Eleventh Circuit Vacates Summary Judgment Following Answer from Florida Supreme Court

In August 2016, the Eleventh Circuit asked the Florida Supreme Court to weigh in on whether a Florida alternative construction dispute resolution statute requiring notice of any construction dispute implicates an insurer’s duty to defend its insured against “suits.” The Florida legislature enacted Chapter 558 of the Florida Statutes in 2003 “establishing a notice and repair process to resolve construction disputes between property owners and contractors, subcontractors, suppliers, or design professionals.” Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co., 2016 WL _____ (11th Cir. Aug. 2, 2016).  The notice and repair process requires a property owner to “serve a written notice of a claim on the contractor, subcontractor, supplier, or design professional . . . , describing the nature of the alleged construction defect.”  The CGL policy at issue here obligates the insurer to “defend the insured against any ‘suit.’”  After finding the term “suit” to be an ambiguous term and the intersection of Florida insurance law and Chapter 558 to be a matter of first impression, the Eleventh Circuit certified the following question of law to the Florida Supreme Court:  “Is the notice and repair process set forth in Chapter 558 of the Florida States a ‘suit’ within the meaning of the CGL policies issued by [the insurer] to [the insured]?”

The Florida Supreme Court answered in the affirmative:  “[a]lthough the Chapter 558 process does not constitute a ‘civil proceeding,’ it 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.”  Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co., ___ So.3d ___, 2017 WL 6379535 (Dec. 14, 2017).  In light of that answer, on January 26, 2018 the Eleventh Circuit reversed the district court’s grant of summary judgment to the insurer and remanded the case for further proceedings.

Posted by Margaret Flatt.

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