EMERALD COAST FINEST PRODUCE COMPANY, INCORPORATED, Plaintiff - Appellant
ALTERRA AMERICAN INSURANCE COMPANY; BANCORPSOUTH INSURANCE SERVICES, INCORPORATED, formerly known as Stewart Sneed Hewes Insurance, Defendants - Appellees
from the United States District Court for the Southern
District of Mississippi
REAVLEY, OWEN, and SOUTHWICK, Circuit Judges.
H. SOUTHWICK, Circuit Judge.
plaintiff leased its commercial warehouse and required the
lessee to provide full property damage insurance coverage for
the warehouse. After the warehouse sustained substantial fire
damage, the plaintiff brought this suit against the lessee,
the insurance agent, and the insurer. The plaintiff settled
with the lessee, and the district court granted summary
judgment to the insurance defendants. The plaintiff appealed.
AND PROCEDURAL BACKGROUND
January 18, 2013, Emerald Coast Finest Produce Company, Inc.
entered a lease agreement with Sunrise Fresh Produce, LLC.
Under the agreement, Sunrise would operate its produce
distribution business in Emerald's specialty refrigerated
warehouse located in Pensacola, Florida. The lease agreement
also gave Sunrise an option to purchase the warehouse for a
price "equal to fair market value, but with a cap of $4,
lease agreement required Sunrise to "provide and keep in
force fire and extended coverage property damage insurance on
the Premises equal to 100% of the replacement value of the
building." In the weeks leading up to the execution of
the lease agreement, Sunrise's Vice President and Chief
Financial Officer, Jarrod Gray, initiated the process of
obtaining the required insurance by contacting Sunrise's
insurance agent at BancorpSouth, Jeff Carter. Carter was Vice
President and Producer at BancorpSouth.
emailed Carter on January 4, 2013, and informed him that
Sunrise would be responsible for "insuring the building,
contents, etc." of a property in the coming weeks. Gray
stated "[t]he building has a value of roughly $5, 000,
000." He asked Carter to "begin the process of
determining insurance cost." Gray also stated he would
"get [Carter] the other information (i.e. contents
value, inventory, trucks, etc.) early next week."
January 14, Carter asked Gray for information about the
building, including the square footage, distance from the
beach, and year the building was built. Another Sunrise
employee, Michael O'Brien, provided that information. In
an email to Gray and O'Brien later that day, Carter
stated, "We can always adjust later but using $5, 000,
000 on main building (125, 000 SF). How much on 8, 000 shop?
($300, 000?) How much in Contents / Stock for Main Building?
Contents for Shop?" O'Brien responded, "Sounds
good on buildings, " and Gray responded, "$300, 000
is fine on shop. Contents in main building would be roughly
$350, 000 including inventory. Contents of [shop] would be
roughly $25, 000."
added the warehouse insurance policy to Sunrise's
existing property damage insurance policy with Alterra
America Insurance Co. The policy limits were as described in the
emails, including a $5, 000, 000 limit on the warehouse. An
endorsement added Emerald to the policy as
"mortgagee." After the policy was issued, Emerald
received a certificate of insurance that listed Sunrise as
the insured, Emerald as an additional interest, and described
the policy limits. Emerald disputes whether it ever received
a copy of the insurance policy, but it does not dispute that
it received a copy of the certificate of insurance. There is
no indication that any party ever expressed concern about the
amount of coverage placed on the warehouse.
April 26, 2013, three months after the parties entered into
the lease agreement, a fire broke out in the warehouse and
substantially damaged the building. Emerald believed the fire
was caused by Sunrise's improper installation of two
48-volt forklift chargers in the warehouse. After the fire,
Alterra hired a company that determined the replacement cost
of the warehouse was $15, 258, 019, far exceeding the $5,
000, 000 in coverage. Another report concluded that repairs
would cost $10, 037, 411. Emerald received the extent of the
$5, 000, 000 policy limit. Emerald claims the defendants
should have placed $15, 000, 000 in coverage, though, and
calculates its damages as the difference between the $5, 000,
000 policy and the $15, 258, 019 replacement-cost figure.
filed the current complaint against Sunrise, BancorpSouth,
and Alterra on October 15, 2014, in the United States
District Court for the Southern District of Mississippi.
Emerald argued Sunrise breached its obligations under the
lease agreement and was negligent in various respects.
Emerald and Sunrise have settled that part of the suit.
claimed BancorpSouth was negligent for failing to determine
the actual replacement-cost value of the warehouse before
placing insurance coverage with Alterra. Emerald asserted
another negligence claim against BancorpSouth for alleged
failure to procure the requested 100-percent replacement-cost
insurance coverage. Finally, Emerald asserted a negligence
claim against Alterra for failing to determine the actual
replacement cost of the warehouse and, in the alternative,
for respondeat superior liability for the negligence of
filed a motion for summary judgment on April 24, 2015.
Alterra did the same a month later. Emerald responded with,
among other motions, a motion for partial summary judgment in
which Emerald argued that the district court should apply
Florida law to its claims. The district court denied that
motion without prejudice due to insufficient briefing. It
noted that Emerald's motion contained two pages ...