By: Henderson Frankl
in Construction Law Attorney J. Matthew Belcastro
If you are involved in Florida’s construction industry, you are probably familiar, to some degree, with Chapter 558, Florida Statutes. Chapter 558 is designed as a pre-suit dispute resolution mechanism which requires a project’s owner to give notice to the contractor of perceived construction defects prior to filing a lawsuit. The contractor, by statute, then has an opportunity to inspect the claimed defects and, if appropriate, propose a solution. When it works, Chapter 558 can provide a valuable opportunity for owners and builders to communicate with respect to perceived construction defects before becoming substantially entrenched in litigation.
Florida’s Legislature certainly seems to believe that the process is effective. The act has expanded over the years. When initially enacted, Chapter 558 only applied to “residential structures.” In 2006, Chapter 558 was expanded to include commercial construction projects as well. Consequently, unless the construction contract “opts out” of Chapter 558 requirements, the owner of a construction project must comply with the notice requirements before filing suit.
Governor Scott has recently approved legislation which appears to further expand the scope and requirements of Chapter 558. For example, under the new statutory scheme, notice provisions are now applicable to temporary completed portions of a project, the project owner is required to provide more details relating to the location of the alleged defect, and additional notice requirements are required to be provided to the builder. The new legislation becomes effective as of October 1, 2015.
An additional recent development pertaining to Chapter 558 is found in the recent case of Altman Contractors, Inc. v. Crum & Forster Specialty Ins. Co., from the Southern District of Florida. The issue presented in that case was whether an insurance carrier had an obligation to defend and indemnify the contractor for pre-suit matters arising from a notice provided under Chapter 558. The court ultimately determined that, based upon the policy language providing coverage for any “suit” (defined to include arbitration or other alternative dispute resolution proceedings), the pre-suit process contemplated by Chapter 558 is not a “civil proceeding” and consequently not a “suit” for coverage purposes. As a result, the carrier had no obligation to defend or indemnify its insured contractor for matters arising pursuant to the Chapter 558 notice. Because the case was decided by a federal court, it will be interesting to see if other Florida courts reach the same conclusion.
About the Author:
J. Matthew Belcastro concentrates his practice in the areas of construction litigation, construction contracts, business and real estate litigation. He also has an active appellate practice. Prior to joining Henderson Franklin in November 2000, Matt began his legal career in Jacksonville, Florida, where he focused on commercial litigation and bankruptcy law. He is admitted to practice in all Florida state courts, as well as in the United States District Court for the Middle District of Florida, the Eleventh Circuit Court of Appeals and the United States Supreme Court. Matthew can be reached at matthew.belcastro@henlaw.com or by phone at 239.344.1100.
