The Broward School Board is trying to find a way to recover some of the $26 million it paid out to victims of the 2018 mass shooting in Parkland.
The district has filed a lawsuit in Broward Circuit Court, seeking $17 million for breach of contract from the underwriters of Lloyd’s of London, the district’s provider of general liability insurance.
The lawsuit, filed in Broward Circuit Court in November, alleges the insurer provided bad legal advice related to the district’s liability after the mass shooting at Marjory Stoneman Douglas High in Parkland. The company then “wrongly abandoned” the district, the suit states. The district alleges the insurer’s actions forced it to agree to settle the case in December 2021 for $26.3 million rather than continue to fight.
The district was sued by 17 families of students and staff who died, 17 students and staff who were injured, and 18 students who suffered trauma. The settlements ranged from $22,800 for those with no physical injuries to $1 million for those whose family member died.
The lawsuit centers on whether the mass shooting should have been counted as one incident or a separate incident for each of the 52 victims and family members who sued the school district.
The underwriters for Lloyds of London concluded it was one incident, subject to the policy’s liability cap of $700,000, according to the lawsuit.
But the district argued that, based on Florida Supreme Court precedent, each gunshot injuring a victim counted as a separate occurrence. Therefore, the tragedy should be counted as 52 separate lawsuits, each subject to the $700,000 liability cap, the district argues.
The state Supreme Court ruled in Koikos v. Travelers Insurance Co. in 2003 that each of two separate gunshots fired at a restaurant “constitutes a separate occurrence,” the district’s lawsuit states.
“A main reason the Board settled at that stage of the case was because Underwriters misinformed it regarding the number of occurrences and wrongfully denied coverage beyond a single policy limit, notwithstanding the Florida Supreme Court’s controlling decision in Koikos,” the lawsuit states.
A spokesman for Lloyd’s of London told the South Florida Sun Sentinel, “Lloyd’s isn’t at liberty to discuss individual policies or policyholders, nor can it comment on matters in litigation.” No responses have been filed in court papers either.
In recent months, the district has been aggressively searching for new sources of revenue, as it faces at least $80 million in cuts due to declining enrollment.
But it’s unclear why the school district is filing this lawsuit four years after agreeing to pay a $26 million settlement with Parkland families. A district spokesperson did not respond to requests for comment.
The school district paid the Lloyd’s underwriters an annual premium of $695,000, the lawsuit said.
Under the district’s coverage, the district would pay the first $300,000 for each occurrence, and the insurer would pay up to $700,000.
In most cases, state law limits a school district’s total liability to $200,000 per individual and $300,000 per incident for most negligence cases. Plaintiffs may try to get around that by filing a lawsuit in federal court or getting a claims bill filed in the Legislature.
A few weeks after the Feb. 14, 2018, shooting, victims and their families received a letter from Johns Eastern, which administers the district’s Lloyds of London policy, stating the $300,000 cap.
“We were so appalled and taken aback by the (adjuster’s) ridiculous quote,” Todd Michael, a lawyer who represented families of two victims, told the Sun Sentinel in April 2018.
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School district spokeswoman Nadine Drew said at the time, “The School District is not attempting to limit damages, but it is simply stating the law of the State of Florida that has been put in place by the Legislature.”
Some Parkland families filed a challenge to the cap that went to the state Supreme Court.
In June 2019, Lyman Reynolds, a lawyer for the insurer, offered advice to Debbie Klauber, an outside lawyer for the district, on what to include in a brief for the Supreme Court appeal, according to an email included as an exhibit to the lawsuit.
“I would strongly argue positively and forcefully that the statute and case law clearly hold that there is a hard cap of $300,000.00 for all claims arising out of the single incident/event — not a ‘suggestion,’” Reynolds wrote in the email included in the lawsuit. “Finally, I would suggest avoiding the term ‘shooting’ which may be read as implying more than one occurrence in favor of the term ‘mass casualty event,’ which should be read for what it is, which is one occurrence.”
The Supreme Court upheld the $300,000 cap in 2020, ruling against Parkland families.
But that didn’t resolve the issue, the lawsuit states, since “the underlying plaintiffs were disincentivized to settle for $300,000 because the Florida legislature had the power to enact legislation to increase the liability cap in special circumstances such as the Parkland school shootings,” the suit states.
In November 2020, the insurer paid the district $700,000 and then closed the case in January 2021, months before the lawsuit was settled, the complaint states.
As the district was in final settlement negotiations in August 2021, Klauber emailed an agent for the insurer. Her email, included as an exhibit in the lawsuit, asks, “Can you, or someone, provide confirmation or clarification that there is a SINGLE LIMIT that would apply to this case for the School Board and any other assureds, as we’ve represented to the Court?”
A representative for the insurer responded that a single limit applies, the suit states. “No analysis whatsoever was provided, despite the Florida Supreme Court’s controlling decision in Koikos,” the lawsuit states.
Two months later, in November 2021, the Parkland plaintiffs amended their complaint as a civil-rights lawsuit to file it in federal court, where the $300,000 limit doesn’t apply. The district settled the cases for $26.3 million in December 2021.
The district faced “mounting litigation costs, the possibility of having to pay the plaintiffs’ attorneys’ fees (which could end up being in the millions), and, potentially, punitive damages,” the lawsuit states. “The School Board feared that its worst-case total exposure could reach $100 million.”
The lawsuit doesn’t detail the unexpected way the School Board ultimately reached a settlement with the families, in which the case was treated as a civil-rights case and sent to federal court to get around the $300,000 cap, which was outlined in an attorney-client session minutes obtained by the South Florida Sun Sentinel in 2022.
Board members knew the families would not settle for $300,000, and they were concerned if the state Legislature got involved, the district’s expense could be much greater, according to the minutes.
“It’s the quickest way to the pathway to get money and that’s why I can be OK with it,” then-School Board member Rosalind Osgood, who is now a state senator, said during a 2021 attorney-client session. “It’s a technique to allow us to close this.”
The district would have received $15.6 million to help cover the lawsuit had the Lloyds underwriters plan treated each case as a separate incident, the new lawsuit states. The district is also seeking attorneys’ fees, interest and other costs, bringing the total demand up to $17.4 million.
One challenge the district may face is the Supreme Court’s 2020 decision to uphold the $300,000 per incident liability cap, Bob Jarvis, a law professor at Nova Southeastern University in Davie who specializes in constitutional law, told the Sun Sentinel.
In that case, the Supreme Court upheld that ‘”the mass shooting committed by (the shooter) is a single ‘incident or occurrence’ … and the cumulative liability for all claims of injury resulting from the incident may not exceed the aggregate cap … set forth in the statute.”
“Of course, an insurance policy is a private contract, whereas the Florida Constitution’s sovereign immunity provision represents the public policy of the state and is designed to protect the public fisc,” Jarvis said. “As such, the analogy is not perfect.
“But if I had to bet, I would bet that the Florida Supreme Court would apply (the 2020 ruling) to this case, reasoning that there is no reason to create a different rule absent any contrary policy language, and rule against the District,” Jarvis said.