Civil Remedy Notice of Insurer Violations
Login

Filing Number:     788996
Filing Accepted:  10/28/2024
         Print Filing
Complainant
Last/Business Name *  
CPWR, LLC D/B/A CAPITAL CONTRACTOR SERVICES   First Name  
Street Address * 14471 MIRAMAR PARKWAY, SUITE 203
City, State Zip * MIRAMAR, FL 33027
Email Address * TGOMBERG@CAPITALSERVES.COM
Complainant Type: * Third Party
Insured
Last/Business Name*   GAMMY PAINTING WATERPROOFING, INC.   First Name  
Policy # * VBA677689 00 Claim #* 7030194393
Attorney
Attorney is Applicable
Last Name* ANDERSON First Name * AMANDA Initial K
Street Address* 9111 W. COLLEGE POINTE DR.
City, State Zip* FORT MYERS , FL 33919
Email Address * AANDERSON@INSURANCE-COUNSEL.COM
Violation
Insurer Type *   Authorized Insurer Unauthorized Insurer
 
Insurer Name*   COVINGTON SPECIALTY INSURANCE COMPANY
NAIC Company Code 13027
 
Name of individual responsible for violation (if any):* CHRISTIE MOLINI 945 E PACES FERRY RD NE, SUTE 1800 ATLANTA , GEORGIA 30326 CMOLINI@RSUI.COM
Type of Insurance * Commercial Property & Casualty   
Reason for Notice *
Claim Denial
Claim Delay
* Statutory provision(s) which the insurer allegedly violated.
 
624.155(1)(b)(1) Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests.
626.9541(1)(i)(3)(a) Failing to adopt and implement standards for the proper investigation of claims.
626.9541(1)(i)(3)(c) Failing to acknowledge and act promptly upon communications with respect to claims.
626.9541(1)(i)(3)(d) Denying claims without conducting reasonable investigations based upon available information.
626.9541(1)(i)(3)(f) Failing to promptly provide a reasonable explanation in writing to the insured of the basis in the insurance policy, in relation to the facts or applicable law, for denial of a claim or for the offer of a compromise settlement.
* Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

COMMON POLICY DECLARATIONS NAMED INSURED: Gammy Painting Waterproofing, Inc. MAILING ADDRESS: 17345 NW 78th Place, Hialeah, FL 33015 POLICY PERIOD: FROM: 2/14/2019 TO 2/14/2020 AT 12:01 A.M. Standard Time at your mailing address above. **** UNITED SPECIALTY INSURANCE COMPANY Commercial General Liability Coverage Form DECLARATIONS POLICY NO.: VBA677689 00 NAMED INSURED: Gammy Painting Waterproofing, Inc. LIMITS OF INSURANCE General Aggregate Limit (other than Products/Completed Operations) $2,000,000 Products/Completed Operations Aggregate Limit $2,000,000 Personal and Advertising Injury Limit $1,000,000 Each Occurrence Limit $1,000,000 Fire Damage Limit $100,000 Medical Expense Limit $5,000 **** Form GBA 105014 1215 This Endorsement Changes The Policy. Please Read It Carefully. CONTRACTOR COVERAGE EXTENSION ENDORSEMENT – BLANKET ADDITIONAL INSURED – OWNERS, LESSEES, OR CONTRACTORS; PRIMARY AND NONCONTRIBUTORY; BLANKET WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART A. To the extent of coverage afforded by this policy, SECTION II – WHO IS AN INSURED is amended to include as an additional insured any owner, lessee or contractor for whom you are performing operations or working at their premises when you have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy, but only with respect to liability for “bodily injury”, “property damage” or “personal and advertising injury” caused, in whole or in part, by: Your acts or omissions; or The acts or omissions of those acting on your behalf; in the performance of your ongoing operations for the additional insured(s) described above. However: The insurance afforded to such additional insured only applies to the extent permitted by law; and If coverage provided to the additional insured is required by a contract or agreement, the insurance afforded to such additional insured will not be broader than that which you are required by the contract or agreement to provide for such additional insured. Any entity requiring to be specifically listed as additional insured per the terms of the contract or agreement may be listed in the schedule below: Name of Person or Organization: B. With respect to the insurance afforded to these additional insureds, the following additional exclusions apply: “Bodily injury”, “property damage” or “personal and advertising injury” arising out of the rendering of or the failure to render, any professional architectural, engineering or surveying services, including: The preparing, approving, or failing to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders or drawings and specifications; or Supervisory, inspection, architectural or engineering