• CGL Policies, Supplemental Payment Provision, and Attorney’s Fees - A contractor’s commercial general liability insurer appealed a final judgment in favor of homeowners that damages awarded to them in a construction defect suit against the contractor were recoverable under the insurer’s CGL policy. The Fifth District affirmed this portion of the judgment without discussion, but reversed the trial court’s conclusion that the CGL policy did not cover the homeowners’ attorney’s fees awarded against the contractor. During the garnishment proceeding and on cross-appeal, the homeowners argued that their attorneys’ fees were covered under the policy’s supplemental payment provision that provides the insurer will pay “all costs taxed against the insured in the ‘suit.’” The court agreed, holding that “all costs” was substantially similar to “all court costs” analyzed in other court decisions on the supplementary payment provision, and could similarly be read to include attorney’s fees, especially since the insurer did not, but could have, defined the term to exclude attorney’s fees. Accordingly, the court reversed this portion of the judgment and remanded for an award granting the homeowners their attorneys’ fees and costs awarded against the contractor in the underlying defect litigation. Mid-Continent Casualty Company v. Treace, 2015 WL 9491876 (Fla. 5th DCA Dec. 31, 2015) (NOTE: This opinion has not been released for publication in the permanent law reports. Until released, it is subject to revision or withdrawal).
  • Florida Homeowners Construction Recovery Fund - A homeowner filed a claim for restitution under the Florida Homeowners Construction Recovery Fund (the “Fund”) for $33,673.53 paid to a contractor for work that was never completed. The homeowner appealed the award of $2,359.33, which the Fund approved in accord with a restitution award of the same amount in an earlier license disciplinary proceeding against the contractor. The First District affirmed the $2,359.33 amount, holding that Fla. Stat. § 489.143 permits recovery under the Fund based on the lesser of a judgment, award, restitution order, or $25,000. Because the homeowner only had the restitution order of $2,359 when making his claim, he could only be awarded that amount. Dorelas v. Florida Department of Business and Professional Regulation, 176 So. 3d 391 (Fla. 1st DCA 2015).


  • Miller Act & Sureties - Sub-subcontractor sued a project’s two sureties for non-payment under the Miller Act and moved for partial summary judgment. The sureties moved for partial summary judgment against the sub-subcontractor’s claim for lost anticipated profits for work not yet performed, attorney’s fees, and alleged damages under certain invoices. Lost profits are not out-of-pocket labor and material costs and therefore not recoverable under the Miller Act. The court accepted the sub-subcontractor’s representation that it was not seeking lost profits; however, factual questions as to whether a portion of one invoice contained lost profits precluded summary judgment in the surety’s favor. Material questions of fact also precluded summary judgment in the surety’s favor regarding its argument that certain invoices included costs for “multiple mobilizations,” which were excluded by the sub-subcontract, where the sub-subcontractor argued these costs were the result of the prime contractor’s delays—a recoverable cost under the Miller Act. Similarly, the Court denied the sub-subcontractor’s motion for summary judgment on delay damages despite its argument that the issue had been resolved in the prime contractor’s prior suit for non-payment, because that court had expressly declined to adjudicate the sub-subcontractor’s claims or damages. Summary judgment was also inappropriate on the surety’s argument that a waiver signed by the sub-subcontractor precluded claims under certain invoices because the waiver failed to expressly release Miller Act claims, mention the specific invoices, or state a relevant time period related to the waiver’s coverage. The Court granted summary judgment in the surety’s favor on the sub-subcontractor’s claim for attorney’s fees, holding that federal law, rather than state law, controls and does not afford a claim for attorney’s fees under the Miller Act. The sub-subcontractor was entitled to summary judgment on the sureties’ affirmative defense of breach of contract because the principal was not a party to any contract with the sub-subcontractor and the sub-subcontract did not incorporate the subcontract; therefore, the surety could not raise this defense. Similarly, lack of privity and the absence of mutual debts warranted summary judgment in the sub-subcontractor’s favor on the surety’s setoff affirmative defense. However, issues of material fact precluded summary judgment in the sub-subcontractor’s favor on the sureties’ remaining affirmative defenses of payment, estoppel, mitigation, and release and waiver. United States F/u/b/o Jack Daniels Construction, Inc. v. Liberty, 2015 WL 9460115 (M.D. Fla. Dec. 28, 2015).
