{"id":893547,"date":"2018-01-31T14:21:04","date_gmt":"2018-01-31T21:21:04","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=893547"},"modified":"2018-02-02T11:25:05","modified_gmt":"2018-02-02T18:25:05","slug":"supreme-courts-latest-construction-defect-decision-impact-construction-insurance-claims","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/supreme-courts-latest-construction-defect-decision-impact-construction-insurance-claims\/","title":{"rendered":"Supreme Court\u2019s Latest Construction Defect Decision and Its Impact on Construction Insurance Claims"},"content":{"rendered":"<p>David B. Haber, Frank Soto and Brett Silverberg | <a href=\"https:\/\/www.law.com\/dailybusinessreview\/sites\/dailybusinessreview\/2018\/01\/12\/supreme-courts-latest-construction-defect-decision-and-its-impact-on-construction-insurance-claims\/\" target=\"_blank\">Daily Business Review<\/a> | January 12, 2018<\/p>\n<h4 class=\"article-description hidden-xs hidden-sm\">The issue of whether a 558 notice serves as a \u201cclaim\u201d under a commercial general liability (CGL) policy, such as the one issued by Crum &amp; Forster Specialty Ins. Co. (C&amp;F) in\u00a0<em>Altman Contractors v. Crum &amp; Forster Specialty Insurance,\u00a0<\/em>No. SC16-1420, 2017 WL 6379535 (Fla. Dec. 14, 2017), has finally been resolved and construction defect claimants can expect earlier participation from their carriers.<\/h4>\n<p>Prior to the\u00a0<em>Altman\u00a0<\/em>decision, homeowners and\/or condominium associations were frustrated during the Chapter 558 process after sending a notice of claim because insured construction parties could not get insurers to become involved in pre-suit negotiations. Such a result was antithetical to the purpose of Chapter 558\u2014which was instituted specifically to streamline the construction defect claims process and encourage early alternative dispute resolution.<\/p>\n<p>In\u00a0<em>Altman<\/em>, the following question was presented to the Florida Supreme Court: \u201cIs the notice and repair process set forth in Chapter 558, Florida Statutes, a \u2018suit\u2019 within the meaning of the CGL policy issued by the insurer, C&amp;F, to the general contractor, Altman Contractors, Inc. (Altman)?\u201d The Florida Supreme Court recently answered in the affirmative and held that the notice process set forth in Chapter 558 does indeed constitute a \u201csuit\u201d within the meaning of the CGL policy at issue\u2014which in turn means that insurance carriers can no longer sit back following receipt of a 558 notice and must instead take an active role earlier in the process.<\/p>\n<p><strong>\u2018Duty to Defend\u2019<\/strong><\/p>\n<p>The\u00a0<em>Altman<\/em>\u00a0case stems from defects in the construction of Sapphire Condominium, a high-rise residential condominium in Broward County. C&amp;F insured Altman for the Sapphire project through a policy that provided, in pertinent part, as follows: \u201c[w]e will pay those sums that the insured becomes legally obligated to pay as damages because of \u2018bodily injury\u2019 or \u2018property damage\u2019 to which this insurance applies. \u00a0We will have the right and duty to defend the insured against any \u2018suit\u2019 seeking those damages.\u201d Altman sought a declaratory judgment that C&amp;F owed it a duty to defend and indemnify as part of the Chapter 558 pre-suit process to resolve claims for construction defects, and that C&amp;F breached the liability insurance policy by refusing to initially defend Altman in the suit against Sapphire. C&amp;F denied that Sapphire\u2019s 558 notices invoked its duty to defend Altman under the policy because the notices did not constitute a \u201csuit.\u201d Notwithstanding, the Florida Supreme Court held that the Chapter 558 process is included in the policy\u2019s definition of \u201csuit\u201d as an \u201calternative dispute resolution proceeding.\u201d<\/p>\n<p>The insurance policy at issue in\u00a0<em>Altman<\/em>\u00a0is a standard commercial general liability policy and as such it is likely to have a profound impact on future Chapter 558 construction defect litigation. Accordingly, defense carriers are more likely to be engaged in construction disputes, particularly during the pre-suit stage after a Chapter 558 notice is received\u2014or at least they should in light of this decision. As such, the 558 process, unlike in many past years, is now likely to encourage the claimant and insured to attempt to settle construction defect claims prior to expending time and resources litigating those claims. Such a notion is consistent with the legislature\u2019s aim in creating Chapter 558 as an effective alternative dispute resolution mechanism, intended to curb construction defect litigation.<\/p>\n<p>In light of the foregoing, it is imperative that individual homeowners, homeowner associations and\/or condominium associations, along with their experts, prepare detailed inspection reports that set forth the various construction defects affecting their property, what resulting damage is occurring as a result of those defects, the locations of the defects throughout the property, and determine compliance with the applicable building code, plans and specifications. By virtue of more detailed reports in compliance with the requirements of Chapter 558, it seemingly becomes more likely that construction defect disputes will result in settlements at an earlier stage\u2014thereby saving the parties exorbitant amounts of money that otherwise would be expended in litigation.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>David B. Haber, Frank Soto and Brett Silverberg | Daily Business Review | January 12, 2018 The issue of whether a 558 notice serves as a \u201cclaim\u201d under a commercial general liability (CGL) policy, such as the one issued by Crum &amp; Forster Specialty Ins. Co. (C&amp;F) in\u00a0Altman Contractors v. Crum &amp; Forster Specialty Insurance,\u00a0No.&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/supreme-courts-latest-construction-defect-decision-impact-construction-insurance-claims\/\">Continue reading <span class=\"screen-reader-text\">Supreme Court\u2019s Latest Construction Defect Decision and Its Impact on Construction Insurance Claims<\/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":true,"_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":[4,30,3],"tags":[9895,9876,24,94,3],"class_list":["post-893547","post","type-post","status-publish","format-standard","hentry","category-construction-defects","category-general-liability-policy","category-insurance-claims","tag-advise-consult","tag-chapter-558","tag-construction-defect","tag-florida","tag-insurance-claims","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Supreme Court\u2019s Latest Construction Defect Decision and Its Impact on Construction Insurance Claims - Advise &amp; 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