tag:blogger.com,1999:blog-51757903821097785262024-03-08T00:27:10.904-05:00Boyle & Leonard, P.A.Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.comBlogger34125tag:blogger.com,1999:blog-5175790382109778526.post-49689174832873509142016-01-22T08:42:00.001-05:002016-01-22T08:42:32.743-05:00
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<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Arial",sans-serif;">AN INTENDED ACT DOES NOT EQUATE TO
INTENDED HARM:<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></u></b></div>
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<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Arial",sans-serif;">THE HEIGH BAR EMPLOYEES MUST MEET TO
UTILIZE THE INTENTIONAL ACT <o:p></o:p></span></u></b></div>
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<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Arial",sans-serif;">EXCLUSION TO BRING A CLAIM DIRECTLY
AGAINST THEIR EMPLOYER<o:p></o:p></span></u></b></div>
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<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Arial",sans-serif;"><o:p><span style="text-decoration: none;"> </span></o:p></span></u></b></div>
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<span style="font-family: "Arial",sans-serif;">By:
Ellen G. Smith, Esq. <o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">Boyle,
Gentile & Leonard, P.A.<o:p></o:p></span></div>
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<a href="http://www.boylegentilelaw.com/"><span style="font-family: "Arial",sans-serif;"><span style="color: #0563c1;">www.BoyleGentileLaw.com</span></span></a><span style="font-family: "Arial",sans-serif;"><o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;"><o:p> </o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">Just because an employer
intends that an act be done does not mean that an employer intended harm to
come from that which would allow employees to avoid workers’ compensation
laws.<span style="mso-spacerun: yes;"> </span>Florida Statute §440.11(1)(b)
delineates when an employee can seek coverage under the intentional tort
exception in workers’ compensation claims.<span style="mso-spacerun: yes;">
</span>Florida Statute §440.11(1)(b) states:<o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">(1)<span style="mso-tab-count: 1;"> </span>The liability of an employer prescribed in s. 440.10 shall be
exclusive and in place of all other liability, including vicarious liability,
of such employer to any third-party tortfeasor and to the employee, the legal
representative thereof, husband or wife, parents, dependents, next of kin, and
anyone otherwise entitled to recover damages from such employer at law or in
admiralty on account of such injury or death, except as follows:<o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">(b)<span style="mso-tab-count: 1;"> </span>When an employer commits an intentional tort that causes the
injury or death of an employee.<span style="mso-spacerun: yes;"> </span>For
purposes of this paragraph, an employer’s action shall be deemed to constitute
an intentional tort and not an accident only when the employee proves, by clear
and convincing evidence that:<o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">1.<span style="mso-tab-count: 1;"> </span>The employer deliberately intended to injury the employee;
or<o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">2.<span style="mso-tab-count: 1;"> </span>The employer engaged in conduct that the employer knew,
based on prior similar accidents or on explicit warnings specifically
identifying a known danger, was virtually certain to result in injury or death
to the employee, and the employee was not aware of the risk because the danger
was not apparent and the employer deliberately concealed or misrepresented the
danger so as to prevent the employee from exercising informed judgment about
whether to perform the work.<o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;"><o:p> </o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">In reaction to the Supreme
Court’s ruling in <u>Turner v. PCR, Inc.</u>, 754 So. 2d 683 (Fla. 2000), the
Florida legislature raised the bar in the enactment of Florida Statute
§440.11(1)(b), from the previous standard of substantial certainty, to create
an even narrower window where employees can avoid the immunity employer’s
possess under the worker’s compensation laws.<a href="file:///C:/Users/nhatt/Documents/Ellen%20Blog%20Post%201-22-16.docx" name="_ftnref1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Arial",sans-serif; font-size: 11pt; line-height: 107%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"><span style="color: #0563c1;">[1]</span></span></span><!--[endif]--></span></span></a><span style="mso-spacerun: yes;"> </span>Not only did the legislature require that
employees prove their case by the heightened standard of<span style="mso-spacerun: yes;"> </span>clear and convincing evidence, but also
created a standard where an employer must have deliberately intended the harm
or where a harm is so obvious to occur because the harm has occurred before and
will occur every time a that act is performed.<span style="mso-spacerun: yes;">
</span>Since its enactment several District Courts have evaluated claims under
the new heightened test, all of which have failed to meet the significantly
higher standard created in Florida Statute §440.11(1)(b). <u>See</u> <u>Gorham
v. Zachry Industrial Inc.</u>, 105 So. 3d 629, 634 (Fla. 4th DCA 2013)(“[T]he
mere knowledge and appreciation of a risk-something short of substantial
certainty – is not intent.<span style="mso-spacerun: yes;"> </span>The defendant
who acts in the belief or consciousness that the act is causing an appreciable
risk of harm to another may be negligent, and if the risk is great the conduct
may be characterized as reckless or wanton, but it is not an intentional
wrong.”); <u>See</u> <u>Boston v. Publix Super Market, Inc.</u>, 112 So. 3d
654, 657 (Fla 4th DCA 2013)(“the statute provides an exceptionally narrow
exclusion from immunity, requiring intentional, deceitful conduct on the part
of the employer.”); <u>See</u> <u>List Industries, Inc. v. Dalien</u>, 107 So.
3d 470, 471 (Fla. 4th DCA 2013)(“The change from ‘substantial certainty’ to
‘virtually certain’ is an extremely different and manifestly more difficult
standard to meet.<span style="mso-spacerun: yes;"> </span>It would mean that a
plaintiff must show that a given danger will result in an accident every – or
almost every – time.”); <u>See</u> <u>Vallejos v. Lanm Cargo, S.A.</u>, 116 So.
3d 545 (Fla. 3d DCA 2013)(“the failure to train or warn of obvious dangers does
not amount to concealing or misrepresenting the danger so as to prevent [the
employee] from exercising informed judgment”).<o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">The Florida Supreme Court in
<u>Travelers Indem. Co. v. PCR. Inc.</u>, 889 So. 2d 779 (2004) relied upon the
standing rule that “tort law principles do not control judicial construction of
insurance contracts….Thus, intentional act exclusions are limited to the
express terms of the policies and do not exclude coverage for injuries more
broadly deemed under tort law principles to be consequences flowing from the
insured’s intentional acts.”<span style="mso-spacerun: yes;"> </span>at. 793;
quoting <u>Prudential Prop. & Cas. Ins. Co. v. Swindal</u>, 622 So. 2d 467,
470 (1993). Intentional act exclusions are not a bar to insurance coverage for
liability arising from claims brought under the objectively, substantially
certain to result in injury exception.<span style="mso-spacerun: yes;"> </span><u>Travelers</u>,
889 So. 2d at 781.<span style="mso-spacerun: yes;"> </span><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">The key distinction is whether
the employer intended to cause the harm, not whether the employer intended the
action</i></b>.<span style="mso-spacerun: yes;"> </span><u>See</u> <u>id.</u>; <u>Swindal</u>,
622 So. 2d at 472 (intentional acts exclusion did not bar coverage where
insured approached another with a loaded handgun, got into an altercation with
that individual during which the gun discharged and severely injuring the
individual; insured testified he did not intend to shoot and cause harm to the
person) (emphasis added); <u>See</u> <u>Cabezas v. Florida Farm Bureau Cas.
Ins. Co.</u>, 830 So. 2d 156, 160 (Fla. 3d DCA 2002)(intentional acts exclusion
did bar coverage where the insured admits he intentionally struck the person
behind him who he believed was an assailant); <u>Cloud v. Shelby Mut. Ins. Co.
of Shelby OH</u>, 248 So. 2d 217 (Fla. 3d DCA 1971)(ruling that tort law’s
“reasonably foreseeable consequences” rule has no application to insurance
policies, and intentional act exclusion did not bar coverage where the insured
intentionally pushed another car out of its way causing injury to a passenger
in the car being pushed); <u>Phoenix Ins. Co. v. Helton</u>; 298 So. 2d 177
(Fla. 1st DCA 1974)(exclusionary clause did not bar coverage because the
insured did not intend to injure others even though insured intentionally drove
his car into a crowd of people).<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<span style="font-family: "Arial",sans-serif; font-size: 11pt; line-height: 107%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">The Florida
legislature’s enactment of Florida Statute 440.11(1)(b) combined with the
Florida Supreme Court ruling in <u>Travelers</u> makes clear that the
legislature intends for employees to use the channels created in the workers’
compensation law scheme which itself was put in place to provide quick recovery
for employees who are injured on the job and emphasizes that tort principles
have no place in workers’ compensation claims</span>
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<a href="file:///C:/Users/nhatt/Documents/Ellen%20Blog%20Post%201-22-16.docx" name="_ftn1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="font-family: "Arial",sans-serif;"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Arial",sans-serif; font-size: 10pt; line-height: 107%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"><span style="color: #0563c1;">[1]</span></span></span><!--[endif]--></span></span></span></a><span style="font-family: "Arial",sans-serif;"><span style="font-size: x-small;"> The Supreme Court recognized that an
exception to employer’s worker’s compensation immunity existed in <u>Turner</u></span><span style="font-size: x-small;">
utilizing a “substantially certain” to cause injury or death standard. <o:p></o:p></span></span></div>
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Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com0tag:blogger.com,1999:blog-5175790382109778526.post-79927078035308394072015-12-04T12:02:00.001-05:002015-12-04T12:02:06.457-05:00
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
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<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Times New Roman",serif; font-size: 12pt;">Insurance Coverage for Punitive Damages in
Florida<o:p></o:p></span></u></b></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;">By: Matthew M.
Jackson, Esquire <o:p></o:p></span></div>
<br />
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;">Boyle, Gentile
& Leonard, P.A. <o:p></o:p></span></div>
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<a href="http://www.boylegentilelaw.com/"><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><span style="color: #0563c1;">www.boylegentilelaw.com</span></span></a><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;">It is a commonly
held belief that Florida public policy forbids insurance coverage for punitive
or exemplary damages, regardless of the policy language.<span style="mso-spacerun: yes;"> </span>However, a review of cases addressing the
issue reveals that the public policy prohibition on coverage for punitive
damages applies only to insureds who engage in <u>active</u> <u>wrongdoing</u>.<span style="mso-spacerun: yes;"> </span>It is clear that Florida’s public policy does
not prohibit insurance coverage for punitive damages based on vicarious
liability.<span style="mso-spacerun: yes;"> </span>The Florida Supreme Court has
succinctly set forth the policy, and the reasoning behind it.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;">“Florida public
policy prohibits liability insurance coverage for punitive damages assessed
against a person because of his own wrongful conduct.” <u>U.S. Concrete Pipe
Co. v. Bould</u>, 437 So. 2d 1061 (Fla. 1983).<span style="mso-spacerun: yes;">
</span>“The Florida policy of allowing punitive damages to punish and deter
those guilty of aggravated misconduct would be frustrated if such damages were
covered by liability insurance.” <u>Id.</u><o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;">“However, it is
generally held that there is a distinction between the actual tortfeasor and
one only vicariously liable and that therefore public policy is not violated by
construing a liability policy to include punitive damages recovered by an
injured person where the insured did not participate in or authorize the act.” <u>See</u>
<u>Id.</u>, citing <u>Sterling Insurance Co. v. Hughes</u>, 187 So. 2d 898
(Fla. 3d DCA 1966).<span style="mso-spacerun: yes;"> </span>Common scenarios
wherein an insured could face punitive damages based on vicarious liability
include companies answering for the conduct of employees, and contractor-subcontractor
relationships where the subcontractor’s actions provide the basis for a cause
of action which supports punitive damages.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoPlainText" style="margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">In cases where
punitive damages are awarded based on vicarious liability, an analysis of the
relevant policy language is necessary. Simply because public policy would allow
for punitive damages based on vicarious liability does not mean that the
language of the insurance policy actually provides coverage.<span style="mso-spacerun: yes;"> </span>For example, in <u>First Specialty Ins. Co.
v. Caliber One Indem. Co.</u>, 988 So. 2d 708 (Fla 2nd DCA 2008) the Second
District Court of Appeal, held that while public policy did not forbid coverage
of punitive damages based on vicarious liability, the language of the policy,
which defined damages as “any compensatory amount”, did not provide coverage
for punitive damages because punitive damages are not compensatory.<span style="mso-spacerun: yes;"> </span>In addition, the 2<sup>nd</sup> District held
that the policy did not provide coverage, because it specifically excluded
coverage for “penalties or fines” rendered against the insured.<span style="mso-spacerun: yes;"> </span>See Id. at 713.<span style="mso-spacerun: yes;"> </span>However, even a clause specifically excluding
punitive damages was held to be insufficient justification for dismissing a
complaint against an insurance company.<span style="mso-spacerun: yes;">
</span>See <u>Schwab v. First Appalachian Ins. Co.</u>, 58 F.R.D. 615, 622
(Fla. 1973).<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
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<div class="MsoPlainText" style="margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">Additionally, the
Florida Supreme Court has held that there must be some independent wrongdoing
by the vicariously liable party to allow for punitive damages.<span style="mso-spacerun: yes;"> </span>See <u>Mercury Motors Express, Inc. v. Smith</u>,
393 So.2d 545, 549 (Fla. 1981).<span style="mso-spacerun: yes;"> </span>This
appears to require negligence on the part of the vicariously liable party, or
some other wrongful conduct- however, if the wrongful conduct of the
vicariously liable party is itself the basis of a portion of the punitive
damages, this would prevent recovery from insurance, at least as to the
punitive damages based directly on the wrongful conduct, based on the public
policy previously discussed.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoPlainText" style="margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">It is important to
note that even if an insurance policy clearly excludes punitive damages, or in
cases where no vicarious liability is alleged and insurance coverage for
punitive damages is obviously prohibited by public policy, an insurance company
that defends an insured must act in good faith towards the insured, as to
potentially covered claims and as to punitive damages claims.<span style="mso-spacerun: yes;"> </span>See <u>Ging v. American Liberty Ins. Co</u>.,
423 F.2d 115, 116 (5<sup>th</sup> Cir. 1970).<span style="mso-spacerun: yes;">
</span>In Ging, the insured was grossly negligent, resulting in a car accident
and the death of the driver of another vehicle. See Id. at 117.<span style="mso-spacerun: yes;"> </span>The insurance company defended the insured
under a reservation of rights, and expressly stated that punitive damages were
not covered.<span style="mso-spacerun: yes;"> </span>See Id.<span style="mso-spacerun: yes;"> </span>The insurer did not settle within policy
limits despite an offer from the estate of the deceased driver to do so, did
not inform the insured of the offer, did not forward correspondence from the
estate to the insured despite requests by the estate to do so, and engaged in
other bad faith conduct.<span style="mso-spacerun: yes;"> </span>See Id. at
117-118.<span style="mso-spacerun: yes;"> </span>After judgment was entered
against insured for compensatory and punitive damages, the insurer paid in full
the compensatory damages, and the estate took assignment of the insured’s bad
faith claims and sued the insurer for bad faith, attempting to collect the judgment
for punitive damages.<span style="mso-spacerun: yes;"> </span>In reversing
summary judgment in favor of the insurer, the <u>Ging</u> court held:<o:p></o:p></span></div>
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<div class="MsoPlainText" style="margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">“Because an
insurance company actually did undertake the complete defense of its insured to
a suit seeking both compensatory and punitive damages, the company had the duty
of acting in good faith toward its insured as to the entire undertaking.”<span style="mso-spacerun: yes;"> </span><u>See</u> <u>Id.</u> at 116<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
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<div class="MsoPlainText" style="margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">While there are
several legal impediments, in some cases, insurance policies may indeed cover
punitive damage, despite popular belief to the contrary.<span style="mso-spacerun: yes;"> </span>As always, the facts and the policy language
will control the analysis, but when vicarious liability is alleged, insurance
coverage for punitive damages becomes a possibility to be carefully evaluated.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com1tag:blogger.com,1999:blog-5175790382109778526.post-48811456832809214012015-11-30T14:58:00.001-05:002015-11-30T14:58:34.006-05:00
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<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Times New Roman",serif; font-size: 12pt;">Three’s a Party, Four’s A Crowd: The
Tripartite Relationship in the Insurance Context</span></u></b><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;">By Molly A. Chafe,
Esquire<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;">Boyle, Gentile
& Leonard, P.A.<o:p></o:p></span></div>
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<a href="http://www.boylegentilelaw.com/"><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><span style="color: #0563c1;">www.boylegentilelaw.com</span></span></a><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p></o:p></span></div>
<br />
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<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
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<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p><span style="text-decoration: none;"> </span></o:p></span></u></b></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 200%;">In Florida,
communications between a lawyer and a client are “confidential” and, barring
exception, not subject to disclosure. See Fla. Stat. § 90.502. One exception is
the “joint client” exception to attorney-client privilege. <u>See</u> Fla.
Stat. § 90.502(4)(e). The exception applies only when an attorney represents
two parties “in common” who later are opponents in a civil action.<o:p></o:p></span></div>
<br />
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<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 200%;">An attorney may represent
clients jointly, so long as the joint representation does not entail a conflict
of interest and the clients request or agree to the joint representation. This
often comes into play in the insurance context, when a liability insurer hires
an attorney to defend a policyholder; this relationship is called a “tripartite
relationship” (insurer, insured and insured’s counsel). Despite having three
parties to this relationship, parties to this relationship can assert
attorney-client privilege and work-product.<span style="mso-spacerun: yes;">
</span><o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 200%;">However, when an insurer denies coverage, asserts a
defense to coverage, or issues a reservation of rights under an insurance
policy, the interests of the insurer and insured are in direct conflict. <u>Univ.
of Miami v. Great Am. Assur. Co.</u>, 112 So. 3d 504, 507 (Fla. 3d DCA 2013). Under
such circumstances, both parties need their own counsel and an attorney
generally may not represent both the insurer and the insured. <u>Id</u>. Thus,
the tripartite relationship is broken.<o:p></o:p></span></div>
<br />
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<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 200%;">However, the United States District Court for the
Southern District in <u>Maplewood Partners, L.P. v. Indian Harbor Ins. Co.</u>,
2011 WL 3918597 *1 (S.D. Fla. Sept. 6, 2011), held that an insurer was entitled
to discovery of otherwise protected attorney client communications and attorney
work product from the underlying case because of the existence of a common
interest between the insurer and the insured and because the insured put
defense counsel work product “at issue” by challenging the insurer’s allocation
assessment.<o:p></o:p></span></div>
<br />
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<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 200%;">The insured initiated
coverage litigation against the insurer for breach of a D&O policy, disputing
the insurer’s allocation between covered and uncovered amounts with respect to
the defense and settlement of four separate lawsuits. <u>Id.</u> at *1.<span style="mso-spacerun: yes;"> </span>The insurer sought discovery of all
communications between the insured and its defense counsel concerning the
underlying matters and assessments made by the insured or defense counsel
concerning the insured’s liability and the settlement value of the litigation. <u>Id.</u><span style="mso-spacerun: yes;"> </span>The insured objected to this discovery,
arguing that the information sought was protected by Florida’s attorney client
privilege and federal law’s attorney work product doctrine. <u>Id.<o:p></o:p></u></span></div>
<br />
<div class="MsoNormal" style="line-height: 200%; margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 200%;">The Southern District
rejected the insured’s argument after a hearing on a motion to compel, finding
that the applicability of the work product doctrine in this case turned on
federal law notwithstanding that the documents at issue were prepared in
connection with state court litigation. <u>Id.</u> at *2. Thus under federal
law, the court determined that the insured waived the protection afforded by
the doctrine with respect to defense counsel’s assessment of liability and
damages in the underlying litigation by putting that assessment “at issue.” <u>Id.</u>
at *5. The court held that because the insured brought suit against the
insurer, the insured could not preclude the discovery of information that was
vital to the insurer’s defense that its allocation method was appropriate as
compared to the allocation method pressed by the insured. <u>Id.<o:p></o:p></u></span></div>
<br />
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<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 200%;">Next, the court held that
the insurer was entitled to the discovery of information that otherwise would
be protected from disclosure by the privilege afforded attorney-client
communications under Florida law.<span style="mso-spacerun: yes;"> </span><u>Id.</u>
at *5. According to the court, the insured could not claim this privilege as to
the insurer because of the existence of a common interest between the insured
and insurer with respect to the underlying litigation. <u>Id.</u><span style="mso-spacerun: yes;"> </span>Specifically, the court found that the
insured and insurer “shared a common interest in defeating liability in the
underlying proceedings.” <u>Id.</u> Specifically, the court rejected the
insured’s arguments that there was no common interest here because the insurer
did not have a duty to defend under the policy and because the insurer had
issued a reservation of rights letter. <u>Id.</u> at *6.<o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com2tag:blogger.com,1999:blog-5175790382109778526.post-23395995158678352232015-11-19T12:28:00.001-05:002015-11-19T12:28:29.992-05:00
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<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Times New Roman",serif; font-size: 12pt;">RIP & TEAR<o:p></o:p></span></u></b></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12pt;">The Eleventh
Circuit’s Decision in <o:p></o:p></span></b></div>
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<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">Carithers v. Mid-Continent Cas. Co.</span></u></b><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">, 782 F.3d
1240 (11th Cir. 2015)<o:p></o:p></span></b></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: "Times New Roman";"><o:p> </o:p></span></b></div>
<br />
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<span style="font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">By: Amanda
K. Anderson, Esquire <o:p></o:p></span></div>
<br />
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<span style="font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">Boyle,
Gentile & Leonard, P.A. <o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<a href="http://www.boylegentilelaw.com/"><span style="font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: "Times New Roman";"><span style="color: #0563c1;">www.boylegentilelaw.com</span></span></a><span style="font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
<br />
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<o:p><span style="font-family: Calibri;"> </span></o:p></div>
<br />
<div class="MsoNormal" style="line-height: 200%; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 200%; mso-fareast-font-family: "Times New Roman";">Prior to the
Eleventh Circuit’s recent decision in <u>Carithers</u>, the law surrounding the
removal and replacement of the defective work itself, even if it caused
“property damage”, was less than clear. <u>See</u> <u>Boran Craig Barber Homes
v. Mid-Continent</u>, No. 2:06-cv-89 – Doc. 262 (M.D. Fla. Feb. 19, 2009); </span><u><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 200%; mso-bidi-font-style: italic;">Arnett v. Mid-Continent Cas. Co.</span></u><i><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 200%;">,
</span></i><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 200%;">2010WL2821981
(S.D. Fla. 2010); <u><span style="mso-bidi-font-style: italic;">Assurance Company
of America v. Lucas Waterproofing Co. Inc.</span></u><i>, </i>581 F.Supp.2d
1201 (S.D. Fla.2008).<o:p></o:p></span></div>
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<div class="MsoNormal" style="line-height: 200%; margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 200%; mso-fareast-font-family: "Times New Roman";">In <u>Carithers</u>, the district court found that a balcony
was defectively constructed, which caused damage to a garage. <u>Carithers v.
Mid-Continent Cas. Co.</u>, 782 F.3d 1240 (11th Cir. 2015). The district court
also recognized that, under Florida law, the defectively constructed balcony
was not covered by the policy. <u>Id.</u> However, the district court found as
a fact that, in order to repair the garage (which the parties agree constituted
property damage), the balcony had to be rebuilt. <u>Id.</u></span><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 200%;"><o:p></o:p></span></div>
<br />
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<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 200%; mso-fareast-font-family: "Times New Roman";">The insurer, Mid–Continent Casualty Company (“MCC”), did not
contend that this factual finding was clearly erroneous. <u>Id.</u>Rather, MCC
claimed that the Carithers cannot recover for any defective work, even where repairing
that work is a necessary cost of repairing work for which there is coverage. <u>Id.
<o:p></o:p></u></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 200%; mso-fareast-font-family: "Times New Roman";">The Eleventh Circuit held that the district court did not err
in awarding damages for the cost of repairing the balcony. <u>Id.</u> Under
Florida law, the Carithers had a right to “the costs of repairing damage caused
by the defective work....” <u>U.S. Fire Ins. Co. v. <span style="mso-bidi-font-style: italic;">J.S.U.B., Inc.</span></u><i>,</i> 979 So.2d 871, 889 (Fla. 2007). Since
the district court determined that repairing the balcony was part of the cost
of repairing the garage, which was defective work, the Carithers were entitled
to these damages. <u>Carithers</u>, 782 F.3d at 1251. Thus, the Eleventh
Circuit has clarified that removal and replacement of the defective work itself
is covered a “damages because of ‘property damage’”. <o:p></o:p></span></div>
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<o:p><span style="font-family: Calibri;"> </span></o:p></div>
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<o:p><span style="font-family: Calibri;"> </span></o:p></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com1tag:blogger.com,1999:blog-5175790382109778526.post-1409864128645407332015-11-12T15:02:00.001-05:002015-11-12T15:02:22.453-05:00
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<b style="mso-bidi-font-weight: normal;"><u><span style="color: #252525; font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">Does the CGL Cover
“Preventative Medicine?”<o:p></o:p></span></u></b></div>
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<span style="color: #252525; font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">By: Mark A. Boyle, Esquire<o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 31.7pt 0pt 0in; text-align: center;">
<span style="color: #252525; font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">Boyle, Gentile & Leonard, P.A.<o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 31.7pt 0pt 0in; text-align: center;">
<a href="http://www.boylegentilelaw.com/"><span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;"><span style="color: blue;">www.boylegentilelaw.com</span></span></a><span style="color: #252525; font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;"><o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 31.7pt 0pt 0in; text-align: center;">
<span style="color: #252525; font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0in 8pt; text-align: justify; text-indent: 0.5in;">
<span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">Does the Commercial General Liability (“CGL”) cover the cost to
mitigate against future property damage?<span style="mso-spacerun: yes;">
</span>In other words, does the CGL cover “preventative medicine?”<span style="mso-spacerun: yes;"> </span>The answer in Florida appears to be yes.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0in 8pt; text-align: justify; text-indent: 0.5in;">
<span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">An issue that regularly appears in construction defect
litigation is the question of whether or not a commercial general liability
insurer is required to pay for repairs to areas of the project which have not
yet sustained physical damage, but are likely or virtually certain to sustain
such damage in the future.<span style="mso-spacerun: yes;"> </span>Florida had
no specific answer to whether such claims were covered in the past, until, the
recent decision of <u>Pavarini Construction Co. v. ACE American Insurance
Company</u>, case no.: 1:14-cv-20524-JLK (</span><a href="file:///Z:/Research/Property%20Damage/Pavarini%20v%20ACE/Pleadings/Doc.%20146%20-%20Amd.%20Order%20Granting%20Pavarini's%20MSJ%2010-30-15.pdf"><span style="font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;"><span style="color: blue;">Amended
Order dated 10-30-15</span></span></a><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">).<span style="mso-spacerun: yes;"> </span>In <u>Pavarini</u>, ACE was the commercial
general liability insurer for Pavarini Construction Co. <span style="mso-spacerun: yes;"> </span>Pavarini was seeking coverage for a series of
defective construction conditions.<span style="mso-spacerun: yes;"> </span>ACE
was an excess CGL insurer, whose following form policy necessarily imported the
standard CGL property damage definition found in the underlying policy issued
by AIG.<span style="mso-spacerun: yes;"> </span>In relevant part, the property
damage definition in the CGL policy provides:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 1in 8pt; text-align: justify;">
<span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">Property
damage means:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 1in 8pt; text-align: justify;">
<span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">a.