activities. Claims, “suits” and/or damages arising out of the acts, omissions and/or negligence of the additional insured(s). “Bodily injury” or “property damage” occurring after: All work, including materials, parts or equipment furnished in connection with such work, on the project (other than service, maintenance or repairs) to be performed by or on behalf of the additional insured(s) at the site of the covered operations has been completed; or That portion of “your work” out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as a part of the same project. C. With respect to the insurance afforded to these additional insureds, the following is added to SECTION III – LIMITS OF INSURANCE: If coverage provided to the additional insured is required by a contract or agreement, the most we will pay on behalf of the additional insured is the amount of insurance: Required by the contract or agreement; or Available under the applicable Limits of Insurance shown in the Declarations; whichever is less. This endorsement shall not increase the applicable Limits of Insurance shown in the Declarations. D. Primary and Noncontributory Provision If the contract between the additional insured and you requires that the insurance afforded by this policy be primary and noncontributory, this insurance shall be primary and noncontributory, but only; As to the general liability policy(ies) where that additional insured is listed as the named insured on the declaration page(s) of such policy(ies), and Only if such claims, “suits” and/or damages arise out of the sole negligence of the Named Insured. E. Waiver of Subrogation Provision The Transfer of Rights of Recovery Against Others To Us Condition (SECTION IV – COMMERCIAL GENERAL LIABILITY CONDITIONS) is amended by the addition of the following: If required as part of a written contract or agreement, we will waive any right of recovery we may have against those who are added as additional insureds by this endorsement because of payment we make for injury or damage arising out of your ongoing operations performed under a contract with them. This waiver applies only when you are solely negligent. This waiver shall not apply to claims, “suits” and/or damages arising in whole or in part out of the acts, omissions, and/or negligence of those added as additional insureds by this endorsement. **** Form CG 00 01 04 13: DEFINITIONS: 13. “Occurrence” means an accident, including continuous or repeated exposure to substantially the same general harmful conditions. **** 17. “Property damage” means: a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the “occurrence” that caused it. **** 22. “Your work”: a. Means: (1) Work or operations performed by you or on your behalf; and (2) Materials, parts or equipment furnished in connection with such work or operations. b. Includes: (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of "your work"; and (2) The providing of or failure to provide warnings or instructions. **** SECTION I - COVERAGES Coverage A – Bodily Injury and Property Damage Liability Insuring Agreement We will pay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which this insurance applies. … This insurance applies to “bodily injury” an “property damage” only if: The “bodily injury” or “property damage” is caused by an occurrence that takes place in the “coverage territory”; The “bodily injury” or “property damage” occurs during the policy period;
 
* Facts and circumstances giving rise to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

In submitting this summary of facts, CPWR, LLC d/b/a Capital Contractor Services (“CPWR”) affirmatively states that this is not intended to be exhaustive or comprehensive; rather, this is merely intended to satisfy the statutory requirements of providing a brief summary in accordance with Florida Statute § 624.155. CPWR submits that all facts and circumstances giving rise to this Civil Remedy Notice of Insurer Violation (“CRN”) are well known to Covington Specialty Insurance Company. Furthermore, and because the insurance claims at issue have yet to be resolved, CPWR respectfully reserves the right to amend this CRN with additional relevant information as it becomes known. Covington Specialty Insurance Company (“Covington”) issued to Gammy Painting Waterproofing, Inc. (“Gammy” or “Insured”) a general liability policy, covering the time period February 14, 2019, through February 14, 2020 and bearing policy number VBA677689 00 (the “Policy”). Covington’s listed address 945 East Paces Ferry Road, Suite 