{"id":893415,"date":"2018-01-03T12:51:57","date_gmt":"2018-01-03T19:51:57","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=893415"},"modified":"2018-01-03T12:51:57","modified_gmt":"2018-01-03T19:51:57","slug":"suit-fla-supreme-court-holds-statutory-defect-notice-suit-cgl-policy","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/suit-fla-supreme-court-holds-statutory-defect-notice-suit-cgl-policy\/","title":{"rendered":"Suit Up: Fla. Supreme Court Holds Statutory Defect Notice is a “Suit” Under CGL Policy"},"content":{"rendered":"

Katharine E. Kohm | The Dispute Resolver<\/a> | December 23, 2017<\/p>\n

Recently, the 11th Circuit\u00a0was presented with an appeal concerning a commercial general liability (“CGL”)\u00a0insurer’s duty to defend a general contractor.\u00a0 At issue was whether statutory-required notice\u00a0from an owner to the general\u00a0was a “suit” under the policy triggering the defense duty.<\/p>\n

The 11th posed\u00a0this certified question to the Florida Supreme Court:<\/p>\n

Is the notice and repair process set forth in chapter 558, Florida Statutes, a \u201csuit\u201d within the meaning of the commercial general liability policy?<\/p><\/blockquote>\n

The Court, in\u00a0Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co.<\/u>, No. SC16-1420, 2017 WL 6379535, at *1 (Fla. Dec. 14, 2017), answered yes, Chapter 558 defect notice is a suit for purposes of CGL coverage.\u00a0As such there insurer had a\u00a0duty to defend.\u00a0The holding has potential implications for insurers in\u00a0other states that subscribe to similar defect notice schemes or rights to repair.\u00a0See, e.g.,<\/u>\u00a0Cal. Civ. Code \u00a7\u00a7 895 et seq.; Colo. Rev. Stat. \u00a7 13-20-801 et seq.; Tex. Prop. Code. Ann. \u00a7\u00a7 27.001 et seq.\u00a0There are upwards of 30 states nationwide.<\/p>\n

First of all,\u00a0what is Fla. Stat. chapter 558?\u00a0 In Florida, before suit can be commenced\u00a0by any owner claiming that a construction defect exists, the owner must follow a certain notice and response procedure. Basically the owner must\u00a0give notice to\u00a0the contractor or design professional of the alleged defect.\u00a0 Then those\u00a0receiving notice\u00a0provide notice\u00a0to any lower-tier\u00a0subcontractors that may have responsibility for the defect in question and all recipients can respond to the owner.\u00a0 If the owner does not receive adequate responses,\u00a0it then can file suit. \u00a0The legislative findings specifically identified this process as\u00a0an\u00a0“alternative dispute resolution mechanism” such that the inspections involved and any findings or settlement offers made as a result of the inspections become inadmissible if there are future proceedings.<\/p>\n

Under\u00a0the CGL policy, the insurer has the “right and\u00a0duty to defend<\/span>\u00a0the insured against any ‘suit<\/span>‘ seeking those damages [of personal or property damage].” The definition of a “suit”\u00a0is a “civil proceeding in which damages\u00a0. . .\u00a0to which this insurance applies are alleged.” It also includes “an arbitration proceeding\u00a0. . .\u00a0to which the insured must submit or does submit with our consent” or\u00a0“any other alternative dispute resolution proceeding . . . to which the insured submits with our consent.”<\/p>\n

Therefore, the question was whether Fla. Stat. ch. 558 notice is a “suit.”\u00a0 The Court analogized the notice to “other alternative dispute resolution proceeding”\u00a0(especially given the legislative history)\u00a0and confirmed it was indeed a suit.\u00a0 The issue of insurer “consent” was\u00a0a hurdle that the Court did not need to cross in the decision.\u00a0 The Court observed that “whether [the insurer] consented to\u00a0[the general contractor’s]\u00a0<\/span>participation in the chapter 558 process . . .\u00a0is outside the scope of the certified question and an issue of fact disputed by the parties.”<\/p>\n","protected":false},"excerpt":{"rendered":"

Katharine E. Kohm | The Dispute Resolver | December 23, 2017 Recently, the 11th Circuit\u00a0was presented with an appeal concerning a commercial general liability (“CGL”)\u00a0insurer’s duty to defend a general contractor.\u00a0 At issue was whether statutory-required notice\u00a0from an owner to the general\u00a0was a “suit” under the policy triggering the defense duty. The 11th posed\u00a0this certified… Continue reading Suit Up: Fla. Supreme Court Holds Statutory Defect Notice is a “Suit” Under CGL Policy<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[4,30],"tags":[9895,4739,19,94],"class_list":["post-893415","post","type-post","status-publish","format-standard","hentry","category-construction-defects","category-general-liability-policy","tag-advise-consult","tag-commercial-general-liability-policy","tag-construction-defects-2","tag-florida","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nSuit Up: Fla. 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