11th Circuit To Decide Whether Construction Defect Notice Under Florida Repair Statute Is A 'Suit'
Recently, the United States District Court for the Southern District of Florida addressed what constitutes a "suit" within the context of Florida's right-to-repair procedure for construction defect disputes. In Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co., No. 13-80831-CIV, 2015 WL 3539755 (S.D. Fla. June 4, 2015), the district court held that a notice under Chapter 558 of the Florida statutes, the "notice and repair" statute, "does not constitute a 'civil proceeding'" and thus "is not a 'suit'" triggering an insurer's duty to defend under Altman's Crum & Forster commercial general liability (CGL) policies.
The district court explained that Chapter 558, which "provides a presuit procedure for a property owner to assert a claim for construction defects against a contractor," constitutes "a 'mechanism,' not a 'proceeding'[.]" "[F]or something to be a 'civil proceeding,' there must be some sort of forum and some sort of decision maker involved." "Chapter 558[, however,] has no 'enforcement,' no 'adjudication' and no 'administration' of 'rights, remedies[,] laws or regulations.'" That is, "'Chapter 558 encourages settlement by providing a procedure to lead the parties to the waters of compromise; it does not make them drink.'" (Id. at *8, quoting Hebden v. Roy A. Kunnemann Const., Inc., 3 So.3d 417, 419 [Fla. 4th DCA 2009]). Thus, because the construction defect notice involved no forum or decision maker, it failed to trigger any coverage. The district court's decision is consistent with a line of California cases holding the phrase "damages" on account of a "suit" refers to "money ordered by a court." (Certain Underwriters at Lloyd's of London v. Superior Court, 24 Cal. 4th 945 [2001].)
Altman has appealed the district court's decision. In its opening brief, Altman argues the Chapter 558 process is a civil proceeding, and therefore a "suit," because it "is a required first step in any construction defect litigation" and "is undisputedly part of a larger action and a 'civil...
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