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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
REGENT AEROSPACE CORPORATION,
Plaintiff,
vs. AFFILIATED FM INSURANCE COMPANY,
Defendant.
___________________________________/ CASE NO.: 1:21-cv-23629-JLK
DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
Defendant Affiliated FM Insuran ce Company, pursuant to Rule 56 of the Federal Rules of
Civil Procedure and Local Rule 56.1, moves for summary j udgment, and states:
I. SUMMARY .
Affiliated FM is entitled to su mmary judgment for two reasons. First, the damages Regent
seeks are not recoverable under the insurance policy as a matte r of law. Second, Regent should be
precluded from presenting evidence of the damages it seeks beca use their purported damages were
either inadequately disclosed in fatally deficient reports by e xperts who were withdrawn or failed
to appear for their depositions, or entirely concealed by Regen t until a week before the discovery
deadline.
II. AFFILIATED FM IS ENTITLED TO SUMMARY JUDGMEN T ON THE DAMAGES REFERENCED
BY REGENT ’S JULY 15, 2022 EXPERT REPORTS , TO WHICH REGENT DEFERRED IN ITS
INTERROGATORY ANSWERS .
A. By its June 2022 answers to interrogat ories, Regent limited itself to the
damages stated in its July 15, 2022 expert reports.
Regent’s June 2022 answers to int errogatories regarding all asp ects of the damages it
claims in this lawsuit, including the amounts, nature, elements , method of calculation, and
documents supporting the damages, defer to its e xperts and expe rt reports. (Statem ent of Material Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 1 of 20
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 Facts (“SMF”) ¶ 27.)1 On the July 15, 2022 deadline for it to provide expert disclos ures, including
reports as required by Rule 26(a)(2) ( see D.E. 19), Regent disclosed three experts: Bruce Smith
for business interruption and extr a expense, Dennis James for c ode upgrades, and David Abreu for
business personal property. (SMF ¶ 28.) On March 20, 2023, eigh t months later and just a week
before the March 29, 2023 discovery deadline, Regent withdrew Mr. Smith. (SMF ¶ 34.)
Mr. James and Mr. Abreu’s reports were grossly deficient, and b oth failed to appear at their
respective scheduled depositions.2 Regent never supplemented or c orrected its June 2022 answers
to interrogatories or its expert disclosures. Discovery closed on March 29, 2023. (D.E. 32.) By rule, Regent is limited to the damages stated in its expert rep orts disclosed in July 2022. Fed. R.
Civ. P. 26(e), 37(c). But the damages referenced in Regent’s ex pert disclosures are not recoverable
under the insurance policy.
B. Because Regent never supplemente d or corrected its answers to
interrogatories or its expert dis closures, it cannot supply “evidence on a
motion, at a hearing, or at a trial” of any damages other than what it
disclosed in its July 15, 2022 expert reports.
Regent is limited to the damages it stated in its June 2022 ans wers to interrogatories
because Regent failed to timely supplement or correct said answers. Further, because Regent’s June 2022 answers to interrogatories regarding damages defer en tirely to its experts and expert
reports, Regent was required to timely supplemented its Rule 26 (a) disclosures, interrogatory
answers, responses to document requests, and expert disclosures in order to seek any different
damages than those disclosed in its July 15, 2022 expert reports or supply evidence of damages
1 Regent’s signature page is dat ed June 20, 2022, its notice of service of its amended interrogatory
answers is dated June 17, 2022. (SMF ¶ 26.)
2Affiliated FM has separately m oved to strike bot h Mr. James and Mr. Abreu for failure to appear
for their scheduled depositions, and because their disclosed re ports fail to comply with
Rule 26(a)(2) and the Court’s s cheduling order. (D.E. 49, D.E. 50.) Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 2 of 20
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 through anyone other than the experts it disclosed. Rule 26(e)( 1) requires that “A party who has
made a disclosure under Rule 26(a)—or who has responded to an i nterrogatory, …must
supplement or correct its disclosure or response: (A) in a timely manner if the party learns that in
some material respect the disclo sure or response is incomplete or incorrect.” Fed. R.
Civ. P. 26(a)(2) . But Regent never supplemented its discovery responses or expert disclosures.3
Thus, with respect to damages, u nder Rule 37, Regent cannot use any “information or
witness” other than the experts and expert reports it disclosed on July 15, 2022, “to supply evidence
on a motion, at a hearing, or at a trial.” Fed. R. Civ. P. 37(c). As this Court has held, “[c]ompliance
with Rule 26 is not a casual requirement” with respect to exper t disclosures. Cordell Consultant,
Inc. v. Abbott , No. 11-80416-CIV, 2015 WL 11539506, at *3 (S.D. Fla. July 6, 2015) (citations
omitted). “When a party fails to comply with Rule 26, the sanct ion of exclusion is automatic and
mandatory unless the sanctioned party can show that its violation was either justified or harmless.”
