Game Changers for 2018
Jacob Epstein explains in the Florida Community Association Journal certain changes for communities that are pursuing claims due to a construction defect. “In December of 2017, the Florida Supreme Court issued a ruling that will likely expedite the Chapter 558 pre-litigation process for condominium and homeowners associations in construction defect cases, ensuring the involvement of insurance carriers earlier in the Chapter 558 pre-suit process. In Altman Contractors, Inc. v. Crum & Foster Specialty Insurance Co., Case No. SC16- 1420, 2017 WL 6379535 (Fla. Dec. 14, 2017), the Florida Supreme Court held that the notice and repair process pursuant to Chapter 558 qualifies as a “suit” pursuant to the language of a typical construction defendant’s general commercial liability (“CGL”) insurance policy. Condominium and homeowners associations can therefore expect a more worthwhile Chapter 558 pre-suit process, as each defendant’s insurance carrier holds great influence and ultimate monetary responsibility for any final settlement.
Assuming that a defendant’s insurance carrier does not disclaim coverage, construction defendants in 558 lawsuits are typically represented by their carrier’s appointed counsel. Prior to Altman, insurance carriers would commonly delay their appearance in any given case until after a lawsuit was filed pursuant to language in the typical CGL policy. This procedural delay would typically lead to a situation where (i) coverage counsel is not representing the construction defendant during the presuit process; and (ii) the final decision maker — the insurance carrier — has no involvement in the pre-suit process. Therefore, the entire pre-suit process could go by without any involvement by the carrier, who would miss pre-suit inspections, the exchange of documents pursuant to Chapter 558, and any testing conducted prior to the filing of a lawsuit. In the second half of 2018, we will likely see coverage counsel getting involved much earlier in the 558-process, which will expedite pre-suit discovery, will enable the insurance carriers to set their reserves much earlier in the process, and will similarly help facilitate the purpose of Chapter 558, Florida Statutes — to encourage early resolution of construction defect disputes and to streamline the claims process.”