{"id":893478,"date":"2018-01-17T14:24:15","date_gmt":"2018-01-17T21:24:15","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=893478"},"modified":"2018-01-11T14:39:35","modified_gmt":"2018-01-11T21:39:35","slug":"construction-defect-notice-repair-process-suit-florida-supreme-court-decides","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/construction-defect-notice-repair-process-suit-florida-supreme-court-decides\/","title":{"rendered":"Construction Defect Notice And Repair Process Was A \u201cSuit,\u201d Florida Supreme Court Decides"},"content":{"rendered":"

Steven A. Meyerwitz | Daily Business Review<\/a> | January 8, 2018<\/p>\n

The Florida Supreme Court, in response to a question certified by the U.S. Court of Appeals for the Eleventh Circuit, has ruled that the notice and repair process in chapter 558, Florida Statutes, which sets forth procedural requirements before a claimant may file an action for a construction defect, was a \u201csuit\u201d within the meaning of a commercial general liability\u00a0insurance policy.<\/p>\n

The Case<\/em><\/p>\n

Altman Contractors, Inc., was the general contractor for the construction of a high-rise residential condominium in Broward County, Florida, known as Sapphire Condominium.<\/p>\n

Between April 2012 and November 2012, Sapphire served Altman with several notices of claim under chapter 558, Florida Statutes, that cumulatively claimed over 800 construction defects in the Sapphire project.<\/p>\n

On or about January 14, 2013, Altman notified\u00a0its insurer, Crum & Forster Specialty Insurance Company (\u201cC&F\u201d), of Sapphire\u2019s claims and demanded defense and indemnity.<\/p>\n

C&F denied that Sapphire\u2019s notices of claim invoked its duty to defend, asserting that the notices did not constitute a \u201csuit.\u201d When C&F refused to defend Altman, it retained counsel to defend the notices of claim.<\/p>\n

On May 28, 2013, Sapphire served Altman with a supplement to its November 2012 notice, claiming 13 additional deficiencies in the Sapphire project. Sapphire demanded that Altman \u201ctake all measures necessary to correct the identified construction and\/or design defects.\u201d<\/p>\n

On August 5, 2013, C&F, though maintaining its position that Sapphire\u2019s notices of claim did not invoke its duty to defend Altman under the policy, hired counsel to defend the claims under a reservation of rights. Altman objected to C&F\u2019s selection of counsel, demanded that its original counsel be paid to continue defending, and requested reimbursement from C&F for the fees and expenses it had incurred since notifying C&F of Sapphire\u2019s notices of claim.<\/p>\n

C&F denied Altman\u2019s requests.<\/p>\n

Ultimately, Altman settled all\u00a0of Sapphire\u2019s claimed construction defects without any lawsuit being filed and without C&F\u2019s involvement.<\/p>\n

Altman asked the U.S. District Court for the Southern District of Florida to declare that C&F owed it a duty to defend and to indemnify it under the policy. The district court ruled in favor of C&F, and Altman appealed to the Eleventh Circuit.<\/p>\n

The circuit court certified the following 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\u00a0policy issued by C&F to Altman?<\/p>\n

The C&F Policy<\/em><\/p>\n

The C&F policy provided:<\/p>\n

We will pay those sums that the insured becomes legally obligated to pay as damages because of \u201cbodily injury\u201d or \u201cproperty damage\u201d to which this insurance applies. We will have the right and\u00a0duty to defend<\/em>\u00a0the insured against any \u201csuit<\/em>\u201d seeking\u00a0those damages. However, we will have no duty to defend the insured against any \u201csuit<\/em>\u201d seeking damages for \u201cbodily injury\u201d or \u201cproperty damage\u201d to which this insurance does not apply. We may, at our discretion, investigate any \u201coccurrence\u201d and settle any claim or \u201csuit\u201d that may result.<\/p><\/blockquote>\n

(Emphasis added.)<\/p>\n

The policy also provided:<\/p>\n

\u201cSuit\u201d means a civil proceeding in which damages because of \u201cbodily injury,\u201d \u201cproperty damage\u201d or \u201cpersonal and advertising injury\u201d to which this insurance applies are alleged. \u201cSuit\u201d includes:<\/p>\n

a. An arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with our consent; or<\/p>\n

b. Any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent.<\/p><\/blockquote>\n