1800, Atlanta, Georgia 30326-1160. The facts giving rise to this Civil Remedy Notice should be well known to the Covington. However, a brief description follows: On or about June 14, 2019, Capital Contractor Services, (“CPWR” or “Complainant”) entered into a Subcontract Agreement with Gammy to serve as a subcontractor to complete exterior renovations of the Bentley Bay Condominium located at 520 and 540 West Avenue Miami Beach, Florida 33139 (the “Project”), including but not limited to concrete, waterproofing, and painting exterior work at the Project. Gammy was required, pursuant to the terms of the Subcontract Agreement, to name CPWR as an additional insured on its policies of insurance, including the Policy issued by Covington. Gammy represented to CPWR that CPWR qualified as an additional insured under the Policy. On or about March 5, 2024, the Bentley Bay Condominium Association, Inc. filed suit against CPWR in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County (the “Lawsuit”). The Lawsuit makes specific allegations related to the work performed by Gammy, including allegations that property damage was caused during performance of the work. The Association specifically alleges: 23. Capital materially breached the Contract by failing to perform its concrete repair, waterproofing, and painting work in a good and workmanlike manner and in accordance with the Specifications and industry standards, by painting over building components that Capital knew or should have known required further repairs and surface preparation prior to painting, and by causing property damage while performing its work, including, without limitation, to Condominium’s sliding glass door trim and window frames, coatings, and sealant systems. Moreover, Capita has not cured the defects in the work. On or around March 28, 2024, counsel for CPWR issued a demand for defense and indemnity seeking coverage for CPWR as an additional insured under the Policy. CPWR issued a second letter renewing CPWR’s demand for defense and indemnity on or around April 30, 2024, and informed Covington of a scheduled mediation. Covington ultimately acknowledged the claim via a letter dated April 24, 2024. Therein, Covington rejected CPWR’s tender and asserted that CPWR did not qualify as an additional insured. Covington claimed the Lawsuit only alleged property damage that occurred after the Project was put to its intended use and as such, the claims did not arise from Gammy’s ongoing operations. Covington also claimed there was no coverage to the extent Gammy’s operations exceeded the scope of the operations scheduled on the Policies. Covington also cited additional reason for why there “may be no coverage.” CPWR responded to Covington’s denial on or about June 17, 2024, and demonstrated to Covington that the Lawsuit specifically alleged that property damage occurred during Gammy’s ongoing operations. CPWR also requested a copy of the Policy and reserved its rights to further challenge the denial upon receipt and review of the same. A copy of the Policy was disclosed on or around June 19, 2024. On July 3, 2024, Covington issued email correspondence reaffirming their prior denial. CPWR responded that same day setting forth the specific allegations of the complaint in the Lawsuit that property damage was caused during ongoing operations. CPWR also set forth evidence that the work classification limits did not foreclose coverage under the Policy as at least some of Gammy’s work fell within the Policy classifications. On or around August 9, 2024, CPWR followed up on its July 3, 2024, email rebutting the coverage denial. Covington responded to that correspondence on the same date requesting a copy of a policy issued to a separate subcontractor on the Project but did not provide a substantive response to CPWR’s coverage arguments. On or around September 18, 2024, CPWR once more followed up on Covington’s coverage position. On or around September 19, 2024, Covington responded via email that their coverage position remained unchanged without any supporting documentation or analysis. On or around October 1, 2024, CPWR issued email correspondence to Covington providing citations to the Complaint that establish allegations of property damage caused during Gammy’s ongoing operations, case law supporting coverage, and a renewed demand for a defense as an additional insured. CPWR requested a response within seven days of the correspondence but has yet to receive any correspondence in return. All letters and emails are