Physical injury to tangible property, including all resulting loss of use of
that property. All such loss of use shall be deemed to occur at the time of the
physical injury that caused it; or<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 1in 8pt; text-align: justify;">
<span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">b.
Loss of use of tangible property that is not physically injured. All such loss
shall be deemed to occur at the time of the occurrence that caused it.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0in 8pt; text-align: justify;">
<span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">In addressing this issue, the <u>Pavarini</u> court noted the
relatively recent Florida Supreme Court decision in <u>J.S.U.B.</u> recognizing
that defective construction conditions could constitute both a covered
“occurrence” and “property damage” within the meaning of a CGL policy.<span style="mso-spacerun: yes;"> </span>ACE took the position that the mere existence
of defective conditions did not trigger coverage and thus, they had very
limited obligations.<span style="mso-spacerun: yes;"> </span>Citing the recent
11<sup>th</sup> Circuit Court of Appeals decision in <u>Carithers v.
Mid-Continent Casualty Co.</u>, 782 F. 3d 1240 (11<sup>th</sup> Cir. 2015), the
<u>Pavarini</u> Court noted: <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 1in 8pt; text-align: justify;">
<span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">There,
a balcony that had been defectively installed by a subcontractor was causing
runoff and resulting water damage to an adjacent garage.<span style="mso-spacerun: yes;"> </span><u>See Id.</u> Although the balcony itself
did not constitute independent “property damage” under the terms of the policy,
its replacement was necessary in order to effectively repair the garage.<span style="mso-spacerun: yes;"> </span><u>See Id.</u> At 1251.<span style="mso-spacerun: yes;"> </span>“In other words, to repair the garage, it was
necessary to completely replace the defectively constructed balcony.”<span style="mso-spacerun: yes;"> </span>Memorandum and Order, <u>Carithers v.
Mid-Continent Cas. Co.</u>, No. 12-008890 (M.D. Fla. Mar. 11, 2014), DE 126 at
8.<span style="mso-spacerun: yes;"> </span>Similarly here, in order to
adequately repair the non-defective project components, the building had to be
stabilized.<span style="mso-spacerun: yes;"> </span>Even if the predominant
objective of the repair effort was to fix the instability caused by the
defective subcontractor work, it is undisputed that the same effort was
required to put an end to ongoing damage to otherwise non-defective property,
e.g. damage to stucco, penthouse enclosure, and critical concrete structural
elements.<span style="mso-spacerun: yes;"> </span><i style="mso-bidi-font-style: normal;">See </i>DE 128 at 2-3; DE 131 at 52-63.<span style="mso-spacerun: yes;">
</span>Thus, the ACE policy provides for complete indemnification.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 1in 8pt 0in; text-align: justify;">
<span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">In addition to these holdings, the Court noted the following in
a footnote.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 1in 8pt; text-align: justify;">
<span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">Citing
<i style="mso-bidi-font-style: normal;">J.S.U.B</i>, Defendant argues somewhat
incidentally that mitigation of damages is not covered.<span style="mso-spacerun: yes;"> </span>Nowhere in <i style="mso-bidi-font-style: normal;">J.S.U.B.</i> is mitigation of damages mentioned.<span style="mso-spacerun: yes;"> </span>On the contrary, <i style="mso-bidi-font-style: normal;">J.S.U.B.</i> stands for the proposition that claims for repairing
structural damage caused by the defective work of subcontractors may be
covered.<span style="mso-spacerun: yes;"> </span><b style="mso-bidi-font-weight: normal;">As a natural corollary, coverage may exist for costs to repair
defective work in order to prevent further structural damage and covered loss. </b><span style="mso-spacerun: yes;"> </span><i style="mso-bidi-font-style: normal;">See,
e.g. Carithers v. Mid-Continent Cas. Co., </i>782 F. 3d 1240, 1251 (11<sup>th</sup>
Cir. 2015). [Emphasis Added]<o:p></o:p></span></div>
<br />
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<span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">The Court’s holding is consistent with numerous decisions across
the country, finding that damage mitigation, once the property damage threshold
has been established as an initial matter, are covered.<span style="mso-spacerun: yes;"> </span></span><i><span style="font-family: "TimesNewRomanPS-ItalicMT",serif; line-height: 150%; mso-bidi-font-family: TimesNewRomanPS-ItalicMT; mso-bidi-font-size: 12.0pt;">See, e.g.</span></i><span style="font-family: "TimesNewRomanPSMT",serif; line-height: 150%; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-font-size: 12.0pt;">, </span><i><span style="font-family: "TimesNewRomanPS-ItalicMT",serif; line-height: 150%; mso-bidi-font-family: TimesNewRomanPS-ItalicMT; mso-bidi-font-size: 12.0pt;">AIU Ins. Co. v. Super. Ct.</span></i><span style="font-family: "TimesNewRomanPSMT",serif; line-height: 150%; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-font-size: 12.0pt;">, 799 P.2d 1253, 1272 (Cal. 1990)
(coverage for “remedial and mitigative actions”); </span><i><span style="font-family: "TimesNewRomanPS-ItalicMT",serif; line-height: 150%; mso-bidi-font-family: TimesNewRomanPS-ItalicMT; mso-bidi-font-size: 12.0pt;">Globe Indem. Co. v. State</span></i><span style="font-family: "TimesNewRomanPSMT",serif; line-height: 150%; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-font-size: 12.0pt;">, 118 Cal. Rptr. 75, 79 (Ct. App. 1974)
(explaining that it would “seem strangely incongruous” to the insured “that his
policy would cover him for damages to tangible property destroyed through his
negligence in allowing a fire to escape but not for the sums incurred in
mitigating such damages by suppressing the fire”); </span><i><span style="font-family: "TimesNewRomanPS-ItalicMT",serif; line-height: 150%; mso-bidi-font-family: TimesNewRomanPS-ItalicMT; mso-bidi-font-size: 12.0pt;">Am. Econ. Ins. Co. v. Commons</span></i><span style="font-family: "TimesNewRomanPSMT",serif; line-height: 150%; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-font-size: 12.0pt;">, 552 P.2d 612, 613-14 (Or. Ct. App.
1976) (adopting rationale of </span><i><span style="font-family: "TimesNewRomanPS-ItalicMT",serif; line-height: 150%; mso-bidi-font-family: TimesNewRomanPS-ItalicMT; mso-bidi-font-size: 12.0pt;">Globe Indem.</span></i><span style="font-family: "TimesNewRomanPSMT",serif; line-height: 150%; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-font-size: 12.0pt;">); </span><i><span style="font-family: "TimesNewRomanPS-ItalicMT",serif; line-height: 150%; mso-bidi-font-family: TimesNewRomanPS-ItalicMT; mso-bidi-font-size: 12.0pt;">Aronson Assocs., Inc. v. Pa. Nat’l Mut. Cas. Ins. Co.</span></i><span style="font-family: "TimesNewRomanPSMT",serif; line-height: 150%; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-font-size: 12.0pt;">, 14 Pa. D. & C.3d 1, 7 (C.P.
1977), </span><i><span style="font-family: "TimesNewRomanPS-ItalicMT",serif; line-height: 150%; mso-bidi-font-family: TimesNewRomanPS-ItalicMT; mso-bidi-font-size: 12.0pt;">aff’d
</span></i><span style="font-family: "TimesNewRomanPSMT",serif; line-height: 150%; mso-bidi-font-family: TimesNewRomanPSMT; mso-bidi-font-size: 12.0pt;">422 A.2d 689
(Pa. Super. 1979) (per curiam) (“preventive measures can be recovered where
they are required to protect against a third person being harmed.”).</span><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;"><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0in 8pt; text-align: justify;">
<span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">Indeed, “[t]o find otherwise would require the insured to
intentionally allow property damage or bodily harm to occur for the damages to
be covered.” <i style="mso-bidi-font-style: normal;">Big-D Constr. Corp. v. Take
it for Granite Too, </i>917 F. Supp. 2d 1096, 1109 (D. Nev. 2013).<span style="mso-spacerun: yes;"> </span>As explained by one court: It is folly to
argue that if a policy owner does nothing and thereby permits the piling up of
mountainous claims at the eventual expense of the insurance carrier, he will be
held harmless of all liability, but if he makes a reasonable expenditure and
prevents a catastrophe he must do so at his own cost and expense. <o:p></o:p></span></div>
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<div class="MsoNormal" style="line-height: 150%; margin: 0in 1in 8pt 0in; text-align: justify;">
<i style="mso-bidi-font-style: normal;"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">Leebov
v. U.S. Fid. & Guar. Co.</span></i><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">, 165 A. 2d
82, 84 (Pa. 1960). <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 1in 8pt 0in; text-align: justify;">
<span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">So, for now, in Florida, mitigation damages are here to stay. <o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com3tag:blogger.com,1999:blog-5175790382109778526.post-26497879267025556692015-11-06T13:59:00.001-05:002015-11-06T13:59:58.697-05:00
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<b style="mso-bidi-font-weight: normal;"><u><span style="color: #252525; font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">To assign or not to assign?
The burning question for aggrieved policyholders throughout Florida<o:p></o:p></span></u></b></div>
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<span style="color: #252525; font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">By: Justin M. Thomas <o:p></o:p></span></div>
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<span style="color: #252525; font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">Boyle, Gentile & Leonard, P.A.<o:p></o:p></span></div>
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<a href="http://www.boylegentilelaw.com/"><span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;"><span style="color: blue;">www.boylegentilelaw.com</span></span></a><span style="color: #252525; font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;"><o:p></o:p></span></div>
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<span style="color: #252525; font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;"><o:p> </o:p></span></div>
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<span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">Recently, Security First Insurance Company sought administrative
review of the Florida Office of Insurance Regulation’s (“OIR”) denial of requested
changes to their homeowner’s insurance policies issued in Florida, which
operated to prohibit post-lost assignments without the company’s approval.<span style="mso-spacerun: yes;"> </span><u>Security First Ins. Co. v. State of
Florida Office of Ins. Reg.</u> 2015 WL 36446925 (Fla. 1st DCA June 22,
2015).<span style="mso-spacerun: yes;"> </span>The Court affirmed the decision
of the OIR relying primarily on the storied history of Florida jurisprudence
that approved of the exact conduct <u>Security First</u> sought to
eliminate.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">On rehearing, Security urged the First District Court of Appeal to
certify conflict to the Florida Supreme Court.<span style="mso-spacerun: yes;">
</span><u>Security First Ins. Co. v. State of Florida Office of Ins. Reg.</u>
2015 WL 36446925 (Fla. 1st DCA October 26, 2015). The court declined this
request based on Florida’s existing authority that permits assignment of
post-loss rights. In doing so, however, the court acknowledged the existence of
a narrow statutorily imposed exception to this general rule with regard to
health insurance claims. <span style="mso-spacerun: yes;"> </span>In the
healthcare context, both Florida Courts and Legislature have acknowledged the
existence of significant public policy considerations require a prohibition on
the assignment of health care claims. <span style="mso-spacerun: yes;"> </span>The <u>Security First</u> Court, however,
recognized the distinction and elected not to extend the exception beyond the
health insurance arena.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">The <u>Security First</u> holding is consistent with the recent <span style="mso-spacerun: yes;"> </span>Fifth District Court of Appeal of <u>Accident
Cleaners, Inc. v. Universal Ins. Co.</u> 2015 WL 1609973 (Fla. 5th DCA April
10, 2015), which also recognized approved of the assignability of post loss
claims. However, the <u>Accident Cleaners Court</u> went further in
acknowledging that assignees are not required to have an insurable interest at
the time of loss in order to sue the insurer. In doing so, the <u>Accident
Cleaners</u> Court pronounced Florida's long history in approving post loss
assignments of insurance rights and the entitlement of the assignee to enforce
the same:<o:p></o:p></span></div>
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<span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">[d]ating back to 1917, the Florida Supreme Court recognized that
provisions in insurance contracts requiring consent to assignment of the policy
do not apply to assignment after loss.<span class="apple-converted-space"> </span></span><a href="https://a.next.westlaw.com/Link/Document/FullText?findType=Y&serNum=1917001200&pubNum=0000734&originatingDoc=I5c26aee4e21011e4b86bd602cb8781fa&refType=RP&fi=co_pp_sp_734_210&originationContext=document&transitionType=DocumentItem&contextData=(sc.Keycite)#co_pp_sp_734_210"><span style="font-family: Arial;"><em><span style="color: #145da4; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic;">W. Fla. Grocery Co. v. Teutonia Fire Ins.</span></em><em><span style="color: #145da4; line-height: 150%; mso-bidi-font-size: 12.0pt;"> </span></em><em><span style="color: #145da4; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic;">Co.</span></em><em><span style="color: #145da4; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;">,</span></em></span><span class="apple-converted-space"><span style="color: #145da4; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;"> </span></span><span style="color: #145da4; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;">74 Fla. 220, 77 So. 209, 210–11 (1917)</span></a><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">;<span class="apple-converted-space"> </span><em>see</em><span class="apple-converted-space"><i> </i></span></span><a href="https://a.next.westlaw.com/Link/Document/FullText?findType=Y&serNum=2014832910&pubNum=0000735&originatingDoc=I5c26aee4e21011e4b86bd602cb8781fa&refType=RP&fi=co_pp_sp_735_377&originationContext=document&transitionType=DocumentItem&contextData=(sc.Keycite)#co_pp_sp_735_377"><em><span style="color: #252525; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic; mso-bidi-font-weight: bold;"><span style="font-family: Arial;">Cont'l</span></span></em><span class="apple-converted-space"><i><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;"> </span></i></span><span style="font-family: Arial;"><em><span style="color: #252525; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic; mso-bidi-font-weight: bold;">Cas</span></em><em><span style="color: #252525; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic;">.</span></em></span><span class="apple-converted-space"><i><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;"> </span></i></span><span style="font-family: Arial;"><em><span style="color: #252525; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic; mso-bidi-font-weight: bold;">Co</span></em><em><span style="color: #252525; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic;">.</span></em></span><span class="apple-converted-space"><i><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;"> </span></i></span><span style="font-family: Arial;"><em><span style="color: #252525; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic; mso-bidi-font-weight: bold;">v</span></em><em><span style="color: #252525; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic;">.</span></em></span><span class="apple-converted-space"><i><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;"> </span></i></span><em><span style="color: #252525; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic; mso-bidi-font-weight: bold;"><span style="font-family: Arial;">Ryan</span></span></em><span class="apple-converted-space"><i><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;"> </span></i></span><span style="font-family: Arial;"><em><span style="color: #252525; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic; mso-bidi-font-weight: bold;">Inc</span></em><em><span style="color: #252525; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic;">.</span></em></span><span class="apple-converted-space"><i><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;"> </span></i></span><span style="font-family: Arial;"><em><span style="color: #252525; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic; mso-bidi-font-weight: bold;">E</span></em><em><span style="color: #252525; line-height: 150%; mso-bidi-font-size: 12.0pt;">.</span></em><em><span style="color: #252525; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;">,</span></em></span><span class="apple-converted-space"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;"> </span></span><span class="cosearchterm"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-weight: bold; text-decoration: none; text-underline: none;">974</span></span><span class="apple-converted-space"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;"> </span></span><span class="cosearchterm"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-weight: bold; text-decoration: none; text-underline: none;">So</span></span><span class="cosearchterm"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;">. <span style="mso-bidi-font-weight: bold;">2d</span></span></span><span class="apple-converted-space"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;"> </span></span><span class="cosearchterm"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-weight: bold; text-decoration: none; text-underline: none;">368</span></span><span class="cosearchterm"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;">,</span></span><span class="apple-converted-space"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;"> </span></span><span class="cosearchterm"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-weight: bold; text-decoration: none; text-underline: none;">377</span></span><span class="apple-converted-space"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;"> </span></span><span class="cosearchterm"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-weight: bold; text-decoration: none; text-underline: none;">n</span></span><span class="cosearchterm"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;">.</span></span><span class="apple-converted-space"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;"> </span></span><span class="cosearchterm"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-weight: bold; text-decoration: none; text-underline: none;">7</span></span><span class="apple-converted-space"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;"> </span></span><span class="cosearchterm"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;">(<span style="mso-bidi-font-weight: bold;">Fla</span>. <span style="mso-bidi-font-weight: bold;">2008</span>)</span></span></a><span class="apple-converted-space"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;"> </span></span><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">(reaffirming the principle from<span class="apple-converted-space"> </span><em><u><span style="font-style: normal; mso-bidi-font-style: italic;">W. Fla. Grocery Co.</span></u></em><span class="apple-converted-space"> </span>that the law is well-settled that
anti-assignment provisions do not apply after loss);<span class="apple-converted-space"> </span></span><a href="https://a.next.westlaw.com/Link/Document/FullText?findType=Y&serNum=1998036950&pubNum=0000735&originatingDoc=I5c26aee4e21011e4b86bd602cb8781fa&refType=RP&fi=co_pp_sp_735_1386&originationContext=document&transitionType=DocumentItem&contextData=(sc.Keycite)#co_pp_sp_735_1386"><span style="font-family: Arial;"><em><span style="color: #145da4; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic;">Lexington Ins. Co. v. Simkins Indus., Inc.</span></em><em><span style="color: #145da4; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;">,</span></em></span><span class="apple-converted-space"><span style="color: #145da4; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;"> </span></span><span style="color: #145da4; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;">704 So. 2d 1384, 1386
n. 3 (Fla.1998)</span></a><span class="apple-converted-space"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;"> </span></span><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">(“[A]n
insured may assign insurance proceeds to a third party after a loss, even
without the consent of the insurer.” (citing<span class="apple-converted-space"> </span></span><a href="https://a.next.westlaw.com/Link/Document/FullText?findType=Y&serNum=1995048287&pubNum=0000735&originatingDoc=I5c26aee4e21011e4b86bd602cb8781fa&refType=RP&fi=co_pp_sp_735_142&originationContext=document&transitionType=DocumentItem&contextData=(sc.Keycite)#co_pp_sp_735_142"><span style="font-family: Arial;"><em><span style="color: #145da4; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic;">Better Constr., Inc. v. Nat'l Union Fire
Ins. Co. of Pittsburgh</span></em><em><span style="color: #145da4; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic; text-decoration: none; text-underline: none;">,</span></em></span><span class="apple-converted-space"><span style="color: #145da4; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;"> </span></span><span style="color: #145da4; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;">651 So.2d 141, 142 (Fla. 3d DCA 1995)</span></a><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">). Furthermore, the right to sue for a breach of contract to
enforce assigned rights was recognized early in Florida history.<span class="apple-converted-space"> </span><em>See</em><span class="apple-converted-space"><i> </i></span></span><a href="https://a.next.westlaw.com/Link/Document/FullText?findType=Y&serNum=2000045857&pubNum=0000735&originatingDoc=I5c26aee4e21011e4b86bd602cb8781fa&refType=RP&fi=co_pp_sp_735_57&originationContext=document&transitionType=DocumentItem&contextData=(sc.Keycite)#co_pp_sp_735_57"><span style="font-family: Arial;"><em><span style="color: #145da4; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic;">Nationwide Mut. Fire Ins. Co. v. Pinnacle
Med., Inc.</span></em><em><span style="color: #145da4; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;">,</span></em></span><span class="apple-converted-space"><span style="color: #145da4; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;"> </span></span><span style="color: #145da4; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;">753 So.2d 55, 57 (Fla.2000)</span></a><span class="apple-converted-space"><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;"> </span></span><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">(“The right of an assignee to sue for breach of contract to
enforce assigned rights predates the Florida Constitution.” (citing<span class="apple-converted-space"> </span></span><a href="https://a.next.westlaw.com/Link/Document/FullText?findType=Y&serNum=1886011327&pubNum=0000353&originatingDoc=I5c26aee4e21011e4b86bd602cb8781fa&refType=RP&originationContext=document&transitionType=DocumentItem&contextData=(sc.Keycite)"><span style="font-family: Arial;"><em><span style="color: #145da4; font-style: normal; line-height: 150%; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic; text-decoration: none; text-underline: none;">Robinson
v. Nix</span></em><em><span style="color: #145da4; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;">,</span></em></span><span class="apple-converted-space"><span style="color: #145da4; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;"> </span></span><span style="color: #145da4; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt; text-decoration: none; text-underline: none;">22 Fla. 321 (1886)</span></a><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">).<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0in 8pt; text-align: justify;">
<u><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">Id.</span></u><span style="color: #252525; font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;"> at 2.<span style="mso-spacerun: yes;"> </span>Interestingly, the utility of a
policyholder’s post-loss assignment of policy rights hinges on the ability to
enforce those acquired rights.<span style="mso-spacerun: yes;"> </span>This
importance is highlighted when an insured suffers a sudden loss from a covered
peril, such as damage to an insured home from a severe storm, and in turn is
able to use an assignment of rights under the policy to assign those rights to
a contractor, that will assist the policyholder in repairing the loss.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0in 8pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; line-height: 150%; mso-bidi-font-size: 12.0pt;">In
closing, Florida policyholders in accord with the decisions in <u>Security
First</u> and <u>Accident Cleaners</u>, may still employ the assignment of
post-loss rights under their insurance policies as an effective method to
resolve and recover from an insured loss.<span style="mso-spacerun: yes;">
</span>Further, the foregoing decisions should provide comfort to assignees
with respect to the validity and enforceability of assigned post-loss policy
rights.<span style="mso-spacerun: yes;"> </span>Lastly, it should be noted that
the Court in <u>Security First</u>, unequivocally stated that the Florida
Legislature should consider, and if necessary address, the public policy
arguments raised by insurers—not the judiciary. . Only time will tell if
Florida’s Lawmakers accept the invitation.<o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com1tag:blogger.com,1999:blog-5175790382109778526.post-55056006088681371842015-11-02T11:18:00.001-05:002015-11-02T11:18:20.570-05:00
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><u><span style="font-size: 14pt; line-height: 107%; mso-bidi-font-size: 12.0pt;">WHEN IS A MOTION FOR REHEARING REQUIRED?<o:p></o:p></span></u></b></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<span style="line-height: 107%; mso-bidi-font-size: 12.0pt;">By: Alexander L. Brockmeyer,
Esquire<o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<span style="line-height: 107%; mso-bidi-font-size: 12.0pt;">Boyle, Gentile &
Leonard, P.A.<o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<a href="http://www.boylegentilelaw.com/"><span style="line-height: 107%; mso-bidi-font-size: 12.0pt;"><span style="color: #0563c1;">www.boylegentilelaw.com</span></span></a><span style="line-height: 107%; mso-bidi-font-size: 12.0pt;"><o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="line-height: 150%; margin: 0in 0in 0pt; text-align: center;">
<span style="line-height: 150%; mso-bidi-font-size: 12.0pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0in 0pt; text-align: justify;">
<span style="line-height: 150%; mso-bidi-font-size: 12.0pt;"><span style="mso-tab-count: 1;"> </span>Preservation of error is
a concept litigators know all too well. Generally, to raise an error on appeal
a litigant must object at trial when the alleged error occurs. <u>F.B. v. State</u>,
852 So. 2d 226, 229 (Fla. 2003) (citing <u>J.B. v. State</u>, 705 So. 2d 1376,
1378 (Fla. 1998)). “The contemporaneous objection requirement originated in the
English legal system as a mechanism for preserving error for appellate review,
and the requirement was carried forward and generally adopted in America. <u>Murphy
v. International Robotic Systems, Inc.</u>, 766 So. 2d 1010, 1016 (Fla. 2000)
(citations omitted). The Florida Supreme Court explained the rationale of the
objection requirement as being:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0.7in 0pt; text-align: justify;">
<span style="line-height: 150%; mso-bidi-font-size: 12.0pt;">“…based on practical
necessity and basic fairness in the operation of a judicial system. It places
the trial judge on notice that error may have been committed, and provides him
[or her] an opportunity to correct it at an early stage of the proceedings.
Delay and an unnecessary use of the appellate process result from a failure to
cure early that which must be cured eventually.” <u>Id.</u> (quoting <u>Castor
v. State</u>, 365 So. 2d 701, 703 (Fla. 1978)). <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0.7in 0pt; text-align: justify;">
<span style="line-height: 150%; mso-bidi-font-size: 12.0pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0in 0pt; text-align: justify;">
<span style="line-height: 150%; mso-bidi-font-size: 12.0pt;"><span style="mso-tab-count: 1;"> </span>However, how does a
litigant preserve an alleged error of defect that appears for the first time in
a judgment? File a motion for rehearing. Generally, a litigant need not file a
motion for rehearing if he or she is “displeased with a trial court’s decision
on a matter because it found the opposing argument more persuasive….” <u>Pensacola
Beach Pier, Inc. v. King</u>, 66 So. 3d 321, 324 (Fla. 1st DCA 2011). However,
Florida’s appellate courts require a litigant to file a motion for rehearing in
order to preserve an error appearing for the first time in the judgment itself,
an error that occurred at trial, or a judgment entered after a jury trial. <u>Id.</u>;
<u>New Hampshire Indem Co. v. Gray</u>, 2015 WL 5845240, *2 (Fla. 1st DCA
2015); <u>Lake Sarasota, Inc. v. Pan. Am. Sur. Co.</u>, 140 So. 2d 139, 142
(Fla. 2d DCA 1962). <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="line-height: 150%; mso-bidi-font-size: 12.0pt;">Therefore, the next time you receive a final judgment
ask yourself, should I file for rehearing? If the final judgment contains
something you are seeing for the first time, the answer is most likely yes.
