Civil Remedy Notice of Insurer Violations
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Filing Number:     821003
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*   LAWSON INDUSTRIES, INC.   First Name  
Policy # * ATN-ATL1710795 (17-18); LIG0035000 (18-19); LIG003 Claim #* USGL 3293
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):* ALIGN CLAIMS SERVICES
Type of Insurance * Commercial Property & Casualty   
Reason for Notice *
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.
626.9541(1)(i)(3)(g) Failing to promptly notify the insured of any additional information necessary for the processing of a claim.
* Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

Lawson Industries, Inc. (“Lawson”) purchased at least three commercial general liability (“CGL”) insurance policies from United Specialty Insurance Company (“USIC”) providing products-completed operations coverage for liability because of property damage resulting from Lawson’s work, specifically policy numbers ATN-ATL1710795 (17-18); LIG0035000 (18-19); and LIG0035001 (19-20) (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, Lawson, they also provide coverage to Lennar Homes, LLC (“Lennar”) as an additional insured. The Policies contains the following endorsement, in same or substantially 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… SCHEDULE Name of Additional Insured Person(s) Or Organization(s) As required by written contract. The Policies contain another similar endorsement extending this coverage to Lawson’s completed operations. The subcontract between Lennar and Lawson required that Lawson name Lennar as an additional insured on its CGL 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 United Specialty Insurance Company ("USIC") has failed to address Lennar Homes, LLC’s (“Lennar”) tenders of defense in good faith. The USIC policies of insurance implicated are policy numbers ATN-ATL1710795 (17-18); LIG0035000 (18-19) and LIG0035001 (19-20) (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 roofing work performed by Lennar’s subcontractor, Lawson Industries, Inc. (“Lawson”). During original construction, Lawson 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 and Lennar has been forced to defend itself at its own expense, contrary to the coverage afforded within the Policies. Included in the subcontract between Lennar and Lawson was a requirement that Lawson would secure commercial general liability insurance and name Lennar as an Additional Insured. Lawson 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 Lawson’s work. This coverage extends to both the named insured, Lawson, and the additional insured, Lennar. As described supra, the Policies extend coverage to additional insureds where required by contract. Because the written subcontract between Lawson and Lennar required Lawson 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 several occasions, including February 27, 2024 and April 24, 2024. Lennar provided additional documents on October 18, 2024. Lennar, through counsel, sought a coverage decision from USIC on November 11, 2024, March 3, 2025, and May 7, 2025. Nonetheless, USIC has failed to respond to Lennar’s tenders of defense. USIC’s refusal to provide a defense to Lennar is 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. 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 Plaintiff’s 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 Lawson 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 Lawson 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 Lawson or Lennar, nor has USIC apprised Lennar of any claim resolution process. Instead, USIC appears to be employing a misguided strategy of simply ignoring Lennar’s tenders in an effort to avoid paying the defense costs to which Lennar is entitled. 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, including without limitation participating in the mediation scheduled for May 15, 2025.
Comments
User Id Date Added Comment
Chris.Cole@phelps.com 07-03-2025 Phelps Dunbar LLP 100 South Ashley Drive Suite 2000 Tampa, FL 33602 Phone 813 472 7550 Fax 813 472 7570 Bret M. Feldman Partner bret.feldman@phelps.com Direct 813 472 7879 July 3, 2025 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: Lawson Industries Complainant: Lennar Homes, LLC Policy Nos.: ATN-ATL1710795 DFS File No.: 821003 Accepted by DFS: May 13, 2025 To Whom It May Concern: We write on behalf of United Specialty Insurance Company (“USIC”), which provided commercial general liability coverage to Lawson Industries, Inc (“Lawson”) under Policy No. ATN-ATL1710795 for the policy period of November 16, 2017 to November 16, 2018 (“the Policy”). The Policy provides commercial general liability coverage to Lawson subject to the Policy’s 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 821003 (“the Notice”) that attorney Lauren Kerr, Esq. filed with the Department of Financial Services (“the Department”) on behalf of Lennar Homes, LLC (the “Complainant”) regarding its tender for defense and indemnity as an additional insured under the Policy for the lawsuit filed by the Palmetto Cover Condominium Association (the “Association”) against the Complainant styled, Palmetto Cove Condominium Association v. Lennar Homes, LLC, Case No. 2024-004724, pending in the Circuit Court of Lee County, Florida (the “Lawsuit”). The Lawsuit concerns alleged construction defects and damages at the Palmetto Cove Condominium residential development (the “Project”). The Notice was electronically filed with and accepted by the Department on May 13, 2025. As a preliminary matter, USIC administers its policies with different third-party administrators. In the Notice, the Complainant references three different policies; however, this response only pertains to the USIC Policy referenced above, which was administered by National Claim Services, LLC. 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)(c), 626.9541(1)(i)(3)(f), and 626.9541(1)(i)(3)(g) 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 Lawson who allegedly performed work on the Project pursuant to a subcontract with the Complainant. The Notice alleges that per the terms of said subcontract, the Lawsuit’s allegations, and the Policy, the Complainant allegedly qualifies as an additional insured under the Policy. 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. Specifically, the Notice alleges that USIC’s refusal to provide a defense to the Complainant is knowingly wrongful because the Lawsuit, as pled, implicates coverage under the Policy and does not implicate any exclusions. Pursuant to the policy USIC issued to Lawson, its named insured, additional insured status is only afforded where a written contract requires such coverage. Here, the Complainant has failed to provide USIC a copy of a written agreement between the Complainant and Lawson requiring additional insured coverage. Therefore, the Complainant has not sufficiently documented a contractual obligation to afford additional insured status. Accordingly, USIC did not violate any of its duties under the Policy and did not act in bad faith when handling the Complainant’s claim. In any event, since the time that the Claimant filed the Notice, USIC and the Claimant have mutually resolved this matter. Accordingly, pursuant to section 624.155(3)(d), Florida Statutes, USIC reports to the Department on the disposition of the alleged violations with this response, noting the mutual resolution of the matter. If the Department has any questions or requires any additional information, please contact us. Otherwise, this matter is mutually resolved. Regards, Bret M. Feldman BMF/CDC cc: Via E-mail Lauren D. Kerr, Esq. COGBURN LAW FIRM, P.A. 777 S Harbour Island Blvd, Ste 245 Tampa, FL
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