In Brown v. Universal Property & Casualty Insurance Company, Universal obtained a defense verdict at trial on another Mark Nation cast iron pipe case.
During the claim, Universal issued payment to Ms. Brown on an actual cash value basis. Universal’s payment did not include any amount for overhead and profit. Plaintiff filed a lawsuit claiming Universal breached the policy of insurance and owed her additional money, including money for overhead and profit.
During the trial, plaintiff moved for directed verdict on the issue of overhead and profit. After hearing argument on the motion for directed verdict, the trial court reserved ruling on the motion, and allowed the parties to argue the issue of overhead and profit to the jury. The jury did not find Universal breached the policy and awarded plaintiff nothing.
After the trial, plaintiff moved for directed verdict in accordance with its prior motion for directed verdict and for a new trial. Plaintiff argued that the trial court erred when it did not grant directed verdict to plaintiff as it related to overhead and profit.
Kimberly A. Salmon prepared the response to plaintiff’s renewed motion. Mrs. Salmon argued that plaintiff is only entitled to the actual cash value of the loss, which does not include overhead and profit. Since the policy provides for replacement cost only when necessary repairs are made and expenses are incurred, plaintiff was not entitled to overhead and profit since she did not make any repairs.
Joseph A. Matera appeared for the hearing on behalf of Universal and argued that the Trinidad decision, which was heavily relied on by the plaintiff, was superseded by statute. In Trinidad, the Supreme Court of Florida held that insureds were entitled to overhead and profit where the insured is reasonably likely to need a general contractor for the repairs. However, the Trinidad decision was based both on a statute and policy of insurance that required the insurer to pay replacement cost value regardless as to whether repairs had been completed. The statute and policy at issue in the Brown case provided payments for replacement cost only when the repairs were made and expenses were incurred.
After Mrs. Salmon and Mr. Matera submitted a supplemental brief on the matter and the parties submitted proposed orders to the Court, on August 29, 2025, the trial court denied Plaintiff’s Motion for Directed Verdict in Accordance with Prior Motion for Directed Verdict and Motion for New Trial. The Order, which can be accessed here, reflects that overhead and profit is not a direct physical loss to property but rather a replacement cost.
Congratulations to Universal and we hope everyone else can avoid paying the twenty percent that was never incurred!