Failure to do so may result in the appellate court refusing to consider an
otherwise meritorious argument based on preservation issues.<o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com1tag:blogger.com,1999:blog-5175790382109778526.post-63237829189668841792015-10-28T17:04:00.001-04:002015-10-28T17:04:44.873-04:00
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Times New Roman",serif; font-size: 12pt;">Trigger: A
Previously Unsettled Issue That Now Appears to be Settled<o:p></o:p></span></u></b></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">By Ellen G. Smith, Esq.<o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">Boyle, Gentile & Leonard, P.A.<o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<a href="http://www.boylegentilelaw.com/"><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><span style="color: #0563c1;">www.boylegentilelaw.com</span></span></a><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">Two
main trigger theories have been recognized in Florida.<span style="mso-spacerun: yes;"> </span>The “manifestation” trigger and the
“injury-in-fact” trigger.<span style="mso-spacerun: yes;"> </span>Under the
manifestation trigger the property damage occurs when the property damage
manifests itself and/or could have be discoverable by reasonable inspection<i style="mso-bidi-font-style: normal;">.<span style="mso-spacerun: yes;"> </span></i><u>Carithers
v. Mid-Continent Cas. Co.</u>, 782 F. 3d 1240, 1245 (11th Cir. 2015).<span style="mso-spacerun: yes;"> </span>The “injury-in-fact” trigger identifies that
the property damage occurs when the property is damaged.<span style="mso-spacerun: yes;"> </span><u>Id.</u><span style="mso-spacerun: yes;">
</span>Recent Florida decisions have leaned toward an injury-in-fact
trigger.<span style="mso-spacerun: yes;"> </span><u>Id.</u>; <u>Travelers Prop.
Cas. Co. of Am. v. Amerisure Ins. Co.</u>, 2015 WL 5769247, at *4 (N.D. Fla.
2015); <u>Voeller Const., Inc. v. Southern-Owners Ins. Co.</u>, 2014 WL 1779289
(M.D. Fla. May 5, 2014); <u>Trovillion Const. & Development, Inc. v.
Mid-Continent Cas. Co.</u>, 2014 WL 201678 (M.D. Fla. Jan. 17, 2014); <u>Axis
Surplus Ins. Co. v. Contravest Constr. Co</u><i style="mso-bidi-font-style: normal;">.</i>, 23 Fla. L. Weekly Fed. D 279 (M.D. Fla. June 5, 2012) and <u>Johnson-Graham-Malone,
Inc. v. Amerisure</u>, 18 Fla. L. Weekly Supp. 870a (Fla. April 29, 2011),
dismissed <u>Amerisure Ins. Co. v. Johnson-Graham-Malone, Inc.</u>, 66 So. 3d
415 (Fla. 1st DCA 2011).<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">However,
despite the trend towards holding the “injury-in-fact” trigger is the
applicable trigger theory, a trigger theory has not officially been decided by
the Florida Supreme Court.<span style="mso-spacerun: yes;"> </span>Importantly,
courts are now recognizing that because of this unsettled trigger theory, that
could be a reason an insurer has a duty to defend since any ambiguity in
coverage sides with the insured. <u>See</u> <u>Travelers Prop. Cas. Co. of Am.</u>,
2015 WL 5769247, at *4<i style="mso-bidi-font-style: normal;">; </i><u>Prudential
Prop. and Cas. Co. v. Swindell</u>, 622 So. 2d 467 (FIa. 1993); <u>Westmoreland
v. Lumbermens Mut. Cas. Co.</u>, 704 So. 2d 176 (Fla. 4th DCA 1997); and <u>Hartnett
v. Southern Ins. Co.</u>, 181 So. 2d 524, 528 (Fla. 1965).<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">The
court in <u>Travelers</u> had to decide this issue as the parties disagree
whether the “manifestation” or “injury-in-fact” trigger applied.<span style="mso-spacerun: yes;"> </span><u>Travelers Prop. Cas. Co. of Am</u><i style="mso-bidi-font-style: normal;">.</i>, 2015 WL 5769247, at *3.<span style="mso-spacerun: yes;"> </span>The insurer argued the manifestation trigger
applied and the property damage happened when the damages could have been
discovered, therefore the property damage happened outside of the policy
period. <u>Id</u><i style="mso-bidi-font-style: normal;">.</i><span style="mso-spacerun: yes;"> </span>The insured argued for the injury-in-fact
trigger.<span style="mso-spacerun: yes;"> </span><u>Id</u><i style="mso-bidi-font-style: normal;">.</i><span style="mso-spacerun: yes;"> </span>The <u>Travelers</u> court
relied on <u>Trizec Properties, Inc. v. Biltmore Construction Co.</u>, 767 F.
2d 810 (11th Cir. 1985), which applied the injury-in-fact trigger and held the
insurer had a duty to defend because “the complaint alleged only that the
damage could not be discovered until several years after the policy period
ended”, as such from the allegations in the complaint the damage could have
occurred during the policy period.<span style="mso-spacerun: yes;"> </span>The
court then looked to the decision in <u>Carithers</u>, which had to decide the
issue between which trigger theory applied.<span style="mso-spacerun: yes;">
</span>The <u>Carithers</u> court ultimately ruled that even if it did agree
the manifestation trigger applies, that does not relieve the insurer from
defending because the uncertainty of the law required the insurer to
defend.<span style="mso-spacerun: yes;"> </span><u>Id.</u> at 1246. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;"><span style="mso-tab-count: 1;"> </span>The <u>Travelers</u> court shied away from deciding
whether a manifestation trigger or an injury-in-fact trigger applied, and
simply held:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0.5in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">The bottom line is. The underlying
complaint alleged damage caused by defective stucco work.<span style="mso-spacerun: yes;"> </span>For all that was alleged in the complaint,
the damage may have occurred during the policy period, either after completion
of the work (bringing the case within the your-work or completed-operations
coverage) or perhaps even while the work was ongoing (bringing the case within
the ongoing-operations coverage). Amerisure had a duty to defend the claims.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0.5in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">The result should not be
surprising.<span style="mso-spacerun: yes;"> </span>The whole point of the
contractual provision requiring [subcontractor] to obtain coverage was to
protect against defective-stucco claims just like this.<span style="mso-spacerun: yes;"> </span>The reason [subcontractor] bought the
coverage was to protect against claims just like this.<span style="mso-spacerun: yes;"> </span>Amerisure took a premium for accepting the
risk of actions just like this.<span style="mso-spacerun: yes;"> </span>It had a
duty to cover the risk.<span style="mso-spacerun: yes;"> </span>The plain terms
of Amerisure’s policy so provide.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<u><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">Id.</span></u><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">
at 4.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;"><span style="mso-tab-count: 1;"> </span>Insurance carriers should take these recent decisions as
a warning.<span style="mso-spacerun: yes;"> </span>Given the remaining
uncertainty of the applicable “trigger” in the law, it seems carriers would
embrace their duty to defend proactively.<span style="mso-spacerun: yes;">
</span><o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com0tag:blogger.com,1999:blog-5175790382109778526.post-62703730126639942512015-10-08T13:26:00.001-04:002015-10-08T13:26:16.772-04:00
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">CAUSE
AND EFFECT: ONE OCCURRENCE / MULTIPLE OCCURRENCES UNDER THE “CAUSE THEORY”<o:p></o:p></span></b></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">By: Matthew M. Jackson, Esquire<o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">Boyle, Gentile & Leonard, P.A. <o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<a href="http://www.boylegentilelaw.com/"><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><span style="color: #0563c1;">www.boylegentilelaw.com</span></span></a><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;"><span style="mso-tab-count: 1;"> </span>A typical liability policy has an aggregate policy limit
for claims within a single policy period, and a lower limit for each
“Occurrence” within the policy period.<span style="mso-spacerun: yes;">
</span>For example, a one-year liability policy might provide a $1,000,000
limit per “Occurrence” with a $2,000,000 aggregate limit for all “Occurrences”
within the one-year policy period no matter how many “Occurrences” there may
be.<span style="mso-spacerun: yes;"> </span>This structure creates a scenario
where plaintiffs’ counsel asserting covered losses in excess of the
“Occurrence” limit can access additional funds if it is successfully argued
that the claims asserted, constitute multiple “Occurrences” within the policy
period.<span style="mso-spacerun: yes;"> </span>In short, assuming coverage
otherwise exists, a claim deemed to be one “Occurrence” with $2,000,000 in covered
losses would be subject to the $1,000,000 “Occurrence” limit; while the same
fact pattern, if deemed to be two “Occurrences” with $1,000,000 in covered
losses each, would net the full $2,000,000 aggregate.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><span style="mso-tab-count: 1;"> </span>In a typical policy, “Occurrence” is
defined to mean: “an accident, including continuous or repeated exposure to
substantially the same general harmful conditions.”<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><span style="mso-tab-count: 1;"> </span>A majority of jurisdictions use what
is termed the “Cause Theory” in determining what constitutes a single accident
with repeated or continuous exposure, and what constitutes multiple accidents; and
therefore multiple “Occurrences.”<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><span style="mso-tab-count: 1;"> </span>Application of the cause theory has
most commonly been in conjunction with asbestos litigation, featuring multiple
plaintiffs with repeated exposure.<span style="mso-spacerun: yes;">
</span>However, markedly different results stem from ostensible application of
the same theory depending on what each court determined as the “cause.”<span style="mso-spacerun: yes;"> </span>For example, one Court held:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0.5in 0pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: Calibri;">“(Defendant) is being sued by thousands of claimants alleging exposure
to (asbestos product) on hundreds of job sites, on thousands of different
dates, and under a variety of conditions over a period of six years. Not
everyone exposed to asbestos is affected and not all claimants were exposed
under the same circumstances or to the same lot of asbestos. I hold that the “cause”
of the injuries in question is the exposure of each individual to asbestos.
That exposure thus constitutes an occurrence for the purposes of determining
the number of occurrences.” </span><a href="http://www.westlaw.com/Link/Document/FullText?findType=Y&serNum=1988015704&pubNum=0000999&originatingDoc=Ia2cc8d67918611d993e6d35cc61aab4a&refType=RP&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.UserEnteredCitation)"><span style="color: windowtext; font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: Calibri;">Pittsburgh Corning Corp. v. Travelers Indemnity Co.</span><span style="color: windowtext; font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: Calibri; text-decoration: none; text-underline: none;">, No.
84–3985, 1988 WL 5302 (E.D. PA 1988)</span></a><span style="font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: Calibri;">.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">Taken
to the logical extreme, if exposure of each plaintiff is deemed the “cause,”
then multiple plaintiffs that might have sat in adjacent offices to be exposed
at the same time and in the same place to the same harmful conditions would
still constitute multiple occurrences.<span style="mso-spacerun: yes;">
</span>However, it is clear that a spatial and temporal analysis is inherent in
the “cause theory:” <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0.5in 0pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: Calibri;">“the claims… do not result from exposure at one site to one person or
group. Indeed, this is not a case where there was a single product distributed
to a very limited number of customers. Here, the claimants’ alleged bodily
injuries stem from exposure to different lots of asbestos, multiple different
products (not all distributed at the same time), and in different industrial
settings. The bodily injuries were caused by varying types of exposure to a
variety of products in a multitude of different locations over many decades.”<span style="mso-spacerun: yes;"> </span><u>Westfield Insurance v. Continental
Insurance</u>, 2015 WL 1549277 (N.D. Ohio 2015). <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: Calibri;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">Florida
is among the majority and follows the cause theory. <span style="mso-spacerun: yes;"> </span>See <u>Koikos v. Travelers Ins. Co</u>., 849
So. 2d 263, 268 (Fla. 2003) citing <u>American Indem. Co. v. McQuaig</u>, 435 So.
2d 414 (Fla. 5<sup>th</sup> DCA 1983). <span style="mso-spacerun: yes;"> </span>Florida’s
litigation has resulted in multiple “Occurrences” even when the temporal and
spatial analysis might indicate that one “Occurrence” would apply.<span style="mso-spacerun: yes;"> </span><u><o:p></o:p></u></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">In
the <u>McQuaig</u> case, the resident of a home fired three shots at two police
officers (McQuaig and Pope), injuring both. <span style="mso-spacerun: yes;"> </span>The insurance company argued that there was
only one occurrence because the injury was caused by one instrumentality of danger
(the shotgun), in one very specific location and in close duration. <span style="mso-spacerun: yes;"> </span>The insurance company cited a string of cases
for the proposition that the shots could be considered one occurrence. <span style="mso-spacerun: yes;"> </span>In finding that the shots constituted three
separate occurrences and in distinguishing the cases cited by the insurer, the
fifth district explained: “In each of these cases (cited by the insurer)… there
was a single force, that once set in motion caused multiple injuries. <span style="mso-spacerun: yes;"> </span>Analogous to this would be if a single shot
had injured both McQuaig and Pope. <span style="mso-spacerun: yes;"> </span>This
was not the case.” <u>Id.</u> <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>In other words, if there had been only one
shot causing multiple injuries, then there would have been only one
“occurrence”- but there were multiple shots, and so multiple occurrences.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">The
vague, amorphous definition of “Occurrence” in the typical liability policy
will undoubtedly continue to engender litigation for the foreseeable future, as
courts and counsel grapple with the individual facts of “exposure” cases.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; mso-bidi-font-size: 10.0pt; mso-fareast-font-family: Calibri;"><o:p> </o:p></span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com0tag:blogger.com,1999:blog-5175790382109778526.post-60056808710110198202015-10-06T09:02:00.001-04:002015-10-06T09:02:16.512-04:00
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Times New Roman",serif; font-size: 14pt; mso-bidi-font-size: 12.0pt;">The Federal Protecting Tenants At Foreclosure Act of
2009 Contrasted With Florida’s Act Regarding Termination Of Rental Agreements
Upon Foreclosure<o:p></o:p></span></u></b></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<span style="font-family: "Times New Roman",serif;">By: Michael W. Leonard, Esq. <o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<span style="font-family: "Times New Roman",serif;">Boyle, Gentile & Leonard, P.A.<o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<a href="http://www.boylegentilelaw.com/"><span style="font-family: "Times New Roman",serif;"><span style="color: #0563c1;">www.boylegentilelaw.com</span></span></a><span style="font-family: "Times New Roman",serif;"><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0in 8pt; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif;">There are two statutes that a
successful purchaser at a foreclosure sale must be concerned with when the
property that he or she has purchased is subject to a <b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">bona fide </i></b>lease.<span style="mso-spacerun: yes;"> </span>The Federal Protecting Tenants at Foreclosure
Act (“PTFA”), Pub.L. No. 111-22, Div. A, Title VII, 123 Stat. 1632, 1660-62
(2009), Title VII, Section 701 to 704, codified as amended by 12 U.S.C. §5220,
et seq., which expired on December 31, 2012, pursuant to the sunset provision
contained in Section 704, was revived effective December 31, 2014, as if the
PTFA sunset provision had never taken effect.<span style="mso-spacerun: yes;">
</span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0in 8pt; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif;">Florida likewise has legislation
codified in Florida’s statute pertaining to Termination of Rental Agreement
upon Foreclosure (§83.561).<span style="mso-spacerun: yes;"> </span>Although
the PTFA does provide deference to state laws that afford greater protection to
tenants, the PTFA, preempts any local or state law that provides less
protection than that afforded under the PTFA.<span style="mso-spacerun: yes;">
</span></span><u><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">Mik v. Fed. Home Loan Mortgage Corp.</span></u><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">,
743 F.3d 149, 164 (6th Cir. 2014).<span style="mso-spacerun: yes;"> </span>It is
because of this fact that the differences between Florida’s statute regarding
termination of rental agreements upon foreclosure and the PTFA matter</span><span style="font-family: "Times New Roman",serif;">.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0in 8pt; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif;">Both the PTFA and Florida’s statute
apply only to a bona fide tenant, meaning a tenant who (a) is not the child,
spouse or parent of the mortgagor, (b) occupies the premises pursuant to an
arms-length transaction, and (c) whose rental obligations is not substantially
less than the fair rental market value.<span style="mso-spacerun: yes;">
</span>However, the federal PTFA applies only to <b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">federally-related mortgage loans</i></b>
on any dwelling or residential real property and subjects any immediate
successor in interest in such property to the requirements of the PTFA.<span style="mso-spacerun: yes;"> </span>Furthermore, the PTFA requires an immediate
successor in interest at foreclosure (i.e. the successful bidder at foreclosure
sale) to honor a bona fide lease unless the successful bidder intends to occupy
the unit as a primary residence.<span style="mso-spacerun: yes;"> </span>In the
event that the successful bidder intends to occupy the real property as his
primary residence, he has the right to obtain possession by providing the bona
fide tenant with ninety (90) days written notice before he or she may take
possession.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0in 8pt; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif;">Florida’s statute dealing with
termination of rental agreements upon foreclosure likewise affords protections
for bona fide tenants. However, there are significant differences that a would-be
purchaser would be well served to understand.<span style="mso-spacerun: yes;">
</span>First, Florida’s statute applies to <b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">all</i></b> residential premises that are
subject to a foreclosure sale, not just those relating to a <b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">federally-related
mortgage</i></b>.<span style="mso-spacerun: yes;"> </span>Therefore, when a
foreclosure sale takes place subject to a <b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">non-federally-related mortgage</i></b>, a
purchaser need not concern themselves with the PTFA, but they must still comply
with Florida’s law relevant to a bona fide tenant.<span style="mso-spacerun: yes;"> </span>Another substantial difference between the
two acts relates to the timing of notice that must be provided to a bona fide
tenant.<span style="mso-spacerun: yes;"> </span>Florida’s act only requires that
a bona fide tenant receive thirty (30) days notice.<span style="mso-spacerun: yes;"> </span>In contrast, the PTFA requires that a bona
fide tenant receive ninety (90) days notice when the purchaser intends to
occupy the premises. Therefore, to the extent that there was a foreclosure of a
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">federally-related
mortgage</i></b>, the successful purchaser, who intends to occupy the premises
must serve the ninety (90) day notice and not the thirty (30) day notice
required under Florida law.<span style="mso-spacerun: yes;"> </span>Florida’s
act also permits a successful purchaser to take possession of property subject
to a bona fide lease whether or not that purchaser at foreclosure intends to
occupy the premises.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0in 8pt; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif;">Further, the Florida act requires
that any purchaser at foreclosure sale comply with §83.67, which places affirmative
obligations and duties on that purchaser, thereby potentially subjecting the
purchaser to attorneys’ fees pursuant to Chapter 83 if a purchaser violates that
statute.<span style="mso-spacerun: yes;"> </span>In sum, while there is no
private cause of action against a landlord who violates the PTFA (<i style="mso-bidi-font-style: normal;">see </i></span><u><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">Mik</span></u><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">,
743 F.3d 149, 158), Florida’s statute governing termination of a rental agreement
upon foreclosure subjects the purchaser to the requirements of </span><span style="font-family: "Times New Roman",serif;">§83.67.<span style="mso-spacerun: yes;"> </span>By way of example, a purchaser of property
that has bona fide tenants, has an affirmative obligation to insure that the
dwelling unit does not lose utilities services. A violation of this statute may
subject the landlord to damages and attorneys’ fees, a remedy that is not
afforded under the PTFA.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0in 8pt; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif;">Additionally, a purchaser of <span style="mso-spacerun: yes;"> </span>property at foreclosure, must determine
whether the mortgage is a <b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">federally-related mortgage</i></b>, as that
term is defined in Section 3 of the Real Estate Settlement Procedures Act of
1974 (12 U.S.C. 2602).<span style="mso-spacerun: yes;"> </span>If the mortgage
being foreclosure is in fact a federally-related mortgage, that purchaser, if
he does not intend to occupy the premises, takes title to the foreclosed
property subject to the lease and is obligated to abide thereby.<span style="mso-spacerun: yes;"> </span>This purchaser through foreclosure of
property that was subject to a <b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">federally-related mortgage</i></b> is
subject to the full lease term.<span style="mso-spacerun: yes;">
</span>Conversely, if the mortgage is not a <b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">federally-related mortgage</i></b>,
a purchaser at foreclosure may oust the bona fide tenant by providing the
tenant thirty (30) days written notice, thereby not being subject to the full
lease term.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; margin: 0in 0in 8pt; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif;">The type of mortgage under which a
purchaser takes title at a foreclosure sale matters.<span style="mso-spacerun: yes;"> </span>Be aware of the type of mortgage and the
obligations due and owing by the purchaser.<span style="mso-spacerun: yes;">
</span>The differences matter.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com0tag:blogger.com,1999:blog-5175790382109778526.post-8091213812304955792015-09-18T10:28:00.001-04:002015-09-18T10:28:07.633-04:00
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">DOES
A CGL INSURER WHOSE NAMED INSURED IS AN ARCHITECT OR ENGINEER HAVE A DUTY TO
DEFEND THE GENERAL CONTRACTOR AS AN ADDITIONAL INSURED?<o:p></o:p></span></b></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">By: Amanda K. Anderson, Esq.<o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">Boyle, Gentile & Leonard, P.A. <o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<a href="http://www.boylegentilelaw.com/"><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><span style="color: blue;">www.boylegentilelaw.com</span></span></a><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;"><span style="mso-tab-count: 1;"> </span>The simple answer is, it depends. However, contrary to
the common belief that the answer is absolutely not, given the “professional
services” exclusion in all CGL policies, there is some case law which supports
this possibility. It is fairly fact specific, but the facts alleged in most
construction defect lawsuits would likely trigger an obligation on the part of
a CGL carrier whose named insured provided professional services on the project
to provide a defense to the additional insured, general contractor. This is
likely true even if the policy does not provide coverage to the named insured. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;"><span style="mso-tab-count: 1;"> </span>If the additional insured endorsement, whether blanket or
specific, uses the phrase “arising out of” or “caused, in whole or in part, by”
there is a high likelihood a defense is owed to the additional insured. Every
standard CGL Policy contains a “Separation of Insureds” provision, typically in
Section IV- Conditions, which states in relevant part “any rights or duties
specifically assigned in this Coverage Part to the first Named Insured, this
insurance applies…separately to each insured [<i>i.e.,</i> any additional
insured under Section II of the additional-insured endorsement] against whom
claim is made or ‘suit’ is brought.” <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 8pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">The two seminal
cases supporting this are: <u>State Auto. Mut. Ins. Co. v. Habitat Const. Co.</u>,
875 N.E.2d 1159 (Ill. App. Ct. 2007) and <u>Patrick Eng'g, Inc. v. Old Republic
Gen. Ins. Co.</u>, 973 N.E.2d 1036 (Ill. App. Ct. 2012). In <u>Habitat</u>,
Habitat was the general contractor on a construction project for a building in
Chicago, and Central Building & Preservation (Central Building) was a
subcontractor hired to provide certain services. <u>Habitat Const. Co.</u>, 875
N.E.2d 1159. The written contract between Habitat and Central Building required
Central Building to add Habitat as an additional insured on the commercial
general liability (“CGL”) policy it had in effect through State Auto, its
insurer. <u>Id.</u> The blanket additional insured endorsement in the Central
Building Policy provided that the “person or organization is only an additional
insured with respect to liability arising out of ‘your work’ for that
additional insured for or by you” and explicitly provided, almost identical to
the Travelers Primary Policies, that the insurance provided to the additional
insured does not apply to rendering or failure to render any professional
services. <u>Id.</u> During construction, an employee of Central Building was
allegedly injured and subsequently filed suit against Habitat and others, but
not Central Building. <u>Id.</u> The employee made several claims founded in
negligence and specifically alleged that Habitat was the owner or in charge of
the project site and was present during the construction and participated in coordinating
the work done. <u>Id.</u> In Illinois, the duty to defend is determined by the
same standard as in Florida, the “eight corners”. <u>Id.</u>; <span style="mso-bidi-font-style: italic;">and <u>Nat'l Union Fire Ins. Co. v. Lenox
Liquors, Inc.</u>,</span> 358 So. 2d 533, 536 (Fla. 1977). The <u>Habitat</u>
court held that the allegations of the complaint sufficiently alleged that the
employee’s injuries at least potentially arose out of the named insured’s work,
and therefore gave rise to a duty to defend, and the insurer’s reliance on the
professional exclusion provision was misplaced and had no application as the
additional insured was a general contractor and not an architect, engineer or
surveyor. <u>Id.</u> <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 8pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">In <u>Patrick
Eng’g</u>, Old Republic Insurance Company (“Old Republic”) issued a CGL policy
with a professional services exclusion to Patrick Engineering. <u>Patrick
Eng’g, Inc.</u>, 973 N.E.2d 1036. Patrick Engineering entered into an agreement
with Commonwealth Edison Company (“ComEd”) to provide engineering design
services for the relocation of ComEd’s utility poles, and the agreement
required that ComEd be named as an additional insured. <u>Id.</u> While working
on the project, ComEd damaged an underground sewer facility. <u>Id.</u> The
city filed suit against ComEd alleging that it had acted negligently. <u>Id.</u><span style="mso-spacerun: yes;"> </span>Interestingly, the City never filed a claim
against Patrick, but ComEd did file a third party claim against them. <u>Id.</u>
After Patrick Engineering and ComEd both tendered the claim to Old Republic,
Old Republic denied coverage to ComEd based on the CGL policy’s professional
services exclusion. <u>Id.</u> In its evaluation, the court focused on three
main parts of the CGL policy, (1) the separation of insureds clause; (2) the
additional insured endorsement, and (3) the professional services exclusion. <u>Id.</u>
The CGL policy at issue in <u>Patrick Engineering</u> is the standard post 1986
CGL policy. The court ultimately found that, pursuant to the additional insured
endorsement and the separation of insureds clause, Old Republic had a duty to
defend and indemnify ComEd because despite the named insured’s providing of
professional services, the additional insured did not perform professional
services in connection with the project. <u>Id.</u> <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 8pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">The
separation-of-insureds clause provides each insured, whether named or
additional, with separate coverage. <em>Mactown, Inc. v. Cont'l Ins. Co.,</em><i style="mso-bidi-font-style: normal;"> 716 So.2d 289 (Fla. 3d DCA 1998); <em>Premier
Ins. Co. v. Adams,</em> 632 So.2d 1054 (Fla. 5th DCA 1994); <em>Liberty Mutual
Ins. Co. v. Sentry Ins. Co.,</em> </i>288 So.2d 556 (Fla. 2d DCA 1974); <u>Southern
Owners Ins. Co. v. Wiggins</u>, No. 310-CV-390-J-37MCR, 2012 WL 405322, at *4
(M.D. Fla. Feb. 9, 2012); and <u><span style="mso-bidi-font-style: italic;">United
States Fid. & Guar. Co. v. Globe Indem. Co.</span></u><i>,</i> 60 Ill.2d
295, 299, 327 N.E.2d 321 (1975). A provision providing that the “‘insurance
applies[s]eparately to each insured against whom claim is made,’ ” shows that
the insurer recognizes an obligation to additional insureds distinct from its
obligation to the named insured. <u>See</u> <u><span style="mso-bidi-font-style: italic;">id<i>.</i></span></u> This means that it is as though each insured is
separately insured with a distinct policy, subject to the liability limits of
the policy. <u><span style="mso-bidi-font-style: italic;">Id.</span></u><span style="mso-bidi-font-style: italic;"> <o:p></o:p></span></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 8pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">It is important to
note that courts interpreting the “arising out of” or “in whole or in part”
language have consistently held that such language provides coverage to the
additional insured for <b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">its own scope of fault</i></b> and not just
its vicariously liability. <u>Koala Miami Realty v. Valiant Ins. Co.</u>, 913
So. 2d 25 (Fla. 3d DCA 2005); <u>Taurus Holdings, Inc. v. United States Fid.
