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Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co., No. 13—80831-CIV, 2015 WL 3539755 (S.D. Fla. June 4, 2015)
In Florida, before a claimant can file suit for construction defects, the claimant must conform to the requirements of chapter 558, which requires notice to the builder and lays out a process to allow the builder to inspect and repair the property. In Altman Contractors, Southern District Judge Kenneth A. Marra held that a 558 notice does not trigger the builder’s insurer’s duty to defend under standard CGL policy language.
Altman Contractors received a 558 notice and demanded a defense from its insurer, Crum & Forster. Crum & Forster declined, stating that the matter was not “in suit”, and Altman Contractors sued.
Crum & Forster argued first that section 558.004 precluded a 558 notice from being a claim for insurance. The court rejected this contention, explaining that section 558.004(13) provides only that the provision of the notice is not a claim, meaning that a 558 notice does not absolve the insured from the notice requirements in the policy.
Crum & Forster also argued that a 558 notice was not a “suit”, and the court agreed. The CGL policy provided that Crum & Forster had discretion to settle or investigate any “suit or claim” but only had a duty to defend any “suit.” The policy defined “suit” as a “civil proceeding”. The court, relying on dictionaries that were current when the policies were in effect, concluded: “that for something to be a ‘civil proceeding’, there must be some sort of forum and some sort of decision-maker involved.” Explaining that the 558 process lacks both, the court held that a 558 notice did not constitute a “suit” as defined in the policy and thus did not trigger a duty to defend. The court did not address whether a 558 notice constituted a “claim” triggering the duty to defend because the policy did not impose a defense duty for “claims”.