collectively referred to as “Outline of Communications.” Covington’s Duty to Defend The Policy contains a standard coverage form and additional insured requirements, which, under the plain language of the Policy, contractually obligates Covington to defend CPWR from the allegations in the Lawsuit. In particular, the Policy affords coverage for “property damage” caused by an “occurrence” during the applicable policy periods. Further, based on the Additional Insured Endorsement required by contract, CPWR satisfies the definition of an “additional insured” under the Policy and is to be afforded coverage for the allegations in the Lawsuit. Thus, there should be no question that CPWR is entitled to indemnity and defense for the alleged property damage “arising from” CPWR’s work during Covington’s coverage period. See Jones v. Fla. Ins. Guar. Ass’n, Inc., 908 So. 2d 435, 442-43 (Fla. 2005) (“It is well settled that an insurer's duty to defend its insured against a legal action arises when the complaint alleges facts that fairly and potentially bring the suit within policy coverage.”). Furthermore, Covington is fully aware of the Underlying Action and the specific allegations being made against its insured, CPWR. By correspondence detailed above, CPWR, through its counsel, formally tendered this claim to Covington, demanding defense, and indemnification from Covington under the subject Policy relative to the Lawsuit. However, despite Covington being notified of the claim and pending litigation, Covington failed to provide its insured, CPWR, with a defense in the Lawsuit. On April 24, 2024, Covington responded to CPWR’s demand for indemnification and defense by acknowledging receipt of claim and denying coverage. Moreover, despite reiterating the denial of coverage on July 3, 2024, and September 19, 2024, Covington has not provided a specific response to the information CPWR has provided to support the claim. This is a violation of Florida Statute §626.9541(1)(i)(3)(d) (Denying claims without conducting reasonable investigations based upon available information) and §626.9541(1)(i)(3)(f) (Failing to promptly provide a reasonable explanation in writing to the insured of the basis in the insurance policy, in relation to the facts or applicable law, for denial of a claim or for the offer of a compromise settlement). In summary, despite the fact that Covington was notified of the Lawsuit, Covington has refused to comply with its defense obligations. Covington’s failure to provide a defense or otherwise attempt to resolve the claim and protect CPWR from potential exposure constitutes a material breach of its good faith duties owed to its Insured. At all times relevant hereto, and as evidenced by its engagement in that conduct described herein and specifically proscribed by Florida Statute §626.9541(1)(i)(3)(d) (Denying claims without conducting reasonable investigations based upon available information); §626.9541(1)(i)(3)(f) (Failing to promptly provide a reasonable explanation in writing to the insured of the basis in the insurance policy, in relation to the facts or applicable law, for denial of a claim or for the offer of a compromise settlement.), §624.155(1)(b)(1) (Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests); §626.9541(1)(i)(3)(a) (Failing to adopt and implement standards for the proper investigation of claims); §626.9541(1)(i)(3)(c) (Failing to acknowledge and act promptly upon communications with respect to claims). Covington violated §626.9541(1)(i)(3)(d) when it failed to substantively and timely respond to CPWR’s numerous tenders for defense and indemnity as provided in the Outline of Communications. Covington violated §626.9541(1)(i)(3)(f) when it failed to respond to CPWR’s numerous tenders for defense and indemnity as provided in the Outline of Communications. Covington violated §624.155(1)(b)(1) when it failed to respond to CPWR’s numerous tenders for defense and indemnity as provided in the Outline of Communications. Had Covington accepted CPWR’s defense, a reasonable effort would have and should have been made to settle the claims. Covington has not done this. Covington violated §626.9541(1)(i)(3)(a) when it failed to substantively and timely respond to CPWR’s numerous tenders for defense and indemnity as provided in the Outline of Communications. This is evidence that Covington has failed to adopt and implement standards for the proper investigation of claims. Because had Covington done so, Covington would have at least responded in writing with