& Guar. Co.</u>, 913 So. 2d 528 (Fla. 2005); <u>Monticello Ins. Co. v. City
of Miami Beach</u>, Case No.: 06-20459-CIV, 2008 WL 906537 (S.D. Fla. 2008); <u>Capital
City Real Estate, LLC v. Certain Underwriters at Lloyd's London</u>,
Subscribing to Policy Number: £ARTE018240, 788 F.3d 375, 379-80 (4th Cir.
2015); <u>Gilbane Bldg. Co. v. Admiral Ins. Co.</u>, 664 F.3d 589, 598 (5th
Cir.2011); <u>McIntosh v. Scottsdale Ins. Co.</u>, 992 F.2d 251, 255 (10th
Cir.1993) (original alterations omitted); <u>Am. Empire Surplus Lines Ins. Co.
v. Crum & Forster Specialty Ins. Co.</u>, 2006 WL 1441854 (S.D. Tex. May
23, 2006); <u>Zep Construction v. Interstate Fire & Cas. Co.</u>, 18 Fla.
L. Weekly Supp. 65a (Fla. 12th Cir. 2010); </span><u><span style="color: black; font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">First Mercury Ins. Co. v. Shawmut Woodworking
and Supply Co.</span></u><span style="color: black; font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">, Inc, 2014 WL 5519831,
2 (D. Conn. Oct. 31, 2014); <u>Thunder Basin Coal Co., Inc. v. Zurich Am. Ins.
Co.</u>, 943 F.Supp.2d 1010, 1014 (E.D. Mo. May 2, 2013); <u>WBI Energy
Transmission, Inc. v. Colony Ins. Co.</u>, 56 F.Supp.3d 1194, 1202-1203 (D.
Mont. September 29, 2014).</span><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 8pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><span style="mso-spacerun: yes;"> </span>This concept combined with the separation of
insureds clause necessitate any court to find the general contractor qualifying
as an additional insured, be entitled to at least a defense under a CGL policy despite
the existence of the professional services exclusion. More specifically, when
the underlying construction defect c<span style="mso-bidi-font-style: italic;">omplaint
generally alleges defects in the design and is unclear whether the general
contractor is alleged to have performed “professional services”, the insurer
should provide a defense to the additional insured, non-professional. </span><span style="color: #252525;"><o:p></o:p></span></span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com0tag:blogger.com,1999:blog-5175790382109778526.post-14812049573814471632015-09-09T14:17:00.001-04:002015-09-09T14:17:54.817-04:00
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; page-break-after: avoid; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12pt;">“Suit” Up? : Florida’s Chapter 558 Notice<o:p></o:p></span></b></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; page-break-after: avoid; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12pt;">Does Not Trigger an Insurer’s Duty to Defend</span></b><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; page-break-after: avoid; text-align: center; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; page-break-after: avoid; text-align: center;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">By: Molly
A. Chafe, Esq.<o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: "Times New Roman",serif; line-height: 107%; mso-bidi-font-size: 12.0pt;">Boyle, Gentile & Leonard, P.A. <o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;">
<a href="http://www.boylegentilelaw.com/"><span style="font-family: "Times New Roman",serif; line-height: 107%; mso-bidi-font-size: 12.0pt;"><span style="color: #0563c1;">www.boylegentilelaw.com</span></span></a><span style="font-family: "Times New Roman",serif; line-height: 107%; mso-bidi-font-size: 12.0pt;"><o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; page-break-after: avoid; text-align: center; text-indent: 0.5in;">
<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p><span style="text-decoration: none;"> </span></o:p></span></u></b></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; page-break-after: avoid; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">Many states have
notice and repair statutes, which provide that a claimant is required to give
notice of the alleged construction defects to a contractor and allow for an
opportunity the contractor to respond and repair the defects. Florida has set
forth a similar notice and repair statute.<span style="mso-spacerun: yes;">
</span>Specifically, Chapter 558 provides: “Claimants may not file an Action
subject to this Chapter without first complying with the requirements of this
Chapter.” </span><!--[if supportFields]><span style='font-size:12.0pt;
font-family:"Times New Roman",serif'><span style='mso-element:field-begin'></span><span
style='mso-spacerun:yes'> </span>TA \l "" \s
"WSFTA_d50a3ae4f36343da9ff7302ada788922" \c 6 </span><![endif]--><!--[if supportFields]><span
style='font-size:12.0pt;font-family:"Times New Roman",serif'><span
style='mso-element:field-end'></span></span><![endif]--><span style="font-family: "Times New Roman",serif; font-size: 12pt;">558.003, Fla. Stat. A party
claiming construction defects must first serve the contractor with a written
notice detailing all alleged construction defects and the resulting loss or
damages to the claimant’s property. <u><span style="mso-bidi-font-style: italic;">See</span></u><i>
</i></span><!--[if supportFields]><i><span style='font-size:12.0pt;font-family:
"Times New Roman",serif'><span style='mso-element:field-begin'></span></span></i><span
style='font-size:12.0pt;font-family:"Times New Roman",serif'><span
style='mso-spacerun:yes'> </span>TA \l "" \s
"WSFTA_ce049a69d0e047ffa0239ce4b0a492cc" \c 6 </span><![endif]--><!--[if supportFields]><i><span
style='font-size:12.0pt;font-family:"Times New Roman",serif'><span
style='mso-element:field-end'></span></span></i><![endif]--><span style="font-family: "Times New Roman",serif; font-size: 12pt;">§ 558.004(1), Fla.
Stat. This notice must be served at least 60 days before filing any action
which varies on the size of land and association. <u><span style="mso-bidi-font-style: italic;">See </span></u></span><!--[if supportFields]><u><span style='font-size:
12.0pt;font-family:"Times New Roman",serif;mso-bidi-font-style:italic'><span
style='mso-element:field-begin'></span></span></u><u><span style='font-size:
12.0pt;font-family:"Times New Roman",serif'><span
style='mso-spacerun:yes'> </span>TA \l "" \s
"WSFTA_57a0f55701bd4404bee4b52abf6ab2fe" \c 3 </span></u><![endif]--><!--[if supportFields]><u><span
style='font-size:12.0pt;font-family:"Times New Roman",serif;mso-bidi-font-style:
italic'><span style='mso-element:field-end'></span></span></u><![endif]--><u><span style="font-family: "Times New Roman",serif; font-size: 12pt; mso-bidi-font-style: italic;">id</span></u><i><span style="font-family: "Times New Roman",serif; font-size: 12pt;">.
</span></i><i><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></i></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">Upon receipt of the notice, the contractor
may notify all parties whom it believes may be responsible for the defects. <u><span style="mso-bidi-font-style: italic;">See</span></u><i> </i></span><!--[if supportFields]><i><span
style='font-size:12.0pt;font-family:"Times New Roman",serif'><span
style='mso-element:field-begin'></span></span></i><span style='font-size:12.0pt;
font-family:"Times New Roman",serif'><span style='mso-spacerun:yes'> </span>TA
\l "§ 558.004(3), Fla. Stat" \s
"WSFTA_78370919934c4f6d826f7672af17c9ef" \c 6 </span><![endif]--><!--[if supportFields]><i><span
style='font-size:12.0pt;font-family:"Times New Roman",serif'><span
style='mso-element:field-end'></span></span></i><![endif]--><span style="font-family: "Times New Roman",serif; font-size: 12pt;">§ 558.004(3), Fla.
Stat. All parties notified of a claim are granted notice and opportunity to
inspect the premises to assess the defects and the damage. <u><span style="mso-bidi-font-style: italic;">See</span></u><i> </i></span><!--[if supportFields]><i><span
style='font-size:12.0pt;font-family:"Times New Roman",serif'><span
style='mso-element:field-begin'></span></span></i><span style='font-size:12.0pt;
font-family:"Times New Roman",serif'><span style='mso-spacerun:yes'> </span>TA
\l "§ 558.004(2) and (3), Fla. Stat" \s
"WSFTA_9c15e59f845f48de898b721706e1f1f6" \c 6 </span><![endif]--><!--[if supportFields]><i><span
style='font-size:12.0pt;font-family:"Times New Roman",serif'><span
style='mso-element:field-end'></span></span></i><![endif]--><span style="font-family: "Times New Roman",serif; font-size: 12pt;">§ 558.004(2) and
(3), Fla. Stat. Upon such notice, the contractor is then required to provide
the claimant with a written response: (a) offering to repair and/or make
monetary payment; (b) disputing the claim; or (c) stating that the contractor’s
insurer will make a determination as to the monetary payment. <u><span style="mso-bidi-font-style: italic;">See</span></u><i> </i></span><!--[if supportFields]><i><span
style='font-size:12.0pt;font-family:"Times New Roman",serif'><span
style='mso-element:field-begin'></span></span></i><span style='font-size:12.0pt;
font-family:"Times New Roman",serif'><span style='mso-spacerun:yes'> </span>TA
\l "§ 558.004(4) and (5), Fla. Stat" \s
"WSFTA_8fdf3a616ada45c6a3d1b41d4184d45d" \c 6 </span><![endif]--><!--[if supportFields]><i><span
style='font-size:12.0pt;font-family:"Times New Roman",serif'><span
style='mso-element:field-end'></span></span></i><![endif]--><span style="font-family: "Times New Roman",serif; font-size: 12pt;">§ 558.004(4) and
(5), Fla. Stat. If this process is unsuccessful in resolving the claim, then
this is the only time that litigation can formally begin. <u><span style="mso-bidi-font-style: italic;">See</span></u><i> </i></span><!--[if supportFields]><i><span
style='font-size:12.0pt;font-family:"Times New Roman",serif'><span
style='mso-element:field-begin'></span></span></i><span style='font-size:12.0pt;
font-family:"Times New Roman",serif'><span style='mso-spacerun:yes'> </span>TA
\l "§ 558.004(7), Fla. Stat" \s
"WSFTA_814600c3196e4a4e8ab1590814f609a1" \c 6 </span><![endif]--><!--[if supportFields]><i><span
style='font-size:12.0pt;font-family:"Times New Roman",serif'><span
style='mso-element:field-end'></span></span></i><![endif]--><span style="font-family: "Times New Roman",serif; font-size: 12pt;">§ 558.004(7), Fla.
Stat.</span><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">In
<u>Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co.</u>, Case
No. 13-80831-CIV, 2015 WL 3539755, (S.D. Fla. June 4, 2015), the United States
District Court for the Southern District of Florida evaluated whether an
insurer had a duty to defend and indemnify an insured who receives a notice of
claim pursuant to Chapter 558. In the dispute, a condominium association served
the general contractor, Altman Contractors, Inc. (“ACI”) with the notice of
claim pursuant to Chapter 558. <u>Id.</u> at *1. As a result, ACI sent the
notice of the claim to its insurer, Crum & Forster (“Crum”), and demanded a
defense and indemnification. <u>Id.</u> Crum denied that it had a duty to
defend or indemnify ACI because the matter was not a “suit”. <u>Id.</u> However,
Crum advised ACI that it was exercising its discretion to participate in the
response to the 558 Notice and hired defense counsel to participate in the
response while asserting that it was not waiving its position. <u>Id.</u> ACI
objected to Crum’s selected defense counsel and demanded that Crum continue
with ACI’s chosen defense counsel who had been defending prior to Crum’s
involvement. <u>Id.</u><span style="mso-spacerun: yes;"> </span>ACI also
requested that Crum reimburse it for the fees and expenses that it had incurred
from the time it placed Crum on notice of the 558 Notice. <u>Id.</u> Crum
refused both requests. <u>Id.</u> As a result, ACI brought a declaratory action
against Crum seeking its rights under the policy. <u>Id.</u></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">The parties then filed dueling motions for
summary judgment. <u>Id.</u> at *2. ACI moved for partial summary judgment as
to whether Crum had a duty to defend, asserting that its duty was triggered
when ACI demanded a defense to the Notice of Claim. <u>Id.</u> Crum moved for
summary judgment on all issues, arguing that the language of Chapter 558,
specifically section 558.004(13), Florida Statutes, bars a notice of claim from
constituting a claim for insurance purposes, and, thus, there was no duty to
defend or indemnify ACI. <u>Id.</u> Specifically, Crum argued that the Chapter
558 process did not constitute a “suit” under the terms of the policy. <u>Id.</u>
<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><span style="mso-tab-count: 1;"> </span>The Southern District disagreed with
Crum’s position that the language of Chapter 558 bars a notice of claim from
constituting a claim for insurance purposes.<span style="mso-spacerun: yes;">
</span><u>Id.</u> at *3. However, the Court ultimately determined that under
the specific language of the standard form policies at issue, the Notice of
Claim did not trigger the insurer’s duty to defend. <u>Id.</u> at *5.
Specifically, the policies stated that Crum has “the right and duty to defend
the insured against any ‘suit’ seeking damages because of ‘bodily injury’ or
‘property damage’.” <u>Id.</u> at *5.<span style="mso-spacerun: yes;">
</span>The policies defined “suit” as a “civil proceeding” in which specific
damages are alleged.<span style="mso-spacerun: yes;"> </span><u>Id.</u> The
definition of “suit” includes an “arbitration proceeding” or any “other
alternative dispute resolution proceeding.” <u>Id.</u></span></div>
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<u><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p><span style="text-decoration: none;"></span></o:p></span></u> </div>
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><span style="mso-tab-count: 1;"> </span>Moreover, the Court concluded that a
Notice of Claim under Chapter 558 does not constitute a “civil proceeding” and
therefore is not a “suit” under the subject insurance policies.<span style="mso-spacerun: yes;"> </span><u>Id.</u><span style="mso-spacerun: yes;">
</span>Specifically, the Court looked <i style="mso-bidi-font-style: normal;">Black’s
Law Dictionary</i> in defining “civil proceeding” and “proceeding”, and
determined that nothing about the Chapter 558 process satisfied <i style="mso-bidi-font-style: normal;">Black’s</i> definition.<span style="mso-spacerun: yes;"> </span><u>Id.</u> at *6.<span style="mso-spacerun: yes;"> </span>Additionally, the Court stated that the
Florida Legislature described Chapter 558 as a “mechanism,” and not a
“proceeding.” <u>Id.</u> at *8.</span><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span><span style="font-family: "Times New Roman",serif; font-size: 12pt;">Accordingly,
the Court determined that Crum had no obligation under the insurance policies
to defend or indemnify ACI. <u>Id.</u> at *9.<span style="mso-spacerun: yes;">
</span></span><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">This Court’s decisions concerning state
statutes and standards for interpreting insurance policies have far-reaching
consequences for Florida policyholders. Some have argued that the decision will
have a chilling effect on the proper and effective use of Chapter 558’s
alternative dispute resolution process as it would discourage both the
insurance industry and policyholders from participating in the 558
process.<span style="mso-spacerun: yes;"> </span>However, policyholders should
always review their own policies and timely notify your insurer of a notice of
claim should it arise.</span><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">This case is currently on appeal to the
Eleventh Circuit Court of Appeals. Boyle, Gentile & Leonard, P.A. is
participating as amicus counsel on behalf of several contractor and builder
groups. <o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com0tag:blogger.com,1999:blog-5175790382109778526.post-8775751644788355602015-09-03T12:56:00.001-04:002015-09-03T12:56:33.172-04:00
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif;">MIDDLE DISTRICT OF
FLORIDA COURT CONTEMPLATES COVERED AND UNCOVERVED PROPERTY DAMAGE UNDER
EXCLUSIONS j(5) and j(6) IN DENYING INSURERS MOTION FOR SUMMARY JUDGMENT</span></b><span style="font-family: "Times New Roman",serif;"><o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">By:
Justin M. Thomas, Esquire<o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">Boyle,
Gentile & Leonard, P.A. <o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;">
<a href="http://www.boylegentilelaw.com/"><span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;"><span style="color: #0563c1;">www.boylegentilelaw.com</span></span></a><span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;"><o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<o:p><span style="font-family: Arial;"> </span></o:p></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="mso-tab-count: 1;"><span style="font-family: Arial;"> </span></span><span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">In <u>Essex
Insurance Company v. Kart Construction, Inc., et al.</u>, 2015 WL 4730540 (M.D.
Fla. August 10, 2015), the Court, in denying the insurers summary judgment,
held that Section j(5) of the applicable commercial general liability (“CGL”)
policy <span style="mso-spacerun: yes;"> </span>only excluded coverage to “that
particular part” of the property that the insured is working on at the time an
accident occurs.<span style="mso-spacerun: yes;"> </span>Additionally, the Court
had occasion to consider whether the certain precautionary and preventative
work performed by the insured may be excluded under Section j(5) or j(6), which
is more fully discussed below.<span style="mso-spacerun: yes;"> </span><u>Essex</u>
is of particular import given Judge Merryday’s thorough analysis of precisely
determining what is and isn’t excluded under the j(5) property damage
exclusion.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;"><span style="mso-tab-count: 1;"> </span>Kart
Construction was hired to weld stiffening parts onto a cell tower that was
approximately 127 feet tall.<span style="mso-spacerun: yes;"> </span>The welding
was performed by a capable and experienced welder, with all fire prevention
measures taken during the welding. <u>Id</u>.<span style="mso-spacerun: yes;">
</span>Despite the foregoing safety measures, a fire occurred on “Sprint
antennas, T- Mobile antennas, tower lights, cabling, foundations, and other
equipment.”<span style="mso-spacerun: yes;"> </span><u>Id.</u><span style="mso-spacerun: yes;"> </span>It is important to note that the fire did not
occur on the ten-foot portion of the cell tower where the welding was taking
place.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;"><span style="mso-tab-count: 1;"> </span>Following
the fire, Kart Construction filed a claim with its insurer Essex Insurance
Company seeking indemnity from the fire loss.<span style="mso-spacerun: yes;">
</span>Essex denied the claim and filed the instant action seeking a
declaration that Essex had no duty to indemnify Kart for this loss.<span style="mso-spacerun: yes;"> </span>Subsequent to the filing of the suit, Essex
moved for summary judgment based on the following exclusions:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt 1in; text-align: justify; text-indent: -0.5in;">
<b><span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">2.
Exclusions<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt 1in; text-align: justify; text-indent: -0.5in;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">This
insurance does not apply to:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt 1in; text-align: justify; text-indent: -0.5in;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">....<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt 1in; text-align: justify; text-indent: -0.5in;">
<b><span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">j.
Damage To Property<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt 1in; text-align: justify; text-indent: -0.5in;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">“Property
damage” to:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt 1in; text-align: justify; text-indent: -0.5in;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">...<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt 1in; text-align: justify; text-indent: -0.5in;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">(5)
That particular part of real property on which you<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt 1in; text-align: justify; text-indent: -0.5in;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">or
any contractors or subcontractors working directly or<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt 1in; text-align: justify; text-indent: -0.5in;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">indirectly
on your behalf are performing operations, if<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt 1in; text-align: justify; text-indent: -0.5in;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">the
“property damage” arises out of those operations; or<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt 1in; text-align: justify; text-indent: -0.5in;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">(6)
That particular part of any property that must be<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt 1in; text-align: justify; text-indent: -0.5in;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">restored,
repaired or replaced because “your work” was<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt 1in; text-align: justify; text-indent: -0.5in;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;">incorrectly
performed on it.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;"><span style="mso-spacerun: yes;"> </span><u>Id.</u><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;"><span style="mso-tab-count: 1;"> </span>The
parties took opposing positions on exactly what “particular part” of the real
property Kart’s work took place on.<span style="mso-spacerun: yes;"> </span>Not
surprisingly, Essex maintained the position Kart “operated on” the entire
tower.<span style="mso-spacerun: yes;"> </span><u>Id.</u> at 2.<span style="mso-spacerun: yes;"> </span>The position taken by Essex was rooted in a
separate agreement that required Kart to take preventative measures with
respect to fire prevention in conjunction with the welding activities. <span style="mso-spacerun: yes;"> </span>Conversely, Kart maintained a narrow reading
of j(5), in that the “particular part” of property excluded would only be on
the ten-foot portion of the tower where the welding actually took place.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;"><span style="mso-tab-count: 1;"> </span>In
Florida, the seminal case regarding the scope of j(5) exclusion, which was the
thrust of both parties’ arguments, is <u>American Equity Ins. Co. v. Van
Ginhoven</u>, 788 So.2d 388 (Fla. 5th DCA 2001).<span style="mso-spacerun: yes;"> </span>In <u>Van Ginhoven</u>, a contractor was
hired to perform repairs to an in ground swimming pool, which necessitated the
draining of the pool.<span style="mso-spacerun: yes;"> </span><u>Id</u>.<span style="mso-spacerun: yes;"> </span>While draining the pool, the pool popped out
of the ground causing damage to not only the pool but also to the “pump,
heating system, deck, screen enclosure and the surrounding landscaping and
sprinkling system.”<span style="mso-spacerun: yes;"> </span><u>Id.</u> at 391. <span style="mso-spacerun: yes;"> </span><u>Van Ginhoven</u> held that the j(5)
exclusion only excludes coverage for the pool, whereas the policy covered the
damage to the pump, heating system, deck, screen enclosure and the surrounding
landscaping and sprinkling system.<span style="mso-spacerun: yes;">
</span>Stated more concisely, in Florida, the “j(5) excludes from coverage only
damage to the part of the real property on which the insured is operating at
the moment of the accident.”<span style="mso-spacerun: yes;"> </span><u>Essex</u>,
2015 WL 4730540 at 3.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;"><span style="mso-tab-count: 1;"> </span>Moreover,
the Court in <u>Essex</u>, was careful and thorough in dispelling the overbroad
approach that the insurer asserted in applying the j(5) exclusion to preclude
coverage for property damage caused by the insured across the entire project.<span style="mso-spacerun: yes;"> </span>One recent case rejecting the project-wide
definition of the insured’s “work” expressly and intelligently rejected a
similar argument, giving the Court in <u>Essex</u> support to reject the
insurer’s position.<span style="mso-spacerun: yes;"> </span><u>Liberty Mutual
Fire Insurance Co. v. Mark Yacht Club on Brickell Bay, Inc.</u>, 2009 WL
2633064 (S.D. Fla. August 25, 2009).<span style="mso-spacerun: yes;"> </span>It
is now clear, following <u>Essex</u>, that j(5) excludes property damage to
“that particular part” of the property “on which the insured is operating at
the time of the accident….”<span style="mso-spacerun: yes;"> </span><u>Essex</u>
at 5.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; mso-bidi-font-size: 12.0pt;"><span style="mso-tab-count: 1;"> </span>In
conclusion, <u>Van </u>Ginhoven and now <u>Essex</u>, give clarity to the
timing and scope concerns that are often central to an insurer’s decision to
cover or exclude property damage claims that occur during and insured’s
operations.<span style="mso-spacerun: yes;"> </span>Furthermore, <u>Essex</u>,
in denying the insurer’s motion for summary judgment precludes the chilling
effect that the encouraged interpretation of the j(5) exclusion would have on CGL
policy holders throughout Florida.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com0tag:blogger.com,1999:blog-5175790382109778526.post-60686128008181906392015-08-26T11:19:00.001-04:002015-08-26T11:19:41.918-04:00
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">CAN
A GENERAL CONTRACTOR BE AN ADDITIONAL INSURED WHEN THE ENDORSEMENT REQUIRES A
WRITTEN CONTRACT BUT A SIGNED WRITTEN CONTRACT DOES NOT EXIST?<o:p></o:p></span></b></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">By: Ellen C. Germuska, Esquire<o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">Boyle, Gentile & Leonard, P.A. <o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<a href="http://www.boylegentilelaw.com/"><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><span style="color: #0563c1;">www.boylegentilelaw.com</span></span></a><span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">The
Illinois court recently decided the answer to this question in the affirmative
in <u>West Bend Mut. Ins. Co. v. DJW-Ridgeway Building Consultants, Inc.</u>, --
N.E. 3d --- (Ill. App. Ct. 2015).<span style="mso-spacerun: yes;"> </span>It is
not uncommon that amongst large construction projects with a multitude of
subcontractors, contracts, change orders, payment logs, etc. that certain
documents are misplaced or lost.<span style="mso-spacerun: yes;"> </span><u>West
Bend</u> is of importance because the Court details that just because a signed
contract might not exist, that the existence of the contract can be proven with
several other factors so the additional insured is still covered.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">In
<u>West Bend</u>, an elevator contractor was injured on a project site. W. Bend
Mut. Ins. Co., at *1. Lake Effect Development III, LLC (Lake Effect) hired
DJW-Ridgeway Building Consultants, LLC (Ridgeway) as the general contractor on
a project. <u>Id.</u> Ridgeway then hired Jason the Mason, as a masonry
subcontractor on the project. <u>Id.</u> West Bend Mutual Insurance Company
issued a commercial general liability policy to Jason the Mason, which included
an additional insured endorsement.<span style="mso-spacerun: yes;"> </span><u>Id.</u>
There was no dispute that the policy was in effect at the time of the injury,
which was allegedly caused by Jason the Mason’s work. <u>Id.</u> at *2. The
relevant portion of the additional insured endorsement states:<o:p></o:p></span></div>
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0.5in 8pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">ADDITIONAL
INSURED ENDORSEMENT – CONTRACTOR’S BLANKET<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="margin: 0in 0.5in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">This endorsement modifies insurance
provided under the following:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0.5in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">COMMERCIAL GENERAL LIABILITY COVERAGE
PART<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0.5in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">A. WHO IS AN INSURED (Section II) is
amended to include as an additional insured any person or organization who you
are required to add as an additional insured on this policy under a written
contract or agreement.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0.5in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">The written contract or agreement
must be:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0.5in 8pt 1in; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">1. Currently in effect or becoming
effective during the term of this policy; and<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0.5in 8pt 1in; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">2. Executed prior to the ‘bodily
injury,’ ‘property damage,’ ‘personal injury and advertising injury.’<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0.5in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">…<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0.5in 8pt 0in; text-align: justify;">
<u><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">Id</span></u><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">West Bend denied
Ridgeway’s tender of defense as an additional insured under Jason the Mason’s
policy. <u>Id.</u> at *1. West Bend ultimately filed a declaratory judgment
action against Ridgeway alleging West Bend did NOT owe Ridgeway a defense. <u>Id.</u>
West Bend’s reason for denial was that no signed contract existed at the time
the policy went into or effect, nor was there a signed contract prior to the
injury in April 2008. <u>Id. at *2.<o:p></o:p></u></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">Ridgeway, however, argued
a contract did exist.<span style="mso-spacerun: yes;"> </span><u>Id. </u>Ridgeway
submitted the Proposal and Agreement. <u>Id</u>. The Proposal was submitted
August 2007, and it details what work will be performed, where the work will be
performed, and is signed by the parties on November 8, 2007.<span style="mso-spacerun: yes;"> </span><u>Id. </u>The first paragraph of the
Agreement states it was executed on November 8, 2007 between Ridgeway, the
general contractor, and Jason the Mason, the subcontractor. <u>Id.</u> The
Agreement further states it is, “supplemental to and a part of that certain
signed proposal between Contractor and Sub-Contractor to which it is attached.”
