Civil Remedy Notice of Insurer Violations
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Filing Number:     820993
Filing Accepted:  5/13/2025
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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*   MARIO’S PAINTING OF SOUTH FLORIDA INC.   First Name  
Policy # * ATNATL1811453; ATN1924971; ATN2036652 Claim #* 92348
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*   UNITED SPECIALTY INSURANCE COMPANY
NAIC Company Code 12537
 
Name of individual responsible for violation (if any):* HEATHER ENSELMAN MENTECH; HENSELMAN-MENTNECH@NATLCLAIM.COM
Type of Insurance * Commercial Property & Casualty   
Reason for Notice *
Claim Denial
Unfair Trade Practice
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)(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.

Mario’s Painting of South Florida, Inc. (“Mario’s Painting”) purchased at least three 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 Mario’s Painting’s work, specifically Policy Numbers ATNATL1811453 (Policy year 2018-19); ATN1924971 (Policy year 2019-20); and ATN2036652 (Policy year 2020-21) (the "Policies"). The insuring agreements of the Policies state, in relevant part: 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, Mario’s Painting, they also provide coverage to Lennar Homes, LLC (“Lennar”) as an additional insured. The Policies contain the following endorsement, in same or similar part: ADDITIONAL INSURED – OWNERS, LESSEES OR CONTRACTORS – SCHEDULED 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, but only with respect to … “property damage” … caused, in whole or in part, by [Mario’s Painting’s] acts or omissions… The SCHEDULE lists as the Name Of Additional Insured Person(s) Or Organization(s): [Blanket] As Required By Written Contract, Fully Executed Prior To The Named Insured’s Work The Policies also contain a similar endorsement extending the additional insured coverage to Mario’s Painting’s completed operations. The subcontract between Lennar and Mario’s Painting required that Mario’s Painting name Lennar and its successors and affiliates as an additional insured.
 
