Civil Remedy Notice of Insurer Violations
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Filing Number:     789935
Filing Accepted:  11/1/2024
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Complainant
Last/Business Name *  
CALATLANTIC GROUP, LLC   First Name  
Street Address * 5505 WATERFORD DISTRICT DRIVE
City, State Zip * MIAMI, FL 33126
Email Address * LKERR@COGBURNLEGAL.COM
Complainant Type: * Insured
Insured
Last/Business Name*   BRAD MCDONALD ROOFING & CONSTRUCTION, INC   First Name  
Policy # * ATNATL1710451; ATNATL1821324 Claim #* 80713
Attorney
Attorney is Applicable
Last Name* KERR First Name * LAUREN Initial
Street Address* 777 S. HARBOUR ISLAND BLVD., SUITE 245
City, State Zip* TAMPA , FL 33602
Email Address * LKERR@COGBURNLEGAL.COM
Violation
Insurer Type *   Authorized Insurer Unauthorized Insurer
 
Insurer Name*   UNITED SPECIALTY INSURANCE COMPANY
NAIC Company Code 12537
 
Name of individual responsible for violation (if any):* FORMERLY ALEXIS GRANT, NOW GARY LUPIEN
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)(b) Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue.
626.9541(1)(i)(3)(d) Denying claims without conducting reasonable investigations based upon available information.
* Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

Brad McDonald Roofing & Construction, Inc (“Brad McDonald”) purchased at least two commercial general liability (“CGL”) policies from United Specialty Insurance Company ("USIC") providing ongoing and products-completed operations coverage for liability because of property damage resulting from Brad McDonald’s work, specifically Policy Numbers ATNATL1710451 and ATNATL1821324 (the "Policies"). The insuring agreements of the Policies state: We will pay those sums that the insured becomes legally obligated to pay as damages because of … “property damage” to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages … The Policies define “property damage” to include: a. Physical injury to tangible property, including all resulting loss of use of that property … or b. Loss of use of tangible property that is not physically injured … For coverage to be afforded, “property damage” must have been caused by an “occurrence,” which is defined under the Policies as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions. Not only do the Policies provide coverage to the named insured, Brad McDonald, they also provide coverage to CalAtlantic Group, LLC (“CalAtlantic”) as an additional insured. Note that CalAtlantic Group, LLC was formerly known as CalAtlantic Group, Inc. until it converted to a limited liability company on February 28, 2022. The Policies each contain the following endorsements in same or substantially similar part: ADDITIONAL INSURED – DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART Section II – Who Is An Insured is amended to include as an additional insured the person(s) or organization(s) shown in the Schedule . . . SCHEDULE Name Of Additional Insured Person(s) Or Organization(s) As Per Written Contract ADDITIONAL INSURED – DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART Section II – Who Is An Insured is amended to include as an additional insured the person(s) or organization(s) shown in the Schedule . . . SCHEDULE Name Of Additional Insured Person(s) Or Organization(s) CalAtlantic Group Inc and its affiliates The Policies also each contain endorsements extending the above-described additional insured coverage to Brad McDonald’s Completed Operations. On March 21, 2011, Brad McDonald entered into a subcontract agreement with Standard Pacific of Florida GP, Inc to perform roofing work at certain projects, including the project at issue in the below-described lawsuit. The contract required Brad McDonald to name Standard Pacific of Florida GP, Inc and its affiliated entities as an additional insured on its policies of insurance. CalAtlantic Group, LLC (f/k/a CalAtlantic Group, Inc.) is an affiliated entity and the sole member of Standard Pacific of Florida GP, Inc. Pursuant to both the “blanket” endorsements and specific named additional insured endorsements of the Policies, CalAtlantic is an additional insured under the Policies.
