Civil Remedy Notice of Insurer Violations
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Filing Number:     789404
Filing Accepted:  10/30/2024
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Complainant
Last/Business Name *  
A N PINES, LLC   First Name  
Street Address * 237 WEKIVA POINTE CIR
City, State Zip * APOPKA, FL 32712
Email Address * BO.SUTTON@THOMPSONJAGLAL.COM
Complainant Type: * Third Party
Insured
Last/Business Name*   EMPIRE CONTRACTOR INC   First Name  
Policy # * AGL0042363-00 Claim #* 000014138270
Attorney
Attorney is Applicable
Last Name* SUTTON First Name * ROUSELLE Initial A
Street Address* 4767 NEW BROAD STREET
City, State Zip* ORLANDO , FLORIDA 32814
Email Address * BO.SUTTON@THOMPSONJAGLAL.COM
Violation
Insurer Type *   Authorized Insurer Unauthorized Insurer
 
Insurer Name*   ARCH INSURANCE COMPANY
NAIC Company Code 11150
 
Name of individual responsible for violation (if any):* COMPANY-WIDE
Type of Insurance * Commercial Property & Casualty   
Reason for Notice *
Claim Denial
Claim Delay
Unfair Trade Practice
* 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)(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.

Arch Insurance Company has refused to defend its insured against a pending lawsuit. Arch Insurance Company has refused to defend its additional insured against a pending lawsuit. Arch Insurance Company has refused to attend mediation, including prior mediation and the mediation scheduled for February 4, 2025, and to protect the interest of its insured and its additional insured. Arch Insurance Company is refusing to apply a good faith application of the Product Completed Operations Hazard by refusing to acknowledge work was performed and completed during the policy. And, instead, is using Certificates of Occupancy as the measure of a covered claim. Arch Insurance Company is unreasonably, and in bad faith, interpreting the pleadings so as to effectively plead itself out of coverage. Arch and its adjuster are acting in bath faith, relying on coverage positions not supported by Florida law, and taking advantage of the fact, the named insured is dissolved and unable to defend itself against the bad faith claim handling.
 
* Facts and circumstances giving rise to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

Empire Contractor Inc. performed work for A N Pines, LLC to work on townhomes located in the Windsor Square generally located at 2362 Britwell Pl, Sanford, FL 32773. On March 11, 2022 homeowners filed suit against Park Square Enterprises, LLC for claims arising out of Empire Contractor Inc.’s work. On December 22, 2023, Park Square Enterprises LLC sued A N Pines LLC for claims arising out of Empire Contractor Inc.’s work. On February 2, 2024 Park Square Enterprises, LLC filed an amended Notice of Mediation against A N Pines, LLC for claims arising out of Empire Contractor Inc’s. work. On March 5, 2024, A N Pines, LLC filed a Fourth Party Complaint in the Eighteenth Judicial Circuit, In Seminole County Florida under case No. 2022-CA-000557 (Lawsuit). In the suit A N Pines, LLC named Empire Contractor Inc. as a defendant and alleged Empire Contractor Inc. was liable claims for arising out of Empire Contractor Inc.’s work at the project. On March 5, 2024 A N Pines, LLC served Arch Insurance Company with a Notice of Construction Defect Claim under policy No. AGL0042363-00, which was in effect from 10/20/16 – 10/20/17. In this notice Arch Insurance Company was requested to: Provide A N Pines, LLC with indemnity, defense and additional insured rights, defend Empire Contractor Inc., provide the letter to all affected insurers, participate in early settlement efforts, and provide the requested insurance information. A letter was sent to Arch Insurance Company because it insured Empire Contractor Inc. who worked on the Project. Empire Contractor Inc’s. Arch refused to participate in mediation or to defend its named insured Empire Contractor Inc or A N Pines, LLC because Arch quickly determined, with almost no information, that property damage to the Association could not have occurred during the effective period of the Policy. On April 23, 2024, A N Pines, LLC again requested that Arch Insurance Company participate in settlement efforts and to defend its named insured Empire Contractor Inc against the third party lawsuit A N Pines, LLC was asserting against Arch’s named insured Empire Contractor. Arch refused. On May 8, 2024, Arch sent a letter that again determined, with no actual information, that that property damage to the Association could not have occurred during the effective period of the Policy. On May 9, 2024, counsel for A N Pines replied to Arch’s May 8, 2024 response: #2. You are focusing on the claimant, instead of the insuring agreement, which only considers an occurrence. The