RLF Nazareth LLC v. York RSG International Ltd

── RLF Nazareth LLC v. York RSG International Ltd ── Court: Court of Appeals for the Third Circuit Date: June 03, 2026 Category: General U.S. COURT OF APPEALS FOR THE THIRD CIRCUIT _______________________ No. 25-2101 _______________________ RLF NAZARETH, LLC, Appellant v. YORK RSG (INTERNATIONAL) LIMITED; CERTAIN UNDERWRITERS AT LLOYDS ASCRIBING TO CONTRACT 1706400 _______________________ Appeal from the District Court, D.V.I. Chief Judge Robert A. Molloy, No. 3:19-cv-00071 __________________________ Before: KRAUSE, CHUNG, and SMITH, Circuit Judges Argued May 13, 2026 Decided June 3, 2026 __________________________ NONPRECEDENTIAL OPINION ∗ _________________________ ∗ This disposition is not an opinion of the full Court and, under I.O.P. 5.7, is not binding precedent. SMITH, Circuit Judge. Plaintiff-Appellant RLF Nazareth LLC (“RLF”) appeals from a judgment entered on a jury verdict rejecting its bad faith claim against Defendant-Appellee Certain Underwriters at Lloyds Ascribing to Contract 1706400 (“Lloyds”). On appeal, RLF argues that the District Court erred in instructing the jury on breach of contract—an element of bad faith. In RLF’s view, the issue of breach had been resolved at summary judgment.1 RLF also assigns plain error to the Court’s supposed suggestion that bad faith required proof of unpaid damages beyond the amount Lloyds had already paid pursuant to an appraisal award. We disagree. The District Court’s prior rulings did not remove the issue of breach from the trial, and the charge, read as a whole, did not mislead the jury. We therefore will affirm. I In September 2017, two major hurricanes struck St. Thomas, U.S. Virgin Islands, in rapid succession. Together, Hurricanes Irma and Maria—the fifth and third costliest hurricanes on record, respectively—caused roughly $140 billion in damage in U.S. territories alone.2 This case concerns a small part of that loss. 1 See RLF Nazareth, LLC v. York RSG (Int’l), Ltd., No. 3:19-CV-0071, 2024 WL 1305594, at *1 (D.V.I. Mar. 27, 2024). 2 Doyle Rice, 2017’s three monster hurricanes—Harvey, Irma and Maria—among five costliest ever, USA TODAY (Jan. 30, 2018), https://www.usatoday.com/story/weather/2018/01/30/2017-s-three-monster- 2  RLF owns property located at 7-2 Estate Nazareth, St. Thomas, Virgin Islands 00802 (the “Property”). The Property consists of a main building and three smaller cottages, all of which sustained damage during the hurricanes. At all relevant times, Lloyds insured the Property against certain risks, including windstorms. RLF’s policy (the “Policy”) covered “the dwelling . . . including structures attached to the dwelling.” JA665; JA688. It did not, however, cover “other structures . . . set apart from the dwelling by a clear space.” Id. The parties’ original dispute thus centered on whether the three cottages, and damage to them, fell within the covered “dwelling” or instead qualified as excluded “other structures” under the terms of the Policy. After RLF filed its claim, Lloyds retained York RSG (International), Limited (“York”) to inspect the Property. 3 In its initial inspection, York proceeded to adjust only the main building, not the cottages, and concluded that the gross adjusted loss for the Property was only $60,000. In a letter dated February 13, 2018, Lloyds informed RLF of this loss estimate, which fell below the Policy’s deductible of $162,000. RLF disagreed with the loss calculation and retained its own adjuster, hurricanes-harvey-irma-and-maria-among-five-costliest-ever/107893000