Risk Transfer Devices Don’t Always Work

A Brief Opinion Must Be Honored

Landlords engage in risk transfer by requiring a tenant to insure the property leaving the responsibility for damages to the structure or bodily injury occurring to people on the premises. Because they don’t trust the tenant the landlord will often buy its own insurance to protect against contingent losses.

In Jedak Corporation d/b/a Razzle’s v. Seabreeze Office Associates, LLC and Neil Hunter, Case No. 5D16-3777, District Court of Appeal of The State Of Florida Fifth District (April 13, 2018) the parties disputed the obligations under a written commercial lease agreement.

Seabreeze Office Associates, LLC (“Landlord”), obtained summary judgment for damages arising from the breach of contractual provisions requiring that Appellant, Jedak Corporation d/b/a Razzle’s (“Tenant”), to indemnify and provide insurance coverage to protect Landlord from losses arising from Tenant’s occupancy of the premises. Although Tenant raises numerous issues on appeal, the Court of Appeal only needed to address one, which it conclude is dispositive of the dispute.

The Court of Appeal cited the parties to Cas. Indem. Exch. v. Penrod Bros., 632 So. 2d 1046, 1047 (Fla. 3d DCA 1993) where the landlord’s insurer fully covered a loss, the landlord was found to suffer no compensable damages arising from tenant’s breach of contract.

Because the Landlord did not incur any damages that were caused by the breach of the particular lease provisions dealing with insurance, the lower court erred in granting summary judgment in favor of Landlord and in denying summary judgment in favor of Tenant.

Accordingly, the Court of Appeal reversed and remanded the cause with directions that summary judgment be entered in favor of Tenant.


The Court of Appeal resolved the issues in three paragraphs and probably could have done it with one. Since lawyers and insurers are faced with reviewing court opinions that run dozens of pages before getting to the point Chief Justice Cohen and justices Palmer and Torpy must be commended for their brevity and succinctness. Those of us who read appellate decisions thank you all.

© 2018 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Mr. Zalma’s books available as Kindle books or paperbacks at Amazon.com can be reached at http://zalma.com/zalma-books/

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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