Companhia Energetica Potiguar v. Caterpillar Inc. , No. 14-CV-24277, 2016 WL 3102225, at *5
(S.D. Fla. June 2, 2016) (citing Fed. R. Civ. P. 37(c)(1); U.S. v. Batchelor-Robjohns ,
No. 03-201640-CIV, 2015 WL 1761429, at *2 (S.D. Fla. June 3, 20 05) (granting motion to strike
expert’s report and excluding e xpert from testifying and explai ning that “Rule 37(c)(1) requires
absolute compliance with Rule 26(a), in that it mandates that a trial court punish a party for
discovery violations in connection with Rule 26 unless the violation was harmless or substantially
justified.”)). Under Rule 37(c)(1), “[e]xclusion is ‘automatic’ if it was without substantial
justification.” Certain Underwriters at Lloyd’s of London v. Black Gold Marine, Inc. ,
3 Instead, Regent concealed, until the March 22, 2023 deposition of its Rule 30(b)(6) designee (just
a week before the end of discovery), its intent to seek damages other than those included in its
expert reports. ( See SMF ¶¶ 12, 14, 16-17, 19, 25.) As set forth in section III.A, below, Regent
concealed all costs it seeks relating to Knight Commercial, the construction company Regent
concealed for seven months after signing a contract with it on August 22, 2022. Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 3 of 20
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 No. 19-23586-CIV, 2022 WL 3550294, at *6 (S.D. Fla. Aug. 18, 20 22) (citing Fed. R.
Civ. P. 37(c) advisory committee’s note). And, as this Court ha s noted, “[c]ourts routinely strike
expert reports or exclude expert testimony which is not timely disclosed, even if the consequence
is to preclude a party’s entire claim.” U.S. v. Marder, 318 F.R.D. 186, 191 (S.D. Fla. 2016)
(quoting Warren v. Delvista Towers Condo. Ass’n, Inc., No. 13-23074-CIV, 2014 WL 3764126,
at *1 (S.D. Fla. July 30, 2014)).4
C. Affiliated FM is entitled to s ummary judgment as to the damages referenced
in Regent’s July 15, 2022 expert disclosures.5
1. Affiliated FM is entitled to summary judgment on Regent’s claim s for
business interruption and extra expense because Regent deferred
entirely to its only disclosed e xpert for those alleged damages but has
since withdrawn said expert.
Regent’s Amended Complaint alleges it suffered “business interr uption loss, and extra
expense.” (D.E. 5 ¶¶ 14, 20.) Its answers to interrogatories st ate that all requested information
4 Affiliated FM has separately moved to preclude Regent from usi ng any “information or witness
to supply evidence on a motion, at a hearing, or at a trial, in this matter” of any alleged damages
other than the expert witnesses Regent disclosed on July 15, 20 22 and the alleged damages
disclosed in their expert re ports provided that day. (D.E. 51.)
5 Summary judgment is appropriate “ if the pleadings, depositions , answers to interrogatories, and
admissions on file, together with the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a ju dgment as a matter of law.” Fed. R.
Civ. P. 56(c); see Celotex Corp. v. Catrett , 477 U.S. 317, 322 (1986). A genuine issue exists “if
the evidence is such that a reasonable jury could return a verd ict for the non-moving party.”
Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 250 (1986). Thus, the Court must conduct “the
threshold inquiry of determining whether there is the need for a trial—whether, in other words, there are any genuine factual issu es that properly can be resol ved only by a finder of fact because
they may reasonably be resolve d in favor of either party.” Id. at 250.
The party opposing summary judgme nt “must do more than simply s how that there is some
metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986). That is, once the movant has met it s burden to show absence of
material fact, the party opposi ng summary judgment must then co me forward with affidavits or
other evidence demonstrating th ere is indeed a genuine issue fo r trial. Fed. R. Civ. P. 56(c); Celotex
Corp., 477 U.S. at 323-25; Anderson, 477 U.S. at 248. To survive summary judgment, “the
nonmoving party must offer more than a mere scintilla of eviden ce for its position; indeed, the
nonmoving party must make a showi ng sufficient to permit the ju ry to reasonably find on its Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 4 of 20
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 about the damages it claims, including the amounts, nature, ele ments, method of calculation and
documents supporting its damages, would come from its experts and expert reports. (SMF ¶ 27.)
Regent then disclosed Bruce Smith as its only expert witness for business interruption and extra
expense. (SMF ¶¶ 28, 33.) Regent never supplemented its answers to interrogatories or its expert
disclosures. And discovery c losed on March 29, 2023. (D.E. 32.)
On March 20, 2023, Regent withdrew Mr. Smith (SMF ¶ 34,) so it cannot use him to supply
evidence in this matter. And because it deferred entirely to hi m only for its alleged business
interruption and extra expense damages through its interrogatory answers and expert disclosures, Regent cannot use any other “information or witness to supply evidence on a motion, at a hearing, or at a trial,” regarding any a lleged business interruption and extra expense damages. Fed. R.
Civ. P 26(e), 37(c). Regent also w ithdrew the business interrup tion damages alleged in
Mr. Smith’s report. (SMF ¶ 35.) Because Regent has the burden o f proving its alleged damages
but cannot supply any evidence of any business interruption or extra expense damages,
Affiliated FM is entitled to su mmary judgment as to Regent’s al leged business interruption and
extra expense damages.
