• Florida Supreme Court Resolves Conflict Over Whether Chapter 558 Process Constitutes A Suit
  • January 12, 2018 | Author: Craig Distel
  • Law Firm: McDonald Hopkins LLC - West Palm Beach Office
  • The Florida Supreme Court recently found that the Chapter 558 pre-suit construction defect resolution process qualifies as a “suit” as commonly defined in commercial general liability policies. The court’s decision came in the case of Altman Contractors, Inc. (Altman) v. Crum & Forster Specialty Insurance Company (C&F) 42 Fla. L. Weekly S960b. The court determined that the Chapter 558 pre-suit process qualified as a suit as defined in the insurance policy because the policy included “alternative dispute resolution proceedings” within the scope of such definition.

    BACKGROUND ON THE CASE

    The Altman case arose out of alleged defects and deficiencies in the design and construction of the Sapphire Condominium in Fort Lauderdale. C&F was Altman’s general liability insurer and issued a commercial general liability policy for the applicable policy periods. Altman was served with several Chapter 558 Notices of Claim and forwarded them on to C&F seeking coverage, which C&F denied on the basis that the Chapter 558 process was not a suit as defined by the policy. The court disagreed and held that the Chapter 558 process did constitute a suit within the meaning of the policy, but did not address the additional terms of the policy, which required C&F’s consent before an insured could participate in an alternative dispute resolution proceeding. This case will now be sent back to the 11th Circuit Court of Appeal to determine the amount of damages owed to Altman for attorney and consultant fees spent during the Chapter 558 process.

    IMPLICATIONS FOR CONSTRUCTION COMPANIES

    The Florida Supreme Court’s decision has significant implications for construction companies in Florida because it provides that insurance carriers with similar language can be liable for a contractor’s costs incurred in defending a Chapter 558 Notice of Claim.

    Contractors should review their commercial general liability policies, comply with the terms of the policies, and forward the notices onto their carriers before responding to Chapter 558 notices. Depending on the specific policy language, costs incurred during the Chapter 558 process may be the insurance carrier’s responsibility.