Association does not have to exist at the time of original construction for there to be a covered occurrence. The occurrence under the policy is your insured's defective work causing damage to the work of other trades, including the work of my client. Where in the insurance policy can I find the basis of your position the claimant must exist at the time of the policy in order for the claimant to be damaged? #3. Your insured's work damaged my client's work during your policy. My client has sued your insured for that damage. On September 3, 2024 A N Pines, LLC again served Arch Insurance Company with a follow up Notice of Construction Defect Claim, renewing the same request made on March 5, 2024 that Arch provide its named insured with a defense. No defense or response was provided. On September 12, 2024, A N Pines, LLC informed Arch Insurance Company that its insured was served with process and that Arch provide its named insured with a defense. No defense or response was provided. On October 8, 2024, a Default was entered against Arch’s named insured Empire Contractor. Arch was informed the default was being sought. Arch was informed the default was obtained. Arch refused to provide a defense at any point. On October 11, 2024 A N Pines, LLC again served Arch Insurance Company with a follow up Notice of Construction Defect Claim, renewing the request made on March 5, 2024. On October 14, 2024, A N Pines, LLC again served Arch Insurance Company with a follow up Notice of Construction Defect Claim, renewing the request made on March 5, 2024. This request like the previous, was completely ignored. On October 14, 2024, Arch responded with 3 primary reasons for why it was refusing to defend its insured. On October 14, 2024, counsel for A N Pines, LLC informed Arch that its coverage position was in bad faith for three primary reasons and that if Arch continued in bad faith that a Civil Remedy Notice would be forthcoming. Arch did not respond or provide its insured with a defense. Arch’s basis for denying the claim and refusing to defend its insured are reasons not supported by law and are for reasons not squarely set forth in the four corners of the pleading. Denial Reason 1: If/when the clerk’s default is reduced to judgment, notwithstanding Fortitude (Arch’s third-party administrator) will reopen its file and defend against that enforcement. Reason 1 Response: waiting for the collection action is in bad faith. Arch and its adjuster are acting in bath faith, relying on coverage positions not supported by Florida law, and taking advantage of the fact, the named insured is dissolved and unable to defend itself against the bad faith claim handling. Waiting to fend off a collection action is purely in self-interest. Denial Reason 2: “Even if “costs to address defects” was an inartful description of an amount including repair of some damage to common elements other than defective components themselves, we note that while the lawsuit is for 66 homes, Pines—and therefore Empire—appears to have worked on only 23 of those 66 homes, and construction on 19 of those 23 homes did not begin until after the Arch policy expired (in October of 2017). Therefore, even ignoring its principal coverage defenses, Fortitude’s indemnity obligation would be limited to the cost of repairing damage caused by Empire to common elements other than defective components, and only in 4 of the 66 homes.” Reason 2 Response: The denial is invalid and in bad faith. Empire Contractor performed work during the Arch policy. There are payments to reflect that. A N Pines has been clear that it does not have all of the job records anymore, including payment records. It has only been able to produce what has been found. There is missing information. Arch cannot prove that each building was not its own, standalone, oral contract, i.e., on a building-by-building basis my client made an offer to the insured that if Empire Contractor did the work on that building A N Pines would pay for such work. The insured Empire Contractor accepted the offer by performing such work and a contract was made on each building. A N Pines has been clear this is how the job was run. Arch’s denial is not, and cannot be, based on all facts and evidence. And, Arch wells knows, certificates of occupancy are not what trigger completed operations coverage. The language of the policy does. Counsel A N Pines pasted that policy language in an email to Arch. The policy does deem work completed before issuance of a certificate of occupancy. Based on the facts, Arch is not able to determine dates with the specificity it relies on for its claim denial. Arch cannot legally determine the dates that it has relied on. Arch cannot legally determine what damage has occurred to what component and/or when. Arch has completely