Florida Supreme Court anSwerS CertiFied QueStion in altman v. Crum
Trial & Litigation Section Chair: Brandon Faulkner – Holland & Knight, LLP
In Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co., 832 F. 3d 1318( 11th Cir. 2016), the Eleventh Circuit certified the following question to the Florida Supreme Court: Is the notice-and-repair process set forth in Chapter 558, Florida Statutes, a“ suit” within the meaning of the CGL policies issued by Crum & Forster to Altman Contractors? The Florida Supreme Court recently answered in the affirmative. Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co., 232 So. 3d 273( Fla. 2017).
Altman was the general contractor for a high-rise condominium. Crum & Forster( C & F) insured Altman. C & F’ s policies stated that it had the right and duty to defend against any“ suit.” The policy defined“ suit” to mean a“ civil proceeding,” including an“ arbitration proceeding” or“ any other dispute resolution proceeding” that the insured submitted to with C & F’ s consent.
The condominium association served Altman with Chapter 558 notices of construction defect claims. Altman notified C & F and demanded a defense and indemnifica tion. C & F denied
it had a duty to defend, reasoning that the notices did not constitute a“ suit.” So Altman hired its own counsel. The condominium
© Can Stock Photo / zimmytws association then supplemented its notice with additional claims and demanded that Altman correct them. C & F maintained its position but retained counsel for Altman under a reservation of rights. Altman objected to the counsel, demanded its original counsel, and requested reimbursement of fees and expenses. C & F denied Altman’ s requests, Altman settled the claims without C & F’ s involvement, and then Altman sued in the Southern District of Florida seeking a declaration that C & F owed it a duty to defend and indemnify.
The Southern District found the Chapter 558 process was not a“ suit” under the policy. Therefore, the condominium’ s notices did not trigger a duty to defend. So the Court entered summary judgment for C & F. Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co., 124 F. Supp. 3d 1272( S. D. Fla. 2015). Altman appealed to the Eleventh Circuit, arguing that the Chapter 558 process is a“ suit”
Chapter 558 process … is a voluntary dispute resolution mechanism through which parties may resolve claims without filing suit.
because it is a“ civil proceeding” or“ proceeding,” as defined by Black’ s Law Dictionary and Merriam- Webster’ s Dictionary, or otherwise constitutes an“ alternative dispute resolution proceeding.” The Eleventh Circuit certified the question above.
The Florida
Supreme Court held that the Chapter 558 process is not a“ civil proceeding” under the policy because it is a voluntary dispute resolution mechanism through which parties may resolve claims without filing suit. But it noted that C & F’ s policies broadened the definition of“ suit” to include“[ a ] ny other alternative dispute resolution proceeding” and that Black’ s defines“ alternative dispute resolution” as“[ a ] procedure for settling a dispute by means other than litigation.” It held that Chapter 558 falls within that definition and, in doing, noted that the Florida Legislature described Chapter 558 as“[ a ] n effective alternative dispute resolution mechanism” in section 558.001, Florida Statutes.
Continued on page 53
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