2. Affiliated FM is entitled to summary judgment on Regent’s claim s for
code upgrades because Regent admits it has never actually incur red
them and because Regent cannot supply evidence on the issue.
Affiliated FM is entitled to s ummary judgment on Regent’s claim s for code upgrades for
two reasons. First, Regent cannot supply evidence on the issue because in its interrogatory answers
and expert disclosures, Regent deferred entirely to Dennis Jame s as its only expert regarding code
upgrade damages it seeks in this lawsuit. But Regent never disc losed a written report of his
opinions. Then, Regent abandoned him in its Rule 30(b)(6) designee’s deposition. (SMF ¶ 32.)
behalf.” Urquilla-Diaz v. Kaplan Univ. , 780 F.3d 1039, 1050 (11th Cir. 2015). Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 5 of 20
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 And then Mr. James f ailed to appear at his deposi tion. Second, the insurance polic y only provides
coverage for code upgrade costs if they are actually incurred w ithin two years of the loss, but
Regent admits it has still never incurred them even now, five and a half years after the loss.
a. Affiliated FM is entitled to sum mary judgment on Regent’s claim s for
code upgrades because Regent admits it has never actually incur red
them, so the insurance policy provides no coverage for them.
Even if Regent could supply ev idence of alleged code upgrade co sts, the insurance policy
provides no coverage for the code upgrades Regent alleges here because Regent never made any
repairs related to any alleged code upgrades. (SMF ¶ 6.) Except through the insurance policy’s
Decontamination Costs and Demolition and Increased Cost of Construction coverages, the
insurance policy excludes code upgrade costs:
Group III: This Policy excludes:…
6. Loss from enforcement of any law or ordinance:
a) Regulating the construction, re pair, replacement, use or rem oval,
including debris remova l, of any property; or
b) Requiring the demolition of any property, including the cost i n
removing its debris;
Except as provided by the Decontamination Costs and Demolition and
Increased Cost of Constructi on coverages in this Policy.
(D.E. 5-1 at 20.) And the insuran ce policy’s Decontamination Co sts and Demolition and Increased
Cost of Construction coverages could only provide coverage for code upgrade costs that Regent
has actually “incurred” (D.E. 5-1 at 24) (the “maximum liabilit y for this [Decontamination Costs
and Demolition and Increased Cost of Construction] coverage in any one occurrence will not
exceed the actual costs incurred ….”) (emphasis added), and then only if the property is “repaired,
replaced or rebuilt on the same or another site within two year s from the date or loss.” (D.E. 5-1
at 48.) The insurance policy’s valuation provision specifies that “Adjustment of the physical loss
amount(s) under this Policy will be as of the date of loss at t he place of loss… [and] “[o]n property Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 6 of 20
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 if not repaired, replaced or rebuilt on the same or another sit e within two years from the date of
loss, unless such time is extended by the Company, the actual cash value .” (D.E. 5-1 at 47-48.)6
Here, Regent admits it has not made any repairs that relate to any alleged code upgrades,
more than five and a half years after the loss (SMF ¶ 6), and Regent n ever requested nor was
granted any extension for such repair, replacement or rebuildin g. (SMF ¶ 7.) Thus, Regent is not
entitled to recover any claimed code upgrade costs. Buckley Towers Condo., Inc. v. QBE Ins.
Corp., 395 F. App’x 659, 665 (11th Cir. 2010) (“Buckley Towers is not entitled to law and
ordinance damages because it never repaired the property and never actually incurred increased damages due to the enforcement of laws or ordinances”) (citing Ceballo v. Citizens Prop. Ins.
Corp., 967 So. 2d 811, 815 (Fla. 2007) (holding that an insured was required by the insurance
company to repair property and “incur[] an additional loss in order to recover” law and ordinance
damages); Citizens Prop. Ins. Corp. v. Ceballo , 934 So. 2d 536, 538 (Fla. Dist. Ct. App. 2006)
(same); Md. Cas. Co. v. Knight , 96 F.3d 1284, 1292 (9th Cir. 1996) (obligation to pay more th an
actual cash value could not be triggered under insurance policy because repairs were not made);
6 Construction of an insurance policy, including the extent of c overage, is a question of law for the
court. Jones v. Utica Mut. Ins. Co. , 463 So. 2d 1153, 1157 (Fla. 1985); Montgomery v. Aetna Cas.
& Sur. Co. , 898 F.2d 1537, 1540 (11th Cir. 1990 ) (same) (applying Florida law); Waller v. Truck
Ins. Exch., Inc. , 900 P.2d 619 (Cal. 1995). “[I]nsurance contracts must be cons trued in accordance
with the plain language of the policy.” Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co.,
913 So. 2d 528, 532 (Fla. 2005) (citation omitted). Courts may not “rewrite contracts [or] add
meaning that is not present.” Intervest Constr. Of Jax, Inc. v. Gen. Fid. Ins. Co. , 133 So. 3d 494,
497 (Fla. 2014). “[I]f a policy provision is clear and unambiguous, it should be enforced according
to its terms whether it is a basic polic y provision or an exclusionary provision.” Taurus Holdings,
Inc. v. U.S. Fid. & Guar. Co. , 913 So. 2d 528, 532 (Fla. 2005); In-N-Out Burgers v. Zurich Am.
