JSUB, INC. v. US Fire Ins. Co., 2D03-134.
| Decision Date | 18 March 2005 |
| Docket Number | No. 2D03-134.,2D03-134. |
| Citation | 906 So.2d 303 |
| Parties | J.S.U.B., INC., as partner of First Home Builders of Florida, a joint venture and Logue Enterprises, Inc., as partner of First Home Builders of Florida, a joint venture, Appellants, v. UNITED STATES FIRE INSURANCE COMPANY, a corporation, Appellee. |
| Court | Florida District Court of Appeals |
Mark A. Boyle of Fink & Boyle, P.A., Fort Myers, for Appellants.
Joseph R. Miele and Ronald O. Armbrust of Adorno & Yoss, P.A., Ft. Lauderdale, for Appellee.
Harold R. Mardenborough, Jr. and Ginger L. Barry of McFarlain & Cassedy, P.A., Tallahassee, for Amicus Curiae Florida Home Builders Association, Inc.
David K. Miller and Bruce P. Anderson of Broad and Cassel, Tallahassee, for Amici Curiae Allstate Construction, Inc. and Brittania Homes, Inc.
J.S.U.B., Inc., and LOGUE Enterprises, Inc., as partners of First Home Builders of Florida (the Builder) appeal a final declaratory judgment holding that insurance policies purchased from United States Fire Insurance Company (the Insurer) do not provide coverage for certain damage to homes constructed by the Builder. We conclude that the policies provide coverage and reverse.
The Builder was the general contractor on a series of homes built in Lee County, Florida. Subcontractors performed all work related to soil acquisition, compaction, and testing. After completion of construction, some homes suffered damage when the exterior walls moved or sank as a result of improper compaction of the soil, improper testing of the soil compaction, poor soil or fill material, or a combination thereof. The damage included structural damage as well as damage to items placed in or affixed to the homes, such as wallpaper.
The Builder sought coverage for the damage under a commercial general liability (CGL) policy and renewal policy issued by the Insurer. The policies covered the period from April 24, 1999, through April 24, 2001. When the Insurer denied coverage, the Builder filed an action for declaratory relief, seeking a determination that the insurance policies provided coverage. The Insurer acknowledged that the policies provided coverage for damage to items that the homeowners added to the homes. However, it maintained that the policies did not cover damage to the Builder's own work or product that resulted from the Builder's or a subcontractor's faulty workmanship.
Following a nonjury trial, the trial court determined that the damage was the result of faulty workmanship caused by the subcontractors' use of poor soil, improper soil compaction, or improper testing and that the policies did not provide coverage for faulty workmanship. On that basis, the trial court entered judgment in favor of the Insurer.
The CGL policy and renewal policy (both bearing form number CG 00 01 07 98) contain the following identical, pertinent provisions:
Although we give deference to the trial court's factual findings, the interpretation of an insurance contract is a question of law, and our review of the trial court's interpretation of the subject policies is de novo. Jones v. Utica Mut. Ins. Co., 463 So.2d 1153, 1157 (Fla.1985); Biltmore Constr. Co. v. Owners Ins. Co., 842 So.2d 947, 949 (Fla. 2d DCA 2003); Vollmer v. Key Fin. Corp., 810 So.2d 966, 968 (Fla. 2d DCA 2002). We are required to construe an insurance policy in accordance with its plain language. Swire Pac. Holdings, Inc. v. Zurich Ins. Co., 845 So.2d 161, 165 (Fla.2003). If the relevant policy language is susceptible to more than one reasonable interpretation, one providing coverage and the other limiting coverage, the policy is ambiguous. Auto-Owners Ins. Co. v. Anderson, 756 So.2d 29, 34 (Fla. 2000). In Anderson the Florida Supreme Court reiterated the following:
Ambiguous policy provisions are interpreted liberally in favor of the insured and strictly against the drafter who prepared the policy. Likewise, ambiguous insurance policy exclusions are construed against the drafter and in favor of the insured. In fact, exclusionary clauses are construed even more strictly against the insurer than coverage clauses.