<u>Id.</u> The Agreement also contained a provision requiring the
subcontractor, Jason the Mason, to list Ridgeway as an additional insured on
its policies of insurance and to provide Ridgeway Certificates of Insurance for
worker’s compensation, general liability, auto liability and property damage
insurance prior to commencing work. <u>Id. However, </u>the Agreement was never
signed. <u>Id. at *3.<o:p></o:p></u></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">The President of
Ridgeway, David Wardeberg, testified during his deposition the Proposal was
attached to the Agreement, he did not have a signed copy of the Agreement, but
he believes the terms of the Agreement were accepted by Jason the Mason because
“He went and did the work”. <u>Id.<o:p></o:p></u></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">The President of Jason
the Mason, Jason Schwan, testified during his deposition he had no recollection
of receiving the Agreement from Ridgeway, but that does not mean he did not
receive it, and just because it was in his file does not mean he read it.<span style="mso-spacerun: yes;"> </span><u>Id.<o:p></o:p></u></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">Ridgeway further
submitted a fax from Ridgeway to Jason the Mason’s insurance agent dated
January 2, 2008.<span style="mso-spacerun: yes;"> </span><u>Id.</u> at *4. The
fax requested certificates of insurance issued to Jason the Mason for worker’s
compensation and general liability insurance. <u>Id.</u> The insurance agency,
that same day, faxed to Ridgeway certificates of insurance showing Jason the
Mason as insured, and naming Ridgeway as an additional insured.<span style="mso-spacerun: yes;"> </span><u>Id.<o:p></o:p></u></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">The <u>West Bend</u>
court reasoned, “[i]t is well settled that a party named in a contract may, by
his acts and conduct, indicate his assent to its terms and be bound by its
provisions even though he has not signed it.” <u>Id.</u> at *6, <i style="mso-bidi-font-style: normal;">citing</i> <u>Asset Recovery Contracting,
LLC v. Walsh Construction Co. of Illinois</u>, 2012 IL. App (1st) 101226, ¶64,
226 Ill.Dec. 615, 980 N.E. 2d 708 (<i style="mso-bidi-font-style: normal;">quoting</i>
<u>Landmark Properties, Inc. v. Architects International-Chicago</u>, 172
Ill.App.3d 379, 383, 122 Ill.Dec 344, 526 N.E.2d 603 (1988)). The court further
relied on prior case law outlining that a contract does not have to be a single
piece of paper, and as long as the papers contain all the essential elements of
a contract, and are either physically connected or reference one another with
such definite terms they make up the same contract. <u>Id.</u> at <u>Mid-Town
Petroleum, Inc. v. Dine</u>, 72 Ill. App. 3d 296, 202-04, 28 Ill. Dec. 261, 290
N.E. 2d 428 (1979).<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">The appellate court
affirmed the trial court’s ruling that West Bend did owe Ridgeway a
defense.<span style="mso-spacerun: yes;"> </span><u>Id.</u> at *8. The court
found that the Proposal and Agreement were physically connected, and made
specific reference to one another as to be considered one contract. <u>Id.</u>
Jason the Mason’s conduct in completing the contracted for work, shows his
assent to the terms of the contract.<span style="mso-spacerun: yes;"> </span><u>Id.
</u>The fax from Jason the Mason’s insurance agent, further shows Jason the
Mason was complying with the terms of the contract that required certificates
of insurance prior to performing work and required Ridgeway to be named as an
additional insured on the insurance policies. <u>Id.</u><span style="mso-spacerun: yes;"> </span>As such, the court found Ridgeway was an
additional insured under Jason the Mason’s policy of insurance. <span style="mso-spacerun: yes;"> </span><u>Id.<o:p></o:p></u></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">This could have
implications in other states and in Florida as contracts sometimes are missing
or incomplete but insurance policies require written contracts or agreements in
order for an additional insured to have coverage. <o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com0tag:blogger.com,1999:blog-5175790382109778526.post-22178625831795066652015-08-19T11:35:00.001-04:002015-08-19T11:35:03.380-04:00
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<span style="font-family: "Arial",sans-serif;">APPELLATE JURISDICTION AND INSURANCE
COVERAGE MATTERS<o:p></o:p></span></div>
<br />
<div class="MsoEndnoteText" style="margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">Recently, Florida’s Second District Court
of Appeal in </span><u><span style="font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">Florida Farm Bureau Gen. Ins. Co. v.
Peacock's Excavating Serv., Inc.</span></u><span style="font-family: "Times New Roman",serif; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">,
2015 WL 4497721 (Fla. 2d DCA 2015)</span><span style="font-family: "Times New Roman",serif; font-size: 12pt;"> addressed the issue of what constitutes a
final appealable order under Rule 9.110(k), Florida Rules of Appellate
Procedure.<span style="mso-spacerun: yes;"> </span>There, the insurer, Florida
Farm Bureau Insurance Company (“Florida Farm Bureau”), and insured, Peacock’s
Excavating Service, Inc., (“Peacock”), both filed competing declaratory actions
that requested a determination of Florida Farm Bureau’s duty to defend and
indemnify Peacock under several commercial general liability policies (“CGL”
policy(ies)). The dispute centered on what triggered coverage under the CGL
policy. Florida Farm Bureau contended that the manifestation of the injury
triggered coverage whereas Peacock argued that the injury itself triggered
coverage under the CGL policies. The trial court ultimately entered a partial
final judgment that declared Florida Farm Bureau had a duty to defend Peacock
under certain CGL policies. The partial final judgment did not address Florida
Farm Bureau’s duty to indemnify Peacock under the CGL policies. Nevertheless,
Florida Farm Bureau filed an appeal of the partial final judgment.<o:p></o:p></span></div>
<br />
<div class="MsoEndnoteText" style="margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoEndnoteText" style="margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt;">On appeal, the Second District dismissed
the appeal for lack of jurisdiction. Because Florida Farm Bureau appealed from
a partial final judgment, the appellate court’s jurisdiction hinged on whether
Florida Farm Bureau could appeal the partial final judgment under Rule
9.110(k), Florida Rules of Appellate Procedure. Rule 9.110(k) provides:<o:p></o:p></span></div>
<br />
<div class="MsoEndnoteText" style="margin: 12pt 0.7in 0pt; text-align: justify;">
<span style="color: #252525; font-family: "Times New Roman",serif; font-size: 12pt;">Except
as otherwise provided herein, partial final judgments are reviewable either on
appeal from the partial final judgment or on appeal from the final judgment in
the entire case. A partial final judgment, other than one that disposes of an
entire case as to any party, is one that disposes of a separate and distinct
cause of action that is not interdependent with other pleaded claims. If a
partial final judgment totally disposes of an entire case as to any party, it
must be appealed within 30 days of rendition.<o:p></o:p></span></div>
<br />
<div class="MsoEndnoteText" style="margin: 0in 0in 0pt; text-align: justify;">
<span style="color: #252525; font-family: "Times New Roman",serif; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoEndnoteText" style="margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; font-variant: small-caps;">Fla. R. App. P.
9.110(</span><span style="font-family: "Times New Roman",serif; font-size: 12pt;">k).
The court started its analysis by providing the framework with which litigants
can use to determine whether a partial final judgment possesses the requisite
finality to constitute an appeal order. Specifically, the court stated that the
following three factors guide its jurisdiction analysis:<o:p></o:p></span></div>
<br />
<div class="MsoListParagraphCxSpFirst" style="margin: 12pt 0.7in 12pt 0.95in; mso-add-space: auto; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">1.<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">Whether
the claim disposed of by the partial final judgment could be maintained
independently of the remaining claims;<o:p></o:p></span></div>
<br />
<div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0.7in 8pt 0.95in; mso-add-space: auto; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">2.<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">Whether
one or more parties were removed from the action when the partial final
judgment was entered; and <o:p></o:p></span></div>
<br />
<div class="MsoListParagraphCxSpLast" style="margin: 0in 0.7in 8pt 0.95in; mso-add-space: auto; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">3.<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">Whether
the claims could be separately disposed of based on the same or different
facts.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">With this framework in
mind, the court proceeded to analyze each factor. As to the first factor, the
court concluded that Florida Farm Bureau’s duty to defend was not a separate
and independent cause of action from its duty to indemnify. In support of this
reasoning, the court noted that the very function of a count for declaratory
relief “is to afford an opportunity to obtain a final resolution of all aspects
of a controversy between litigants in a single action.” <u>Id.</u> at *2. To
bolster this conclusion, the court pointed to how both Florida Farm Bureau and
Peacock file a single count of declaratory relief that encompassed Florida Farm
Bureau’s duty to defend and indemnify. Accordingly, the court concluded the
first factor did not weigh in favor of accepting jurisdiction.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">The court easily
determined the second factor did not weigh in favor of accepting jurisdiction
because the partial final judgment did not “effectively remove[]” any party
from the underlying trial court litigation. Finally, with regard to the third
factor, the court concluded that facts necessary to Florida Farm Bureau’s duty
to defend and duty to indemnify overlapped. As such, the duty to defend and
duty to indemnify, while being separate legal duties, were not amenable to
separate dissolution. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify;">
<span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">Accordingly, the court
concluded the partial final judgment failed to meet the threshold indicators of
finality and dismissed the appeal for lack of jurisdiction.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 12pt; text-align: justify;">
<u><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">Peacock</span></u><span style="font-family: "Times New Roman",serif; font-size: 12pt; line-height: 107%;">
is significant for several of reasons. First, it clarified the law within the
Second District Court of Appeal. Prior to <u>Peacock</u>, a split existed
within the Second District. Some cases had held that a partial final judgment
as to an insurer’s duty to defend was a final appealable order. <u>Accord</u> <u>Transcontinental
Ins. Co. v. Jim Black & Associates, Inc.</u>, 888 So. 2d 671 (Fla. 2d DCA
2004); <u>Aetna Commercial Ins. Co. v. American Sign Co.</u>, 687 So. 2d 834
(Fla. 2d DCA 1996). <u>Peacock</u> clarified the applicability of <u>Transcontinental</u>
and <u>American Sign</u> to scenarios where a partial judgment exists only as
to an insurer’s duty to defend. Second, it removed the conflict that previously
existed with the Fourth District Court of Appeal, which in <u>Nationwide Mut.
Ins. Co. v. Harrick</u>, 763 So. 2d 1133 (Fla. 4th DCA 1999), held a partial
final judgment that determines only an insurer’s duty to defend is not an
appealable order. <u>Id.</u> at 1134. Finally, the Court noted that a partial
final judgment addressing only an insurer’s duty to defend is neither
reviewable under Rule 9.1130, Florida Rules of Appellate Procedure, nor by certiorari
review. <o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com0tag:blogger.com,1999:blog-5175790382109778526.post-52484351958222471482015-08-18T11:56:00.003-04:002015-08-18T11:56:30.068-04:00
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 8pt; text-align: justify;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Arial",sans-serif; font-size: 12pt;">NEW JERSEY INTERMEDIATE APPEALS COURT HOLD DEFECTIVE
CONSTRUCTION IS AN “OCCURRENCE” AND “PROPERTY DAMAGE” <o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="line-height: 200%; margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial",sans-serif; font-size: 12pt; line-height: 200%;">In <u>Cypress Point Condominium
Ass’n v. Adria Towers, L.L.C., et al.</u> ---A. 3d ---, 2015 WL 4111890 (N.J.
App. Div. July 9, 2005), the court held that defective construction which
resulted in unintended and unexpected consequential damages caused by the work
of subcontractors constituted both property and an occurrence under a post 1986
CGL Form.<span style="mso-spacerun: yes;"> </span>In so holding, the court
recognized that the New Jersey court system had historically held such risks
were “business risks” and not covered.<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>More specifically, the <u>Cypress Point</u> Court
distinguished two decisions: </span><u><span style="font-family: "Arial",sans-serif; font-size: 12pt; line-height: 200%; mso-fareast-font-family: "Times New Roman";">Weedo
v. Stone-E-Brick, Inc.</span></u><i style="mso-bidi-font-style: normal;"><span style="font-family: "Arial",sans-serif; font-size: 12pt; line-height: 200%; mso-fareast-font-family: "Times New Roman";">, </span></i><span style="font-family: "Arial",sans-serif; font-size: 12pt; line-height: 200%; mso-fareast-font-family: "Times New Roman";">405 A.2d 788 (N.J. 1979)</span><span style="font-family: "Arial",sans-serif; font-size: 12pt; line-height: 200%;"> and </span><u><span style="font-family: "Arial",sans-serif; font-size: 12pt; line-height: 200%; mso-fareast-font-family: "Times New Roman";">Firemen's Ins. Co. of Newark v.
Natl. Union Fire Ins. Co.</span></u><span style="font-family: "Arial",sans-serif; font-size: 12pt; line-height: 200%; mso-fareast-font-family: "Times New Roman";">,
904 A.2d 754 (N.J. Super. App. Div. 2006)</span><span style="font-family: "Arial",sans-serif; font-size: 12pt; line-height: 200%;">.<span style="mso-spacerun: yes;"> </span>In distinguishing <u>Weedo</u> and <u>Firemen’s
Ins. Co</u>., the <u>Cypress Point</u> court noted that both of those opinions,
and many others in New Jersey involved interpretation of the 1973 ISO Form. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 200%; margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial",sans-serif; font-size: 12pt; line-height: 200%;">In evaluating the prior
decision of the New Jersey Supreme Court <u>Weedo</u>, the court made two
specific notations.<span style="mso-spacerun: yes;"> </span>First, the court
noted that under the 1973 Form, the work of subcontractors was equated to the
work of the general contractor for the purpose of determining whether there was
property damage and coverage.<span style="mso-spacerun: yes;"> </span>However,
the court noted the changes to the subject policy in 1986, by including the
subcontractor exception, “treated consequential damages from faulty workmanship
of subcontractors differently than damages cause by the work of general
contractors.”<span style="mso-spacerun: yes;"> </span>The court also
specifically noted that the <u>Weedo</u> court had not resolved whether
consequential damages resulting from subcontractors’ faulty work constituted
either “property damage” or “occurrence.” Rather, the <u>Weedo</u> court
focused only on issues related to the exclusions in the policy.<span style="mso-spacerun: yes;"> </span>The court specifically noted, that the
insurer had conceded that “but for the exclusions in the policy, coverage would
obtain.”<span style="mso-spacerun: yes;"> </span>Second, the <u>Cypress Point</u>
Court rejected insurers’ argument that the insured’s requested at holding in
the case would transform the policy into a performance bond, noting, “A
performance bond guarantees the completion of a construction contractor if a
contractor defaults and unlike an insurance policy, it benefits the project
owner rather than the contractor.<span style="mso-spacerun: yes;">
</span>Assuredly, unlike a liability insurer, it is also entitled to indemnification
from the contractor.” <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 200%; margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial",sans-serif; font-size: 12pt; line-height: 200%;">The court went on to note the intentional
changes made by the Insurance Services Organization culminating in the 1986 ISO
Form and the addition of the so-called subcontractor exception.<span style="mso-spacerun: yes;"> </span>The court noted that in recent years the
majority rule had become that consequential damages caused by construction
defects were covered citing <span style="color: #252525;">Christopher C. French,<span class="apple-converted-space"> </span></span><em><span style="font-family: "Arial",sans-serif;">Construction Defects: Are They “Occurrences”?,</span></em><span class="apple-converted-space"> </span>47<span class="apple-converted-space"> </span><em><span style="font-family: "Arial",sans-serif;">Gonz. L. Rev.</span></em><span class="apple-converted-space"> </span>1, 8–9 (2011).<span style="mso-spacerun: yes;"> </span>Further the Court cited to the Florida
Supreme Court decision in <span class="apple-converted-space"> </span><em><u><span style="font-family: "Arial",sans-serif;">U.S. Fire Ins. Co. v. J.S.U.B., Inc.</span></u></em><em><span style="font-family: "Arial",sans-serif;">,</span></em><span class="apple-converted-space"> </span>which decision explicitly referenced circulars
issued by the ISO setting forth the intended scope of coverage. <span style="mso-spacerun: yes;"> </span><u>See</u> <u>J.S.U.B.</u>, 9379 So. 2d 871,
879 (Fla. 2007) (<span style="color: #252525;">quoting ISO Circular, Commercial
General Liability Program Instructions Pamphlet, No. GL–86–204 (July 15, 1986).</span>
Finally, the court distinguished prior decisions purporting to interrupt New
Jersey law as holding that defect construction was not an occurrence cited<span class="apple-converted-space"> </span><em><u><span style="font-family: "Arial",sans-serif;">Pennsylvania
Nat’l Mut.Cas. Ins. Co. v. Parkshore Dev.Corp</span></u></em><em><span style="font-family: "Arial",sans-serif;">.,</span></em><span class="apple-converted-space"> </span>403<span class="apple-converted-space"> </span><em><span style="font-family: "Arial",sans-serif;">Fed. Appx.</span></em><span class="apple-converted-space"><i style="mso-bidi-font-style: normal;"> </i></span><i style="mso-bidi-font-style: normal;">770 (</i>3d Cir. 2010)<span class="apple-converted-space">.</span></span><span style="font-family: "Arial",sans-serif; font-size: 12pt; line-height: 200%; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: 200%; margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial",sans-serif; font-size: 12pt; line-height: 200%;">The decision in <u>Cypress
Point </u>is particularly important because of where it was decided. <span style="mso-spacerun: yes;"> </span>The New Jersey Supreme Court’s decision in <u>Weedo</u>,
was the seminal cases deciding that defective construction claims were not
covered.<span style="mso-spacerun: yes;"> </span>While these decisions were eminently
correct under the 1973 ISO CGL Form, the broad business risk concepts
recognized in <u>Weedo</u><i style="mso-bidi-font-style: normal;"> </i>were
dependent on the then existing policy language<i style="mso-bidi-font-style: normal;">.<span style="mso-spacerun: yes;"> </span></i>The <u>Weedo</u> court
also cited influential articles by <b style="mso-bidi-font-weight: normal;"><span style="mso-spacerun: yes;"> </span></b>G.H. Tinker, <i style="mso-bidi-font-style: normal;">Comprehensive General Liability Insurance Prospective and Overview</i>,
23 Fed’n Ins. Coun. Q. 217, 218-21 (1975), and Dean Henderson, <i style="mso-bidi-font-style: normal;">Insurance Protection for Products Liability
and Completed Operations What Every Lawyer Should Know</i>, 50 Neb. L. Rev.