Ins. Co., No. 8:20-cv-010000, 2022 WL 472800, at *2 (C.D. Cal. Feb. 10, 2022) (insurance
policies should be interpreted according to the “clear and expl icit” meaning of the terms as used
in their “ordinary and popular sen se.”). California law applies in this lawsuit ( see D.E. 38 at 3-4,)
but the Court need not decide the choice of law question on thi s motion because the outcome on
the issues raised is the same unde r either California or Florid a law. See Ohio St. Troopers Ass’n,
Inc. v. Point Blank Enters., Inc. , No. 0:17-CV-62051-UU, 2018 WL 3109632, at *4 (S.D. Fla.
Apr. 5, 2018); Gevaerts v. TD Bank, NA , 56 F. Supp. 3d 1335, 1339 (S.D. Fla. 2014). Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 7 of 20
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 Renna v. Allstate Ins. Co. , Civ. A. No. 92-20261, 1993 WL 404092, at *3 (N.D. Cal. Sept. 27,
1993); Kahlig Enters., Inc. v. Affiliated FM Ins. Co. , No. SA-20-CV-01091-XR,
2023 WL 1141876, at *4 (W.D. Tex. Jan. 30, 2023) ( “Replacement c ost benefits a nd code upgrade
costs were not payable because [p]laintiff had not, to date, co mmenced repairs of the allegedly
damaged properties at issue. The [p]olicy provides that the physical loss amount will the actual
cash value (“ACV”) if the proper ties are not repaired, replaced , or rebuilt within two years from
the date of loss”). Thus, Affiliated FM is entitled to summary judgment as to any a lleged code
upgrade costs Regent may claim.
b. Affiliated FM is entitled to sum mary judgment on Regent’s claim s for
code upgrades because Regent cannot supply evidence on the issu e.
Regent’s answers to interrogatori es state that all requested in formation about the damages
it claims, including the amounts, nature, elements, method of calculation and documents
supporting its damages, would come from its experts and expert reports. (SMF ¶ 27.) Regent then
disclosed Mr. James as its only expert witness for code upgrades . (SMF ¶ 28.) But it only disc losed
for him a series of photographs it called his “preliminary phot ograph report,” that stated no dollar
amount for alleged code upgrades, (SMF ¶ 30), and a promise it never fulfilled that it would
provide his “report and/or estima te for the required code upgra des.” (SMF ¶ 31.) Regent’s
disclosure says it would disclose his “report and/or estimate” in August 2022 (SMF ¶ 30,) but it
did not do so by then, and still has not done so. (SMF ¶ 31.) A ffiliated FM has separately moved
to strike Mr. James for the inadequate disclosure and failure t o appear at his deposition. (D.E. 49.)
Regent never supplemented its answers to interrogatories or its expert disclosure for Mr. James or provided any expert disclosure for any other expert witness reg arding claimed code upgrade
damages. And discovery close d on March 29, 2023. (D.E. 32.) Als o, just one week before the end
of discovery, Regent’s Rule 30(b)(6) designe e testified the code upgrade am ounts Regent seeks do Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 8 of 20
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 not come from Mr. James. (SMF ¶ 32.) And then Mr. James failed to appear at his deposition.
(D.E. 49-7.) Thus, under Rule 37(c), as set forth in Affiliated FM’s separate motion (D.E. 49,) he
must be stricken, and Regent mus t be precluded from using any “ information or witness to supply
evidence on a motion, at a hearing, or at a trial,” of alleged code upgrade damages. Fed. R.
Civ. P 26(e), 37(c).
3. Affiliated FM is entitled to summary judgment on Regent’s claim s for
business personal property damages because the insurance policy
covers only actual cash value and Regent cannot supply evidence on
the issue.
Affiliated FM is entitled to summary judgment on Regent’s claim s for business personal
property damages for two reasons . First, the insurance policy o nly provides coverage for actual
cash value of business personal property if the business person al property is not actually repaired,
replaced, or rebuilt within two years of the loss. Importantly, Regent admits it has still never
repaired, replaced, or rebuilt any of them even now, five and a half years after the loss. And Regent
cannot establish actual cash value at trial because its expert report is limited to repair or
replacement costs. Second, Regent cannot supply evidence on the issue because in its interrogatory
answers and expert disclosures, Regent deferred entirely to Dav id Abreu as its only expert
regarding business personal property damages it seeks in this l awsuit. Mr. Abreu’s report is
inadequate and immaterial, and he failed to appear at his depos ition.
a. Affiliated FM is entitled to sum mary judgment on Regent’s claim s for
business personal property damages because Regent admits it has
never actually repaired, replaced, or rebuilt them, so the insu rance
policy provides only actual cash value for them, but Regent can not
establish the actual cash value or that Affiliated FM’s payment for
actual cash value was insufficient.
