Litigation over a fire that burned down a restaurant and the commercial space above it on Miami Beach's Lincoln Road has resolved after four years of fighting, with a $2.5 million settlement from a tenant to its landlord's insurer.

Firefighters rushed to 5 Napkin Burgers in the early hours of Feb. 7, 2015, to quell a blaze that started on a cooktop and quickly spread to its ventilation duct. The reason for the fire remains a mystery, but a cleaning crew had been there that night.

West Palm Beach attorneys Michael B. Stevens and Mary Grecz of Derrevere Stevens Black & Cozad represent the landlord's insurer Zurich American Insurance Co., which sued in 2016 after paying out $2.1 million for repairs.

And so began the longest and most labor-intensive case Stevens said he's ever tackled.

The biggest obstacle was overcoming the stigma often associated with subrogation — where a third party enforces the legal rights of another.

"It's different when a defense firm sees an insurer carrier as the plaintiff on the other side, rather than an individual," Stevens said. "And so, part of the struggle on my side was trying to help everybody in the case see that this is going to be treated just like any other case would."

The insurer blamed tenant Puccini LLC, its guarantor and a host of contractors who had worked on the building's duct system. That triggered an appellate detour as Puccini moved to dismiss, arguing it was an implied co-insured under the policy and therefore couldn't be sued by its insurer. When the trial court agreed, Zurich turned to the Third District Court of Appeal, which reversed that in a 2-1 decision.

The restaurant, 5 Napkin Burger, opened in June 2011, after months of work to install ventilation system over its kitchen. But an investigation revealed some of that aluminum duct was covered in "four years of burger grease," according to Stevens, who claimed the tenant denied cleaners access to parts of the duct.

"When you get a cleaning company in there and they get underneath the grill, they can spray it, they can scrub it. But really, to get all the curves of the whole system, you need to be provided access to the entire system," Stevens said. "So there was a portion of this duct that, from what we can tell, never got cleaned, ever. And the fuel source that you get from cooking high-fat-content food over a four-year period is serious. Aside from it being a health hazard, it's a massive safety hazard."

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'A candid moment'

Stevens and Grecz argued that violated the National Fire Protection Association's standards for commercial cooking, and Florida law, which says the owner of a ventilation system is responsible for upkeep — unless that obligation is transferred in writing to another party.

The main issue then became: who was responsible for maintaining and cleaning the duct?

Puccini pointed to Hoodz of S Broward and NE Miami-Dade Counties, which handled monthly maintenance for the duct system, arguing it shouldered the blame. But a deposition of Puccini's corporate representative proved otherwise, as he admitted that he didn't know of any contract that said so.

"Every once in a while you get a candid moment in a deposition, where somebody says something honest," Stevens said. "The reality was, it was their restaurant, it was their duct system, they were the ones benefiting from it, they were the ones responsible for it and he [the corporate representative] admitted it in his deposition."

The plaintiff also blamed the contractors for alleged design defects in the vent. Those claims settled confidentiality after a January mediation.

Faced with a motion for summary judgment over its alleged code violation, Puccini agreed to settle with Zurich for $2.5 million. Its attorney, Yolyvee Rivera of Hamilton Miller & Birthisel in Miami, did not immediately respond to a request for comment.

The settlement was a win for subrogation, in Stevens' eyes, particularly since insurers often get a bad rap.

"More people seem to have negative stories than positive stories that they want to share. But this is an area that's not really publicized very much that actually does good for everybody," Stevens said. "The reason why subrogation is so important for everybody as a whole is because, so often when products fail and hurt people, kill people or damage property, those that don't have the financial resources, those that have been hurt don't have the ability to go up against a major corporation to hold them accountable. But Insurance companies do."

As a result, Stevens says insurers can use litigation to trigger major improvements to product safety and liability in ways that individuals can't — and wins like this can keep premiums lower.

It was also a meaningful result for co-counsel Grecz, who became an attorney the day after the fire.

"It's definitely been a learning experience," Grecz said. "One of the unique things about this case is the number of defendants, and so that gave it its own interesting element in just keeping all of the players straight and the amount of documentation that came with that. I'm really grateful to be able to have had the experience, and to be able to have interacted with some great lawyers and see some interesting legal battles go on."

The litigation isn't over yet. As the landlord was underinsured, it also sued for out-of-pocket losses. Those claims are still pending.

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