415, 418 (1971).<span style="mso-spacerun: yes;"> </span>The Combination of the <u>Weedo</u>
decision and these articles “informed” and impacted the interpretation of CGL
policies for many years beyond their intended scope.<span style="mso-spacerun: yes;"> </span>The <u>Weedo</u> decision and these articles
all correctly informed how the 1973 ISO CGL Policy Form was intended to be
interpreted.<span style="mso-spacerun: yes;"> </span>However, when the policy
changed, first by broad form property damage endorsements in the late 1970s,
and later by incorporation of the broad form property damage concepts into the
main line 1986 ISO CGL Form, the court systems across the country were somewhat
slow to recognize the intended changes to the CGL.<span style="mso-spacerun: yes;"> </span>That New Jersey has finally done so, shows
that the “occurrence” revolution is almost complete.<span style="mso-spacerun: yes;"> </span>As of the dictation of this posting,
virtually all jurisdictions have considered the questions recognize, either by
court decision, or statutory change, the defective construction can constitute
an occurrence.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com1tag:blogger.com,1999:blog-5175790382109778526.post-66728333335087642172014-01-22T09:59:00.000-05:002014-02-19T09:48:20.128-05:00FIRST IN TIME/FIRST IN RIGHT; CITY CODE ENFORCEMENT LIENS DEEMED INFERIOR TO MORTGAGE LIEN RIGHTS <br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<span style="font-size: 12pt;"><span style="font-family: Arial;">FIRST IN
TIME/FIRST IN RIGHT; </span></span></div>
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<span style="font-size: 12pt;"><span style="font-family: Arial;">CITY CODE
ENFORCEMENT LIENS DEEMED </span></span></div>
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<span style="font-size: 12pt;"><span style="font-family: Arial;">INFERIOR
TO MORTGAGE LIEN RIGHTS </span></span></div>
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-size: 12pt;"><o:p><span style="font-family: Arial;"> </span></o:p></span></div>
<div style="text-align: center;">
<span style="font-family: Arial;">By Michael
W. Leonard, Esquire</span></div>
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: Arial;">Boyle, Gentile,
Leonard & Crockett, P.A.</span></div>
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<a href="http://www.boylegentilelaw.com/"><span style="color: blue; font-family: Arial;">www.boylegentilelaw.com</span></a><o:p></o:p></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-size: 12pt;"><o:p><span style="font-family: Arial;"> </span></o:p></span></div>
<div style="text-align: left;">
<span style="font-family: Arial;"><span style="font-size: 12pt;"><span style="mso-tab-count: 1;"> </span>On May 16, 2013, the Florida Supreme
Court issued its long-awaited decision relevant to the priority of a city
ordinance “superpriority” lien to that of a prior recorded mortgage.<span style="mso-spacerun: yes;"> </span>The specific issue on appeal to the Supreme
Court of Florida </span><span style="font-size: 12pt; mso-ascii-font-family: Arial; mso-bidi-font-family: Arial; mso-hansi-font-family: Arial;">was “[w]hether under
</span><span style="font-size: 12pt;"><a href="http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000006&cite=FLCNART8S2&originatingDoc=I30953647be3711e2981ea20c4f198a69&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Keycite)"><span style="color: windowtext; mso-ascii-font-family: Arial; mso-bidi-font-family: Arial; mso-hansi-font-family: Arial; text-decoration: none; text-underline: none;">Article VIII,
section 2(b), Florida Constitution</span></a></span><span style="font-size: 12pt; mso-ascii-font-family: Arial; mso-bidi-font-family: Arial; mso-hansi-font-family: Arial;">, </span><span style="font-size: 12pt;"><a href="http://www.westlaw.com/Link/Document/FullText?findType=L&pubNum=1000006&cite=FLSTS166.021&originatingDoc=I30953647be3711e2981ea20c4f198a69&refType=LQ&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&contextData=(sc.Keycite)"><span style="color: windowtext; mso-ascii-font-family: Arial; mso-bidi-font-family: Arial; mso-hansi-font-family: Arial; text-decoration: none; text-underline: none;">section
166.021, Florida Statutes</span></a></span><span style="font-size: 12pt; mso-ascii-font-family: Arial; mso-bidi-font-family: Arial; mso-hansi-font-family: Arial;"> and Chapter 162, Florida Statutes, a municipality has the authority to
enact an ordinance stating that its code enforcement liens, created pursuant to
a code enforcement broad order and recorded in the public records of the
applicable county, shall be superior in dignity to prior recorded mortgages?”<span style="mso-spacerun: yes;"> </span><u>City of Palm Bay v. Wells Fargo Bank, N.A.</u>,
114 So. 3d 924 (Fla. 2013).<o:p></o:p></span></span></div>
<div style="text-align: left;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: left;">
<span style="font-size: 12pt; mso-ascii-font-family: Arial; mso-bidi-font-family: Arial; mso-hansi-font-family: Arial;"><o:p><span style="font-family: Arial;"> </span></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: left;">
<span style="font-size: 12pt; mso-ascii-font-family: Arial; mso-bidi-font-family: Arial; mso-hansi-font-family: Arial;"><span style="font-family: Arial;"><span style="mso-tab-count: 1;"> </span>The City argued that it was
permitted to allow its ordinances to have superpriority pursuant to the “broad
home rule powers” afforded municipalities.<span style="mso-spacerun: yes;">
</span>Florida Statute 162.09(3) (2004) <span style="color: black;">provides that
certified copies of a code enforcement order imposing a fine, or a fine plus
repair costs, may be recorded in the public records and shall thereafter
constitute a lien against the land on which the violation exists and upon any
other real or personal property owned by the violator.<span style="mso-spacerun: yes;"> </span>Furthermore, according to Section 2(b),
Article VIII of Florida’s Constitution, the legislative body of each
municipality has the power to enact legislation concerning any subject matter
upon which the state Legislature may act.<span style="mso-spacerun: yes;"> </span>Some municipalities treated these laws as allowing them to create “superpriority”
ordinances which </span>would therefore allow the municipal liens, even when
recorded after a mortgage, to take precedence over an earlier recorded mortgage,
thereby insuring that these liens would be satisfied, whether by the bank or
the successful bidder at foreclosure sale.<span style="mso-spacerun: yes;">
</span><o:p></o:p></span></span></div>
<div style="text-align: left;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: left;">
<span style="font-size: 12pt; mso-ascii-font-family: Arial; mso-bidi-font-family: Arial; mso-hansi-font-family: Arial;"><o:p><span style="font-family: Arial;"> </span></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: left;">
<span style="font-size: 12pt; mso-ascii-font-family: Arial; mso-bidi-font-family: Arial; mso-hansi-font-family: Arial;"><span style="font-family: Arial;"><span style="mso-tab-count: 1;"> </span>However, as noted by the Supreme
Court, Florida law determines the priority of interests in real property based,
in general terms, as “first in time, first in right”.<span style="mso-spacerun: yes;"> </span>In other words, generally speaking, those who
record their interests first have priority over later recorded interests.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
<div style="text-align: left;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: left;">
<span style="font-size: 12pt; mso-ascii-font-family: Arial; mso-bidi-font-family: Arial; mso-hansi-font-family: Arial;"><o:p><span style="font-family: Arial;"> </span></o:p></span></div>
<div style="text-align: left;">
<span style="font-size: 12pt; mso-ascii-font-family: Arial; mso-bidi-font-family: Arial; mso-hansi-font-family: Arial;"><span style="font-family: Arial;"><span style="mso-tab-count: 1;"> </span>The Supreme Court of Florida agreed
with the Fifth District Court and concluded that the superpriority provision of
the Palm Bay ordinance was invalid because it conflicted with the state
recording statutes.<span style="mso-spacerun: yes;"> </span>This case
demonstrates that municipalities cannot treat code violations, recorded after
prior recorded documents, as having priority.<span style="mso-spacerun: yes;">
</span>Simply stated, provided that the mortgage holder has named the
municipality as a defendant for its subsequently recorded liens, these liens
may be foreclosed.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com0tag:blogger.com,1999:blog-5175790382109778526.post-12267186003004935462013-11-13T13:59:00.002-05:002014-02-19T09:52:58.636-05:00THE DUTY TO SETTLE AND BAD FAITH<br />
<div align="center" class="MsoNormalCxSpFirst" style="line-height: 150%; margin: 1em 0px; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">The Duty to Settle and Bad Faith<o:p></o:p></span></u></b></div>
<div style="text-align: center;">
</div>
<div style="text-align: center;">
<span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";"><strong>By Molly A. Chafe, Esquire</strong></span></div>
<div style="text-align: center;">
<span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";"><strong>Boyle, Gentile, Leonard & Crockett, P.A.</strong></span></div>
<div style="text-align: center;">
<span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";"><a href="http://www.boylegentilelaw.com/"><strong>www.BoyleGentileLaw.com</strong></a></span></div>
<span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";"></span><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";"></span><br />
<div class="MsoNormalCxSpMiddle" style="line-height: 150%; margin: 1em 0px; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">Many policyholders are not fully aware that an insurance
company (“insurer”) owes certain fiduciary duties to them. This not only encompasses
first-party claims, but third-party claims as well. Generally, an insurer is
required to defend its insured against any actions or proceedings brought
against the insured that fall within the coverage of the policy. </span><span style="font-family: "Arial","sans-serif";">When an </span><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">insurer </span><span style="font-family: "Arial","sans-serif";">becomes aware of a claim against one
of its insureds, the </span><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">insurer </span><span style="font-family: "Arial","sans-serif";">assumes certain fiduciary duties with
regard to how the insurance company handles those claims. In assuming control,
the insurer acquires a fiduciary duty toward the insured, with obligations to
make decisions and otherwise act in the insured’s best interest and to exercise
the utmost good faith in all aspects of handling the claim. <u>Baxter v. Royal
Indemnity Co.</u>, 285 So. 2d 652 (Fla. 1st DCA 1973). </span></div>
<div class="MsoNormalCxSpMiddle" style="line-height: 150%; margin: 1em 0px; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif";">In general,
this duty of good faith toward an insured involves diligence and care in
investigating the facts, evaluating the claim, and considering and negotiating
a settlement. <u>Williams v. Infinity Insurance Co.</u>, 745 So. 2d 573 (Fla.
5th DCA 1999). </span><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">An insurer, in handling the defense of claims against its insured,
has a duty to use the same degree of care and diligence as a person of ordinary
care and prudence should exercise in the management of his own business. <u>Boston
Old Colony Ins. Co. v. Gutierrez</u>, 386 So. 2d 783, 785 (Fla. 1980). For when
the insured has surrendered to the insurer all control over the handling of the
claim, including all decisions with regard to litigation and settlement, then
the insurer must assume a duty to exercise such control and make such decisions
in good faith and with due regard for the interests of the insured. <u>Boston
Old Colony</u>, 386 So. 2d at 785.</span></div>
<div class="MsoNormalCxSpMiddle" style="line-height: 150%; margin: 1em 0px; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif";">This good
faith duty obligates the insurer to advise the insured of settlement
opportunities, to advise as to the probable outcome of the litigation, to warn
of the possibility of an excess judgment, and to advise the insured of any
steps he might to avoid the same. </span><u><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">Boston Old Colony</span></u><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">,
386 So. 2d at 785. The insurer must investigate the facts, give fair
consideration to a settlement offer that is not unreasonable, and settle the
claim, if possible, where a reasonably prudent person, faced with the prospect
of paying the total recovery, would do so.<span style="mso-spacerun: yes;">
</span></span><u><span style="font-family: "Arial","sans-serif";">Government
Employees Ins. Co. v. Grounds</span></u><span style="font-family: "Arial","sans-serif";">,
311 So. 2d 164 (Fla. 1st DCA 1975), cert. discharged, 332 So. 2d 13 (Fla. 1976);
<u>Government Employees Ins. Co. v. Campbell</u>, 288 So. 2d 513 (Fla. 1st DCA
1973), quashed, 306 So. 2d 525 (Fla. 1974); <u>Baxter</u>, 285 So. 2d 652,
cert. discharged, 317 So. 2d 725 (Fla. 1975). Because the duty of good faith
involves diligence and care in the investigation and evaluation of the claim
against the<span class="apple-converted-space"> </span><span class="cosearchterm"><span style="mso-bidi-font-weight: bold;">insured</span></span>, negligence is relevant
to the question of good faith. </span><u><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">Boston Old Colony</span></u><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">,
386 So. 2d at 785. </span><span style="font-family: "Arial","sans-serif";">Moreover,
where substantial injuries by the claimant and potential liability of the
insured are obvious, the failure to tender modest policy limits constitutes bad
faith. <u>See</u> <u>Powell v. Prudential Property & Casualty Ins. Co.</u>,
584 So. 2d 12, 14 (Fla. 3d DCA 1991).</span></div>
<div class="MsoNormalCxSpMiddle" style="line-height: 150%; margin: 1em 0px; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">However, the case of <u>Gutierrez v. Yochim</u> has further strengthened
an insurer’s duty to settle. 23 So. 3d 1221 (Fla. 2d DCA 2009).</span><span style="mso-fareast-font-family: "Times New Roman";"> </span><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">In
<u>Gutierrez</u>, </span><span style="font-family: "Arial","sans-serif";">Ms.
Gutierrez, who was insured by Dairyland, was driving her van when she made a
left turn directly into the path of a motorcycle operated by Mr. Yochim, who
sustained serious injuries. </span><u><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">Id.</span></u><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">
at 1222.</span><span style="mso-fareast-font-family: "Times New Roman";"> </span><span style="font-family: "Arial","sans-serif";">Ms. Gutierrez immediately reported the
accident to Dairyland. <u>Id.</u> Within the month, the insurance company
determined that Ms. Gutierrez was at fault and sent her a certified letter
advising her that she would be personally exposed to an excess judgment for
property damage and bodily injuries. <u>Id.</u> The insurance adjuster
attempted to call Mr. Yochim but was unable to reach him but ordered an
appraisal of the damage.<span style="mso-spacerun: yes;"> </span><u>Id.</u>
Within eight days of the accident, the adjuster learned that Mr. Yochim
suffered an “incapaciting” injury. <u>Id.</u> The appraisal report indicated a
total loss upon which Dairyland cautioned Ms. Gutierrez that it “will make
every effort to resolve these claims within your insurance coverage.<span style="mso-spacerun: yes;"> </span>Due to the serious nature of the accident,
this may not be possible....”<span style="mso-spacerun: yes;"> </span><u>Id.</u>
at 1223. </span></div>
<div class="MsoNormalCxSpMiddle" style="line-height: 150%; margin: 1em 0px; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif";">Roughly a
month after the accident and after a telephone conversation with the
plaintiff’s attorney informing the insurer of his client’s possible paralysis
diagnosis, the adjuster set the reserves for the injuries and asked for the
medical records. <u>Id.</u> Although plaintiff’s attorney had the medical
records, he sent the medical authorization forms to insurer two months after
the accident. <u>Id.</u> However, it was almost five months after the accident
that Dairyland actually ordered the medical records. <a href="http://www.blogger.com/null" name="_GoBack"></a><u>Id.</u>
After receipt of the medical records, Dairyland formally tendered the policy
limits. <u>Id.</u> This was eight months after the accident. A stipulated
judgment in excess of the policy limits was entered by agreement among the
parties. <u>Id.</u> at 1224. As a result, Mr. Yochim filed suit against Ms.
Gutierrez, and she filed a bad faith claim against Dairyland. <u>Id.</u> Trial
court granted summary judgment on the bad faith action in favor of Dairyland
based on its assertion that it orally offered to settle for policy limits
within a day of receiving the medical records. <u>Id.</u></span></div>
<div class="MsoNormalCxSpMiddle" style="line-height: 150%; margin: 1em 0px; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif";">The appellate
court reiterated that an insurer has an obligation to properly defend its
insured from claims that are covered within the policy of insurance and that it
must exercise good faith in satisfying that obligation. <u>Id.</u> at 1225. The
court dismissed Dairyland’s argument that the delay in tendering the policy
limits was a result of the claimant failing to provide medical authorization in
stating that Dairyland’s “fiduciary duty to timely and properly investigate the
claim against the insured was not relieved simply because it was waiting to
receive information from the claimant’s attorney.” <u>Id.</u> It further stated
that because Dairyland knew within days of the accident that its insured was
entirely at fault in causing the accident and was aware that damages exceeded
the insured’s policy limit, it could not say, as a matter of law, that
Dairyland satisfied its duty of good faith under the circumstances. <u>Id.</u>
at 1226. </span></div>
<div class="MsoNormalCxSpMiddle" style="line-height: 150%; margin: 1em 0px; mso-layout-grid-align: none; text-align: justify;">
<span style="font-family: "Arial","sans-serif";"><span style="mso-tab-count: 1;"> </span>Some practitioners have suggested that
the <u>Gutierrez</u> case has effectively resulted in an unreciprocal and
uncooperative relationship between third parties and insurers.<span style="mso-spacerun: yes;"> </span>Specifically, the argument is that an insurer
has an affirmative duty to initiate settlement negotiations while, at the same
time, leaving the claimant with no duty to cooperate with such negations. However,
t</span><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: "Times New Roman";">hroughout litigation, counsel for both sides should engage
in cooperative communication so as to facilitate an action in good faith. But an
insurer must also be aware of the duties owed, keep the insured involved and
advised of the potential liability when an excess judgment is probable, and
timely investigate cases involving serious injuries in order to prevent
potential bad-faith claims. The duty to “settle” is not the duty to “tender
policy limits.” Rather, the duty to settle encompasses the duty to use the same
degree of care and diligence as a person of ordinary care and prudence should
exercise in the management of his or her own affairs. This includes timely
investigation which may lead to a tender of policy limits, but the terms are
not synonymous.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<o:p> </o:p></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com3tag:blogger.com,1999:blog-5175790382109778526.post-5263835918268133212013-11-12T10:35:00.003-05:002013-11-12T10:35:27.487-05:00What is the Scope of Your Additional Insured Coverage?
<br />
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%;">What
is the Scope of Your Additional Insured Coverage?</span></b></div>
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%;"></span> </div>
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%;">by Amanda K. Anderson, Esquire</span></div>
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%;">Boyle, Gentile, Leonard & Crockett, P.A.</span></div>
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%;"><a href="http://www.boylegentilelaw.com/">www.BoyleGentileLaw.com</a></span></div>
<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%;"></span> </div>
<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">I.<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%;">Types
of Additional Insured Endorsements<o:p></o:p></span></b><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%;">There are many variations when it comes to
additional insured endorsements, but there are a couple main categories of
additional insured endorsements. Additional insured endorsements can be
separated into two main categories, scheduled and blanket. The most common scheduled
endorsement is the 20 10 11 85, which commonly states “WHO IS AN INSURED is
amended to include as an insured the person or organization shown in the
Schedule, but only with respect to liability arising out of “your work” for
that insured by or for you.” On the other hand, blanket additional insured
endorsements are typically dependent on the existence of a written contract
which has been executed prior to the loss. Blanket language typically consists
of some iteration of the following: “Who is an insured is amended to include
any person or organization that the insured has agreed or is required by
contract to add as an additional insured.”<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%;">An
examination of the particular language in the endorsement is vital. There are
three phrases which are typically used: (1) “arising out of”; (2) “caused, in
whole or in part”; and (3) “because of”. Additional insured endorsements which
cover damages “arising out of” the subcontractor’s work are the broadest of all
the endorsements. <u>See</u> <u>Taurus Holdings, Inc. v. U.S. Fid. & Guar.
Co.</u>, 913 So. 2d 528 (Fla. 2005). In Florida, courts have universally ruled
that the additional insured is insured for its own liability under the “arising
out of” language. <u>See</u> <u>Koala Miami Realty v. Valiant Ins. Co.</u>, 913
So. 2d 25 (Fla. 3d DCA 2005); <u>Monticello Ins. Co. v. City of Miami Beach</u>,
2008 WL 906537 (S.D. Fla. April 3, 2008). Thus, the additional insured has
coverage for its own negligence and not just the additional insured’s vicarious
liability. The <span style="mso-bidi-font-weight: bold;">“in whole or in part”
language gives coverage to the additional insured so long as there was any
fault on the part of the named insured. <u>See</u> </span><u>Zep Construction
v. Interstate Fire & Cas. Co.</u>, 18 Fla. L. Weekly Supp. 65a (Fla. 12th
Cir.<span style="mso-spacerun: yes;"> </span>2010); <u>Am. Empire Surplus Lines
Ins. Co. v. Crum & Forster Specialty Ins. Co.</u>, 2006 WL 1441854 (S.D.
Tex. May 23, 2006); and <u>Penn Nat’l Mut. Cas. Ins. Co. v. Ipsco Steel
(Alabama), Inc.</u>, 2008 WL 4183345 (S.D. Ala. Mar. 10, 2008). <span style="mso-bidi-font-weight: bold;">As such, additional insured coverage under
this language is not limited to vicarious liability.</span><span style="mso-spacerun: yes;"> </span>Lastly, additional insured status providing
coverage to additional insured “because of” named insured liability has been
held to be limited to mere vicarious liability. <u>See</u> <u>Garcia v. Federal
Ins. Co.</u>, 969 So. 2d 288 (Fla. 2007). <o:p></o:p></span></div>
<br />
<div class="MsoListParagraph" style="margin: 0in 0in 8pt 0.75in; mso-add-space: auto; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -0.5in;">
<!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">II.<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%;">Ongoing
Operations Limitation </span></b></div>
<div class="Default" style="margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif";">Many additional insured endorsements contain
language which limits coverage to damages arising out of the named insured’s
“ongoing operations.” Whether that phrase is intended to remove coverage for
damages included in the “products completed operations hazard” is unclear.
However, most of the courts interpreting this language have found that without
more limitation in the endorsement to make clear that there is no coverage for
completed operations, the “ongoing operations” limitation is insufficient to
removed completed operations coverage. <u>See</u> <u>Tri-Star Theme Builders,
Inc. v. OneBeacon Ins. Co.</u>, 426 Fed.Appx. 506 (9th Cir. 2011); <u>McMillin
Constr. Servs.,L.P. v. Arch Specialty Ins. Co.</u>, 2012 WL 243321 (S.D. Cal.
Jan. 25, 2012); and <u>Jaynes Corp. v. American Safety Indem. Co.</u>, 925
F.Supp.2d 1095 (D. Nev. 2012). <u>But see</u> <u>Colorado Cas. Ins. Co. v.
Safety Control Co., Inc.</u>, 288 P.3d 764 (Az. Ct. App. 2012).</span><b><span style="font-size: 11.5pt;"><o:p> </o:p></span></b></div>
<br />
<div class="Default" style="margin: 0in 0in 0pt 0.75in; mso-list: l0 level1 lfo1; text-indent: -0.5in;">
<!--[if !supportLists]--><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Arial","sans-serif"; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">III.<span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span></b><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Arial","sans-serif";">2013 ISO Amendments </span></b><span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%;"><o:p> </o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%;">In April 2013, the Insurance Services Office,
Inc. (“ISO”) revised its standard CGL forms and endorsements, including 24 of
its 31 standard additional insured endorsements. The revised ISO endorsements
contain three significant modifications of particular concern to contracting
parties: coverage is provided “to the extent permitted by law”; coverage “will
not be broader than” the contract; and limits are the lesser of the contract
requirement or the policy declarations. <o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%;">One of the revised additional insured
endorsements now states that the insurance afforded to the additional insured
“only applies to the extent permitted by law.” This provision was presumably
inserted to address state anti-indemnification statutes. Another additional
insured endorsement option, which could be added to a policy, states: that if
the coverage is required by a contract or agreement, the insurance afforded to
the additional insured “will not be broader than” the coverage that the insured
is “required by the contract or agreement to provide.” It seems likely that the
new language is intended to incorporate into the insurance policy any express
limits on additional insured coverage that the parties have specified in the
contract; for example, where the contract specifies that additional insured
coverage will only extend to vicarious liability. The last major change
reflected in some endorsements states: that the most the insurer will pay on
behalf of the additional insured is either the amount “[r]equired by the
contract or agreement”; or the applicable Limits of Insurance shown in the
Declarations, whichever is less. The intent of this language is to limit the
insurer’s exposure to the lesser of the policy limits or the amount agreed to
by the contracting parties.<o:p></o:p></span></div>
<span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%;"><o:p> </o:p></span><br />
<br />
<div class="MsoNormal" style="margin: 0in 0in 8pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt; line-height: 107%;">Certainly,
all general contractors and subcontractors should be aware of these changes and
adjust their contracts accordingly. <o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com1tag:blogger.com,1999:blog-5175790382109778526.post-82477900968668661512013-10-22T13:40:00.002-04:002014-02-19T09:51:55.953-05:00DO THE ENDS JUSTIFY THE MEANS?<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: Arial;"><b style="mso-bidi-font-weight: normal;"><u>DO
THE ENDS JUSTIFY THE MEANS?</u></b><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<o:p><span style="font-family: Arial;"> by Michael W. Leonard, Esquire</span></o:p></div>
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<o:p><span style="font-family: Arial;">Boyle, Gentile, Leonard & Crockett, P.A.</span></o:p></div>
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<o:p><span style="font-family: Arial;"><a href="http://www.boylegentilelaw.com/">www.boylegentilelaw.com</a></span></o:p></div>
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
</div>
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: Arial;"><span style="mso-tab-count: 1;"> </span>On
September 25, 2013, the Second District Court of Appeal rendered its yet-to-be
published opinion dealing with a proposition of law which was once thought to
be well settled and clearly understood.<span style="mso-spacerun: yes;"> </span><u>Focht
v. Wells Fargo Bank, N.A.</u>, 2013 WL 5338048 (Fla. 2d DCA 2013).<span style="mso-spacerun: yes;"> </span>The <u>Focht</u> decision centered on the
issue of “standing” relevant to a holder of a note and mortgage.<span style="mso-spacerun: yes;"> </span>The law of Florida had, until this decision,
been quite clear.<span style="mso-spacerun: yes;"> </span>A party seeking to foreclose
a mortgage must possess the note and mortgage prior to filing suit.<span style="mso-spacerun: yes;"> </span><i style="mso-bidi-font-style: normal;">See </i><u>Country
Place Cmty. Ass’n v. J.P. Morgan Acq. Corp.</u>, 51 So. 3d 1176, 1179 (Fla. 2d DCA
2010) and <u>McLean v. J.P. Morgan Chase Bank Nat’l Ass’n</u>, 79 So. 3d 170,
173 (Fla. 4th DCA 2012). These two recent
decisions merely reiterate what lawyers have always understood the concept of
“standing” to mean in the foreclosure context.<span style="mso-spacerun: yes;">
</span>“Standing” is and has always been thought of as a defect that may not be
cured by the acquisition of standing after a case has been filed.<span style="mso-spacerun: yes;"> </span><u>Progressive Express Ins. Co. v. McGrath
Cmty. Chiropractic</u>, 913 So. 2d 1281, 1284-85 (Fla. 2d DCA 2005); <u>Jeff-Ray
Corp. v Jacobson</u>, 566 So. 2d 885, 886 (Fla. 4th DCA 1991).<u><o:p></o:p></u></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: Arial;"><span style="mso-tab-count: 1;"> </span>In
the <u>Focht</u> decision, the owner of the property executed and delivered a
note and mortgage to BNC Mortgage, Inc.<span style="mso-spacerun: yes;">
</span>This loan was allegedly later transferred into a trust, in which Wells
Fargo acted as the trustee.<span style="mso-spacerun: yes;"> </span>In January
of 2008, Wells Fargo, as trustee, filed a foreclosure action, which included a
count for a lost note.<span style="mso-spacerun: yes;"> </span>Wells Fargo, in
July of 2008, filed the original note with the court and thereafter filed the
assignment of the note and mortgage in September of 2008.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: Arial;">Ms. Focht raised lack of
“standing” as an affirmative defense to the foreclosure action, arguing that
the assignment filed in the action evidences that at the time the complaint was
filed, Wells Fargo was not the owner of the note and mortgage and therefore had
no standing to bring the claim.<span style="mso-spacerun: yes;"> </span>Wells
Fargo argued that the filing of the original note evidences that it had
standing.<span style="mso-spacerun: yes;"> </span>In further support of its
argument that it had standing when the action was filed was the fact that the
trust in which the Focht note and mortgage were held was created years before
Wells Fargo filed the instant foreclosure action.<span style="mso-spacerun: yes;"> </span>The lower tribunal granted summary judgment
in favor of the lender, and Ms. Focht took appeal.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: Arial;">The appellate court held that
there was a genuine issue of material fact; that being whether Wells Fargo
possessed the note and mortgage at the time the action was filed, and therefore
whether Wells Fargo had standing.<span style="mso-spacerun: yes;"> </span>Despite the reversal of the lower court’s ruling, the Second District
Court of Appeal has requested that the Florida Supreme Court entertain the
following certified question as one of great public importance:<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 1in 0pt; text-align: justify;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: Arial;">CAN A PLAINTIFF IN A FORECLOSURE ACTION
CURE THE INABILITY TO PROVE STANDING AT THE INCEPTION OF SUIT BY PROOF THAT
PLAINTIFF HAS SINCE ACQUIRED STANDING?<o:p></o:p></span></b></div>
<br />
<div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: Arial;"><span style="mso-tab-count: 1;"> </span>It
is clear that the foreclosure crisis as well as the inequities of what can amount
to a windfall to those who continue to live in their homes for free while
contesting the foreclosure action is behind this proposed “standing” exception.<span style="mso-spacerun: yes;"> </span>In fact, as noted in the concurring opinion
of Judge Altenbernd, “trial courts have been overwhelmed by foreclosure filings”.<span style="mso-spacerun: yes;"> </span>Justice Altenbernd goes on to state that
although borrowers may have legitimate affirmative defenses, “the delayed
production of the original note and mortgage in a case where the borrower is in
default should not justify the dismissal of the legal proceedings”.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<o:p><span style="font-family: Arial;"> </span></o:p><br />
<div style="text-align: justify;">
<span style="font-family: "Arial","sans-serif"; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Arial; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><span style="mso-tab-count: 1;"> </span>Although
one can understand the reasoning behind a change in such a long-standing legal
precedence, one must pause to determine if the ends justify the means.<span style="mso-spacerun: yes;"> </span>In other words, what will the effect of a change
in the standing requirement be in foreclosure actions?<span style="mso-spacerun: yes;"> </span>Will it result in even greater recklessness
in the lending institutional record-keeping?<span style="mso-spacerun: yes;"> </span>Will a change in the “standing” standard migrate to other areas of the
law?<span style="mso-spacerun: yes;"> </span>What is the law of unintended
consequences?<span style="mso-spacerun: yes;"> </span>Time will tell whether the
Florida Supreme Court accepts jurisdiction of this certified question and
whether the Supreme Court will tinker with the "standing" requirement.</span></div>
Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com0tag:blogger.com,1999:blog-5175790382109778526.post-28635794305733423142013-08-08T11:50:00.004-04:002013-08-08T11:50:51.700-04:00THE IMPACT OF THE 2013 FLORIDA SESSION LAW
<br />
<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Times New Roman","serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">THE IMPACT OF THE 2013 FLORIDA SESSION LAW<o:p></o:p></span></u></b></div>
<div style="text-align: center;">
<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Times New Roman","serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";">(CHAPTER
2013-137) C.S.C.S.H.B. NO. 87</span></u></b><u><span style="font-family: "Times New Roman","serif"; font-size: 12pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></u></div>
<br />
<div align="center" class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: Arial;">By Michael W.
