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Caution: Major Changes in Construction Defect Litigation Ahead!

May 28, 2019

By Elizabeth B. Ferguson

There was big news out of Florida last week when House Bill 301 was signed by Governor DeSantis and enacted into law as Florida Statute 624.1055. The right to contribution among carriers is alive and well in Florida! In light of this new law, expect to see major changes in construction defect litigation starting in January. We would also anticipate that claims may be held until January for filing in order to take full advantage of the new law.

624.1055 Right of contribution among insurers for defense costs.—

A liability insurer who owes a duty to defend an insured and who defends the insured against a claim, suit, or other action has a right of contribution for defense costs against any other liability insurer who owes a duty to defend the insured against the same claim, suit, or other action, provided that contribution may not be sought from any insurer for defense costs that are incurred prior to the insurer’s receipt of notice of the claim, suit, or other action.

(1) APPORTIONMENT OF COSTS.—The court shall allocate defense costs among insurers who owe a duty to defend the insured against the same claim, suit or other action, in accordance with the terms of the insurance policies. The court may use such equitable factors as the court determines are appropriate in making such allocation.

(2) ENFORCEMENT OF RIGHT OF CONTRIBUTION.—A liability insurer who is entitled to contribution from another insurer under this section may file an action for contribution in a court of competent jurisdiction.

(3) CONSTRUCTION.

     (a) This section is not intended to alter any terms of a liability insurance policy or to create any additional duty on the part of an insurer to an insured.

     (b) An insured may not rely on this section as grounds for a complaint against an insurer.

(4) APPLICABILITY.—This section applies to liability insurance policies issued for delivery in this state, or liability insurance policies under which an insurer has a duty to defend an insured against claims asserted or suits or actions filed in this state. Such liability insurance policies include surplus lines insurance policies authorized under ss. 626.913-39 626.937, the Surplus Lines Law.

(5) Notwithstanding subsection 4, this section does not apply to motor vehicle liability insurance or medical professional liability insurance.

Section 2. Section 624.1055, Florida Statutes, as created by this act, applies to any claim, suit or other action initiated on or after January 1, 2020.

The new statute provides that any claim or suit, initiated after January 1, 2020, will include the right of any carrier who provides a defense to bring a claim against other carriers for contribution toward those defense costs. 

The recovery is limited to attorneys’ fees incurred after the receipt of notice of the claim. The court will be required to apportion the fees based on the language of the policies and can utilize equitable factors in making the allocation.  However, it does not apply to motor vehicle liability insurance or medical professional liability insurance. 

 

 

 

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