reasons for its current effective denial. Covington violated §626.9541(1)(i)(3)(c) when it failed to substantively and timely respond to CPWR’s numerous tenders for defense and indemnity as provided in the Outline of Communications. (Failing to acknowledge and act promptly upon communications with respect to claims). Covington violated its good faith obligations owed to CPWR; specifically, and as evidenced by Covington’s failure to respond to CPWR’s claim correspondence from, in effect, refused to defend CPWR with respect to the claims and damages being alleged in the Underlying Action and/or otherwise failed to provide an explanation in writing with respect to the basis for Covington’s denial of coverage for those claims and damages at issue in the pending litigation despite receiving information in opposition to its denial. Additionally, Covington’s adjusters have sat silent on their duties to properly adjust the claim. Such inaction has created an unreasonable delay in the acceptance of CPWR’s defense and is prejudicial to CPWR pursuant to Fla. Admin. Code R. 690-220.201(3)(c): An adjuster shall not approach investigations, adjustments, and settlements in a manner prejudicial to the insured. Accordingly, Covington’s conduct in this matter has harmed, and continues to harm, CPWR with respect to those claims at issue in the Lawsuit. The aforesaid conduct evidences Covington’s (i) intentional, knowing, and egregious violations of the statutes cited herein, (ii) ongoing bad faith conduct towards CPWR, and (iii) continuing breach of the Policies. The Insured submits that Covington’s conduct outlined herein is the type of act that occurs with such frequency as to indicate a general pattern and practice of business in violation of Florida Statute §624.155(5). The Insurer has placed its interests before the interest of its Insured. These acts are willful, wanton, and malicious, and have been committed with reckless disregard of the Insured’s rights under the Policies. Based on the foregoing, Covington may cure the foregoing statutory violations by accepting its defense obligations to CPWR in the Underlying Action, including payments to CPWR for all amounts expended by CPWR as reimbursement for the owed defense attorneys’ fees and costs including those amounts incurred in filing this Civil Remedy Notice.
Comments
User Id Date Added Comment
aanderson@insurance-counsel.com 02-10-2026 (Withdrawn) The parties have reached and concluded a settlement and this matter is resolved.
rhardeman@rsui.com 12-23-2024 December 23, 2024 CPWR, LLC d/b/a Capital Contractor Services c/o Amanda Anderson, Esq. Boyle Leonard Anderson, P.A. 9111 W College Pointe Drive Fort Myers, Florida 339219 Email aanderson@insurance-counsel.com ayoho@insurance-counsel.com RE: Insured: Gammy Painting Waterproofing Inc Claimant: The Bentley Bay Policy No.: VBA677689 (2/14/2019 to 2/14/2020) Claim No: 7030194393 Dear Mr. Anderson: The foregoing will respond to the Civil Remedy Notice of Insurer Violation (the “Notice”) filed against Covington Specialty Insurance Company (“Covington”) by the Complainant, CPWR, LLC d/b/a Capital Contractor Services (“CPWR”). The Florida Department of Financial Services accepted the Notice on October 28, 2024, 2024. As such, this response is timely. Covington denies all allegations of bad faith, directly or indirectly referenced in the Notice. At the outset, Covington objects to the Notice to the extent it is deficient and fails to comply with the requirements of the Florida Statutes. The Notice does not, inter alia, include the specific information required by Statute or provide an explanation as to how Covington allegedly failed to comply with the terms of the subject policy with specific factual support pertaining or how Covington allegedly failed to comply with the statutory provisions allegedly violated. Subject to and without waiving the foregoing objection, Covington would submit that the allegations in the Notice lack merit. This matter involves a bona fide coverage dispute involving a claim asserted against CPWR for its performance of exterior renovations at the Bentley Bay Condominium located at 520-540 West Avenue, Miami Beach, Florida (“the Project”). The Bentley Bay Condominium consists of two towers that are 24 and 25 stories in height. The Bentley Bay Condominium Association, Inc. (the “Association”) contracted with CPWR to perform concrete repair, waterproofing and painting work for the condominium’s exterior. CPWR reportedly entered a subcontract with Covington’s named