at issue, including but not limited to: Ironclad Indemnity Corporation Policy No. IIC-PRP-2022-07541 (primary layer); Pinnacle Surplus Lines Inc. Policy No. PSL-XS1-2022-3390 (first excess layer); Montclair Assurance Company Policy No. MAC-XS2-2022-09817 (second excess layer); and Sovereign Re Ltd. Policy No. SRL-XS3-2022-5102 (third excess layer), and arising from, related to, or in connection with Hurricane Callista (September 18, 2022), and any and all losses, damages, or claims arising therefrom — are hereby DISMISSED WITH PREJUDICE. This dismissal operates as an adjudication on the merits as to all such claims, and Plaintiff is forever barred from reasserting any such claims against any Defendant in any forum.
2. Dismissal of All Counterclaims and Affirmative Defenses. All counterclaims, crossclaims (if any), third-party claims (if any), and affirmative defenses asserted by any Defendant in this action, including without limitation the affirmative defenses set forth in each Defendant's Answer and Affirmative Defenses filed on April 15, 2023, are hereby DISMISSED WITH PREJUDICE. To the extent any Defendant reserved the right to assert any counterclaim or affirmative claim for relief against Plaintiff in this action, such reserved rights are hereby waived and released, and all such claims are dismissed with prejudice.
3. Withdrawal of Pending Motions. All motions, applications, petitions, and requests for relief currently pending before the Court in this action are hereby deemed withdrawn, as though they had never been filed. Without limiting the generality of the foregoing, the following motions are specifically withdrawn:
(a) Plaintiff's Motion for Partial Summary Judgment Re: Windstorm Sub-Limit, filed November 1, 2023 (D.E. 87);
(b) Defendants' Cross-Motion for Partial Summary Judgment, filed November 15, 2023 (D.E. 94);
(c) Defendants' Motion to Exclude Expert Testimony of Dr. Franklin Reeves (Meteorology), filed October 18, 2023 (D.E. 82);
(d) Plaintiff's Motion to Compel Production of Reinsurance Communications, filed September 22, 2023 (D.E. 76); and
(e) Any and all other pending motions, applications, or requests for relief filed by any Party in this action.
The Parties respectfully request that the Court remove all pending motions from the Court's hearing calendar and strike any scheduled hearing dates in this matter.
4. Costs and Attorneys' Fees. Each Party shall bear its own costs, expenses, and attorneys' fees incurred in connection with this action, including but not limited to filing fees, service costs, deposition costs, expert witness fees, mediation fees, and all other litigation-related expenses, except as otherwise expressly provided in the Settlement Agreement and Mutual Release executed on December 19, 2023. No Party shall seek to recover any costs or attorneys' fees from any other Party in connection with this action, except as may be expressly provided in the Settlement Agreement. For the avoidance of doubt, the Parties agree that no Party is a "prevailing party" within the meaning of Section 627.428, Florida Statutes, or any other applicable fee-shifting statute or contractual fee-shifting provision, by virtue of this Stipulation of Dismissal or the settlement of this action.
5. Jurisdiction Retained. Notwithstanding the dismissal of this action with prejudice, the Court shall retain jurisdiction over this matter solely and exclusively for the limited purpose of enforcing the terms of the Settlement Agreement and Mutual Release executed on December 19, 2023, in the event that any dispute arises between or among the Parties regarding the interpretation, performance, or enforcement of the Settlement Agreement. The Parties agree that any motion to enforce the Settlement Agreement shall be filed in this Court under the above-captioned case number. The Court's retained jurisdiction under this paragraph shall continue until all obligations under the Settlement Agreement have been fully performed and discharged.
6. No Admission of Liability. This Joint Stipulation of Dismissal with Prejudice, and the settlement underlying it, shall not constitute, and shall not be construed or interpreted as, an admission of liability, fault, coverage, non-coverage, wrongdoing, or the validity or invalidity of any claim, defense, or legal position by any Party. The Parties have entered into the Settlement Agreement and this Stipulation solely to avoid the expense, burden, and uncertainty of continued litigation. Neither this Stipulation nor the Settlement Agreement may be offered in evidence or used in any proceeding for any purpose, except in a proceeding to enforce the terms of the Settlement Agreement.
7. Authority. Each undersigned attorney represents and warrants that he or she is duly authorized by the Party he or she represents to execute and file this Joint Stipulation of Dismissal with Prejudice on such Party's behalf, and that such Party has reviewed and approved this Stipulation prior to its execution. Each undersigned attorney further represents that each Party has consented to the dismissal of this action with prejudice upon the terms set forth herein and in the Settlement Agreement.