ignored the 4 corners rule because it knows its insured is a dissolved entity and cannot fight back. Denial Reason 3: “Damage recoverable by the association is limited to damage to common elements, and does not include damage to unit owners’ property, we point out that (1) the association lists “costs to address defects,” and as you know, remedying defects is not covered property damage under the policy; (2) the association lists prejudgment interest, and prejudgment interest on uncovered damage is not covered under the policy; and (3) the association lists attorney’s fees, which are also not covered under the policy.” Reason 3 Response: The Association's Second Amended Complaint does allege damage that triggers the Arch policy. Counsel A N Pines pasted Paragraph 24 in an email to Arch. It clearly alleges the unit owners (members) have suffered damage. The Association suffers damage for defects and resulting damage to the common elements. Unit owners suffer damage from defects resulting in damage to their personal property. Arch is acrobatically interpreting the allegations to please Arch out of coverage. A plain reading of the 4 corners of the pleading do trigger coverage by, among other things, alleged damage to other property. Currently, litigation is still pending against both Empire Contractor Inc. and A N Pines, LLC and Arch Insurance Company has failed to act in good faith. Arch Insurance Company’s actions have willfully, wantonly, and maliciously placed their own interest above that of its insured Empire Contractor Inc. and of A N Pines, LLC as an Additional Insured. Arch, its third-party administrator Fortitude, and the handling adjuster Wanda Campbell should be sanctioned for the bad faith claim handling. Because of the blatant bad faith, A N Pines, LLC has had to resort to the Civil Remedy Notice process. Upon request, all correspondence referenced above will be provided.
Comments
User Id Date Added Comment
iolman@smsm.com 12-27-2024 Please be advised that this law firm represents Arch Specialty Insurance Company (“Arch”) with respect to the Civil Remedy Notice of Insurer Violations number 789404 filed by attorney Rouselle A. Sutton and accepted by the Department on October 30, 2024 (hereinafter “CRN”). This response is timely made. The CRN is in relation to Claim Number 000014138270 under the Arch policy bearing policy number AGL0042363-00 issued to Empire Contractor, Inc. (hereinafter “Insured” or “Empire”) for the policy period of October 20, 2016 to October 20, 2017 (hereinafter “Policy”). Arch categorically denies any and all wrongdoing, including any violation of Fla. Stat. Sections 624.155 or 626.9541 and any subparts thereof. Arch responds that it has acted in good faith, fairly, and honestly in the handling of the subject claim. First, the Complainant, A N Pines, LLC (“A N Pines”), contends that Arch is in violation of the above referenced statutes because it has “refused to defend its insured [Empire] against a pending lawsuit”. A N Pines, a stranger to the Policy, does not have standing or any legal basis to contest Arch’s coverage position vis-à-vis its Insured. Accordingly, A N Pines’ assertions in the CRN relative to purported violations by Arch concerning coverage afforded to its Insured, Empire, are improper, as A N Pines has not and cannot demonstrate that it has any standing or rights under the Policy, whether by assignment or operation of law. Second, to the extent that A N Pines takes issue with Arch’s coverage position as it relates to A N Pines as a purported additional insured, Arch clearly articulated by letter dated May 6, 2024, its grounds for denial of coverage based upon the operative pleading(s) and terms of the Policy, in accord with Florida law. As set forth in Arch’s denial letter, A N Pines does not qualify as an insured or additional insured under the Policy. Specifically, the “Blanket Additional Insured Endorsement” (Form No. 00 AGL0100 00 07 15) (the “Blanket AI Endorsement”) provides additional insured status to those persons or organizations who Empire is “required under a written contract with [Empire] to be named as an additional insured, but only with respect to liability for ‘bodily injury,’ or ‘property damage,’ or ‘personal and advertising injury’ caused, in whole or in part, by [Empire’s] acts or omissions or the acts or omission of [Empire’s] subcontractors….” It is undisputed that no written contract between A N Pines and Empire has been located to date. Indeed, by A N Pines’ own admission: “A N PINES entered into a partially ORAL and partially WRITTEN Contract with EMPIRE to perform portions of the Work, including FRAMING… At this time, A N Pines is unable to locate a copy of the WRITTEN portion of the Contract…”. See A N Pines’ Second Amended Fourth Party Complaint filed on