insured, Gammy Painting & Waterproofing Inc. (“Gammy”), under which Gammy was to serve as a subcontractor to complete exterior renovations at the Project, including concrete, waterproofing and painting exterior work. The Association contends that CPWR’s work on the Project was incomplete and defective and has filed suit against CPWR in the case styled The Bentley Bay Condominium Association, Inc. v. CPWR, LLC d/b/a Capital Contractor Services and The Guarantee Company of North America, USA, Case No. 2024-004007-CA-01, in Miami-Dade County, Florida Circuit Court (the “Lawsuit”). In the Lawsuit, the Association alleges claims against CPWR for breach of contract and unjust enrichment. The Association’s Complaint against CPWR (referred to as “Capital”) contains the following relevant allegations: General Allegations 7. Bentley Bay is a condominium association that operates two waterfront condominium towers located at 520-40 West Avenue, Miami Beach, FL 33139 (the “Condominium”). The towers are known as North and South Tower (the “Towers”). The Towers were originally constructed circa 2004 and are 24 and 25-stories respectively. The Towers collectively contain approximately 168 individual units. *** 9. On December 27, 2018, Bentley Bay engaged Capital, a Florida contractor, to perform concrete repair, waterproofing and painting work for the Condominium’s exterior (the “Contract”). See AIA Document A107-2007 attached as Exhibit “A”. 10. The Contract contained alternates. Alternates are defined items of work that are priced separately and provide an option for the owner to determine the final scope of the work. 11. Here, an alternate for the use of Sherwin Williams’ products and specifications was specified in the Contract and it was apart of Capital’s scope of work. Indeed, Sherwin Williams’ Exterior Repaint Specifications for the Bentley Bay Condominium (the “Specifications”) were affixed to the Contract as exhibit C. 12. The Specifications required Capital to prepare the exterior surfaces before painting by, inter alia, pressure cleaning the exterior surfaces, priming/sealing all exterior surfaces, and repairing hairline cracks. 13. Capital performed concrete repair, waterproofing and painting work on the Towers’ exterior. 14. Sometime after Capital completed its work, Bentley Bay discovered instances of paint delamination at various units in the Towers. To investigate, Bentley Bay engaged KTA-Tator, Inc. (“KTA”) to perform a Preliminary Coatings Failure Analysis. KTA performed a preliminary inspection and analyzed coating samples and concluded the most probable cause of the paint delamination was Capital’s failure to adequately pressure wash the exterior surfaces, as required by the Specifications, and the painting over existing paint that had poor marginal adhesion. See KTA’s Preliminary Report1 attached as Exhibit “B”. *** 16. In addition, Bentley Bay has discovered deficiencies with the sealant work that Capital performed. The sealant appears discolored and has visible mold-like growths, indicating an issue with moisture or inadequate sealing. 17. Bentley Bay seeks recovery from Capital and Surety jointly and severally for damages proximately caused by Capital’s incomplete and defective work at the Condominium. 18. The defects and deficiencies were not readily discoverable by Bentley Bay or its members through reasonable inspection of Capital’s work, and Bentley Bay only became aware of the defects and deficiencies after inspections performed by its consultants. *** COUNT I – BREACH OF CONTRACT (Against Capital) 21. The allegations in paragraphs 1-20 are incorporated herein. 22. Bentley Bay and Capital entered into the Contract whereby Capital agreed to perform concrete repair, waterproofing and painting work at the Condominium in a good and workmanlike manner. 23. Capital materially breached the Contract by failing to perform its concrete repair, waterproofing, and painting work in a good and workmanlike manner and in accordance with the Specifications and industry standards, by painting over building components that Capital knew or should have known required further repairs and surface preparation prior to painting, and by causing property damage while performing its work, including, without limitation, to Condominium’s sliding glass door trim and window frames, coatings, and sealant systems. Moreover, Capital has not cured the defects in its work. 24. Bentley Bay has sustained damages caused by Capital’s breach of contract in that it has to repair Towers exterior painting and sealant systems and remediate Capital’s deficient work. *** COUNT II – UNJUST ENRICHMENT (Against Capital) 25. The allegations in paragraphs 1-8 & 13-20 are incorporated herein. 