Civil Remedy Notice of Insurer Violations
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Filing Number:     791635
Filing Accepted:  11/12/2024
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Complainant
Last/Business Name *  
LENNAR HOMES, 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*   C & C WINDOW & DOOR COMPANY, INC.   First Name  
Policy # * 20325476-17 Claim #* 300-0676121-2022
Attorney
Attorney is Applicable
Last Name* KERR First Name * LAUREN Initial D
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*   SOUTHERN-OWNERS INSURANCE COMPANY
NAIC Company Code 10190
 
Name of individual responsible for violation (if any):* HEATHER REVEZZO
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.

C & C Window & Door Company, Inc. (“C&C”) purchased at least one commercial general liability (“CGL”) policy from Southern-Owners Insurance Company ("Southern") providing ongoing and products-completed operations coverage for liability because of property damage resulting from C&C’s work, specifically Policy Number 20325476-17 (the "Policy"). The insuring agreement of the Policy states: 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 Policy defines “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 Policy as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Not only does the Policy provide coverage to the named insured, C&C, it also provides coverage to Lennar Homes, LLC (“Lennar”) as an additional insured. The Policy contains the following endorsement in relevant part: BLANKET ADDITIONAL INSURED This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE FORM A. Under SECTION II – WHO IS AN INSURED, the following is added: A person or organization is an Additional Insured, only with respect to liability arising out of “your work” for that Additional Insured by or for you: (1) If required in a written contract or agreement . . . The subcontract between C&C and Lennar required that C&C name Lennar as an additional insured on its policies of insurance.
 
* 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 Southern-Owners Insurance Company ("Southern") has failed to address Lennar Homes, LLC’s (“Lennar”) tenders of defense in good faith. The Southern policy implicated is Policy Number 20325476-17 (the "Policy"). Lennar 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 window work performed by Lennar’s subcontractor, C & C Window & Door Company, Inc. (“C&C”). During original construction, C&C performed work at the Project pursuant to the terms and conditions of its subcontract with Lennar. Included in the subcontract between Lennar and C&C was a requirement that C&C would secure commercial general liability ("CGL") insurance and name Lennar as an Additional Insured. C&C purchased at least one CGL policy, the Policy, from Southern, which provides ongoing and products-completed operations coverage for liability because of property damage resulting from C&C’s work. This coverage extends to both the named insured, C&C, and the additional insured, Lennar. As described supra, the Policy extends coverage to additional insureds where required by contract. Because the written subcontract between Lennar and C&C required C&C to name Lennar as an additional insured, Lennar is an additional insured under the Policy. Lennar tendered its defense to Southern on March 29, 2023. On April 21, 2023, Southern denied the claim. On March 15, 2024, Lennar again tendered its defense to Southern and notified Southern of the Lawsuit. However, since that time, Southern has refused to address Lennar’s supplemental tender of defense nor has Southern provided Lennar with a defense in the Lawsuit. On October 21, 2024, Lennar wrote to Southern to dispute the denial but Southern has not reversed its decision. Southern’s refusal to provide a defense to Lennar is knowingly wrongful because the Lawsuit, as pled, implicates coverage under the Policy and does not clearly implicate any exclusions under the Policy. "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. Southern’s failure to defend Lennar has prejudiced and damaged Lennar. Due to Southern’s unreasonable claims handling practices, Lennar has been and will be forced to incur significant defense costs in the Lawsuit, for which Southern is responsible. The Lawsuit includes allegations of losses covered under the Policy. Under Florida law, Southern’s duty to defend Lennar was triggered by the Plaintiff’s allegations, whether they are proven to be true or not. Southern appears to be employing a misguided strategy of simply ignoring the Lawsuit and Lennar’s supplemental tender of defense in an effort to avoid paying the defense costs to which Lennar is entitled. The attorneys' fees and costs that Lennar has incurred have unjustly burdened Lennar. Moreover, by refusing to defend Lennar, Southern has greatly exposed its named insured, C&C, to a much larger claim for Lennar’s defense costs in this matter pursuant to the contractual indemnification provisions in the subcontract. Southern must exercise its duty of good faith to Lennar 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, Southern 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. Southern’s obligations extend to all the insureds under the Policy and are not limited to the named insured. Thus, Southern’s obligations extend to additional insureds, like Lennar. To date, Lennar is unaware of Southern’s investigation, if any, of the claims against Lennar, or its efforts, if any, to seek to settle the claim within the policy limits. Likewise, Southern has never advised Lennar how, or if, it intends to minimize the magnitude of a possible excess judgment against Lennar. Given the facts outlined above, Southern has failed or attempted to meet the standard for good faith in this matter. Lennar will be filing suit against Southern but is also filing this notice in an effort to provide Southern with a last opportunity to deal with Lennar in good faith as well as to perfect its right to pursue the remedies provided under Section 624.155, Florida Statutes. Southern can cure by acknowledging its duty to defend Lennar, reimbursing Lennar for its reasonable defense costs, and working together with Lennar to resolve this claim, including without limitation participating at the mediation scheduled for December 10, 2024.
Comments
User Id Date Added Comment
benton.steve@aoins.com 11-27-2024 This shall serve as Southern-Owners Insurance Company’s (“Southern-Owners”) response to the Civil Remedy Notice of Insurer Violations, filed by or on behalf of Lennar Homes, LLC (hereinafter “Lennar”), with the Florida Department of Financial Services on November 12, 2024, Filing Number 791635 (the “CRN”). Southern-Owners categorically denies each and every allegation of Lennar within the CRN, including but not limited to the alleged violations of the cited provisions of Florida law. Southern-Owners further denies any and all stated or implied allegations, including but not limited to: • improper claim handling, • inadequate investigation, • improper delay or denial, • failing to adequately and promptly communicate, • failing to provide reasonable explanations, • general business practices, • unfair or deceptive trade practices, and/or • unsatisfactory settlement offers or practice, and the like. At no time has Southern-Owners violated any provision of Florida law in the handling of this claim. Southern-Owners objects to the CRN, and the CRN is defective, because it lacks sufficient specificity, as required by Fla. Stat. §624.155(3)(b). The CRN contains generic and vague allegations without sufficiently specific facts. Here, the CRN does not outline the causes of action alleged by Bridgehaven at Citrus Park Homeowners Association, Inc. against Lennar and/or C & C Window & Door Company, Inc. (“C&C”), the damages alleged against Lennar and/or C&C, etc. The CRN fails to adequately identify or explain how Southern-Owners violated the provisions of Florida law cited in the CRN, how the alleged violations relate to the facts of the specific claim, and/or what actions and amount(s) are being demanded to remedy the alleged violations. The lack of specificity in the allegations deprives Southern-Owners of any meaningful notice and ability to respond and renders the CRN invalid on its face. Due to the lack of specificity and other defects, the CRN is invalid and cannot serve as a condition precedent to any action for alleged bad faith against Southern-Owners under Fla. Stat.§624.155, or otherwise under Florida law. Subject to and without waiving these denials and objections, and subject to and without waiving any other available defenses, Southern-Owners states that it has not violated any applicable provision of Florida law in handling this claim. Southern-Owners has at all times acted in good faith, fairly, honestly and with reasonable diligence in its handling and investigation of the claim. It is respectfully submitted that the foregoing demonstrates and confirms that Southern-Owners has handled and continues to handle this claim in good faith. As a final matter, it should be emphasized that the subject policy issued by Southern-Owners is governed by the policy’s terms, conditions, exclusions, and endorsements. This CRN response does not waive any such provisions of the policy.
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