  • CGL Policies, “property damage,” Ongoing Operations Exclusion and Products-Completed Operations Hazard Exclusion, and Coblentz Agreements - Owners of a defectively constructed home sued the homebuilders’ commercial general liability insurer pursuant to an agreement whereby the homebuilders received a release of liability under a consent judgment (entered into with the homeowners) in exchange for assigning their failure-to-defend claim against their insurer to the homeowners (i.e., a Coblentz agreement). On cross motions for summary judgment, the Middle District held that insurer had no duty to defend the homebuilders or satisfy theCoblentz agreement. No obligation to defend or indemnify the builder Horgo Signature existed because no written document identified it as an insured or additional insured, and although it was related to an insured entity involved in the construction, Horgo Enterprises, the homeowners had not pursued a theory of vicarious liability. The insurer also owed no duty to defend the other builder, Winfree, because the underlying complaint alleged damages only for the cost of repairing or replacing Winfree’s defective work and/or materials, which did not fall within the policy’s definition of “property damage.” Similarly, the complaint’s conclusory allegation that “latent construction defects” materially affected the home’s “structural integrity” was also insufficient to trigger the insured’s duty to defend “absent any allegations that the various latent defects damaged some specific non-defective portion of the [home].” Although this conclusion resolved the parties’ motions, the Court assumed for the sake of argument that the insurer did have a duty to defend, and analyzed the insurer’s remaining arguments against the Coblentz agreement: that a defense to coverage existed and that the agreement was unreasonable and not made in good faith. Looking first to the insurer’s coverage defenses, the Court held that the CGL policy’s Section (j)(5) and (j)(6) exclusions—which, when read together, preclude coverage for the costs of repairing, removing, or repairing defective work that occurs while the insured is still performing work—precluded coverage because the homeowners’ inspectors and experts had stated in their reports and depositions that the property damage began to occur immediately upon installation while Winfree, the primary builder of the home, was still working. Turning to the Coblentz agreement itself, the Court concluded the settlement was unreasonable and not made in good faith because (i) the consent judgment and settlement agreement failed to categorize and allocate between covered and uncovered damages, (ii) the homeowners’ experts never opined on the agreement’s reasonableness such that the homeowners failed to carry their burden to prove the agreement’s reasonableness, and (iii) the homebuilders made no effort to minimize the amount and abandoned their viable affirmative defenses. Accordingly, the insurer had no obligation to defend the homebuilders or to satisfy the judgment andCoblentz agreement. Bradfield v. Mid-Continent Casualty Company, 2015 WL 6956543 (M.D. Fla. Nov. 10, 2015) (NOTE: appeal filed by Bradfield with 11th Circuit Court of Appeals on December 14, 2015).
  • Anti-Assignment Clauses - Because the law distinguishes between the right to assign performance and the right to receive damages for its breach, a contract’s provision merely prohibiting assignment of “this Agreement” or “any interest herein” must be interpreted to prevent the assignment of the right to assign performance only—not the right to recover for a breach upon the contract’s completion. Thus, the plaintiff contractor had standing to bring claims assigned to it by the county, and the Court accordingly denied defendant’s corresponding motion to dismiss. The Court also denied the defendant’s motion to dismiss the contractor’s common law indemnity claim, holding that despite a paragraph in the contractor’s settlement agreement with the county stating that the county and the defendant were both responsible for plaintiff’s damages, the settlement agreement and complaint both explained that the county’s liability to the subcontractor was solely due to the defendant’s failure to properly design and administer the project. Lastly, the Court granted defendant’s motion to strike plaintiff’s demand for jury trial based on a jury trial waiver in the defendant’s contract with the county; however, the plaintiff, who was not a party to that contract, was entitled to a jury trial for its own negligence claim. Pursuant to Fed R. Civ. Pro. 39(c)(1), the Court concluded it would try the claims together and enlist a jury to provide a binding verdict for the plaintiff’s negligence claim and an advisory verdict on the county’s assigned claims. H & J Contracting, Inc. v. Jacobs Engineering Group, Inc., 2015 WL 6504543 (S.D. Fla. 2015 Oct. 28, 2015).
  • CGL Policies and Additional Insureds - Travelers, the commercial general liability insurer of a general contractor, sued a stucco subcontractor’s insurer, Amerisure, for attorney’s fees and costs Travelers incurred as a result of undertaking the general contractor’s defense and filing a third-party claim after Amerisure had refused the general contractor’s tender of defense in a state court lawsuit regarding the subcontractor’s defective work. Travelers prevailed on the parties’ cross motions for summary judgment. The subcontractor’s contract with the general contractor required the general contractor to be named as an additional insured under the subcontractor’s insurance policies and that the subcontractor must provide the types of insurance in the prime contract, which required coverage for products-completed operations. The subcontractor’s policy limited the additional insured endorsement to “ongoing operations,” unless the contract with the general contractor required coverage for “your work.” Because the subcontract required coverage for “completed operations”—which the Court equated with “your work” coverage—the Court ruled that the general contractor was an additional insured for both “ongoing operations” (damages while the subcontractor was performing work) and “your work” (damage arising after the subcontractor completed its work). In light of recent federal court decisions holding that the absence of controlling Florida law on whether an “occurrence” under a CGL policy is when the damage “occurs” or “manifests” compels an insurer to undertake the defense, the Court concluded that allegations of the complaint triggered Amerisure’s duty to defend the general contractor. Accordingly, Amerisure was liable for the fees and costs Travelers incurred when Amerisure refused to undertake the general contractor’s defense. Travelers Property Casualty Company of America v. Amerisure Insurance Company, 2015 WL 5769247 (N.D. Fla. Sept. 30, 2015).