Even if Regent could supply evidence of alleged business person al property damages, the
insurance policy provides no coverage beyond actual cash value for the business personal property
damages Regent alleges here be cause Regent has not repaired, re placed, or rebuilt the business Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 9 of 20
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 personal property. (SMF ¶ 8.) The insurance policy’s valuation provision specifies that
“Adjustment of the physical loss amount(s) under this Policy wi ll be as of the date of loss at the
place of loss… [and] “[o]n prope rty if not repaired, replaced o r rebuilt on the same or another site
within two years from the date of loss, unless such time is ext ended by the Company, the actual
cash value.” (D.E. 5-1 at 47-48.) Regent ad mits it has not repaired, repl aced, or rebuilt the business
personal property it claims was damaged, more than five and a half years after the loss (SMF ¶ 8),
that it was paid an amount for actual cash value of its busines s personal property (SMF ¶ 9), and
that it never requested nor was granted any extension to do the repairs, replacement, or rebuilding.
(SMF ¶ 10.)
Regent never claimed that the am ount Affiliated FM paid for bus iness personal property
was not actually, actual cash value. Instead, the report of Reg ent’s expert, to which Regent deferred
entirely as to its alleged damages for business personal proper ty, is limited to repair or replacement
costs. (D.E. 50-3, (providing only “RCV” amounts).) But Regent is not entitled to repair or
replacement cost under the insurance policy because Regent fail ed to repair and/or replace the
business personal property within two years as required by the insurance policy.
Affiliated FM did not breach the policy by paying actual cash v alue for Regent’s business
personal property; and because it only seeks repair or replacem ent costs for its allegedly damaged
business personal property, Rege nt is not entitled to recover a ny business personal property
damages. CMR Constr. & Roofing, LLC v. Empire Indem. Ins. Co. , 843 Fed. Appx. 189, 192-93
(11th Cir. 2021) (applying Flori da law and affirming summary ju dgment in favor of insurer where
claimant sought replacement cost value, policy provided that a claim for replacement cost value
would not be paid “until the lost or damaged property is actual ly repaired or replaced” and “unless
the repairs or replacement are made as soon as reasonably possible after the loss or damage,” and Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 10 of 20
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 repairs had not been completed); Predelus v. Atain Specialty Ins. Co. , No. 21-CV-23382,
2023 WL 1331229, at *5-6 (S.D. Fla. Jan. 31, 2023) (insurer did not breach insurance policy
because coverage is only for actual cash value where repair or replacement not made, and insured
cannot establish actual cash value at trial because its expert report is limited to repair or
replacement costs); Knight , 96 F.3d at 1292 (oblig ation to pay more than actual cash val ue could
not be triggered under insurance policy because repairs were no t made); Renna , 1993 WL 404092,
at *3; Kahlig Enters. , 2023 WL 1141876, at *4 (“Replacement cost benefits… were not payable
because [p]laintiff had not, to date, commenced repairs of the allegedly damaged properties at
issue. The [p]olicy provides t hat the physical loss amount will the actual cash value (“ACV”) if
the properties are not repaire d, replaced, or rebuilt within tw o years from the date of loss”). Thus,
Affiliated FM is entitled to s ummary judgment on Regent’s alleg ed business personal property
damages claim.
b. Affiliated FM is also entitled to summary judgment on Regent’s
claims for business personal property because Regent cannot sup ply
evidence on the issue.
Regent’s answers to interrogatori es state that all requested in formation about the damages
it claims, including the amounts, nature, elements, method of calculation and documents
supporting its damages, would come from its experts and expert reports. (SMF ¶ 27.) Regent
disclosed Mr. Abreu as its only expert witness for business personal property damages. (SMF
¶ 28.) Regent disclosed for him a list of items. (Ex. 3.) For s ome there is an “RCV” dollar amount,
and as to those—in a column entitled “backups”—some name a website or a “po#,” some are blank, and some say “See Backup,” but neither the “po’s” nor ba ckup were included. Also, the list
has no opinions on condition of any item prior to Hurricane Irm a, whether the items were
“damaged as a result of Hurricane Irma,” or the “the facts or d ata considered by the witness in
forming” such opinions. Thus, his report is inadequate and imma terial. Predelus, Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 11 of 20
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 2023 WL 1331229, at *5-6 (insurer en titled to summary judgment because coverage is only for
actual cash value, and insured cannot establish actual cash val ue at trial because its expert report
is limited to repair or replacement costs).
Regent never supplemented its answers to interrogatories or expert disclosure for
Mr. Abreu or regarding business personal property damages. And discovery closed on March 29,
2023. (D.E. 32.) Mr. Abreu’s report is inadequate and immateria l, and he failed to appear at his
deposition. (D.E. 50, D.E. 50-3, D.E. 50-6.) Affiliated FM has separately moved to strike him.
(D.E. 50.) Because Regent has the burden of proving its alleged damages but cannot supply any
evidence of business personal property damages, Affiliated FM i s entitled to summary judgment
as to Regent’s alleged business personal property damages.