September 2, 2024 in the Circuit Court of the Eighteenth Judicial Circuit in and for Seminole County, Florida (Case No. 2022-CA-000557). Accordingly, in the absence of a written contract, A N Pines has failed to satisfy its burden to demonstrate that it qualifies as an additional insured under the Blanket AI Endorsement and, therefore, is not entitled to coverage as same. Third, even if a written contract exists and is ultimately produced, the coverage afforded to any additional insured under the Blanket AI Endorsement is limited to liability that is “caused, in whole or in part, by [Empire]”. Courts applying Florida law have considered and rejected similar claims for additional insured coverage where the underlying complaints did not allege that the putative insured was vicariously liable for the direct fault of the named insured subcontractor. Community Asphalt Corp. v. Travelers Indemnity Co. of America, 2017 U.S. Dist. LEXIS 63877 (S.D. Fla. 2017); Bradfield v. Mid-Continent Cas. Co., 143 F. Supp. 3d 1215, 1229 (M.D. Fla. 2015); 2020 U.S. Dist. LEXIS 107265 (S.D. Fla. 2017); Strauss, P.A. v. Gemini Ins. Co., No. 24-60191-CV-MIDDLEBROOKS, 2024 U.S. Dist. LEXIS 134806 (S.D. Fla. July 25, 2024). Moreover, courts have made clear that “to pursue a vicarious liability claim, the claimant must specifically plead it as a separate cause of action.” Gen. Asphalt Co. v. Bob's Barricades, Inc., 22 So. 3d 697, 699 (Fla. 3d DCA 2009)(citing Goldschmidt v. Holman, 571 So. 2d 422, 423 (Fla. 1990)). Here, the operative Third Party Complaint filed by Park Square Enterprises, LLC against A N Pines does not plead any count or claim for vicarious liability against A N Pines for liability caused, in whole or in part, by Empire. In fact, Park Square’s claims against A N Pines arise solely out of its own independent liability. Accordingly, even setting aside the lack of a written contract, the Blanket AI Endorsement is not activated. A N Pines is not named and does not qualify as an insured or additional insured under any other term or endorsement in the Policy. Fourth, A N Pines’ assertions in the CRN concerning the “good faith application of the Product Completed Operations Hazard” are misplaced and have no bearing on Arch’s coverage position or obligation. As set forth above, A N Pines cannot overcome the threshold issue of establishing that it qualifies as an insured or additional insured under the Policy. If it did qualify as an additional insured under the Blanket AI Endorsement (which Arch denies), then coverage under that endorsement would apply to both completed and ongoing operations, as acknowledged in its May 6, 2024 denial letter. Fifth, A N Pines’ assertions in the CRN regarding adjuster Wanda Campbell’s claim handling are unsubstantiated and specious. Ms. Campbell has been responsive and in communication with A N Pines via its counsel, has provided a detailed (18 page, single-spaced) explanation of Arch’s coverage position (see May 6, 2024 letter) and has invited counsel to provide any “other or different information bearing on coverage”. To date, A N Pines has not provided any additional information or documentation that would impact or change Arch’s coverage position. A N Pines’ lack of coverage is not due to any purported bad faith handling by Arch or its adjuster, rather it is based on the clear and express terms of the Policy and the allegations set forth in the operative pleading(s). Sixth, the CRN is defective, as A N Pines has failed to specify what action it wants Arch to undertake to cure the alleged violations. Heritage Corp. v. Nat'l Union Fire Ins. Co., 580 F. Supp. 2d 1294, 1295 (S.D. Fla. 2008)(holding that the CRN was too vague to permit the insurer to cure the alleged violations because it did not specify which bond or policies were the basis for its bad-faith claims or what sort of action the insured wanted the insurer to take). Arch’s response to the CRN is not, and should not be construed as, a waiver of any terms, conditions, exclusions, or other policy provisions, or any other insurance policies issued by Arch or any of its affiliates. Nothing herein should be considered an exhaustive interpretation of the above referenced Policy. Arch expressly reserves all its rights under the Policy and applicable law. Should the Department require any additional information, please do not hesitate to contact the undersigned. Very truly yours, Ilana B. Olman, Esq., Segal McCambridge Singer & Mahoney 200 E Las Olas Blvd, Suite 1820 Fort Lauderdale, FL 33301 Phone: 954-869-0376 E-mail: iolman@smsm.com A copy of this CRN response has also been provided to A N Pines’ counsel via e-mail and Certified Mail, Return Receipt Requested.
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.

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