Tiara Condominium Association v. Marsh & McLennan Companies, Inc.

Tiara Condominium Association (Tiara) (plaintiff) hired Marsh & McLennan Company (Marsh) (defendant) to serve as Tiara’s insurance broker. Marsh obtained storm insurance for Tiara from Citizens Property Insurance Corporation (Citizens) for a policy with a maximum loss liability of $50 million. In September 2004, Tiara’s condominium sustained substantial damage from two hurricanes. Marsh assured Tiara that the $50 million liability limit on Tiara’s insurance policy was a per-occurrence limit. Consequently, because the damage was from two different storms, Tiara would be entitled to $100 million in recovery on the insurance policy. Tiara relied on this representation from Marsh and spent over $100 million to remediate the hurricane damage, expecting to recover $100 million from Citizens. When Tiara sought payment, Citizens informed Tiara that the $50 million liability limit was a limit for aggregate loss rather than per occurrence. Tiara sued March for breach of contract, negligent misrepresentation, breach of the implied covenant of good faith and fair dealing, negligence, and breach of fiduciary duty. The trial court granted Marsh’s motion for summary judgment on all claims. Tiara appealed to the appeals court, which affirmed the summary judgment ruling for all of the claims except for the negligence and breach of fiduciary duty claims. Tiara maintained that Marsh had failed to advise Tiara of its complete insurance needs and that Tiara was underinsured. Tiara argued that these failures constituted negligence and breach of Marsh’s fiduciary duty to Tiara. In Florida, tort claims involving professional services are not barred under the economic-loss rule. The appeals court certified a question of law to the Florida Supreme Court, asking whether, under Florida law, the economic-loss rule bars an insured party from seeking damages under a tort claim from an insurance broker stemming from a contractual relationship between the insured party and the insurance broker. The certified question made the answer to this question contingent on whether an insurance broker’s services are considered professional services under Florida law, assuming that if the insurance broker’s services are professional, then the economic-loss rule would not bar such a lawsuit.