III. AFFILIATED FM IS ENTITLED TO SUMMARY JUDGMENT AS TO THE ALLEGED DAMAGES
THAT REGENT CONCEALED UNTIL MARCH 22, 2023.
On March 22, 2023, just a week before the discovery deadline, Regent’s Rule 30(b)(6)
designee revealed at deposition that Regent had been concealing for several months its intent to
seek damages at trial not disclosed in its answers to interrogatories or its expert disclosures,
including based on documents it had concealed since August 2022 , some of which it then produced
during the deposition. Those conc ealed alleged damages are the subject of a motion to strike.
(D.E. 51.) But even those concealed damages are not recoverable under the insurance policy as a
matter of law.
A. Affiliated FM is entitled to summary judgment on Regent’s conce aled costs
of its concealed contractor beca use actual cash value is the appropriate
measure under the policy, not repair or replacement costs.
A week before the discovery deadline, Regent’s designee announc ed Regent intends to
seek at trial to recover alleged cost amounts stated in a contr act it signed on August 22, 2022 with
Knight Commercial (“Knight”). (SMF ¶ 12.) Regent admits it concealed everything about Knight Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 12 of 20
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 for at least seven more months and the alleged Knight repair, r eplacement or rebuild costs, until
March 22, 2023 (SMF ¶ 12), despite its obligations under Rule 2 6(a) to supplement its
Rule 26(a)(1)(A) disclosures, ans wers to interrogatories, respo nses to requests for production, and
production of documents. Fed. R . Civ. P. 26(e). Regent’s concea lment is the subject of a motion
to strike. (D.E. 51.) But even ignoring Regent’s concealment, R egent admits it never made the
Knight repairs, replacement or rebuild, five and a half years af ter the date of loss . (SMF ¶ 13).
Thus, the Knight evidence does not support damages that are rec overable under the insurance
policy. Rather, for damages to property that not “repaired, rep laced or rebuilt on the same or
another site within two years fro m the date of loss,” the insurance policy provides for actual cash
value as of the date of loss not costs of repair, replacement, or rebuild. (D.E. 5-1 at 48.) Th e
insurance policy provides:
L. VALUATION
Adjustment of the physical loss amount(s) under this Policy wil l be as
of the date of loss at the place of loss, and for no more than the interest
of the Insured.
13. On property if not repaired, replaced or rebuilt on the sam e or
another site within two years from the date of loss, unless suc h
time is extended by the Company, the actual cash value.
(D.E. 5-1 at 48.) And because the Knight contract costs that Re gent concealed for at least seven
months prior to the week before the end of discovery are for current repair, replacement or rebuild,
they do not supply evidence of rec overable damages, do not supp ort any breach by Affiliated FM,
and cannot defeat summary judgment. CMR Constr. & Roofing , 843 Fed. Appx. at 192-93
(affirming summary jud gment for insurer wh ere claimant sought r eplacement cost value, which
was incorrect measure under insu rance policy because repairs ha d not been completed); Predelus,
2023 WL 1331229, at *5-6 (insurer entitled to summary judgment because coverage is only for actual cash value where repair or replacement not made, and insured cannot establish actual cash Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 13 of 20
CASE NO.: 1:21-cv-23629-JLK
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 value at trial because it disclosed no expert report for that); Porben v. Atain Specialty Ins. Co. ,
546 F. Supp. 3d 1325, 1332 (S.D. Fla. 2021) (barring introducti on of replacement costs where the
measure of recoverable damages in insurance policy was actual c ash value on the dates of loss
because the property had not been repaired or replaced); Knight , 96 F.3d at 1292 (no obligation to
pay more than actual cash value could be triggered under insura nce policy because repairs were
not made). Thus, Affiliated FM is entitled to judgment as a mat ter of law with respect to these
alleged costs, even if they had not been improperly concealed b y Regent.
B. Affiliated FM is entitled to summary judgment on Regent’s conce aled
“permit fees” because Regent has not incurred them, and actual cash value is
the appropriate measure under the insurance policy.
At the March 22, 2023 deposition, Regent announced it intends t o seek $29,000 for “Permit
Fees,” that it has not incurred, an amount Regent’s owner says is an estimate (SMF ¶ 15), the
construction company Regent had concealed for at least seven mo nths. (SMF ¶¶ 11-12.) Regent’s
concealment is the subject of a motion to strike. (D.E. 51.) It appears Regent claims those fees
would be incurred for repair, replacement or rebuild by Knight if Regent commended a repair,
replacement or rebuild. (SMF ¶¶ 13, 15.) But, just as with resp ect to the Knight current repair,
replacement or rebuild costs Reg ent concealed for seven months until March 22, 2023, the
insurance policy covers actual cash value of the property as of the date of loss. (D.E. 5-1 at 48.)
And Regent’s hearsay assertion of permit fee cost amounts does not supply evidence of
recoverable damages and ca nnot defeat summa ry judgment. CMR Constr. & Roofing , 843 Fed.
