GIFFEN ROOFING COMPANY, INC., AND GIFFEN INDUSTRIES OF ORLANDO, INC., APPELLANTS,
v.
DHS DEVELOPERS, INC., AND TUTTLE/WHITE CONSTRUCTORS, INC., ET AL., APPELLEES
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A roofing subcontractor sued its liability insurers for breach of duty to defend after the insurers defended a construction defect lawsuit under a reservation of rights. The court affirmed judgment in favor of the insurers, holding that an insurer may lawfully defend its insured while reserving the right to later challenge coverage if timely notice is given.
An insurer does not breach its duty to defend when it provides a defense to its insured while reserving the right to later challenge coverage, provided that timely notice of the reservation of rights is given to the insured. Giffen's cross-claim failed to allege any breach of duty because it did not allege that the insurers refused to provide a defense, that notice of the reservation was given in an untimely fashion, or that Giffen rejected the proffered defense.
[1] An insurer may provide a defense to its insured under a reservation of rights without breaching its duty to defend, provided timely notice of the reservation is given to…
[2] A cross-claim alleging an insurer's failure to provide a complete defense must allege more than the insurer's defense under a reservation of rights.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“It is well settled that an insurer may provide a defense to its insured while reserving the right to later challenge coverage, if timely notice of such reservation is given to the insured.”
Establishes the core legal principle that an insurer does not breach its duty by defending under reservation of rights, provided notice is timely.
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Join FLexlaw to unlock all legal intelligenceGiffen Roofing Company was a subcontractor on a construction project and was named as a defendant in a suit by the owner against the prime contractor …
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ORFINGER, Chief Judge.
The narrow issue before us on this appeal is whether a liability insurance company breaches its duty to defend its insured when it provides the defense under a reservation of rights. The trial court entered judgment on the pleadings in favor of the insurer and we affirm.
Giffen Roofing Company, Inc. was a subcontractor on a construction project and was joined as a defendant in a suit by the owner against the prime contractor claiming damages because of alleged construction defects. Several insurers were joined who allegedly insured Giffen, including appellees Fidelity and Casualty Company of New York and Continental Insurance Company. A third insurer settled the claim against Giffen and Giffen cross-claims against Fidelity and Continental for attorney’s fees expended because Giffen hired independent counsel. The cross-claim alleged, in pertinent .part:
14. In disregard of the obligations imposed upon them under the terms of the insurance contracts, the insurance companies named herein failed and refused to supply a complete defense of the law suit brought against GIFFEN and have chosen instead to defend under reservations of rights seeking to deny coverage to their insured, GIFFEN.
15. GIFFEN has been damaged by the herein named insurance companies failures and refusals to provide a complete defense against the law suit.
16. The defendant insurance companies breach and failure to provide a complete defense to GIFFEN, as aforementioned, necessitated GIFFEN to employ the services of an attorney to defend said suit, agreed to pay him a reasonable attorneys fee, and to incur Court costs in said suit.
Giffen contends that the insurers were obligated to either: 1) provide it with a “complete” defense (which Giffen says is an “unqualified” defense); or 2) pay the attorney fees for the attorney hired by Giffen.
Giffen’s claim must be reviewed the light of the pleadings which frame the issues. Des Rocher and Watkins Towing Company v. Third National Bank of Miami, 106 Fla. 466, 143 So. 768 (1932). The pleadings here allege that appellees provided a defense under a reservation of rights. There is no allegation that appellees refused to provide a defense, or that notice of the reservation was given in an untimely fashion so as to result in prejudice to the insured. It is well settled that an insurer may provide a defense to its insured while reserving the right to later challenge coverage, if timely notice of such reservation is given to the insured. Centennial Insurance Company v. Tom Gustafson Industries, Inc., 401 So. 2d 1143 (Fla. 4th DCA 1981); Midland Insurance Company v. Watson, 188 So. 2d 403 (Fla.3d DCA 1966).
Neither is there an allegation that Gif fen rejected the proffered defense and set about defending the action with its own counsel. Thus Taylor v. Safeco Insurance Company, 361 So. 2d 743 (Fla. 1st DCA 1978) and Stevens v. Horne, 325 So. 2d 459 (Fla. 4th DCA 1975) relied on by Giffen are inapposite. The cross-claim fails to allege any breach of duty by appellees, and the court was correct in entering a judgment on the pleadings, which judgment is
AFFIRMED.
COWART, J., and WATSON, Associate Judge, concur.
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First Am. Title Ins. Co. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 695 So. 2d 475 (Fla. 3d DCA 1997)…circumstances, an insurer may provide a defense under a reservations of rights. An insurer does not breach its duty to defend an insured when it provides a defense under a reservation of rights. See Giffen Roofing Co., Inc. v. DHS Developers, Inc., 442 So. 2d 396, 396-97 (Fla. 5th DCA 1983). Where, however, an insurer denies a claim and refuses to defend, the insured can take whatever steps are necessary to protect itself from a claim. See Hagen v. Aetna Cas. and Sur. Co., 675 So. 2d 963 (Fla. 5th DCA), revi…
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Vanguard Ins. Co. v. Townsend, 544 So. 2d 1153 (Fla. 5th DCA 1989)…is no breach of the insurance company’s duty to defend6 [*1157] we think the better view is to give full force and effect to the insurer’s reservation of rights agreement or timely notice. See Giffen Roofing Company, Inc. v. D.H.S. Developers, Inc., 442 So. 2d 396 (Fla. 5th DCA 1983); Centennial; Midland National Insurance Co. v. Watson, 188 So. 2d 403 (Fla. 3d DCA 1966); Stevens v. Horne, 325 So. 2d 459 (Fla. 4th DCA 1975); Phoenix Assur. Co. of New York v. Hendry Corporation, 267 So. 2d 92 (Fla. 2d DCA 1972…
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Aguero v. First Am. Ins. Co., 927 So. 2d 894 (Fla. 3d DCA 2005)…ing his right to seek indemnification from the insurer for liability.” Travelers, 344 F. Supp. 2d at 1370. However, the insured must actually reject that defense. Travelers, 344 F. Supp. 2d at 1371 (citing Giffen Roofing Co. v. DHS Developers, Inc., 442 So. 2d 396, 397 (Fla. 5th DCA 1983)). In the instant case, Ryder’s May 20, 1999 letter could be construed as a rejection of First American’s defense under a reservation of rights. If it is determined that Ryder’s letter constituted a rejection of First Americ…
Previewing 3 of 9 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Des Rocher & Watkins Towing Co. v. Third Nat'l Bank of Miami, 106 Fla. 466 (Fla. 1932)
- Taylor v. Safeco Ins. Co., 361 So. 2d 743 (Fla. 1st DCA 1978)
- Stevens v. Horne, 325 So. 2d 459 (Fla. 4th DCA 1975)
- Midland Nat'l Ins. Co. v. Watson, 188 So. 2d 403 (Fla. 3d DCA 1966)
- Centennial Ins. Co. v. TOM Gustafson Indus., Inc., 401 So. 2d 1143 (Fla. 4th DCA 1981)