FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF
Question of Law from the United States Court of Appeals for
the Eleventh Circuit - Case No. 15-12816
P. Handfinger and Meredith N. Reynolds of Peckar &
Abramson, P.C., Miami, Florida, for Appellant
Kimberly A. Ashby of Foley & Lardner, LLP, Orlando,
Florida; and Holly S. Harvey of Clyde & Co., Miami,
Florida, for Appellee
Gregory D. Podolak of Saxe Doernberger & Vita, P.C.,
Naples, Florida, and Brian J. Clifford of Saxe Doernberger
& Vita, P.C., Trumbull, Connecticut, Amicus Curiae United
A. Boyle, Molly Chafe Brockmeyer, and Alexander A. Brockmeyer
of Boyle & Leonard, P.A., Fort Myers, Florida; Christine
A. Gudaitis and Ashley B. Jordan of Ver Ploeg & Lumpkin,
P.A., Miami, Florida, Amici Curiae Construction Association
of South Florida, South Florida Associated General
Contractors, Leading Builders of America, Florida
Homebuilders Association, and National Association of Home
Gray Dunlap, Jr. of W. Gray Dunlap, Jr., P.A., St.
Petersburg, Florida; and Steven M. Klepper of Kramon &
Graham, P.A., Baltimore, Maryland, Amici Curiae American
Insurance Association, Florida Insurance Council, and
Property Casualty Insurers Association of America
Contractors, Inc., the general contractor for the
construction of a condominium, was insured by Crum &
Forster Specialty Insurance Company ("C&F") on
a general liability policy. C&F had a duty to defend
Altman in any "suit, " as defined by the policy,
arising from the project.
claims that this duty to defend was invoked when the property
owner served it with several notices under chapter 558,
Florida Statutes, a statutory process for resolving
construction defect claims that is a condition precedent to
filing a lawsuit. There are no issues presented to us that
would bring into question whether there is underlying
coverage under the policy for at least some of the claims.
review the following question of law certified by the United
States Court of Appeals for the Eleventh Circuit (rephrased
only to match references within this opinion):
Is the notice and repair process set forth in chapter 558,
Florida Statutes, a "suit" within the meaning of
the commercial general liability policy issued by C&F to
Altman Contractors, Inc. v. Crum & Forster Specialty
Ins. Co., 832 F.3d 1318, 1326 (11th Cir.
2016). We answer this question in the affirmative
because the chapter 558 presuit process is an
"alternative dispute resolution proceeding" as
included in the policy's definition of "suit."
However, we do not address whether, in this case, C&F
consented to Altman's participation in the chapter 558
process, thereby giving rise to its duty to defend, because
it is outside the scope of the certified question and an
issue of fact disputed by the parties.
was the general contractor for the construction of a
high-rise residential condominium in Broward County, Florida,
Sapphire Condominium ("Sapphire"). Altman was
insured by C&F for the Sapphire project through seven
consecutive one-year commercial general liability (CGL)
insurance policies, all of which were materially the same
("the policy"). These policies were in effect from
February 1, 2005, through February 1, 2012.
The policy provided in pertinent part:
We will pay those sums that the insured becomes legally
obligated to pay as damages because of "bodily
injury" or "property damage" to which this
insurance applies. We will have the right and duty to
defend the insured against any "suit"
seeking those damages. However, we will have no duty to
defend the insured against any "suit"
seeking damages for "bodily injury" or
"property damage" to which this insurance does not
apply. We may, at our discretion, investigate any
"occurrence" and settle any claim or
"suit" that may result.
(Emphasis added.) The policy defined the term
"suit" as follows:
"Suit" means a civil proceeding in which damages
because of "bodily injury, " "property
damage" or "personal and advertising injury"
to which this insurance applies are alleged. "Suit"
a. An arbitration proceeding in which such damages are
claimed and to which the insured must submit or does submit
with our consent; or
b. Any other alternative dispute resolution proceeding in
which such damages are claimed and to which the insured
submits with our consent.
policy did not provide further definitions for "civil
proceeding" or "alternative dispute resolution
proceeding" as used within this definition of
April 2012 and November 2012, Sapphire served Altman with
several chapter 558 notices of claim, which cumulatively
claimed over 800 construction defects in the Sapphire
project. On or about January 14, 2013, Altman notified
C&F of Sapphire's claims and demanded, pursuant to
the policy, that C&F defend and indemnify Altman as to
Sapphire's claims. C&F denied that Sapphire's
notices of claim invoked its duty to defend because the
notices did not constitute a "suit." When C&F
refused to defend Altman, it retained counsel to defend the
notices of claim.
28, 2013, Sapphire served Altman with a supplement to the
November 2012 notice, claiming thirteen additional
deficiencies in the Sapphire project. Sapphire demanded that
Altman "take all measures necessary to correct the
identified construction and/or design defects."
August 5, 2013, C&F, maintaining its position that
Sapphire's notices of claim did not invoke its duty to
defend Altman under the policy, hired counsel to defend the
claims. According to C&F, it retained counsel for Altman
under a reservation of rights in anticipation of possible
litigation. Altman objected to C&F's selection of
counsel, demanded that its original counsel be paid to
continue defending, and requested reimbursement from C&F
for the fees and expenses incurred since notifying C&F of
Sapphire's notices of claim. C&F denied Altman's
requests. Ultimately, Altman settled all of Sapphire's
claimed construction defects without any lawsuit being filed
and without C&F's involvement.
filed a declaratory judgment action in the United States
District Court for the Southern District of Florida seeking a
declaration that C&F owed a duty to defend and to
indemnify it under the policy. Altman moved for partial
summary judgment "solely on the issue of whether
[C&F's] duty to defend its insured, [Altman], was
triggered when [Altman] demanded a defense to the"
notices of claim. Altman Contractors, Inc. v. Crum &
Forster Specialty Ins. Co., 124 F.Supp.3d 1272, 1275
(S.D. Fla. 2015). C&F also moved for summary judgment.
federal district court concluded that nothing in chapter 558
precludes coverage during the chapter 558 presuit process
"if the policy otherwise would provide for
coverage." Id. at 1278. Looking to the terms of
the policy, the federal district court found "no
ambiguity in the policy provisions at issue" and
concluded that "[n]othing about the Chapter 558 process
satisfies th[e] definition" of "civil
proceeding." Id. at 1279. Thus, the federal
district court denied Altman's motion for partial summary
judgment and granted summary judgment for C&F.
Id. at 1282-83.
appealed to the United States Circuit Court of Appeals for
the Eleventh Circuit, and the Eleventh Circuit certified the
legal issue before us. 832 F.3d at 1326.
Whether C&F has a duty to defend Altman during the
chapter 558 process is determined by whether the process is a
"suit" as defined by the policy. "[I]nsurance
policy interpretation . . . is a question of law, subject to
de novo review." Penzer v. Transp. Ins. Co., 29
So.3d 1000, 1005 (Fla. 2010). We construe insurance contracts
according to their plain language. Fayad v. Clarendon
Nat'l Ins. Co., 899 So.2d 1082, 1086 (Fla. 2005).
And the parties do not dispute that Florida law controls.