Appx. at 192-93 (affirming summar y judgment in favor of insurer where policy provided claim
for replacement cost value would not be paid “until the lost or damaged property is actually
repaired or replaced” and and re pairs had not been completed); Predelus , 2023 WL 1331229,
at *5-6 (insurer entitled to summary judgment because coverage is only for actual cash value where
repair or replacement not made, and insured cannot establish ac tual cash value at trial because it Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 14 of 20
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 disclosed no expert report for that); Porben , 546 F. Supp. 3d at 1332 (barring introduction of
replacement costs where the meas ure of recoverable damages in i nsurance policy was actual cash
value on the dates of loss because the property had not been re paired or replaced); Knight , 96 F.3d
at 1292 (no obligation to pay more than actual cash value could be triggered under insurance policy
because repairs were not made). Thus, Affiliated FM is entitled to judgment as a matter of law
with respect to these alleged costs, even if they had not been improperly concealed by Regent.
C. Affiliated FM is entitled to summary judgment on Regent’s conce aled claim
for extra expense of an alternative location that it never leas ed because those
expenses were never incurred.
The only extra expense claim Regent disclosed in its answers to interrogatories regarding
damages and the expert reports to which it deferred are the $5, 288 of storage container costs, as
discussed in section C, above. One week before the discovery deadline, Regent’s Rule 30(b)(6)
designee testified that Regent now intends to also claim at trial $254,227.50 for a one-year lease of an alternative location that it never actually leased. (SMF ¶ 17.) Regent’s concealment is the
subject of a motion to strike. (D.E. 51.) Even if Regent had no t concealed this claim for extra
expense, Affiliated FM would stil l be entitled to summary judgm ent because the insurance policy
does not cover extra expenses that Regent did not actually incur . D.E. 5-1 at 35.) (“The recoverable
Extra Expense loss is the reasonable and necessary extra expens e incurred by the Insured of the
following during the Period of Liability….”) (emphasis added). And Regent admits it did not
actually incur these expenses. (SMF ¶ 18.) Thus, Affiliated FM is still entitled to summary
judgment as to these concealed alleged costs. Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 15 of 20
CASE NO.: 1:21-cv-23629-JLK
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 D. Affiliated FM is entitled to su mmary judgment on Regent’s conce aled claim
for extra expense for storage containers because it is based on amounts in
concealed documents and exceeds th e time period stated in its d isclosed
expert’s report.
Through its June 2022 interrogatory answers and July 15, 2022 expert disclosures, Regent
deferred entirely to Bruce Smith as to extra expense damages. H is report states that Regent’s extra
expense damages were storage container costs through March 2018, which totaled $5,288 based
on his summary of concealed invoi ces. His report states that th e time period applicable to Regent’s
extra expense coverage ended on March 8, 2018:
(SMF ¶ 33.) Under the Rules, because Regent deferred entirely t o its expert report through its
interrogatory answers and expert disclosure that it never suppl emented or corrected, Regent cannot
now claim more than $5,288 for storage container costs.
But that’s exactly what Regent is trying to do. On March 20, 20 23, Regent withdrew
Mr. Smith. Then, at its March 22, 2023 deposition, Regent annou nced it was also withdrawing the
extra expenses asserted in Mr. Smith’s expert report (of $5,288 ), and, instead, intends to seek
$56,823.19 or more for storage containers. (SMF ¶ 16.) Regent’s concealment is t he subject of a
motion to strike. (D.E. 51.) Regent’s designee testified the am ounts are based on a summation of
invoice documents he says are still in Regent’s possession, but he admits Regent continues to
conceal the documents. (SMF ¶ 16.) Even if Regent had timely disclosed these damages which it belatedly seeks to recover, its testimony, unsupported by the a lleged invoices comprising the
amounts, which it continues to c onceal, is inadmissible under t he Rules of Evidence. Fed. R. Evid.
Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 16 of 20
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 1001-04, 1008; 2 McCormick On Evid. § 231 (8th ed.) (“The rule is this: in proving the content of
a writing,… where the terms of the content are material to the case, the original document must be produced unless it is shown to be unavailable for some reason o ther than the serious fault of the
proponent, or unless secondary evi dence is otherwise permitted by rule or statute.”).
E. Affiliated FM is entitled to summary judgment on Regent’s conce aled claim
for rents because that is not the measure of recoverable amount s under the
insurance policy.
At its March 22, 2023 deposition, Regent’s Rule 30(b)(6) design ee announced it intends to
seek at trial completely different business interruption damage s from those previously disclosed,
and now withdrawn. Now, Regent intends to claim rents from Sept ember 10, 2017 through at least
December 2022, for which it produced for the first time—during the deposition—an Excel
spreadsheet summation of rents. (SMF ¶ 19.) But summation of “r ents” is not a measure of
recoverable amounts under the insurance policy.
The Business Interruption Covera ge of the insurance policy prov ides coverage for “Gross
Earnings” for “the actual loss sustained by the Insured of Gros s Earnings, less all charges and
expenses that do not necessarily continue, plus all other earni ngs derived from the operations of
the business, excluding loss covered under Rental Income, durin g the Period of Liability.”
