Recently, in Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co., the United States Court of Appeals for the Eleventh Circuit addressed an issue of first impression. In Altman, the Eleventh Circuit evaluated whether an insurer has a duty to defend and indemnify an insured who receives a Notice of Claim pursuant to Chapter 558, Florida Statutes (“Notice of Claim”). The Southern District of Florida previously ruled that a Notice of Claim did not constitute a suit, and thus, does not trigger a duty to defend and indemnify. The insured then appealed that ruling to the Eleventh Circuit, which ruled that the terms “suit” and “civil proceeding,” as found in the subject Commercial General Liability (CGL) insurance policies, may be ambiguous as used in the policies. Due to important public policy considerations, the Eleventh Circuit 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 GCL policies issued by C&F to ACI?”
In the underlying dispute, a condominium association served Altman Contractors, Inc. (“ACI”), a general contractor, with a Notice of Claim. ACI notified its insurer of the claim and demanded a defense and indemnification. ACI’s insurer denied that it had a duty to defend or indemnify ACI because the matter was not in suit. Without waiving this position, the insurer told ACI that it would exercise its discretion to participate in the preparation of ACI’s response to the Notice of Claim. ACI, however, objected to the insurer’s selection of counsel as it already had counsel and wanted its chosen law firm to continue on its behalf. ACI also demanded reimbursement for attorneys’ fees and costs already incurred from the time it placed the insurer on notice of the Notice of Claim. This demand was likewise denied. ACI then filed suit seeking a declaration that its insurer owed ACI defense and indemnity as to the Notice of Claim and for damages flowing from its insurer’s alleged breach.
In the trial court, ACI moved for partial summary judgment as to whether the insurer had a duty to defend, asserting this duty was triggered when ACI demanded a defense to the Notice of Claim. The insurer moved for summary judgment on all issues, arguing that the language of Chapter 558, specifically Section 558.004(13), Florida Statutes, bars a Notice of Claim from constituting a claim for insurance purposes, and therefore there was no duty to defend or indemnify ACI.
The Southern District ultimately determined that under the specific language of the policies at issue, the Notice of Claim did not trigger the insurer’s duty to defend, and therefore the insurer did not breach the terms of the policies as a matter of law.
ACI appealed the decision to the Eleventh Circuit, arguing that “because the Chapter 558 process is a condition precedent to bringing a lawsuit and impacts any subsequent lawsuit,” it should be considered a “suit” under GCL policies. In the alternative, ACI argued that a Notice of Claim, even if not a “civil proceeding” as defined in GCL policies, nevertheless constitutes an “alternative dispute resolution proceeding,” and was therefore still a “suit” under the GCL policies.
The insurer replied that the definition of “suit” in its policies requires a proceeding that determines the insured’s legal liability to pay damages and argued that the pre-suit process mandated by Chapter 558, Florida Statutes, is not such a proceeding.
The Eleventh Circuit believed that “there are reasonable arguments presented by both sides as to whether the Chapter 558 process constitutes a ‘suit’ or ‘civil proceeding’ within the meaning of the CGL policies issued by C&F [the insurer].” The court, “confronted with a question intersecting state insurance law and a state statute for which there is no guidance from the Florida courts,” and given that “the outcomes of this case may have significant practical and policy implications for Florida,” determined that certification to the Florida Supreme Court was appropriate. It certified the following question: “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?”
 No. 15-12816 (11th Cir. Aug. 2, 2016).
 Id. at 14.
 Id. at 18.
 Id. at 5.
 Id. at 5-6.
 Id. at 6.
 Id. at 10-11.
 Id. at 8-9.
 Id. at 12-13.
 Id. at 10-11.
 Id. at 11.
 Id. at 14-15.
 Id. at 16.
 Id. at 18.