26. This count is an alternative to Count I and in the event it is determined defective work and damage caused by Capital arose outside of the existence of its contract. 27. Bentley Bay conferred a benefit on Capital through the payment to Capital for concrete repair, waterproofing and painting work on the Condominium’s exterior work. 28. Capital has knowledge of and voluntarily accepted the benefit conferred on it by accepting payments from Bentley Bay for work performed. 29. The circumstances are such that it would be inequitable for Capital to retain the benefit of the payment received because Capital failed to provide proper concrete repair, waterproofing, and painting work in a good and workmanlike manner and in accordance with industry standards and paint manufacturer’s, Sherwin Williams, product data sheets. Capital’s failure to perform work in a good and workmanlike manner has and will cause Bentley Bay to incur costs for repairing Capital’s deficient and damaging work. Therefore, it would be inequitable for Capital to retain the benefit of the compensation that Bentley Bay paid to it. 30. Injustice can only be avoided by Capital returning compensation to Bentley Bay for the fair value of the damages that Bentley Bay has sustained as a result of Capital’s failure to properly perform its work. *** The KTA Preliminary Report, which is attached to the Complaint, states that the exterior of the condominium buildings were painting in 2021 and, some months after paint application, defects in the topcoat surface consisting of blisters and paint peeling were observed. The Report describes the paint delamination that was observed and the results from the laboratory analysis of the paint samples obtained, and opines as to the likely cause of the paint peeling, but does not describe any resulting damages caused by the allegedly defective concrete, waterproofing and painting work performed by Gammy. Covington issued a Commercial General Liability Policy to Gammy, Policy No. VBA677689, that was in effect from February 14, 2019 to February 14, 2020 (the “Policy”). The Policy Declarations describe Gammy’s classifications as follows: “cleaning – outside surfaces of buildings and other exterior surfaces”; “painting – exterior buildings or structures – three stories or less in height”; and “painting – interior – buildings or structures.” On April 8, 2024, Covington received correspondence from counsel for CPWR, in which CPWR requested a defense and indemnity with respect to the Lawsuit as a purported additional insured under the Policy. On April 24, 2024, Covington issued an eleven-page disclaimer letter to CPWR, advising that Covington is unable to accept CPWR’s tender because there is no coverage under the Policy and detailing the bases for Covington’s determination in this regard. The Notice generally asserts that Covington has delayed the claim, failed to substantively and timely respond to CPWR’s tenders and requests that Covington reconsider its coverage position, failed to conduct a reasonable investigation and has not made reasonable efforts to settle this claim. Covington denies these allegations, and all other assertions in the Notice. As noted above, Covington promptly responded to CPWR’s initial tender, providing a detailed explanation for Covington’s determination that there is no coverage under the Policy for the claims asserted against CPWR. Contrary to the allegations in the Notice, Covington provided timely substantive responses to CPWR’s subsequent communications rebutting Covington’s coverage determination, advising that Covington’s position remains that there is no duty to defend or indemnify CPWR with respect to this matter. Moreover, based on the information known at this time, this matter involves a bona fide dispute over coverage, including lack of additional insured status, operations that exceed the scope of the Policy classifications, as well as lack of coverage for repair and replacement of the insured’s product and work. The allegations in the Lawsuit make clear that CPWR is being sued for its own conduct in connection with the Project. Thus, Covington denies that CPWR is entitled to additional insured status under the Policy because (i) the alleged “property damage” was not caused, in whole or in part by Gammy’s acts or omissions; (ii) the Lawsuit arises