Leonard, Esquire</span></div>
<div align="center" class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: Arial;">Boyle, Gentile,
Leonard & Crockett, P.A.</span></div>
<div align="center" class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: center;">
<a href="http://www.boylegentilelaw.com/"><span style="color: blue; font-family: Arial;">www.boylegentilelaw.com</span></a><o:p><span style="font-family: Arial;"> </span></o:p></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: Arial;">On June 7, 2013,
Florida’s Governor, Rick Scott, signed the Committee Substitute for House Bill
No. 87 (the “Act”).<span style="mso-spacerun: yes;"> </span>Foreclosure—Actions
and Proceedings—Complaint, 2013 Fla. Sess. Law Serv. Ch. 2013-137 (C.S.C.S.H.B.
87).<span style="mso-spacerun: yes;"> </span>The impact of this House Bill is significant
for actions involving foreclosure of Florida real estate, and alters, some would
say significantly, Florida’s foreclosure landscape.<span style="mso-spacerun: yes;"> </span>The purpose of this article is not to discuss
all of the statutory changes, but to highlight some of the changes which this
author finds substantial.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: Arial;">Of first
importance is the issue of whether these statutory modifications have retroactive
impact, and therefore affect pending foreclosure actions or only actions which
are filed after the respective statutes’ effective dates.<span style="mso-spacerun: yes;"> </span>The first sentence of Section 8 of the Act
states that, “[T]he Legislature finds that this act is remedial in nature and
applies to all mortgages encumbering real property and all promissory notes
secured by a mortgage, whether executed before, on or after the effective date
of this act.”<span style="mso-spacerun: yes;"> </span>The Act clearly states
that it is remedial, and remedial statutes, as a general rule, have retroactive
application.<span style="mso-spacerun: yes;"> </span>The enacting Legislation,
however, provides exceptions to this general statement, which exceptions will
be discussed below.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: Arial;"><span style="mso-tab-count: 1;"> </span>Section
95.11, Florida Statutes, relating to Florida’s statute of limitations, now clarifies
that as to actions filed after July 1, 2013, a lender which has or is
foreclosing on a one to four family dwelling unit must enforce its claim for a
deficiency within one year from the date that a certificate of title is issued
by the clerk or the day after the lender accepts a deed in lieu of
foreclosure.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: Arial;"><span style="mso-tab-count: 1;"> </span>Additionally,
the Governor and the Legislature created Section 702.015, Florida Statutes,
which supplements the requirements of lenders relating to claims relating to
lost or destroyed instruments.<span style="mso-spacerun: yes;"> </span>The
creation of this Statute now requires that if the action relates to residential
property, the Complaint must affirmatively allege: (a) that at the time of the
commencement of the action, the Plaintiff holds the note; (b) the specific
factual basis by which the Plaintiff is the entity entitled to enforce the note;
(c) if the Plaintiff was delegated authority to file the foreclosure action on
behalf of another entity that is the actual owner of the note, the authority of
the Plaintiff and the document which grants the Plaintiff such authority, and;
(d) if the Plaintiff is in possession of the note, a statement, under penalty
of perjury, that the Plaintiff holds the subject note.<span style="mso-spacerun: yes;"> </span>Alternatively, if the Plaintiff does not
possess the original note, it must provide an affidavit which details the clear
chain of custody of the note, the facts showing that the Plaintiff is entitled
to enforce the note, together with exhibits of such copies of the note and
allonge, or other documents showing receipt of the original note.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: Arial;"><span style="mso-tab-count: 1;"> </span>Section
702.036, Florida Statutes, was also created which provides that if a party
attempts to challenge a foreclosure judgment or the foreclosure sale resulting
therefrom, that party’s relief is limited to one of a claim for monetary
damages, which relief will not affect the quality or character of the title to
the foreclosure property.<span style="mso-spacerun: yes;"> </span>This is a
significant change for those successful third party bidders acquiring title at
foreclosure sale and having to spend substantial resources in proving the
validity of their title.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt; text-align: justify;">
<span style="font-family: Arial;"><span style="mso-tab-count: 1;"> </span>Substantial
revisions were likewise made to Section 702.10, Florida Statutes.<span style="mso-spacerun: yes;"> </span>Now, a lien holder, which includes not only
the Plaintiff lender but also any defendant who holds a valid lien encumbering
the subject property, has the right to demand an expedited foreclosure process
through an “order to show cause”.<span style="mso-spacerun: yes;"> </span>The
enactment of this statute applies even to causes of action pending with courts
on the effective date.<span style="mso-spacerun: yes;"> </span>This legislative
enactment is particularly important to both condominium and homeowner’s
associations who are often pushing for lenders to timely complete their
foreclosure action. <o:p></o:p></span></div>
<span style="font-family: "Arial","sans-serif"; font-size: 11pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Arial; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><span style="mso-tab-count: 1;"> </span>Finally,
Section 702.11, Florida Statutes, was also created as part of the Act, which
specifies what is deemed adequate protection for a borrower when the Plaintiff
lender is not in possession of the original note.<span style="mso-spacerun: yes;"> </span>Adequate protection now includes a written
indemnification agreement, a surety bond, a letter of credit, a deposit of cash
collateral, or such other security as the court deems just and proper.<span style="mso-spacerun: yes;"> </span>Like Section 702.10, this statute applies to
actions currently pending in Florida tribunals. </span>Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com0tag:blogger.com,1999:blog-5175790382109778526.post-37244620479603080312013-07-01T12:39:00.002-04:002013-07-01T12:39:16.082-04:00MOST STATES NOW HOLD THAT DEFECTIVE CONSTRUCTION CAN BE AN OCCURRENCE IN A CGL POLICY
<br />
<div align="center" class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Arial","sans-serif"; font-size: 13pt;">MOST STATES NOW HOLD THAT DEFECTIVE
CONSTRUCTION</span></u></b></div>
<div align="center" class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: center;">
<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: "Arial","sans-serif"; font-size: 13pt;">CAN BE AN OCCURRENCE IN A CGL POLICY</span></u></b></div>
<br />
<div align="center" class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: "Arial","sans-serif";">By Mark A. Boyle, Esquire</span></div>
<div align="center" class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: "Arial","sans-serif";">Boyle, Gentile, Leonard &
Crockett, P.A.</span></div>
<div align="center" class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: center;">
<a href="http://www.boylegentilelaw.com/"><span style="font-family: "Arial","sans-serif";"><span style="color: blue;">www.BoyleGentileLaw.com</span></span></a><span style="font-family: "Arial","sans-serif"; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt;">Over the last ten
years, one of the biggest issues in insurance litigation across the country has
been the question of whether construction defects constitute an
occurrence.<span style="mso-spacerun: yes;"> </span>A spate of recent opinions
finding that defective construction can constitute an occurrence continues a trend
favoring coverage on behalf of builders under their Commercial General
Liability (CGL) policies.<span style="mso-spacerun: yes;"> </span>Most
businesses, including businesses involved in the construction trades such as
general contractors and subcontractors, procure a standard form of insurance
known as the CGL policy.<span style="mso-spacerun: yes;"> </span>Most CGL
policies are issued on a standard form promulgated by the Insurance Services
Office (ISO).<span style="mso-spacerun: yes;"> </span>Given that this CGL ISO
form is in use throughout the country, one might think that the interpretation
of this policy would be uniform throughout most jurisdictions.<span style="mso-spacerun: yes;"> </span>This is definitely not the case.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt;">The term “occurrence”
is defined under the standard form CGL policy as follows:<o:p></o:p></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0.5in 0pt; text-align: justify;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt;">[A]n accident,
including continuous or repeated exposure to substantially the same general
harmful conditions.<o:p></o:p></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt;">Crucially, the term “accident” is not
defined.<span style="mso-spacerun: yes;"> </span>The gist of the dispute between
contracting insureds and their insurance carriers is whether defective
construction is sufficiently “accidental” to constitute a covered loss.<span style="mso-spacerun: yes;"> </span>Boiled to its essence, insurance carriers argue
that defective construction events are merely faulty workmanship, the
foreseeable result of which is eventual damage and other problems.<span style="mso-spacerun: yes;"> </span>This argument holds that such foreseeability
of damage makes construction defect losses non-accidental and therefore
uninsurable under the CGL policy.<span style="mso-spacerun: yes;"> </span></span><span style="font-family: "Arial","sans-serif"; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt;">Thankfully, while
this argument has maintained some traction (<u>see</u> <u>Kvaerner Metals Div.
of Kvaerner U.S., Inc. v. Commercial Union Ins. Co.</u>, 589 Pa. 317 (Pa. 2006)),
the vast majority of jurisdictions which have considered the issue over the
last ten years have correctly found coverage.<span style="mso-spacerun: yes;">
</span>The most recent state Supreme Court to address the issue is the Supreme
Court of Appeals of West Virginia. <span style="mso-spacerun: yes;"> </span><u>See</u>
<u>Cherrington, et al. v. Erie Ins. Property & Casualty Co.</u>, No.
12-0036, --- S.E..2d --- (W.V. June 18, 2013).<span style="mso-spacerun: yes;">
</span><span style="mso-spacerun: yes;"> </span>The Supreme Court of West
Virginia explicitly held that the defective workmanship resulting in property
damage constituted an occurrence and accident under a commercial general liability
policy.<span style="mso-spacerun: yes;"> </span>The court also noted that its
decision in this regard was following the new “majority rule” based on
decisions across the country.<span style="mso-spacerun: yes;"> </span>Finally,
the West Virginia Supreme Court noted that its decision in C<u>herrington</u> overruled
its prior decisions holding defective construction could not be covered under
CGL policies.</span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt;">Another very recent Supreme
Court ruling on this issue comes from the Supreme Court of Connecticut.<span style="mso-spacerun: yes;"> </span>In <u>Capstone Bldg. Corp. v. American
Motorist Ins. Co.</u> 308 Conn. 760, --- A.3d --- (Conn. June 11, 2013), the
insured general contractor, Capstone, was sued for defective construction.<span style="mso-spacerun: yes;"> </span>The contractor submitted a claim for
defective construction to its CGL insurance carrier, who denied the claim
outright.<span style="mso-spacerun: yes;"> </span>The Connecticut Supreme court
specifically held:</span><span style="font-family: "Arial","sans-serif"; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0.5in 0pt; text-align: justify;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt;">Because negligent
work is unintentional from the point of view of the insured, we find that it
may constitute the basis for an “accident” or “occurrence” under the plain
terms of the commercial general liability policy.</span><span style="font-family: "Arial","sans-serif"; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt;">A similar result was
reached in <u>K & L Homes, Inc. v. American Family Mut. Ins. Co.</u>, 829 N.W.
2d 724 (N.D. April 5, 2013).<span style="mso-spacerun: yes;"> </span>In <u>K &
L Homes</u>, the builder, K & L, was sued by the owners of a
newly-constructed house which had been purchased from K & L.<span style="mso-spacerun: yes;"> </span>Not long after the purchase of the house from
K & L, the owners claimed that they noticed cracks, unevenness and shifting
in their home.<span style="mso-spacerun: yes;"> </span>K & L submitted these
claims to its insurance carrier, who denied them outright.<span style="mso-spacerun: yes;"> </span>The North Dakota Supreme Court began its analysis
of the issue by noting, “[c]urrently, the majority of state supreme courts who
have decided the issue of whether inadvertent faulty workmanship is an
accidental ‘occurrence’ potentially covered under the CGL policy have decided
that it can be an ‘occurrence’.”<span style="mso-spacerun: yes;"> </span>The
court concluded that faulty workmanship may constitute an “occurrence” if the
faulty work was “unexpected” and not intended by the insured, and the property
damage was not anticipated or intentional, so that neither the harm was
anticipated, intended, or expected.<span style="mso-spacerun: yes;"> </span></span><span style="font-family: "Arial","sans-serif"; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify; text-indent: 0.5in;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt;">Both the <u>K & L</u>
and <u>Capstone</u> courts recognized that their decision was consistent with
the Florida Supreme Court’s pronouncements on the same issue in <u>U.S. Fire
Ins. Co. v. J.S.U.B., Inc.</u>, 979 So. 2d 871 (Fla. 2007).<span style="mso-spacerun: yes;"> </span>In <u>J.S.U.B.</u>, the Florida Supreme Court
held:</span><span style="font-family: "Arial","sans-serif"; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0.5in 0pt; text-align: justify;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt;">We conclude that
defective work performed by a subcontractor that causes damage to the
contractor’s completed project and is neither expected nor intended from the
standpoint of the contractor can constitute “property damage” caused by an
“occurrence” as those terms are defined in a standard form commercial general
liability policy.</span><span style="font-family: "Arial","sans-serif"; font-size: 12pt;"><o:p> </o:p></span></div>
<br />
<div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: justify;">
<span style="font-family: "Arial","sans-serif"; font-size: 12pt;">The Florida Supreme Court’s ruling in this
regard was a significant change.<span style="mso-spacerun: yes;"> </span>(The
change was, of course, made at the urging of our firm.<span style="mso-spacerun: yes;"> </span>Boyle, Gentile, Leonard & Crockett, P.A.
represented the contractor in <u>J.S.U.B.</u> at the claims presentation stage,
before the trial court, before the intermediate appeals court, all the way
through to our victory at the Florida Supreme Court.)<span style="mso-spacerun: yes;"> </span>Reduced to its essence, insurance carriers
argue that a contractor’s failure to perform its contract is always intentional
- - essentially arguing that a contractor’s failure to perform its work in
accordance with its contract necessarily makes the resulting problems arising
from that work foreseeable.<span style="mso-spacerun: yes;"> </span>While this
argument may have some initial intuitive appeal, the argument fails upon closer
analysis:</span><span style="font-family: "Arial","sans-serif"; font-size: 12pt;"><o:p> </o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 12pt;">Yet, on even a
moment’s reflection, we all understand that contracts are broken, many times,
for reasons that we would call “accidental.”<span style="mso-spacerun: yes;">
</span>The wrong number of boxes was shipped because someone made a mistake in the
counting.<span style="mso-spacerun: yes;"> </span>The lawsuit was filed in the
wrong venue because someone made a mistake when reading the venue statute.<span style="mso-spacerun: yes;"> </span>As one court explained, “at bottom, an
occurrence is simply an unexpected consequence of an insured’s act, even if due
to negligence or faulty work”.</span><span style="font-family: "Arial","sans-serif"; font-size: 12pt;"><o:p> </o:p></span></div>
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<u><span style="font-family: "Arial","sans-serif"; font-size: 12pt;">See</span></u><span style="font-family: "Arial","sans-serif"; font-size: 12pt;"> Ellen S. Pryor, <u>The Economic Loss
Rule and Liability Insurance</u>, 48 Ariz. L. Rev 905, 917 (2006) (<u>quoting</u>
<u>Anthem Elecs., Inc. v. Pac. Employers Ins. Co.</u>, 302 F.3d 1049, 1056 (9th
Cir. 2002)).</span><span style="font-family: "Arial","sans-serif"; font-size: 12pt;"><o:p> </o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 12pt;">Certainly, if foreseeability of injury were the
test for whether or not something was insurable, nothing would be insured, as
all forms of liability that give rise to actionable damages are premised on the
foreseeability of damages.<span style="mso-spacerun: yes;"> </span>If this
argument were to be accepted, it would make CGL policies a Seinfeld-esque
insurance policy about nothing.<span style="mso-spacerun: yes;"> </span></span><span style="font-family: "Arial","sans-serif"; font-size: 12pt;"><o:p> </o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 12pt;"><span style="mso-tab-count: 1;"> </span>In
future blog entries, I will explore (1) how the “property damage” definition in
the CGL policy interacts with the “occurrence” definition in defective
construction cases, (2) how changes to the CGL policy, beginning with the broad
form property damage endorsement in the 1970s, expanded the availability of
coverage for defective construction, and (3) how the CGL product differs from
performance bonds.<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 12pt;"><o:p> </o:p></span></div>
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Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com4tag:blogger.com,1999:blog-5175790382109778526.post-23026970846204148622013-06-17T14:31:00.003-04:002013-06-17T14:32:44.569-04:00TRIGGER OF COVERAGE - WHICH TRIGGER APPLIES?<b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 12pt;"><div align="center" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;"><u>Trigger of Coverage – Which Trigger Applies? </u></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;"><o:p>By Amanda K. Anderson, Esquire</o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;"><o:p>Boyle, Gentile, Leonard & Crockett, P.A.</o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;"><o:p><a href="http://www.boylegentilelaw.com/">www.BoyleGentileLaw.com</a></o:p></span></div>
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<span style="mso-list: Ignore;">I.<span style="font: 7pt 'Times New Roman';"><strong> </strong></span></span>What is Trigger?<o:p></o:p></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Typically, a Commercial General Liability (“CGL”) policy covers “property damage [that] occurs during the policy period,” when the damage is caused by an “occurrence.”<span style="mso-spacerun: yes;"> </span>“Occurrence” is defined by the typical post-1986 ISO CGL form as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” This type of policy is referred to as an “occurrence policy.”<span style="mso-spacerun: yes;"> </span><u>Arad v. Caduceus Self Ins. Fund, Inc.</u>, 585 So. 2d 1000 (Fla. 4th DCA 1991).<span style="mso-spacerun: yes;"> </span>Today, some CGL policies explicitly refer to a “trigger of coverage,” and if so, that “trigger” applies. </span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Trigger is simply “a label for the event or events that under the terms of the insurance policy determines whether a policy must respond to a claim in a given set of circumstances.”<span style="mso-spacerun: yes;"> </span>Robert D. Fram, <u>End Game:<span style="mso-spacerun: yes;"> </span>Trigger of Coverage in the Third Decade of CGL Latent Injury Litigation</u>, 454 PRACTICING L. INST. 9 (1993).<span style="mso-spacerun: yes;"> </span>In most circumstances, the event causing damage occurs simultaneously with the resulting harm.<span style="mso-spacerun: yes;"> </span>The issue is more complex where the damage occurs (or is reasonably alleged to have occurred), but is not discovered until a later time.<span style="mso-spacerun: yes;"> </span>Courts in different jurisdictions have reached disparate conclusions under comparable facts and identical policy language.<span style="mso-spacerun: yes;"> </span>In continuing damage or delayed discovery cases, which is the only time a trigger argument applies, courts have adopted no fewer than five trigger theories.<span style="mso-spacerun: yes;"> </span><u>Dow Chems. Co. v. Assoc. Indem. Corp.</u>, 724 F. Supp. 474, 478-79 (E.D. Mich. 1989).<span style="mso-spacerun: yes;"> </span></span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 12pt; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">II.<span style="font: 7pt 'Times New Roman';"> </span></span></span></b><span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Five Main Theories Regarding Trigger of Coverage. <o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">First is the continuous trigger approach, which holds that all policies on the risk from the initial exposure through manifestation are triggered.<span style="mso-spacerun: yes;"> </span><u>See</u> <u>e.g.,</u> <u>Keene Corp. v. Ins. Co. of N. Am.</u>, 667 F.2d 1034 (D.D.C. 1981).<span style="mso-spacerun: yes;"> </span></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Second is the exposure theory, which presumes that damage occurs when exposure to the causative agent or event takes place and not when the symptoms of the exposure become evidence.<span style="mso-spacerun: yes;"> </span><u>See</u> <u>e.g.,</u> <u>Ins. Co. of N. Am. v. Forty-Eight Insulations, Inc.</u>, 633 F.2d 1212 (6th Cir. 1980).<span style="mso-spacerun: yes;"> </span></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Third is the actual injury or injury-in-fact theory, which focuses on when the injury or damage actually occurred, irrespective of when it was found, who found it or who was capable of finding it.<span style="mso-spacerun: yes;"> </span>(This trigger is sometimes referred to as the “actual damage” or “damage-in-fact” trigger, though the more common phrase uses the term “injury”, regardless of whether the context is property damage or bodily injury.)<span style="mso-spacerun: yes;"> </span>If it happened in more than one policy period, then multiple policies of insurance may be triggered. <span style="mso-spacerun: yes;"> </span><u>See</u> <u>Axis Surplus Ins. Co. v. Contravest Construction Co.</u>, 2012 WL 2048303, at * 1 (M.D. Fla. June 5, 2012), 23 Fla. L. Weekly Fed. D. 279; <u>Johnson-Graham-Malone, Inc. v. Amerisure Ins. Co.</u>, 18 Fla. L. Weekly Supp. 870 (Fla. 4th Cir. Apr. 29, 2011) <u>appeal</u> <u>dismissed</u> <u>by</u> <u>Amerisure Ins. Co. v. Johnson-Graham-Malone, Inc.</u>, 66 So. 3d 415 (Fla. 1st DCA 2011); <u>see</u> <u>e.g.,</u> <u>Don’s Bldg. Supply, Inc. v. OneBeacon Ins. Co.</u>, 267 S.W. 3d 20 (Tex. 2008); <u>Am. Home Prods. Corp. v. Liberty Mut. Ins. Co.</u>, 565 F. Supp. 1485 (S.D.N.Y. 1983), <u>aff’d</u> <u>as</u> <u>modified</u>, 748 F.2d 760 (2d Cir. 1984).<span style="mso-spacerun: yes;"> </span></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Fourth is the manifestation theory, which holds that policies are triggered when the damage becomes “manifest,” or is discovered.<span style="mso-spacerun: yes;"> </span><u>Eagle-Picher Indus., Inc. v. Liberty Mut. Ins. Co.</u>, 682 F.2d 12 (1st Cir. 1982).<span style="mso-spacerun: yes;"> </span>The question always remains: to whom must the property damage have manifested.<span style="mso-spacerun: yes;"> </span></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Last, there is a double-trigger theory, which holds that there are two triggers, exposure and manifestation, regardless of whether damage continues between those two events.<span style="mso-spacerun: yes;"> </span><u>See</u> <u>e.g.,</u> <u>Zurich Ins. Co. v. Raymark Indus., Inc.</u>, 514 N.E. 2d 150 (Ill. 1987).<span style="mso-spacerun: yes;"> </span>As <u>Dow Chemicals</u> counsels, however, “trigger rulings are most appropriately derived by reference to the operative policy language, as opposed to the judicial gloss placed upon similar language in ostensibly analogous cases.”<span style="mso-spacerun: yes;"> </span><u>Dow Chemicals</u> 724 F. Supp. at 479.<span style="mso-spacerun: yes;"> </span></span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 12pt; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">III.<span style="font: 7pt 'Times New Roman';"> </span></span></span></b><span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Case Law in Florida<o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">There are t<span style="mso-bidi-font-weight: bold;">wo main theories of trigger in Florida:<span style="mso-spacerun: yes;"> </span>(1) injury-in-fact; and (2) manifestation. <span style="mso-spacerun: yes;"> </span></span>The focus is on the “property damage” as the signaling event – the only event under the language of the CGL – that must “occur” during the policy period in order to be covered. <span style="mso-spacerun: yes;"> </span><u>See</u> <u>Travelers v. C.J. Gayfer’s</u>, 366 So. 2d 1199 (Fla. 1st DCA 1979); <u>Johnson-Graham-Malone</u>, 18 Fla. L. Weekly Supp. 870; and <u>Trizec v. Biltmore</u>, 767 F. 2d 810 (11th Cir. 1985)(Florida courts have rejected the “manifestation trigger” in favor of coverage triggered by property damage alone taking place during the policy period). </span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 12pt; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">a.<span style="font: 7pt 'Times New Roman';"> </span></span></span></b><u>Plain Meaning Analysis and Florida’s Rules of Contract Construction Support the Injury-in-Fact Trigger<o:p></o:p></u></div>
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The primary case in Florida holding that the “injury-in-fact” trigger applies is <u>Axis Surplus Ins. Co. v. Contravest Construction Co.</u><span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">, 2012 WL 2048303, at * 1 (M.D. Fla. June 5, 2012), 23 Fla. L. Weekly Fed. D. 279. The court reasoned that because the policy at issue required the insurer to cover “property damage . . . caused by an occurrence,” just as the court in <u>Trizec</u> did, the physical injury or destruction of tangible property had to occur during the policy period in order to trigger coverage, and thus, “injury-in-fact” was the applicable trigger.<span style="mso-spacerun: yes;"> </span><u>Id.</u><span style="mso-spacerun: yes;"> </span></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Under Florida law, courts must construe insurance policies according to the plain meaning of the policy language.<span style="mso-spacerun: yes;"> </span><u>Auto-Owners Ins. Co. v. Anderson</u>, 756 So. 2d 29, 34 (Fla. 2000);<span style="mso-spacerun: yes;"> </span><u>see</u> <u>also</u> Fla. Stat. § 627.419(1) (“Every insurance contract shall be construed according to the entirety of its terms and conditions as set forth in the policy and as amplified, extended, or modified by any application therefore or any rider or endorsement thereto.”).<span style="mso-spacerun: yes;"> </span>Florida rules of insurance policy interpretation do “not allow courts to rewrite contracts, add meaning that is not present, or otherwise reach results contrary to the intentions of the parties.”<span style="mso-spacerun: yes;"> </span><u>Excelsior Ins. Co. v. Pomona Park Bar & Package Store</u>, 369 So. 2d 938, 942 (Fla. 1979).<span style="mso-spacerun: yes;"> </span>If a policy is silent on an issue, a court may not “add to or read in language not contained on the face of the policy.”<span style="mso-spacerun: yes;"> </span><u>Meister v. Utica Mut. Ins. Co.</u>, 573 So. 2d 128, 130 (Fla. 4th DCA 1991).<span style="mso-spacerun: yes;"> </span></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Furthermore, in the case of <u>Mid-Continent Cas. Co. v. Frank Casserino Const., Inc.</u>, the Middle District interpreted a CGL policy in support of the proposition that damage must occur during the policy period even if it is not discovered until after the policy expires by holding that that a plaintiff’s expert’s affidavit could provide support showing that even though damage had not yet been discovered, that damage was occurring during the policy period.<span style="mso-spacerun: yes;"> </span><u>Mid-Continent Cas. Co. v. Frank Casserino Const., Inc.</u>, 721 F. Supp. 2d 1209 (M.D. Fla. 2010).</span></div>