 
* Facts and circumstances giving rise to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

This civil remedy notice is being filed because United Specialty Insurance Company ("USIC") has failed to address CalAtlantic Group, LLC’s (“CalAtlantic”) tenders of defense in good faith. The USIC policies implicated are Policy Numbers ATNATL1710451 and ATNATL1821324 (the "Policies"). CalAtlantic Group, Inc. (n/k/a CalAtlantic Group, LLC) has been named as a defendant in a lawsuit styled as Bridgehaven at Citrus Park Homeowners Association, Inc. v. Lennar Homes, LLC, et al, Case No. 22-CA-009092, Hillsborough County, Florida (now pending before the American Arbitration Association) (the “Lawsuit”). The Lawsuit alleges property damage resulting from work performed at the Bridgehaven community (the “Project”), including the roofing work performed by CalAtlantic’s subcontractor, Brad McDonald Roofing & Construction, Inc (“Brad McDonald”). During original construction, Brad McDonald performed work at the Project pursuant to a subcontract agreement with Standard Pacific of Florida GP, Inc (“StanPac”). Included in the subcontract between StanPac and Brad McDonald was a requirement that Brad McDonald would secure commercial general liability ("CGL") insurance and name StanPac and its affiliated entities as an additional insured on its policies of insurance. CalAtlantic Group, LLC (f/k/a CalAtlantic Group, Inc.) is an affiliated entity and the sole member of StanPac. Brad McDonald purchased at least two CGL policies, the Policies, from USIC, which provide ongoing and products-completed operations coverage for liability because of property damage resulting from Brad McDonald’s work. This coverage extends to both the named insured, Brad McDonald, and the additional insured, CalAtlantic. As described supra, the Policies extend coverage to CalAtlantic Group, Inc. (n/k/a CalAtlantic Group, LLC) as a named additional insured. The Policies also extend coverage to additional insureds where required by contract. Because the written subcontract between StanPac and Brad McDonald required Brad McDonald to name StanPac and its affiliates as an additional insured on its policies of insurance, and CalAtlantic is an affiliate of StanPac, CalAtlantic is an additional insured under the Policies. CalAtlantic tendered its defense to USIC on March 30, 2023. On May 9, 2023, USIC responded and denied the claim. USIC denied the claim, in part, because there was no “suit” filed in contrast to the Complaint attached to CalAtlantic’s tender of defense. CalAtlantic again tendered its defense to USIC on March 15, 2024. Seven months later, on October 25, 2025, and after CalAtlantic wrote to USIC to dispute the coverage denial, USIC advised the matter was “under review”. To date, USIC has refused to provide CalAtlantic with a defense in the Lawsuit. USIC’s refusal to provide a defense to CalAtlantic knowingly wrongful because the Lawsuit, as pled, implicates coverage under the Policies and does not clearly implicate any exclusions under the Policies. "Under Florida law, an insurer's duty to defend its insured against legal action is quite broad, and 'is determined by comparing the allegations contained within the four corners of the underlying complaint with the language of the policy.'" Zurich Am. Ins. Co. v. Southern- Owners Ins. Co., 314 F. Supp. 3d 1284, 1299 (M.D. Fla. 2018) (Howard, J.) citing Addison Ins. Co. v. 4000 Island Blvd. Condo. Ass'n, Inc., 263 F. Supp. 3d 1266, 1269 (S.D. Fla. 2016) (quoting Jones v. Fla. Ins. Guar. Ass'n Inc., 908 So. 2d 435, 443 (Fla. 2005)). That is, an insurer's duty to defend is determined solely by the allegations in the underlying complaint. Zurich, 314 F. Supp. 3d at 1299 citing Category 5 Mgmt. Grp., LLC v. Companion Prop. & Cas. Ins. Co., 76 So. 3d 20, 23 (Fla. 1st DCA 2011); Lawyers Title Ins. Corp. v. JDC (Am.) Corp., 52 F. 3d 1575, 1580 (11th Cir. 1995). "The duty arises when the relevant