from acts, omissions and/or negligence of CPWR; and/or (iii) the alleged “property damage” did not occur during Gammy’s ongoing operations. Even if CPWR qualifies as an additional insured (which Covington disputes), the Policy’s classification limitation applies to preclude coverage because concrete repair, waterproofing and exterior painting of buildings that are 24 and 25 stories in height exceed the scope of the Policy classifications. Florida courts have routinely held that classification limitations, like the classification limitation included in the Policy are unambiguous and preclude coverage where some or all of the insured’s work on a project is outside the scope of the policy classifications. In addition, the Association’s Complaint, and the KTA Preliminary Report attached thereto, does not describe any resulting damage from the allegedly defective concrete repair, waterproofing and painting. Instead, the Association alleges it has sustained damages because it has to repair the exterior painting and sealant systems and remediate CPWR’s deficient work. The cost of repairing and/or replacing Gammy’s defective work does not constitute an “occurrence” of “property damage” under the Policy. The Policy defines “property damage” in relevant part as “[p]hysical injury to tangible property” and an “occurrence” is defined in relevant part to mean an “accident.” Based on this language, the Policy provides coverage for damage to other property caused by Gammy’s defective products or work, but does not provide coverage for the cost of repairing or replacing Gammy’s defective products or work itself. Finally, as noted in Covington’s April 24, 2024 disclaimer correspondence and subsequent communications to CPWR, there is no coverage under the Policy, in whole or in part, based on the following additional reasons: (1) There is no coverage under the Policy for damage arising outside of the applicable policy period. (2) There is no coverage to the extent that there is no “property damage” caused by an “occurrence” within the meaning of the Policy. (3) There is no coverage to the extent that Exclusion b. applies. (4) There is no coverage to the extent Exclusions j(5) and/or j(6) apply. (5) There is no coverage to the extent Exclusion k. applies. (6) There is no coverage to the extent Exclusion l. applies. (7) There is no coverage to the extent Exclusion m. applies. (8) There is no coverage to the extent the fungi, bacteria or mold exclusion applies. (9) There is no coverage under the Policy to the extent that Gammy made material misrepresentations in its application for insurance, when it advised that its operations do not include work above three stories. At this point, Covington has made every effort to address the issues alleged in the Notice. Without waiving its rights to contest the validity of the subject defective and improper Civil Remedy Notice, as the facts clearly demonstrate, Covington has, and continues to comply with both Florida law and the applicable policy of insurance throughout the entire handling of this claim. Covington’s investigation and coverage determination in this matter were proper, and Covington denies any allegations that it has not acted fairly and honestly toward its insured. For these reasons, Covington respectfully denies all allegations in the Notice, as Covington’s actions at all times have been in compliance with Florida law. While this response is meant to be comprehensive, Covington’s response above is based upon the information provided in the Notice and the information received to date. Accordingly, Covington’s response is not necessarily exhaustive and does not preclude Covington from asserting any other valid reason for seeking rejection and return of the Notice. Also, this response or any act or failure to act on the part of Covington or any agent or representative Covington should not be construed as a waiver of any rights or defenses available to it by contract or at law, as all such rights and defenses are hereby specifically reserved. Very truly yours Christie Molini RSUI Group, Inc. 404-760-4970 cmolini@rsui.com
Acknowledgement
* The submitter hereby states that this notice is given in order to perfect the rights of the person(s) damaged to pursue civil remedies authorized by Section 624.155, Florida Statutes.

Before submitting a Notice using this system, please verify that all text has been entered correctly and completely. Once the Notice has been submitted, the text cannot be changed or deleted.




DFS-10-363
Rev. 10/14/2008