* 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 Lennar Homes, LLC’s (“Lennar”) tenders of defense in good faith. The USIC policies implicated are Policy Numbers ATNATL1811453 (Policy year 2018-19); ATN1924971 (Policy year 2019-20); and ATN2036652 (Policy year 2020-21) (the "Policies"). Lennar has been named as a defendant in a lawsuit styled as Palmetto Cove Condominium Association v. Lennar Homes, LLC, Case No. 2024-004724, in the Circuit Court of Lee County, Florida (the “Lawsuit”). The Lawsuit alleges property damage resulting from claims due to painting and sealant work performed by Lennar’s paint subcontractor, Mario’s Painting of South Florida, Inc. (“Mario’s Painting”). During original construction, Mario’s Painting performed work on the project pursuant to the terms and conditions of its subcontract with Lennar. To date, USIC has failed to provide Lennar with a defense in the Lawsuit. Included in the subcontract between Lennar and Mario’s Painting was a requirement that Mario’s Painting would secure commercial general liability ("CGL") insurance and name Lennar as an Additional Insured. Mario’s Painting purchased at least three policies, the Policies, from USIC, which provide ongoing and products-completed operations coverage for liability because of property damage resulting from Mario’s Painting’s work. This coverage extends to both the named insured, Mario’s Painting, and the additional insured, Lennar. As described supra, the Policies extend coverage to additional insureds where required by contract. Because the written subcontract between Mario’s Painting and Lennar required Mario’s Painting to name Lennar as an additional insured on its policies of insurance, Lennar is an additional insured under the Policies. Lennar tendered its defense to USIC on February 27, 2024, and again on April 24, 2024. On May 17, 2024, USIC denied Lennar’s tenders of defense. USIC’s refusal to provide a defense to Lennar or Mario’s Painting is knowingly wrongful because the Lawsuit, as pled, implicates coverage under the Policies and does not clearly implicate any exclusions under the Policies. In purported support of its denial, USIC acknowledged that Lennar “may” qualify as an additional insured, but that coverage was “potentially” excluded due to the pre-existing damage exclusion. USIC wrongfully stated that in Florida, the “occurrence” is the date of the original defective work. This position conflicts with Florida courts’ interpretation of coverage triggers. Some federal courts applying Florida law have applied a “manifestation theory”, meaning that the “occurrence” occurs at the time that the injury manifests itself. See, e.g. Essex Builders Group, Inc. v. Amerisure Ins. Co., 485 F. Supp. 2d 1302 (M.D. Fla. 2006); Auto Owners Ins. Co. v. Travelers Caus. & Sur Co., 227 F. Supp. 2d 1248 (M.D. Fla. 2002). Other federal courts, as well as Florida state courts, favor the “injury-in-fact theory”, meaning that coverage is triggered when an “occurrence” results in “property damage”. See, e.g. Axis Surplus Ins. Co. v. Contravest Const. Co., 921 F. Supp 3d 240 (11th Cir. 2015); Johnson-Graham-Malone, Inc. v. Austwood Enterprises, Inc., et. al, Duval Circuit Court Case No. 16-2009-CA-005750 (Order Granting Plaintiff’s Partial Summary Declaratory Judgment dated April 29, 2011). Here, the Complaint is silent as to the date the alleged damages occurred and, accordingly, the “occurrence” could have fallen within the USIC policy periods. USIC further intended to mislead Lennar by stating that coverage is precluded by the Condominium and Townhome Exclusion endorsement under policy no. ATN-ATL1811453. However, the plain language of the endorsement states: “the exclusion does not apply to new construction and remodel/repair jobs with 4 stories or less.” The units at issue are less than four stories. "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. The only way an insurer can avoid its duty to defend based on an exclusion is by showing that the allegations in the underlying complaint fall solely and entirely within that exclusion. See Lime Tree Vill. Cmty. Club Ass’n, Inc. v. State Farm Gen. Ins. Co., 980 F. 2d 1402, 1405-07 (11th Cir. 1993); see also Northland Cas. Co. v. HBE Corp., 160 F. Supp. 2d 1348, 1359 (M.D. Fla. 2011). “If the allegations of the complaint leave any doubt regarding the duty to defend, the question must be resolved in favor of the insured requiring the insurer to defend.” Baron Oil Co. v. Nationwide Mut. Fire Ins. Co., 470 So. 2d 810, 814 (Fla. 1st DCA 1985); see also Higgins v. State Farm Fire & Cas. Co., 894 So. 2d 5, 10 (Fla. 2004) (approving standard articulated in Baron Oil); Voeller Constr., Inc. v. Southern-Owners Ins. Co., No. 8:13-cv-3169, 2014 U.S. Dist. Lexis 61862 at *4 (M.D. Fla. May 5, 2014). Lennar disputes the application of any policy exclusions to the Lawsuit entirely. However, even if any exclusions did apply to the Lawsuit, the allegations of the Lawsuit do not fall solely and entirely within any exclusions and therefore USIC cannot avoid its duty to defend its insureds. USIC’s failure to defend Lennar has prejudiced and damaged Lennar. Due to USIC’s unreasonable claims handling practices, Lennar 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 Lennar was triggered by the Plaintiffs’ allegations, whether they are proven to be true or not. The attorneys' fees and costs that Lennar has incurred have unjustly burdened Lennar. Additionally, in refusing to defend Lennar, USIC has greatly exposed its named insured Mario’s Painting to a much larger claim for Lennar’s defense costs in this matter pursuant to the contractual indemnification provisions in the subcontract. USIC must exercise its duty of good faith to both Lennar and Mario’s Painting 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 Lennar. To date, Lennar is unaware of USIC’s investigation, if any, of the claims against Lennar, or its efforts, if any, to resolve the claims against Lennar within existing policy limits. Likewise, USIC has never advised Lennar how, or if, it intends to minimize the magnitude of a possible excess judgment against Mario’s Painting or Lennar, nor has USIC apprised Lennar of any claim resolution process. Given USIC’s lack of participation in defense of the Lawsuit and the other facts outlined above, USIC has utterly failed or even attempted to meet the standard for good faith in this matter. Lennar 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 Lennar 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 Lennar, reimbursing Lennar for its reasonable defense costs, and working together with Lennar to resolve this claim.
Comments
User Id Date Added Comment
rca@gartnerbloom.com 07-07-2025 On May 13, 2025, Lennar Homes, LLC (“Lennar”) filed a Civil Remedy Notice, Filing Number 820993 (“CRN”), against United Specialty Insurance Company (“USIC”). With respect to certain commercial general liability policies issued by USIC to Mario’s Painting of South Florida, Inc. (“USIC Policies”). The CRN concerns the lawsuit filed in the Circuit Court of the Twentieth Judicial Circuit in and for Lee County, Florida, Case No.: 24-CA-004724 styled Palmetto Cove Condominium Association, Inc. v. Lennar Homes, LLC et.al. (“Lawsuit”). USIC denies the allegations of the CRN and specifically denies that it, or any of its representatives, violated §624.155(1)(b)(1) and §§626.9541(1)(i)(3)(a)(b) and (d) or committed any wrongdoing in its handling of Lennar’s claim. On or about Wednesday, June 6, 2025, the Lawsuit settled in its entirety without any admission of liability or coverage by the parties (and their non-party insurers) to the Lawsuit, including but not limited to, all claims regarding the availability of insurance coverage under the USIC Policies. Lennar has agreed that no response to the CRN is required while settlement is pending, and it will withdraw the CRN on the condition and at the time that the Settlement Agreement in the Lawsuit is fully executed and the settlement funds have been received and cleared.
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