8. Proposed Order. The Parties respectfully request that this Court enter the Proposed Order of Dismissal with Prejudice, which is being filed simultaneously herewith as a separate document. The proposed order provides for the dismissal of this entire action with prejudice, the withdrawal of all pending motions, and the retention of jurisdiction for enforcement of the Settlement Agreement, consistent with the terms of this Stipulation.
[SIGNATURES ON FOLLOWING PAGES]
SIGNATURE PAGE TO JOINT STIPULATION OF DISMISSAL WITH PREJUDICE Case No. 2022-CA-031547
COUNSEL FOR PLAINTIFF VERIMARK HOSPITALITY GROUP INC.:
CALDERWOOD & HARKNESS LLP 333 SE 2nd Avenue, Suite 4400 Miami, Florida 33131
By: ________
Elaine Forsythe, Esq. Partner Florida Bar No. 0078412 Telephone: (305) 555-7200
Email: eforsythe@calderwoodharkness.com
By: ________
Tiffany Rosenthal, Esq. Associate Florida Bar No. 1024839 Telephone: (305) 555-7215
Email: trosenthal@calderwoodharkness.com
Counsel for Plaintiff Verimark Hospitality Group Inc.
COUNSEL FOR DEFENDANTS IRONCLAD INDEMNITY CORPORATION AND PINNACLE SURPLUS LINES INC.:
FENDOWELL ROURKE & STANTON LLP 101 E. Kennedy Boulevard, Suite 3900 Tampa, Florida 33602
By: ________
Gregory Stanton, Esq. Partner Florida Bar No. 0063271 Telephone: (813) 555-4800
Email: gstanton@bracewellrourke.com
By: ________
Meredith Liang, Esq. Associate Florida Bar No. 1117503 Telephone: (813) 555-4822
Email: mliang@bracewellrourke.com
Counsel for Defendants Ironclad Indemnity Corporation and Pinnacle Surplus Lines Inc.
SIGNATURE PAGE TO JOINT STIPULATION OF DISMISSAL WITH PREJUDICE Case No. 2022-CA-031547 (continued)
COUNSEL FOR DEFENDANTS MONTCLAIR ASSURANCE COMPANY AND SOVEREIGN RE LTD.:
DELVECCHIO & KRAUS LLP 425 Park Avenue, 20th Floor New York, New York 10022
By: ________
Patricia Kraus, Esq. Partner Admitted Pro Hac Vice (Order dated April 28, 2023) Telephone: (212) 555-6100
Email: pkraus@delvecchiokraus.com
By: ________
Raymond Cho, Esq. Associate Admitted Pro Hac Vice (Order dated April 28, 2023) Telephone: (212) 555-6118
Email: rcho@delvecchiokraus.com
Counsel for Defendants Montclair Assurance Company and Sovereign Re Ltd.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on January 5, 2024, a true and correct copy of the foregoing Joint Stipulation of Dismissal with Prejudice was served via the Florida Courts E-Filing Portal, which will send an electronic notification of such filing to the following counsel of record, and/or by electronic mail to the following:
Gregory Stanton, Esq. Meredith Liang, Esq. FENDOWELL ROURKE & STANTON LLP 101 E. Kennedy Boulevard, Suite 3900 Tampa, Florida 33602 gstanton@bracewellrourke.com mliang@bracewellrourke.com
Patricia Kraus, Esq. Raymond Cho, Esq. DELVECCHIO & KRAUS LLP 425 Park Avenue, 20th Floor New York, New York 10022 pkraus@delvecchiokraus.com rcho@delvecchiokraus.com
CALDERWOOD & HARKNESS LLP
By: ________
Elaine Forsythe, Esq. Florida Bar No. 0078412 333 SE 2nd Avenue, Suite 4400 Miami, Florida 33131 Telephone: (305) 555-7200
Email: eforsythe@calderwoodharkness.com
Counsel for Plaintiff Verimark Hospitality Group Inc.
Filed: January 5, 2024 Case No. 2022-CA-031547 Circuit Court of the Eleventh Judicial Circuit of Florida, in and for Miami-Dade County General Jurisdiction Division
VERIMARK HOSPITALITY GROUP INC., a Delaware corporation,
Plaintiff,
Case No.: 2022-CA-031547
v.
Judge: Hon. Catherine Embry
IRONCLAD INDEMNITY CORPORATION, a Connecticut corporation; PINNACLE SURPLUS LINES INC., a Texas corporation; MONTCLAIR ASSURANCE COMPANY, a New York corporation; and SOVEREIGN RE LTD., a Bermuda corporation,
Defendants.