A new opinion from Florida’s Fourth District Court of Appeal helps clarify this issue and shows that the tolling also applies to Florida’s statute of repose. In section 558.004, Florida Statutes, the legislature mandated that a claimant give pre-suit notice of a construction defect (or damages arising from a construction defect) to the responsible party at least 60 days before filing a civil action (120 days in the case of an association involving more than 20 parcels). If the claimant fails to abide by this pre-suit notice provision, the civil action may be stayed pending compliance with the provision.

The Florida Senate is following a recent national trend of tightening its laws governing construction defect claims. Currently, under FL. Stat. § 558.004, entitled Notice and Opportunity to Repair, a party claiming a construction defect must serve a notice of claim upon the party whom they have contracted with to perform work. To date, the notices of claim only require “reasonable detail sufficient to determine the general nature of each alleged defect and a description of the damage or loss resulting from the defect, if known.”

The contractor then filed suit against its insurer to recover the legal fees and indemnity costs it incurred as a result of the 558 claim. A federal trial judge considered whether a 558 notice triggered a CGL insurer’s defense obligations pursuant to the terms of the policy.2 The court began by recognizing the unique nature of Fla. Stat. §558.004(13), which states that the provision of a 558 notice to an insurer does not constitute a claim for insurance purposes. Consequently, the court held that while an insured’s furnishing of a notice to its insurer does not constitute a claim, the contents of the notice may constitute a claim which triggers an insurer’s defense and indemnity obligations.

ACI was served with a Notice of Claim and Supplemental Notices of Claim by the condominium pursuant to Chapter 558 of the Florida Statutes. Fla. Stat. Ann. § 558.004(13). After receiving the Chapter 558 notice, ACI sent a demand letter to its insurer, Crum & Forster Specialty Insurance Co. ("Crum & Forster"), which had issued a CGL policy covering ACI.

Within 30 days of service of the owner’s notice of claim, the contractor, subcontractor, supplier or design professional to whom the notice is directed is entitled to inspect the property in order to assess each defect. If the contractor, subcontractor, supplier or design professional determines that destructive testing is necessary to determine the nature of the alleged defects and what caused those defects, there are certain other notice rights and obligations associated with that destructive testing, including the right of the owner to object under Florida Statutes Sec. 558.004. Within 45 days after service of the property owner’s notice of claim, the contractor, subcontractor, supplier or design professional served with that notice is required to serve a written response which must provide for one of the following: an offer to remedy the defect, at no cost to the owner, with a detailed description of the necessary repairs and the timetable for completion; an offer to settle the claim by a payment of money; a hybrid, for lack of a better term, offer to settle the claim by a combination of repairs and a monetary payment, with, again a description of the required repairs and the timetable to complete those repairs; a statement that the claim is disputed and that there will be no attempt to remedy the alleged defect or settle the claim; a statement that any monetary payment will be determined by the contractor’s, subcontractor’s, supplier’s or design professional’s insurance company within 30 days after the insurance company is notified of the claim.

The responsible party may: (i) fix the defects at its own cost; or (ii) pay the property owner a sum of money in full settlement of the claim; or (iii) offer a mix of repairs and money; or (iv) turn the claim over to its insurance carrier for payment; or (v) deny liability and do nothing. Florida’s statutory framework makes it possible for the property owner to know within 45 days of first providing the required statutory notice, the position of the responsible party, and the next step that the property owner must take to resolve its problem.Section 558.004, Florida Statutes, has some other important provisions that require particular emphasis. First, in the event that immediate repairs to the property are necessary, the statute does not preclude a property owner from making emergency repairs to protect the health, safety or welfare of the property owner.

In Saltponds, the condo association retained an engineer who identified various alleged construction defects after the developer turned the condominium over to the association. The association served a notice of claim on the contractor, developer and project architect under Florida Statute Section 558.004, and filed suit thereafter. The Third DCA reversed the trial court’s dismissal finding that the surety pled various factual allegations that could support a tolling argument.