Florida Duty to Defend a Chapter 558 Right to Repair Notice

In Altman Contractors, Inc. v. Crum & Forster Specialty Insurance Co., 2015 WL 3539755 (S.D. Fla. 2015), Altman was the general contractor for a residential condominium project. The condominium association served Altman with Chapter 558 notices. A Chapter 558 notice is a statutory prerequisite to a property owner’s construction defect lawsuit and provides the contractor with an opportunity to respond and avoid litigation. Altman demanded that its CGL insurer, Crum & Forster, provide a defense to the Chapter 558 notices by hiring counsel to represent Altman’s interests. While not disputing that the claimed defects may be covered under the policy, Crum & Forster denied any duty to defend against the notices on the basis that they did not constitute a “suit.” Altman filed suit. The federal trial court agreed with Crum & Forster and granted partial summary judgment in its favor.   The policy provided that Crum & Forster had a duty to defend any “suit” seeking covered damages.  The policy defined “suit” in pertinent part as a “proceeding.” Relying on definitions from Black’s Law Dictionary, the court states that a “proceeding” necessarily involves both a forum and a decision maker. Because Chapter 558 provides only “a mechanism to guide the parties into discussions with one another,” and does not provide any setting for the parties to appear before anyone who would assist with the process, it does not qualify as a “proceeding” of any kind.