(D.E. 5-1 at 33.) The Business In terruption Coverage of the ins urance policy provides coverage
for “Gross Profits” for “the act ual loss sustained by the Insur ed of the: a) Reduction in Sales; and
the b) Increased Cost of Doing Business, Resulting from the nec essary interruption of business
during the Period of Liability.” (D.E. 5-1 at 33.) Regent admit ted its last sales from its Miami
location were in 2016, long before Hurricane Irma in September 2017. (SMF ¶ 23.) Therefore,
Regent suffered no loss covered as “Gross Profits.” The Busines s Interruption Coverage of the
insurance policy relating to Rent al Income, even if applicable, requires application of a formula
that removes “charges and expenses that do not continue,” and is limited in time to the “Period of Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 17 of 20
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 Liability.” (D.E. 5-1 at 35.) Thus , a summation of rent amounts as Regent now intends to claim is
not a measure of amounts recove rable under the insurance policy .
Also, Regent’s previously disclosed, but now withdrawn, busines s interruption expert
Mr. Smith, determined the busin ess interruption period ended on March 8, 2018—contrary to
Regent’s concealed-until-a-week-before-the-end-of-discovery, cu rrent intent to claim rents
through at least December 2022:
(SMF ¶ 33.)7 Regent’s concealment is the su bject of a motion to strike. (D. E. 51.)
And because a summation of “rents” is not a measure of loss rec overable under the
insurance policy, Regent’s testim ony of a summation of rents is irrelevant and inadmissible, and
does not preclude summary judgment. See Porben , 546 F. Supp. 3d at 1332 (barring introduction
of alleged costs where that was not the measure of recoverable damages in insurance policy). In
addition, calculation of busines s interruption damages and dete rmination of the period of liability
under the insurance policy are s ubjects for an expert witness. But Regent withdrew its business
interruption expert. And Regent’s concealment of what it would claim until a week before the end
of discovery, would defeat the purpose of the Rule 26(e) expert witness disclosure “to safeguard
against surprise.” Warren , 2014 WL 3764126, at *1 (citation omitted). But even if these concealed
7 It appears Regent withdrew Mr. Smith because his conclusion th at Regent suffered any business
interruption was incorrect, incl uding because he failed to cons ider Regent’s financial information
for the Miami location, including that its last sales at the Mi ami location were in 2016, long before
Hurricane Irma on September 10, 2017. (See SMF ¶ 23.)
Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 18 of 20
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 damages are not stricken, Affiliated FM is entitled to summary judgment, because a summation of
“rents” is not a measure of loss recoverable under the plain la nguage of the insurance policy and
law.
F. Affiliated FM is entitled to summary judgment on Regent’s conce aled claim
for alleged professional fees b ecause it is based on amounts in concealed
documents.
At its March 22, 2023 deposition, Regent’s designee announced for the first time it intends
to seek $19,818.75 for “Professional Fees,” for a business inte rruption claim preparation firm
(SMF ¶ 25), although it admitted it never presented any busines s interruption damages to
Affiliated FM as part of its Hurricane Irma claim. (SMF ¶ 20.) In addition, no such type or amounts
of alleged damages are included in any of Regent’s expert repor ts, to which Regent deferred for
all its damages. (SMF ¶ 25.) On March 20, 2022, Regent withdrew its business interruption expert.
(SMF ¶ 34.) And at deposition, Regent announced that it is not seeking business interruption
damages of the type presented in the business interruption expe rt report it had disclosed on July 15,
2022. (SMF ¶ 35.)
Regent’s designee also admitted the concealed amounts it now se eks are based on a
summary of amounts in invoices it continues to conceal. (SMF ¶ 25.). Regent’s concealment of
this information is the subject of a motion to strike. (D.E. 51 .) And Regent’s bare testimony,
unsupported by the purported invoices, is inadmissible to demonstrate these fees are recoverable under the policy. Fed. R. Evid. 1001-04, 1008; 2 McCormick On Evid. § 231. Thus, Affiliated FM is entitled to summary judgmen t on these alleged costs.
WHEREFORE Defendant Affiliated FM Insurance Company respectfull y requests this
Court grant summary judgment agai nst Plaintiff Regent Aerospace Corporation on the damages
Regent claims in this lawsuit, both with respect to the damages Regent claimed in its discovery Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 19 of 20
CASE NO.: 1:21-cv-23629-JLK
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LAPIN & LEICHTLING , LLP, 255 ALHAMBRA CIRCLE , SUITE 600, CORAL GABLES , FLORIDA 33134 (305) 569-4100 responses and Rule 26 disclosures, and the damages Regent conce aled until a week before the
discovery deadline, and such furth er relief for Defendant the Court deems just and proper.
Respectfully submitted,
LAPIN & LEICHTLING, LLP Counsel for Defendant Affilia ted FM Insurance Company
255 Alhambra Circle, Suite 600 Coral Gables, Florida 33134 Telephone No.: (305) 569-4100 By: s/ Adam B. Leichtling
ADAM B. LEICHTLING Florida Bar No. 984175 [email protected]
[email protected] Case 1:21-cv-23629-JLK Document 54 Entered on FLSD Docket 04/13/2023 Page 20 of 20