Construction Case Law Update - July 2015 #2

FLORIDA STATE CASES

• CGL Policies; Declaratory Judgments; Appeal of a Partial Final Judgment – A commercial general liability insurer and its insured sought declaratory relief over the question of insurance coverage and the duty to defend and indemnify the insured in a separate suit for defective site work. The court initially granted summary judgement for the insured; however, on the insurer’s motion for reconsideration, the court granted partial final judgment in the insurer’s favor and limited the insurer’s duty to defend to certain policy periods. But the order did not mention the duty to indemnify. When the insurer appealed, the court raised sua sponte the issue of whether the partial final judgment was a final appealable order, given that the judgment did not resolve the duty to indemnify issue. The court held that the partial final judgment was not a final appealable order because the dispute involved a single, indivisible cause of action, and the issues of indemnity and defense, though separate duties, were not amenable to separate and independent disposition because the facts informing one duty also informed the other. Accordingly, the court dismissed the appeal, finding that, in this case, a determination of both the duty to defend and the duty to indemnify must be made before a partial final judgment on CGL coverage is ripe for appeal. Florida Farm Bureau General Ins. Co. v. Peacock’s Excavating Service, Inc., No. 2D14-977, 2015 WL 4497721 (Fla. 2d DCA July 24, 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 FEDERAL CASES

• Coblentz Agreements; CGL Policies; Apartment-to-Condominium Conversions - A general contractor’s commercial general liability insurer sued for a declaration that it had no coverage obligations under a Coblentz consent-judgment agreement that had settled an underlying lawsuit filed by the condominium association of an apartment-to-condominium conversion against the apartment complex’s original owner and its general partner for (1) construction defects and (2) negligently supplying information (i.e. that the condominium was constructed in a workmanlike manner and free from water intrusion) that the association relied on in purchasing the condominiums. To seek coverage under the Coblentz agreement, the defendants needed to prove: (1) the insurer wrongfully refused to defend; (2) a duty to indemnity; and (3) that the settlement was reasonable and made in good faith. On the insurer’s motion for summary judgment, the court concluded that the insurer had an obligation to the apartment complex’s original owner but not its general partner, which was not an owner and therefore not an additional insured. On the duty-to-indemnify issue, the court adopted the “injury-in-fact” approach for determining when coverage is triggered under an occurrence-based CGL policy, and found that the defendants’ expert testimony and reports indicated that the property damage could have occurred during the insurer’s policy timeframe. Thus, the insurer could not prevail on summary judgment because it did not carry its burden to show that no property damage occurred during the policy period. Conflicting testimony also precluded summary judgment on whether the settlement was reasonable and made in good faith. However, the court granted summary judgment for the insurer on the issue of whether it owed a duty to defend or indemnify the defendants against the association’s claim for negligent supply of information, finding that the complaint’s allegations did not involve “property damage” caused by an “event” as defined in the policy. Accordingly, the court entered judgment for the insurer on the negligent-information count and as to the general partner, but otherwise denied the insurer’s summary judgment motion. St. Paul Fire & Marine Ins. Co. v. Cypress Fairway Condominium Ass’n Inc., No. 6:13-cv-1088-Orl-31TBS, 2015 WL 4429269 (M.D. Fla. July 20, 2015).