pleadings allege facts that 'fairly and potentially bring the suit within policy coverage.'" Id. citing Lawyers Title Ins. Corp., 52 F. 3d at 1580 (quoting Lime Tree Vill. Cmty. Club Ass'n, Inc. v. State Farm Gen. Ins. Co., 980 F. 2d 1402, 1405 (11th Cir. 1993)). The actual facts of the situation are not relevant, such that "the insurer must defend even if facts alleged are actually untrue or legal theories unsound." Id. As a result, "an insurer's duty to defend is distinct from, and broader than, the duty to indemnify," Id. citing Sinni v. Scottsdale Ins. Co., 676 F. Supp. 2d 1319, 1323 (M.D. Fla. 2009), which "must be determined by analyzing the policy coverage in light of the facts in the underlying case," J.B.D. Constr., Inc. v. Mid-Continent Cas. Co., 571 F. App'x 918, 927 (11th Cir. 2014) (emphasis added). In addition, where an injured party "alleges facts partially within and partially outside the coverage of the policy, the insurer is obligated to defend the entire suit." Category 5 Mgmt. Grp., LLC, 76 So. 3d at 23. USIC’s failure to defend CalAtlantic has prejudiced and damaged CalAtlantic. Due to USIC’s unreasonable claims handling practices, CalAtlantic has been and will be forced to incur significant defense costs in the Lawsuit, for which USIC is responsible. The Lawsuit includes allegations of losses covered under the Policies. Under Florida law, USIC’s duty to defend CalAtlantic was triggered by the Plaintiff’s allegations, whether they are proven to be true or not. USIC appears to be employing a misguided strategy of simply ignoring the Lawsuit and CalAtlantic’s tenders of defense in an effort to avoid paying the defense costs to which CalAtlantic is entitled. The attorneys' fees and costs that CalAtlantic has incurred have unjustly burdened CalAtlantic. Moreover, by refusing to defend CalAtlantic, USIC has greatly exposed its named insured, Brad McDonald, to a much larger claim for CalAtlantic’s defense costs in this matter pursuant to the contractual indemnification provisions in the subcontract. USIC must exercise its duty of good faith to CalAtlantic and must employ “the same degree of care and diligence as a person of ordinary care and prudence should exercise in the management of his own business.” Farinas v. Florida Farm Bureau Gen. Ins. Co., 850 So. 2d 555 (Fla. 4th DCA 2003) (internal citations omitted). Under Farinas, USIC is obligated to (1) fully investigate all claims at hand to determine how to best limit its insured’s liability; (2) seek to settle as many claims as possible within the policy limits; (3) minimize the magnitude of possible excess judgments against its insureds by reasoned claim settlement; and (4) keep the insureds informed of the claim resolution process. USIC’s obligations extend to all the insureds under the Policies and are not limited to the named insured. Thus, USIC’s obligations extend to additional insureds, like CalAtlantic. To date, CalAtlantic is unaware of USIC’s investigation, if any, of the claims against CalAtlantic, or its efforts, if any, to seek to settle the claim within the policy limits. Likewise, USIC has never advised CalAtlantic how, or if, it intends to minimize the magnitude of a possible excess judgment against CalAtlantic. Given USIC’s failure to defend CalAtlantic and the other facts outlined above, USIC has failed or even attempted to meet the standard for good faith in this matter. CalAtlantic will be filing suit against USIC but is also filing this notice in an effort to provide USIC with a last opportunity to deal with CalAtlantic in good faith as well as to perfect its right to pursue the remedies provided under Section 624.155, Florida Statutes. USIC can cure by acknowledging its duty to defend CalAtlantic, reimbursing CalAtlantic for its reasonable defense costs, and working together with CalAtlantic to resolve this claim, including without limitation participating at the mediation scheduled for December 10, 2024.
