Yogursmooth, Inc. et al. vs. Covington Specialty Insurance Company et al.

Case Background

On December 6, 2017, Plaintiffs Yogursmooth Inc., d/b/a La Cantina Xpress Grill, and Maso, L.L.C., d/b/a Maso Restoration, LLC, a/a/o Yogursmooth Inc., d/b/a La Cantina Xpress Grill filed a breach of contract lawsuit against Covington Specialty Insurance Company.

The lawsuit was filed in the Florida State, Miami-Dade County, Eleventh Circuit Court. Honorable Reemberto Diaz presided over this lawsuit. [Case number: 2017-027982-CA-01]

Cause

Plaintiffs Yogursmooth Inc., d/b/a La Cantina Xpress Grill, a Florida corporation, and Maso, L.L.C., d/b/a Maso Restoration, LLC, a Florida limited liability company, a/a/o Yogursmooth Inc., d/b/a La Cantina Xpress Grill held an active insurance policy issued by Covington Specialty Insurance Company in exchange for a paid premium. The policy covered Yogursmooth’s property and business against specific losses. The insured property, located at 1881 NW 87th Avenue, Suite 194, Hialeah, Florida 33015, sat within Sedano’s Plaza Lakes on the Green shopping center. The Capin Group managed the shopping center, including Yogursmooth’s premises. Capin also served as an officer, director, employee, or agent of the Capin Group.

On May 12, 2014, the Miami-Dade Fire Rescue Department responded to an alarm at the property. Upon arrival, firefighters saw the alarm panel displayed “Waterflow-North Stairwell.” They looked through a window and saw no smoke but noticed a small amount of water on the floor. Firefighters tried to determine the water’s source but could not. Neither the fire department nor Capin Group representatives entered the property to investigate further. Capin Group never informed Yogursmooth that a water alarm had been triggered.

On or about May 13, 2014, while the policy remained active, the property sustained damage from fire, water, and plumbing failure. Yogursmooth promptly reported the loss to Covington, which assigned a claim number and an adjuster. Covington inspected the property but later issued an underpayment for the claim.

Damages

Yogursmooth, Inc., d/b/a La Cantina Xpress Grill, sought a judgment against Covington Specialty Insurance Company for damages, interest, and costs. The company also requested attorney fees under Florida law and any other relief deemed fair. Yogursmooth’s final demand was $198,000 for tenant improvements and $34,000 for contents.

Key Arguments and Proceedings

Legal Representation

  • Plaintiff(s): Yogursmooth Inc., d/b/a La Cantina Xpress Grill, a Florida corporation | Maso, L.L.C., d/b/a Maso Restoration, LLC, a Florida limited liability company, a/a/o Yogursmooth Inc., d/b/a La Cantina Xpress Grillheld
    • Counsel for Plaintiff(s): Leo Da Silva | Miguel Lara | Brian Costa
    • Experts for Plaintiff(s): Al Brizuela | Frank Inguanzo
  • Defendant(s): Covington Specialty Insurance Company | Capin Group Inc
    • Counsel for Defendant(s):  Samera Beshir | David J Maldoff | Scott Frank | Kirsten Wegel | Michelle Diverio
    • Experts for Defendant(s): Michael E. Baluyot | Clemens Peschl

Claims

Breach of Contract – Yogursmooth vs. Covington

Yogursmooth, Inc. alleged that it had a valid insurance policy with Covington Specialty Insurance Company. The company paid all required premiums and fulfilled its contractual obligations. However, Covington failed to provide the full payment owed for damages covered under the policy. Yogursmooth also complied with all post-loss requirements. As a result of Covington’s breach, the company suffered financial losses.

Negligence – Yogursmooth vs. Capin Group

Yogursmooth claimed that the Capin Group, as the property management company, had a duty to manage the shopping center responsibly and warn tenants of foreseeable risks. However, Capin Group failed to notify Yogursmooth when a water alarm sounded at the property. The following day, Yogursmooth discovered significant water damage, which could have been addressed sooner with timely notification.

Negligence – Yogursmooth vs. Jose Capin

Yogursmooth also alleged negligence against Jose Capin, who managed the shopping center. Like the Capin Group, Capin failed to notify Yogursmooth about the water alarm. The delayed response resulted in extensive property damage. Yogursmooth pursued compensation for its losses, including inventory damage, lost revenue, and reconstruction costs.

Breach of Contract – Maso vs. Covington

Maso Restoration, acting as an assignee of Yogursmooth, provided emergency water mitigation and construction services at the damaged property. Under the assignment of benefits, Maso directly billed Covington for these services. However, Covington refused to make full payment. Maso claimed it fulfilled all policy obligations and suffered financial losses due to the insurer’s breach.

Defense

Covington and Capin Group denied the allegations against them and asserted affirmative defenses. Further, Capin Group filed a counterclaim against Yogursmooth.

Yogursmooth argued that Capin Group’s claim was barred as the lease did not clearly state an intent to indemnify the Capin Group for its own negligence or wrongful actions, as required under Florida law. Therefore, the claim was barred in whole or in part.

Additionally, Yogursmooth contended that the Capin Group was not free of fault. As a result, the claim could not be fully upheld.

Expert Testimony

Plaintiffs’ expert witnesses included Al Brizuela, who testified about the cause of damage, including smoke, soot, and water effects on building elements. Frank Inguanzo assessed the extent of damages to tenant improvements, betterments, and contents.

Defendants’ expert witnesses included Michael E. Baluyot and Clemens Peschl, a damages expert.

Jury Verdict

On February 12, 2024, the jury returned a defense verdict after finding no breach of contract by Covington Specialty Insurance Company. No damages were awarded.

Court Documents:

Documents are available for purchase upon request at jurimatic@exlitem.com