The Chapter 558 Process<\/em><\/p>\n

Chapter 558, titled \u201cConstruction Defects,\u201d sets forth procedural requirements before a claimant may file an action for a construction defect. Specifically, a claimant must:<\/p>\n

serve written notice of claim on the contractor, subcontractor, supplier, or design professional, as applicable<\/p>\n

before the claimant may file an action for a construction defect.\u00a0Upon receipt of a chapter 558 notice of claim, the recipient:<\/p>\n

must\u00a0serve a written response to the claimant<\/p>\n

within the statutorily specified time-period, providing either an offer:<\/p>\n

to remedy the alleged construction defect at no cost to the claimant,<\/p>\n

to compromise and settle the claim by monetary payment,<\/p>\n

to compromise and settle the claim by a combination of repairs and monetary payment,<\/p>\n

a statement disputing the claim, or a statement that any monetary payment will be determined by the recipient\u2019s insurer.<\/p>\n

Once the claimant has\u00a0received a timely settlement offer,\u00a0the claimant in writing<\/p>\n

must accept or reject the offer<\/p>\n

The Florida Supreme Court\u2019s Decision<\/em><\/p>\n

The Florida Supreme Court answered the certified question in the affirmative.<\/p>\n

In its decision, the court ruled that the chapter 558 process was an \u201calternative dispute resolution proceeding\u201d within the meaning of the definition of \u201csuit\u201d because it was a \u201cstatutorily required presuit process aimed to encourage the claimant and insured to settle claims for construction defects without resorting to litigation.\u201d The court added that the legislature had explicitly described chapter 558 as \u201c[a]n effective alternative dispute resolution mechanism,\u201d intended to be beneficial for reducing construction defect litigation.<\/p>\n

The court next found that the chapter 558 process, which explicitly provided for damages, met the requirement in the policy\u2019s definition of \u201csuit\u201d that damages be claimed in the alternative dispute resolution proceeding.<\/p>\n

The court did not address whether C&F had consented to Altman\u2019s participation in the chapter 558 process, explaining that it was outside the scope of the certified question and an issue of fact disputed by the parties, but it concluded that the notice and repair process set forth in chapter 558 constituted a \u201csuit\u201d within the meaning of the commercial general liability policy issued by C&F to Altman as an \u201calternative dispute resolution proceeding\u201d to which the C&F\u2019s consent was required to invoke its duty to defend Altman.<\/p>\n

The case is\u00a0Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co.<\/em>, No. SC16-1420 (Fla. Dec. 14, 2017).\u00a0Attorneys involved include: Adam P. Handfinger and Meredith N. Reynolds of Peckar & Abramson, P.C., Miami, Florida, for Appellant. Kimberly A. Ashby of Foley & Lardner, LLP, Orlando, Florida; and Holly S. Harvey of Clyde & Co., Miami, Florida, for Appellee. Gregory D. Podolak of Saxe Doernberger & Vita, P.C., Naples, Florida, and Brian J. Clifford of Saxe Doernberger & Vita, P.C., Trumbull, Connecticut, Amicus Curiae United Policyholders. Mark A. Boyle, Molly Chafe Brockmeyer, and Alexander A. Brockmeyer of Boyle & Leonard, P.A., Fort Myers, Florida; Christine A. Gudaitis and Ashley B. Jordan of Ver Ploeg & Lumpkin, P.A., Miami, Florida, Amici Curiae Construction Association of South Florida, South Florida Associated General Contractors, Leading Builders of America, Florida Homebuilders Association, and National Association of Home Builders. W. Gray Dunlap, Jr. of W. Gray Dunlap, Jr., P.A., St. Petersburg, Florida; and Steven M. Klepper of Kramon & Graham, P.A., Baltimore, Maryland, Amici Curiae American Insurance Association, Florida Insurance Council, and Property Casualty Insurers Association of America.<\/p>\n","protected":false},"excerpt":{"rendered":"

Steven A. Meyerwitz | Daily Business Review | January 8, 2018 The Florida Supreme Court, in response to a question certified by the U.S. Court of Appeals for the Eleventh Circuit, has ruled that the notice and repair process in chapter 558, Florida Statutes, which sets forth procedural requirements before a claimant may file an… Continue reading Construction Defect Notice And Repair Process Was A \u201cSuit,\u201d Florida Supreme Court Decides<\/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],"tags":[9895,9876,94,10335],"class_list":["post-893478","post","type-post","status-publish","format-standard","hentry","category-construction-defects","tag-advise-consult","tag-chapter-558","tag-florida","tag-notice-and-repair","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nConstruction Defect Notice And Repair Process Was A \u201cSuit,\u201d Florida Supreme Court Decides - 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