{"id":893549,"date":"2018-01-31T14:28:36","date_gmt":"2018-01-31T21:28:36","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=893549"},"modified":"2018-01-31T14:28:36","modified_gmt":"2018-01-31T21:28:36","slug":"florida-supreme-court-confirms-558-not-civil-proceeding-allowing-contractors-design-professionals-resolve-defect-disputes-intended-legislature","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/florida-supreme-court-confirms-558-not-civil-proceeding-allowing-contractors-design-professionals-resolve-defect-disputes-intended-legislature\/","title":{"rendered":"Florida Supreme Court Confirms 558 is Not a Civil Proceeding, Allowing Contractors and Design Professionals to Resolve Defect Disputes as Intended by the Legislature"},"content":{"rendered":"

Brian A. Wolf and Joseph R. Young | Smith Currie & Hancock<\/a> | December 14, 2017<\/p>\n

Contractors and design professionals are entitled to notice of alleged defects in their work and the opportunity to fix them without intervention by insurance companies and needless litigation. Today, Florida\u2019s Supreme Court in\u00a0Altman Contractors, Inc. v. Crum & Forster Specialty Insurance Co.<\/u>, No. SC15-1420 (Dec. 14, 2017), held that the Florida Statute Chapter 558 dispute resolution process is not a civil proceeding. This means that contractors and subcontractors who receive a 558 demand are free to participate in the notice and right to cure process without notifying their insurers of non-covered claims for construction defects unless otherwise specified in their insurance policy.<\/p>\n

Chapter 558, Florida Statutes, was enacted almost 15 years ago with the express purpose of resolving construction defect claims without expensive and time-consuming litigation. Chapter 558 was originally known as the notice and right to cure statute. Unfortunately, the statute is now more commonly referred to as the \u201cconstruction defect statute.\u201d The trend has been for owners, contractors and design professionals to engage in expensive and protracted processes often lead by condo-lawyers and their engineering consultants, and on the other side, insurance companies, their lawyers and adjusters.<\/p>\n

In\u00a0Altman Contractors, Inc. v. Crum & Forster Specialty Insurance Co.<\/u>, the contractor\u2019s reaction to an extensive 558 notice was an attempt to force its insurer to pay for the 558 process. Altman Contractors argued that its commercial general liability policy contractually obligated its insurance company to defend against the 558 process because it was no different than a lawsuit. Altman attempted to convince the Supreme Court that the 558 notice and right to cure process was a \u201ccivil proceeding\u201d as defined by language of their insurance policy.<\/p>\n

The Supreme Court expressly held that the chapter 558 presuit process is a mechanism for resolving disputed construction defect claims but it is not a civil proceeding. The Court reasoned that chapter 558 is a notice and repair process which is not equivalent to a lawsuit because participation is voluntary and does not involve a third-party acting like a judge. The Court noted that the 558 process does not take place in a court setting and the parties are free to resolve or not resolve the defect claims as they choose.<\/p>\n

It is critical to note that the Supreme Court determined that that the 558 process would fit the insurance policy\u2019s definition of a \u201csuit\u201d if the insured submitted to the 558 process with the insurer\u2019s consent. The Court reasoned that the 558 process is an alternative dispute resolution proceeding as defined by the insurance policy that Crum & Forster Specialty Insurance Co. sold to Altman Contractors, Inc. The Supreme Court relied on the language of the insurance policy which included a specific definition of a \u201csuit\u201d in the context of the insurer\u2019s duty to defend.<\/p>\n

The Court\u2019s holding is important because it allows contractors to request and obtain consent of their commercial general insurance company for the insurance company to pay for and participate in the 558 process. The Court\u2019s holding provides contractors with guidance for triggering their insurance company\u2019s duty to pay for the defense of a 558 proceeding. If the contractor elects to trigger defense coverage, then it is incumbent on the contractor to notify its insurer of the 558 claims and specifically request the insurer\u2019s consent to the process before participating in the 558 process.<\/p>\n

Contractors and design professionals who receive a 558 notice and demand to cure should take care to consult with their construction attorney to review their insurance coverage and determine whether and how to involve insurance in the 558 process. The determination will depend on whether any of the defects alleged in the 558 notice are covered by insurance and the specific triggering language of all applicable insurance policies.<\/p>\n","protected":false},"excerpt":{"rendered":"

Brian A. Wolf and Joseph R. Young | Smith Currie & Hancock | December 14, 2017 Contractors and design professionals are entitled to notice of alleged defects in their work and the opportunity to fix them without intervention by insurance companies and needless litigation. Today, Florida\u2019s Supreme Court in\u00a0Altman Contractors, Inc. v. Crum & Forster… Continue reading Florida Supreme Court Confirms 558 is Not a Civil Proceeding, Allowing Contractors and Design Professionals to Resolve Defect Disputes as Intended by the Legislature<\/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":[4,164,9009],"tags":[9895,9876,10247,284,94],"class_list":["post-893549","post","type-post","status-publish","format-standard","hentry","category-construction-defects","category-construction-dispute","category-design-professionals","tag-advise-consult","tag-chapter-558","tag-construction-defect-disputes","tag-design-professionals","tag-florida","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nFlorida Supreme Court Confirms 558 is Not a Civil Proceeding, Allowing Contractors and Design Professionals to Resolve Defect Disputes as Intended by the Legislature - 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