News & Insights

Recent Posts

WSHB's Constance Endelicato To Speak at ASHRM 2019 Annual Conference

Supreme Court Allows Suit Over Website Accessibility

Strategies for Defending Legionella and Mold Claims

Residential Revolution

Time Limit Demand Issues Arrive in North Carolina

WSHB Welcomes New Partner Julie A. Weerth to the Firm's New York Office

Temp Agency Absolved of Liability in Hotly Contested Action

Alternative Fee Agreements and Construction Issues: Oil and Water or Perfect Pairing!?

WSHB's Graham Miller Helps Demystify Construction Claims in the Pacific Northwest

WSHB Partner Janice Michaels Named to The Best Lawyers in America© 2020 List

One Bad Apple: Navigating through Sexual Battery and other Intentional Torts

Leading Construction Litigator Cynthia Tari Joins WSHB's Dallas Office

WSHB’s Philadelphia Partner Secures Summary Judgment in Catastrophic Premises Liability Matter

WSHB Welcomes New Partner Andrew Kessler

New Bill In New York Proposed for Signature by Governor Andrew Cuomo is Set To Make Employers "SWEAT"

Renowned Litigator Jason Williams Joins WSHB's Nevada Office

Litigator Richard Young Joins WSHB's Nevada Office

Published Appellate Opinion Upholding Summary Judgment in Favor of Commercial Tenant Against $3.5M Subrogation Suit

17 WSHB Lawyers Honored as 2019's Rising Stars

Arizona Supreme Court Allows Court of Appeals Decision Expanding Defendants' Ability to Enforce Settlements to Stand

WSHB’s Jason Klein Breaks Down the Good, the Sad and the Funny Sides of Claims

Litigating Sexual Battery and Other Intentional Torts: Navigating the One Bad Apple in Medical Negligence

WSHB Partner Michelle Arbitrio to Moderate Panel on Insurance and Risk Management in the Age of Mass Shootings

Girl on Fire: The Price of Pursuing the Truth in the #MeToo World

Pragmatic Issues on Settlement Versus Trial for Legal Malpractice Cases

WSHB Partner Jade Tran Named to Lawyers of Color's "Nation's Best" List

A Withering Assault

The Natural Progression of Natural Disasters

Nevada’s Governor Signs Chapter 40 Reform Bill

WA Condo Law Changes Hope to Curtail Frivolous Defect Lawsuits and Stimulate Production

WSHB Co-Founder Stephen Henning Steps Into the Spotlight at this Year's West Coast Casualty Seminar

Professional Liability Expert Weighs In On Protecting Your Practice From Opioid Doc Arrest Fallout

Penalties, Punitives, and Granny Cams: The Escalating Lure of Elder Abuse Litigation

Are Structured Settlements Still Relevant

Game Changing Trends Affecting Construction

He's Not My Guy: The Joint-Employer Doctrine

WSHB Case Update: DOL Proposes Increase to Minimum Salary Threshold

WSHB and DWF Announce Exclusive Association

WSHB Client Alert: Meser v. Bound Brook Board of Education

WSHB Partner Nancy Quinn Koba Elected Supreme Court Justice for the Ninth District

WSHB Case Update: Is a 558 Notice a “Suit?” Contractors and Insurers Wait For the Hammer to Drop as the Supreme Court is Asked to Determine Defense Obligations

October 6, 2016

The answer to this certified question could profoundly impact the number of construction defect lawsuits filed in Florida, as well as the availability and price of CGL insurance for contractors. If a 558 notice is not a suit triggering a duty to defend, those in the construction industry might decline meaningful participation in the 558 process, and instead invite litigation in order to secure their insurer’s contribution. On the other hand, imposing a duty on insurers to defend during the Chapter 558 process would necessarily involve a significant outlay of attorney’s fees and costs, potentially driving up premiums in the process.

Surprisingly, in the 13 years since Chapter 558 was enacted, no Florida court has addressed the issue of whether the initiation of its notice and repair process constitutes a “suit” under a CGL policy, thereby triggering the duty of the insurer to defend. In recognition of the significance of this issue, the 11th Circuit, in Altman Contractors, Inc. v. Crum & Forster Specialty Insurance Company, recently certified the following question to the Florida Supreme Court:

“Is the notice and repair process set forth in Chapter 558 of the Florida Statutes a “suit” within the meaning of the CGL policies issued by C&F to ACI?”

This question arose from Altman’s appeal of a District Court decision that the Chapter 558 process was not a “suit” within the unambiguous meaning of the policy issued by Crum to Altman. The District Court first noted that Chapter 558 contained no statutory bar to defense and coverage of 558 proceedings and, as such, proceeded to focus on the language of the subject insurance policy. Particularly, the District Court relied largely upon definitions contained in Black’s Law Dictionary and its understanding of the 558 notice and repair process as a “mechanism” and not a “proceeding.” The statute guided parties to enter into discussions about possible resolution, but did not provide for the parties to appear before anyone to assist with the process, or result in a decision or delineation of their respective rights and remedies. Of note, the relevant policy provisions were taken from ISO forms, such that most carriers, not just Crum, would be affected.

Justice Jordan of the 11th Circuit wrote that they were “not as sure” as the District Court on the unambiguous nature of the policy, noting that its definition of “suit” included “[a]ny other alternative dispute resolution proceeding.” In that regard, there were “reasonable” arguments presented by both sides as to whether the Chapter 558 process constituted a “suit” within the meaning of the CGL policy issued by Crum. He also noted foreign authority holding that other states’ statutory notice and repair processes (such as California’s Calderon process and Colorado’s Defect Action Reform Act) were “suits.” However, unlike Chapter 558, which is silent in that regard, the parallel California statute specifically states that initiation of the Calderon process triggers obligations under an insurance policy as if a Complaint had been filed in state court.

Obviously, there are intertwined issues of public policy, statutory construction and policy interpretation at play. Regardless of the direction the Court rules, the decision will have huge implications in Florida as it relates to construction defect litigation. At issue are fees and costs incurred in the defense and resolution of claims which have not matured to a Complaint, and the efficiency of the 558 mechanism in resolving disputes pre-suit. We will monitor the Supreme Court’s response, which is anticipated within the next six months, and update accordingly.


Privacy Policy      |      Site Map

© 2019 Wood Smith Henning & Berman LLP

Subscribe to our mailing list

* indicates required