Id. (citations omitted). Additionally, "in construing insurance policies, courts should read each policy as a whole, endeavoring to give every provision its full meaning and operative effect." Id.
The trial court determined that the subject CGL policies do not provide coverage based on the Florida Supreme Court's decision in LaMarche v. Shelby Mutual Insurance Co., 390 So.2d 325 (Fla.1980), and its progeny. In the past, Florida courts have generally taken the position that CGL policies do not cover the cost of replacement of a builder's or general contractor's defective materials or workmanship. See, e.g., Auto-Owners Ins. Co. v. Marvin Dev. Corp., 805 So.2d 888, 893 (Fla. 2d DCA 2001)1
; Lassiter Constr. Co. v. Am. States Ins. Co., 699 So.2d 768, 770 (Fla. 4th DCA 1997); Home Owners Warranty Corp. v. Hanover Ins. Co., 683 So.2d 527, 529 (Fla. 3d DCA 1996). Florida courts have also extended this general rule to defective work performed by a subcontractor on a general contractor's behalf. Tucker Constr. Co. v. Mich. Mut. Ins. Co., 423 So.2d 525, 528-29 (Fla. 5th DCA 1982).
On appeal, the Builder challenges the trial court's determination that the policies do not cover the losses, arguing that (1) in 1986, several years after LaMarche was decided, portions of the standard language in CGL policies changed; and (2) in State Farm Fire & Casualty Co. v. CTC Development Corp., 720 So.2d 1072 (Fla.1998), the Florida Supreme Court effectively broadened CGL coverage by expanding the interpretation of what constitutes an "accident" when that term is not defined in an occurrence-based policy. The Builder argues that the Insurer's policies provide broader coverage than the policy that was at issue in LaMarche and, therefore, that the trial court erred in concluding that no coverage existed. We agree.
In LaMarche, the supreme court reviewed this court's decision in Shelby Mutual Insurance Co. v. LaMarche, 371 So.2d 198 (Fla. 2d DCA 1979). Our decision specified that we were not deciding whether the CGL policy expressly provided coverage for the damage that had been incurred, but rather, we determined that the policy exclusions that were at issue did not create an ambiguity. Id. at 201. In its review...
To continue reading
Request your trial
-
Lennar Corp. v. Great American Ins. Co.
...focused on exclusions in the pre-1986 policy, including the"your work" exclusion that did not contain the subcontractor exception. See id. at 307-10. The J.S.U.B. court held that defective construction causing unintended and unexpected damage is an "accident" and mentioned that the "your wo......
-
Continental Cas. Co. v. Ryan Inc. Eastern
...issue and "[remanded] this case to the circuit court for further proceedings on the authority of J.S.U.B., Inc. v. United States Fire Insurance Co., 906 So.2d 303 (Fla. 2d DCA 2005)." Continental, 910 So.2d at 299.3 As to appellate attorney's fees, the court granted Ryan and Hartford's moti......
-
Mid-continent Cas. Co. v. Frank Casserino Constr. Inc.
...(emphasis added); see also LaMarche v. Shelby Mutual Ins. Co., 390 So.2d 325, 326 (Fla.1980); but see J.S. U.B., Inc. v. U.S. Fire Ins. Co., 906 So.2d 303 (Fla. 2d DCA 2005), aff'd 979 So.2d 871, 891 (Fla.2007) (noting, however, that “we distinguish but do not recede from LaMarche because t......
-
Botee v. S. Fid. Ins. Co.
...899 So.2d 1082, 1086 (Fla.2005) ; Travelers Indem. Co. v. PCR Inc., 889 So.2d 779, 785 (Fla.2004) ; J.S.U.B., Inc. v. U.S. Fire Ins. Co., 906 So.2d 303, 307 (Fla. 2d DCA 2005). When an exclusion is ambiguous or is susceptible to more than one meaning, it must be construed in favor of the in......