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Additionally, Judge Hugh A. Carithers of the Duval County Circuit Court of the Fourth Judicial Circuit, in the case of <u>Johnson-Graham-Malone, Inc. v. Amerisure Ins. Co.</u> held that the carrier owed the insured a duty to defend because the operative underlying complaint gave rise to at least a potential that covered property damage actually occurred during one or more of the carrier’s CGL policies.<span style="mso-spacerun: yes;"> </span><u>Johnson-Graham-Malone, Inc</u>, 18 Fla. L. Weekly Supp. 870 <u>appeal</u> <u>dismissed</u> <u>by</u> <u>Amerisure Ins. Co. v. Johnson-Graham-Malone, Inc.</u>, 66 So. 3d 415 (emphasis added).<span style="mso-spacerun: yes;"> </span>Judge Carithers relied on the case of <u>Travelers Insurance Co. v. C.J. Gayfer’s & Co.</u><span style="mso-bidi-font-size: 14.0pt;">, 366 So. 2d 1199 (Fla. 1st DCA 1979).<span style="mso-spacerun: yes;"> </span></span></div>
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<u>C.J. Gayfer’s</u> is one of many Florida cases that have long held that, under an occurrence-based CGL policy where damage and the causative event do not occur simultaneously, it is the damage that must occ<span style="mso-bidi-font-size: 14.0pt;">ur, or be fairly alleged to occur, during the policy period, in order for coverage to exist and not the happening of the event or act that caused the damage.<span style="mso-spacerun: yes;"> </span>The applicable line of cases begins in 1964 with <u>New Amsterdam Casualty Co. v. Addison</u>, 169 So. 2d 877 (Fla. 2d DCA 1964), in which the Second District Court of Appeal held, as a matter of first impression in Florida, that “[t]he time of the occurrence of an accident, within the meaning of a policy of liability, is generally deemed to be the time when the complaining party actually was damaged and not when the wrongful act was committed.” <u>Id</u><u>.</u> at 886.</span></div>
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<span style="mso-bidi-font-size: 14.0pt;">Relying on <u>New Amsterdam Casualty Co. v. Addison</u>, the First District Court of Appeal in 1978 similarly held that occurrence-based liability coverage is triggered “when the complaining party is damaged,” regardless of when the causative act occurred. <u>Hertz Corp. v. Pugh</u>, 354 So. 2d 966, 969 (Fla. 1st DCA 1978).<span style="mso-spacerun: yes;"> </span>A year later, the same court held in <span style="mso-bidi-font-style: italic;"><u>C.J. Gayfer’s</u></span>, that “the phrase ‘caused by an occurrence’ informs the insured that an identifiable event other than the causative negligence must take place during the policy period.” <u>C.J. Gayfer’s</u>, 366 So. 2d 1199.<span style="mso-spacerun: yes;"> </span></span>The term ‘occurrence’ is commonly understood to mean the event in which negligence manifests itself in property damage or bodily injury, and it is used in that sense [in the policy].” <u>Id</u><i>.</i> at 1202.<span style="mso-spacerun: yes;"> </span>Although the court used the term “manifest”, it applied the actual injury/injury-in-fact trigger: the date the water damage actually occurred.<span style="mso-spacerun: yes;"> </span><u>See</u> <u>Id.</u></div>
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As discussed <i style="mso-bidi-font-style: normal;">supra</i>, in <span style="mso-bidi-font-style: italic;"><u>Trizec</u></span>, the Eleventh Circuit relied in part on this line of cases to hold that under Florida law and the language of an occurrence-based policy, damage that continues, or is fairly alleged to continue, through multiple policy periods can trigger coverage under each successive policy.<span style="mso-spacerun: yes;"> </span><u>Trizec</u>, 767 F. 2d 810.<span style="mso-spacerun: yes;"> </span>Th<span style="mso-bidi-font-size: 14.0pt;">e court specifically rejected manifestation as a trigger of coverage.<span style="mso-spacerun: yes;"> </span><u>Id.</u> at 813 (emphasis </span>added).<span style="mso-spacerun: yes;"> </span><span style="mso-bidi-font-style: italic;">Under facts similar to those here, <u>Trizec</u></span> involved a carrier’s duty to defend its policyholder against a claim alleging property damage caused by negligent construction of a roof deck.<span style="mso-spacerun: yes;"> </span><u>Id.</u><span style="mso-spacerun: yes;"> </span>The construction took place from 1971 to 1975, the carrier was on the risk from 1972 to 1976, and the damage was discovered in 1979.<span style="mso-spacerun: yes;"> </span><u>Id.</u><span style="mso-spacerun: yes;"> </span>The carrier claimed it did not have a duty to defend, arguing “the occurrence of the damage can only trigger coverage where it is discovered or has ‘manifested’ itself.”<span style="mso-spacerun: yes;"> </span><u>Id.</u></div>
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The court disagreed: “the language of the policy itself belies Liberty’s assertions,” adding:</div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">The potential for coverage is triggered when an “occurrence” results in “property damage.”<span style="mso-spacerun: yes;"> </span>There is no requirement that the damages “manifest” themselves during the policy period.<span style="mso-spacerun: yes;"> </span>Rather, it is the damage itself which must occur during the policy period for coverage to be effective.<span style="mso-spacerun: yes;"> </span>Here, the actual date that the damage occurred is not expressly alleged, but the language of the complaint, at least marginally and by reasonable implication, could be construed to allege that the damage (cracking and leaking of roof deck with resultant rusting) may have begun to occur immediately after installation, 1971 to 1975, and continued gradually thereafter over a period of time . . . . Because the complaint alleges facts which fairly bring the cause within the coverage of the insurance contract, there is a potential for coverage and [the carrier] owes [the policyholder] a duty to defend the main action.<o:p></o:p></span></div>
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<u>Id.</u> at 813 (internal citation omitted); <u>see</u> <u>also</u> <u>Boardman Petroleum</u>, 135 F.3d at 754 n. 13<span style="mso-spacerun: yes;"> </span>(“[c]ourts applying Georgia, Florida, and Alabama law . . . have rejected the ‘manifestation trigger of coverage’ approach in favor of an approach under which coverage is triggered by property damage alone taking place during the policy period” <u>citing</u> <u>Trizec</u>)(emphasis added).</div>
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<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-size: 14.0pt; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">b.<span style="font: 7pt 'Times New Roman';"> </span></span></span></b><u>Cases Supporting the Manifestation Trigger </u></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">The primary case holding that “manifestation” is the applicable trigger in Florida is <u>Auto Owners Ins. Co. v. Travelers Cas. & Surety Co. </u>, 227 F.Supp. 2d 1248 (M.D. Fla. 2002). The issue becomes the question of whether there can be more than one manifestation. <u>See</u> <u>Boran Craig Barber Homes, Inc. v. Mid-Continent Cas. Co.</u>, Case Number 2:06-cv-00089-UA-SPC (M.D. Fla. Feb. 19, 2009)(holding there can be more than one manifestation). </span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">The Middle District of Florida then uniquely took an odd turn with regard to trigger of coverage decisions, in the <u>Auto Owners</u> case, in support of the position that the appropriate trigger of coverage is manifestation.<span style="mso-spacerun: yes;"> </span>In <u>Auto Owners</u><i style="mso-bidi-font-style: normal;">,</i> the court was called upon to decide whether a policy covered property damage caused by a leaking pipe, where the leak was discovered after the applicable policy expired but the damage occurred during the policy period.<span style="mso-spacerun: yes;"> </span><u>Auto Owners</u>, 227 F.Supp. 2d 1248.</span></div>
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<i style="mso-bidi-font-style: normal;"><span style="mso-bidi-font-family: Arial; mso-bidi-font-size: 14.0pt;"><span style="mso-tab-count: 1;"><span style="font-family: Calibri;"> </span></span></span></i><span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">The court started out in the right direction, finding that in Florida “the potential for coverage is triggered when an ‘occurrence’ results in ‘property damage.’<span style="mso-spacerun: yes;"> </span>There is no requirement that the damages be ‘manifest’ during the policy period.<span style="mso-spacerun: yes;"> </span>Rather, it is the damage itself which must occur during the policy period for coverage to be effective.”<span style="mso-spacerun: yes;"> </span><u>Id.</u> at 1265-66 (<u>citing</u><i style="mso-bidi-font-style: normal;"> </i><u>Trizec</u>, 767 F. 2d at 813).</span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Two paragraphs later, however, the court, without explanation or solace in logic and in contravention to <u>Trizec</u>, states, “Florida courts follow the general rule that the time of occurrence within the meaning of an ‘occurrence’ policy is the time at which the injury first manifests itself”, and thus “the ‘trigger’ for coverage for the CGL policies is when the damage occurs and if damage is continuously occurring, the ‘trigger’ is the time the damage ‘manifests’ itself or is discovered.” <u>Id.</u> at 1266.<span style="mso-spacerun: yes;"> </span>The court then held that the trigger of coverage (and the occurrence) was the date the leaking pipe was discovered, even though the damage caused by the leaking pipe “undisputedly occurred” before it was discovered. <u>Id.</u> at 1268.</span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;"><span style="mso-tab-count: 1;"> </span>The <u>Auto Owners</u><i style="mso-bidi-font-style: normal;"> </i>court’s<i style="mso-bidi-font-style: normal;"> </i>internally inconsistent position resulted from its reliance on an Alabama case: <u>American Motorists Insurance Co. v. Southern Security Life Insurance Co.</u><i style="mso-bidi-font-style: normal;">,</i> 80 F. Supp. 2d 1280, 1284 (M.D. Ala. 2000), which in turn relies on <u><span style="mso-bidi-font-style: italic;">C.J. Gayfer’s & Co</span>.</u>, 366 So. 2d 1199.<span style="mso-spacerun: yes;"> </span><u>Auto Owners</u><i style="mso-bidi-font-style: normal;">,</i> 227 F. Supp. 2d at 1266.<span style="mso-spacerun: yes;"> </span>The <u><span style="mso-bidi-font-style: italic;">C.J. </span>Gayfer’s</u> court stated that an “occurrence” under the policy “is commonly understood to mean the event in which negligence manifests itself in property damage or bodily injury.” <u>C.J. Gayfer’s & Co</u><u>.</u>, 366 So. 2d 1199. Although the court used the term “manifest”, it applied the actual injury/injury-in-fact trigger: the date the water damage actually occurred.<span style="mso-spacerun: yes;"> </span><u>See</u> <u>Id.</u></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Moreover, in the case of <u>Amerisure Ins. Co. v. Albanese Popkin the Oaks Dev. Group, L.P.</u>, 2010 WL 4942972 (S.D. Fla. Nov. 30, 2010), the Southern District made the distinction that in <u>Trizec</u>, “[b]ecause the complaint in the underlying case was construed to have alleged that the damage occurred during the policy period, the question of when the damage manifested itself was irrelevant to the analysis,” but recognized <span style="mso-bidi-font-style: italic;"><u>Trizec’s</u></span> holding that with an occurrence policy, “the critical inquiry is when did the insured sustain actual damage.”<span style="mso-spacerun: yes;"> </span><u>Id.</u><span style="mso-spacerun: yes;"> </span>Despite this, in purposely ignoring any continuously occurring damage, the Southern District found that “[m]anifestation of the damage [was] relevant…because it establishe[d] that…actual damage [was sustained] before the policy became effective.”<span style="mso-spacerun: yes;"> </span><u>Id.</u><span style="mso-spacerun: yes;"> </span>This holding further demonstrates inconsistencies in Florida as the court concluded that actual damage was sustained when those actual damages were manifest or seen or viewed or discovered and completely ignores any time frame between when the damages began or ended.<span style="mso-spacerun: yes;"> </span>At some point in time the damage began to happen/occur/exist/take place.<span style="mso-spacerun: yes;"> </span>At some point in time, prior to repair, those damages were iscovered/seen/observed/viewed/manifest.<span style="mso-spacerun: yes;"> </span>And there is some point in time that the damages were finally repaired – meaning – the damage ended.<span style="mso-spacerun: yes;"> </span>The Southern District has seemingly decided this case in a vacuum where time does not exist. </span></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 12pt; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">IV.<span style="font: 7pt 'Times New Roman';"> </span></span></span></b><span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Conclusion<o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">As demonstrated by the case law above, and given the recent <u>Axis</u> case, the courts appear to be shifting away from manifestation trigger and applying actual policy language in holding that the correct trigger is injury in fact. <o:p></o:p></span></div>
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Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com0tag:blogger.com,1999:blog-5175790382109778526.post-9210005167113809212013-05-24T10:16:00.001-04:002013-05-24T10:16:25.319-04:00TIARA CONDOMINIUM AND THE ECONOMIC LOSS RULE<div align="center" class="MsoNormal" style="margin: 0in 0in 8pt; text-align: center; text-indent: 0.5in;">
<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: 'Arial','sans-serif'; font-size: 12pt; line-height: 107%;">Tiara Condominium and the Economic Loss Rule</span></u></b><span style="font-family: 'Arial','sans-serif'; font-size: 12pt; line-height: 107%;"><o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt; line-height: 107%;">by RaQwin Young, Esquire<o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt; line-height: 107%;">Boyle, Gentile, Leonard & Crockett, P.A.<o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt; line-height: 107%;"><a href="http://www.boylegentilelaw.com/">www.boylegentilelaw.com</a></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt; line-height: 107%;">The March 7, 2013 Florida Supreme Court ruling in <u>Tiara Condominium Association, Inc. v. Marsh & McLennan Companies, Inc., et. al.</u>, 110 So. 3d 399 (Fla. 2013) limited the application of the Economic Loss Rule to the products liability context, creating the potential for an increase in tort claims arising out of contract.<o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;"><span style="mso-spacerun: yes;"> </span></span><span style="font-family: 'Arial','sans-serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';">In <u>Tiara</u>, Tiara Condominium Association (“Tiara”) hired Marsh & McLennan (“Marsh”) as its insurance broker to secure condominium insurance coverage. <u>Id.</u> at 400. <span style="mso-spacerun: yes;"> </span>Marsh obtained a windstorm policy with a loss limit of about $50 million through Citizens Property Insurance Corporation (“Citizens”). <u>Id.</u> <span style="mso-spacerun: yes;"> </span>After sustaining damage caused by hurricanes Frances and Jeanne in September 2004, Tiara began a loss remediation process. <u>Id.</u> <span style="mso-spacerun: yes;"> </span>Marsh assured Tiara that the loss limit coverage was per occurrence and not in the aggregate. <u>Id.</u> <span style="mso-spacerun: yes;"> </span>Tiara relied on this assurance when it decided to undergo more expensive loss remediation. <u>Id.</u> <span style="mso-spacerun: yes;"> </span>Unfortunately, when Tiara went to Citizens to recover payment, it was informed that the loss limit was in the aggregate, not per occurrence, causing Tiara to sustain economic loss due to its more expensive remediation efforts. <u>Id.</u> <o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';">In October 2007, Tiara filed suit against Marsh, including claims for negligence and breach of fiduciary duty. <u>Id.</u> <span style="mso-spacerun: yes;"> </span>The appeals court certified a question to the Supreme Court to determine whether the Economic Loss Rule prevents Tiara from recovering on these claims. <u>Id.</u> at 401. <span style="mso-spacerun: yes;"> </span>The Supreme Court decided in favor of Tiara and ruled that Tiara’s negligence claim was not barred because “the Economic Loss Rule applies only in the products liability context.” <u>Id.</u> at 407.<o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt; line-height: 107%;">In its opinion, the Court provided a background as to the origins and rationale behind the Economic Loss Rule. <span style="mso-spacerun: yes;"> </span>The Rule was initially intended to apply in products liability cases to prevent tort actions to recover solely economic damages when the parties are in contractual privity. <span style="mso-spacerun: yes;"> </span>The rationale behind the rule was that “contract principles [are] more appropriate than tort principles for resolving economic loss without an accompanying physical injury or property damage.” <span style="mso-spacerun: yes;"> </span><u>Florida Power & Light Co. v. Westinghouse Elec. Corp.</u>, 510 So. 2d 899, 902 (Fla. 1987). <span style="mso-spacerun: yes;"> </span>The courts wanted to prevent plaintiffs from circumventing the bargained for terms of a contract by bringing an action in tort. Despite the Rule’s roots in products liability, over the years courts have expanded the Economic Loss Rule to apply to other situations involving claims in tort arising out of contract. <span style="mso-spacerun: yes;"> </span>In <u>Tiara</u>, the Court determined that applying the Economic Loss Rule outside of the products liability context is “unwise and unworkable in practice;” thus, it decided to limit the Rule’s scope to products liability cases<a href="null" name="_GoBack"></a>. <span style="mso-spacerun: yes;"> </span><u>Tiara</u>, 110 So. 3d at 407.<o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt; line-height: 107%;">Justice Canady wrote a dissenting opinion emphasizing the important role that the Economic Loss Rule plays in maintaining the boundary between tort and contract. <u>Id.</u> at 411. <span style="mso-spacerun: yes;"> </span>Canady expressed his worry that, with the majority’s decision, “we face the prospect of every breach of contract claim being accompanied by a tort claim.” <u>Id.</u> at 414.<o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt; line-height: 107%;">Justice Pariente’s concurring opinion attempted to address Canady’s concerns and asserted that common law principles of contract already restrict tort claims between parties in contractual privity. <u>Id.</u> at 408. <span style="mso-spacerun: yes;"> </span>Pariente emphasized that the majority’s decision “is neither a monumental upsetting of Florida law nor an expansion of tort law at the expense of contract principles. <span style="mso-spacerun: yes;"> </span>To the contrary, the majority merely clarifies that the economic loss rule was always intended to apply only to products liability cases.” <u>Id.</u><o:p></o:p></span></div>
<span style="font-family: 'Arial','sans-serif'; font-size: 12pt; line-height: 107%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">It is unclear how the majority decision in <u>Tiara</u> will affect litigation in the future. <span style="mso-spacerun: yes;"> </span>However, it certainly raises the possibility that courts will entertain an increased amount of tort claims arising out of contractual relationships. <span style="mso-spacerun: yes;"> </span>This may have an impact on the insurance industry in that the potential for increased exposure to liability may lead to higher premiums and more complex indemnification provisions in policies.</span>Anonymoushttp://www.blogger.com/profile/10310099532417707259noreply@blogger.com4tag:blogger.com,1999:blog-5175790382109778526.post-70066809054136510222013-05-21T11:31:00.000-04:002013-05-21T11:31:18.120-04:00TAX DEED QUIET TITLE ACTIONS GAINING POPULARITY AGAIN<div align="center" class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: center;">
<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">TAX DEED QUIET TITLE ACTIONS GAINING POPULARITY AGAIN</span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">by Michael W. Leonard, Esquire</span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Boyle, Gentile, Leonard & Crockett, P.A.</span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;"><a href="http://www.boylegentilelaw.com/">www.boylegentilelaw.com</a></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">As foreclosure actions have moved their way through the courts, some mortgagors and their respective mortgagees have elected to abandon their homes and collateral in favor of saving the additional expenses relevant to the maintenance of the property and the associated ad valorem taxes.<span style="mso-spacerun: yes;"> </span>This has resulted in an ever increasing number of tax deed sales in order to pay counties their much needed revenues.<span style="mso-spacerun: yes;"> </span>With the ever increasing number of tax deed sales, many purchasers have elected to enter the fray, not for the purpose of holding on to these acquisitions for the long run, but instead, reselling the acquired property in hopes of making a quicker profit.<span style="mso-spacerun: yes;"> </span>The purpose of this article is to address the need for a quiet title suit in the event that property is acquired with an eye on reselling the property in the short run.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Title based on a tax deed is considered insurable if: (1) the tax deed has been on record for more than 20 years; (2) all subsequent real estate taxes have been paid by the tax deed grantee and his successors; (3) there has been no adverse claim asserted of record, and; (4) there has been no possession adverse to the tax deed grantee or his successors.<span style="mso-spacerun: yes;"> </span><i style="mso-bidi-font-style: normal;">See </i>Fund Title Notes, TN 30.01.02(2).<span style="mso-spacerun: yes;"> </span>Provided the above requirements can be proven, then title after the expiration of this 20 year period will be deemed insurable.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Many tax deed purchasers are unwilling to wait the 20 year period in order to have marketable title. In some situations, title underwriters have agreed to insure property acquired via tax deed after 4 years has elapsed since issuance of the tax deed by the Clerk of Court, pursuant to Florida Statute, section 95.191. This statute provides that: <span style="mso-tab-count: 1;"> </span><o:p></o:p></span></div>
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<span style="color: black; font-family: 'Times New Roman','serif'; font-size: 12pt;">When the holder of a tax deed goes into actual possession of the real property described in the tax deed, no action to recover possession of the property shall be maintained by a former owner or other adverse claimant unless the action commenced is begun within 4 years after the holder of the tax deed has gone into actual possession. When the real property is adversely possessed by any person, no action shall be brought by the tax deed holder unless the action is begun within 4 years from the date of the deed.<o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">As one can see, section 95.191, Fla. Stat. is a two way street.<span style="mso-spacerun: yes;"> </span>This statute limits the prior owner and anyone under the prior owner from claiming possessory rights if the tax deed purchaser has been in actual possession for a period of 4 years.<span style="mso-spacerun: yes;"> </span>Likewise, even if a tax deed purchaser acquires title to the property but does not take actual possession, such tax deed holder is prohibited from instituting an action for possession after the expiration of 4 years.<span style="mso-spacerun: yes;"> </span>In either event, the party who is relying on this statute must present competent substantial evidence establishing continuous adverse possession as defined by section 95.16(2), Fla. Stat.<span style="mso-spacerun: yes;"> </span>This statute provides:<o:p></o:p></span></div>
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<span style="color: black; font-family: 'Times New Roman','serif'; font-size: 12pt;">(2) For the purpose of this section, property is deemed possessed in any of the following cases:<o:p></o:p></span></div>
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<a href="null" name="co_pp_0eb50000c74e2_1"></a><span style="color: black; font-family: 'Times New Roman','serif'; font-size: 12pt;">(a) When it has been usually cultivated or improved.<o:p></o:p></span></div>
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<span style="color: black; font-family: 'Times New Roman','serif'; font-size: 12pt;">(b) When it has been protected by a substantial enclosure. All land protected by the enclosure must be included within the description of the property in the written instrument, judgment, or decree. If only a portion of the land protected by the enclosure is included within the description of the property in the written instrument, judgment, or decree, only that portion is deemed possessed.<o:p></o:p></span></div>
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<span style="color: black; font-family: 'Times New Roman','serif'; font-size: 12pt;">(c) When, although not enclosed, it has been used for the supply of fuel or fencing timber for husbandry or for the ordinary use of the occupant.<o:p></o:p></span></div>
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<span style="color: black; font-family: 'Times New Roman','serif'; font-size: 12pt;">(d) When a known lot or single farm has been partly improved, the part that has not been cleared or enclosed according to the usual custom of the county is to be considered as occupied for the same length of time as the part improved or cultivated.<o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">To be able to take advantage of the aforementioned statute, and therefore obtain title insurance for a subsequent sale, evidence must be recorded establishing that neither the prior owner nor anyone claiming under the prior owner retained or remained in possession for a year or more after issuance of the tax deed.<span style="mso-spacerun: yes;"> </span>Clearly, if one is looking to avoid a quiet title action, and instead rely on the above statutes, it becomes even more important to either remove the prior tenant of the owner or ensure that there is evidence that the prior occupant’s possession is not a continuation of his or her rights under the prior owner’s regime.<span style="mso-spacerun: yes;"> </span>One way to secure this evidence is by adding language to a new lease with the former tenant that says occupancy is not a continuation of occupancy under a prior ownership, but is instead an express acknowledgement that the occupancy is being undertaken by, through and under the new tax deed holder.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">It is important to keep in mind that, even after the expiration of the 4 year period, title underwriters may remain skeptical or be otherwise unwilling to provide title insurance absent confirmation that the tax deed sale process was in conformance with Chapter 197 of Florida Statutes.<span style="mso-spacerun: yes;"> </span>As a result, many tax deed purchasers have elected to move forward with the filing of a quiet title action following the tax deed sale purchase.<span style="mso-spacerun: yes;"> </span>The filing of a quiet title action has the benefit of ensuring that title insurance can be obtained, following a successful quiet title action.<span style="mso-spacerun: yes;"> </span>Another added benefit of a quiet title action involves the situation when purchasers are confronted with hold-over owners or tenants who refuse to vacate the subject property.<span style="mso-spacerun: yes;"> </span>Fortunately, Florida Statute, section 197.562, allows the successful bidder to obtain possession of the property which is the subject of the quiet title action.<span style="mso-spacerun: yes;"> </span>A successful bidder is entitled to apply for a writ of assistance upon 5 days notice directed to the person refusing to deliver possession.<span style="mso-spacerun: yes;"> </span>Unlike actions in foreclosure and the safeguards put in place by the Protection Tenants at Foreclosure Act, there are no similar protections afforded to the occupants holding possession after a tax deed sale.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="font-family: 'Arial','sans-serif'; font-size: 12pt;">Unless a purchaser is intending to hold on to property purchased at a tax deed sale for a substantial period of time, the filing of a quiet title action is an excellent way in which to confirm title to the successful bidder and remove unwanted owners and tenants from possession thereof.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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