Comments
User Id Date Added Comment
carol.thoits@phelps.com 12-19-2024 VIA ELECTRONIC SUBMISSION Florida Department of Financial Services Division of Consumer Services Civil Remedy Section Larson Building 200 East Gaines Street Tallahassee, FL 32299-0322 Re: Civil Remedy Notice of Insurer Violation Company: United Specialty Insurance Company Insured: Brad McDonald Roofing & Construction, Inc. Complainant: CalAtlantic Group, LLC Policy Nos.: ATN-ATL1710451 (eff. 06/30/2017 – 06/30/2018) ATN-ATL1821324 (eff. 06/30/2018 – 06/30/2019) DFS File No.: 789935 Accepted by DFS: November 1, 2024 To Whom It May Concern: We write on behalf of United Specialty Insurance Company (“USIC”), which provided commercial general liability coverage to Brad McDonald Roofing & Construction, Inc. (“Brad McDonald”) under Policy No. ATN-ATL1710451 for the policy period of June 30, 2017 to June 30, 2018 (the “2017-18 Policy”) and Policy No. ATN-ATL1821324 for the policy period of June 30, 2018 to June 30, 2019 (the “2018-19 Policy”) (collectively, the “Policies”). The Policies provide commercial general liability coverage to Brad McDonald subject to the Policies’ terms, conditions, limitations, definitions, and exclusions therein. We write on USIC’s behalf in response to the Civil Remedy Notice of Insurer Violations File Number 789935 (the “Notice”) that attorney Lauren Kerr, Esq. filed with the Department of Financial Services (the “Department”) on behalf of CalAtlantic Group, LLC (the “Complainant”) regarding its tender for defense and indemnity as an additional insured under the Policies for the lawsuit filed by Bridgehaven at Citrus Park Homeowners Association, Inc. (the “Association”) against the Complainant styled, Bridgehaven at Citrus Park Homeowners Association, Inc. v. Lennar Homes, LLC, et. al., Case No. 22-CA-009092, previously pending in the Circuit Court for Hillsborough County, Florida and currently pending before the American Arbitration Association (the “Lawsuit”). The Lawsuit concerns alleged construction defects and damages at the Bridgehaven community located in Hillsborough County, Florida (the “Project”). The Notice was electronically filed with and accepted by the Department on November 1, 2024. In the Notice, the Complainant alleges that USIC committed statutory violations with regard to the handling of its tender and the Lawsuit. The Complainant alleges that USIC violated sections 624.155(1)(b)(1), 626.9541(1)(i)(3)(a), 626.9541(1)(i)(3)(b), and 626.9541(1)(i)(3)(d), Florida Statutes. In the Section of the Notice purporting to describe the alleged facts and circumstances giving rise to the alleged violations, the Complainant alleges that it was named as a defendant in the Lawsuit filed by the Association. According to the Notice, the Lawsuit alleges property damage resulting from alleged construction defects due to work performed by the Complainant’s subcontractors, including Brad McDonald who allegedly performed roofing work on the Project pursuant to a subcontract with Standard Pacific of Florida GP, Inc., an affiliated entity of the Complainant. The Notice alleges that per the terms of said subcontract, the Lawsuit’s allegations, and the Policies’ terms, the Complainant allegedly qualifies as an additional insured under the Policies. The Notice further alleges that USIC has failed to defend the Complainant in the Lawsuit as a purported additional insured when it allegedly had a duty to do so, which has purportedly incurred legal fees and costs. Specifically, the Notice alleges that USIC improperly issued a coverage denial to the Complainant. As a preliminary matter, USIC categorically denies that it or any of its representatives violated any of the statutes referenced in the Notice or committed any wrongdoing in its handling of the Complainant’s claim. Since receiving notice of the claim, USIC has been investigating the alleged damages and its purported obligations to Complainant. According to the Notice, USIC can cure any alleged violations by acknowledging the Complainant as an additional insured and working with the Complainant to resolve its claim and outstanding legal fees and costs, which includes USIC’s participation in a mediation scheduled for December 10, 2024. Further, according to section 624.155, Florida Statutes, the deadline to cure any alleged violations in the Notice is December 31, 2024. During the statutory cure period, USIC and Complainant’s coverage counsel have conferred, and USIC has acknowledged the Complainant as an additional insured and agreed to participate in the Complainant’s defense. Additionally, USIC participated in the December 10th mediation to negotiate a reimbursement of the Complainant’s outstanding defense fees and costs. Accordingly, USIC has cured any purported violations alleged in the Notice. If the Department has any questions or requires any additional information, please contact us. Very truly yours, Bret M. Feldman BMF/GG cc: Via U.S. Mail & E-mail Lauren Kerr, Esq. COGBURN LAW FIRM, P.A. 777 S. Harbour Island Blvd., Suite 245 Tampa, FL 33602
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