The Florida Supreme Court issued its opinion in Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co., Case No., SC16-1420, which answered the following certified question from the United States Court of Appeals for the Eleventh Circuit: 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?
The Court answered the certified question “in the affirmative” holding that the notice and repair process set forth in Chapter 558 of the Florida Statutes constitutes a “suit” within the meaning of commercial general liability policies. In reaching its conclusion, the Court ruled that a Notice of Claim under Chapter 558 cannot be considered a “civil proceeding” because the recipient’s participation in the presuit process is not mandatory, adjudicative, or legally binding. However, the Court also found that a Notice of Claim under Chapter 558 fit with the policy’s definition of “alternative dispute resolution proceeding” because Chapter 558 provides for “a statutorily required presuit process aimed to encourage the claimant and insured to settle claims for construction defects without resorting to litigation” under §§ 558.001 and 558.004 of the Florida Statutes.
The Court then ultimately concluded that a Notice of Claim under Chapter 558 is included in the policy’s definition of “suit” as an “alternative dispute resolution proceeding” to which the insurer’s consent is required to invoke the insurer’s duty to defend the insured. The Court did not reach the issue of whether the insurer consented to the contractor’s participation in the 558 process because that issue was outside the scope of the certified question and was an issue of fact disputed by the parties.
If you have any questions about the Court’s decision or the presuit process mandated by Chapter 558, Florida Statutes, please do not hesitate to contact a member of CSK’s Construction Group.