August 19th, 2015


Recently, Florida’s Second District Court of Appeal in Florida Farm Bureau Gen. Ins. Co. v. Peacock’s Excavating Serv., Inc., 2015 WL 4497721 (Fla. 2d DCA 2015) addressed the issue of what constitutes a final appealable order under Rule 9.110(k), Florida Rules of Appellate Procedure.  There, the insurer, Florida Farm Bureau Insurance Company (“Florida Farm Bureau”), and insured, Peacock’s Excavating Service, Inc., (“Peacock”), both filed competing declaratory actions that requested a determination of Florida Farm Bureau’s duty to defend and indemnify Peacock under several commercial general liability policies (“CGL” policy(ies)). The dispute centered on what triggered coverage under the CGL policy. Florida Farm Bureau contended that the manifestation of the injury triggered coverage whereas Peacock argued that the injury itself triggered coverage under the CGL policies. The trial court ultimately entered a partial final judgment that declared Florida Farm Bureau had a duty to defend Peacock under certain CGL policies. The partial final judgment did not address Florida Farm Bureau’s duty to indemnify Peacock under the CGL policies. Nevertheless, Florida Farm Bureau filed an appeal of the partial final judgment.



On appeal, the Second District dismissed the appeal for lack of jurisdiction. Because Florida Farm Bureau appealed from a partial final judgment, the appellate court’s jurisdiction hinged on whether Florida Farm Bureau could appeal the partial final judgment under Rule 9.110(k), Florida Rules of Appellate Procedure. Rule 9.110(k) provides:


Except as otherwise provided herein, partial final judgments are reviewable either on appeal from the partial final judgment or on appeal from the final judgment in the entire case. A partial final judgment, other than one that disposes of an entire case as to any party, is one that disposes of a separate and distinct cause of action that is not interdependent with other pleaded claims. If a partial final judgment totally disposes of an entire case as to any party, it must be appealed within 30 days of rendition.



Fla. R. App. P. 9.110(k). The court started its analysis by providing the framework with which litigants can use to determine whether a partial final judgment possesses the requisite finality to constitute an appeal order. Specifically, the court stated that the following three factors guide its jurisdiction analysis:


  1. Whether the claim disposed of by the partial final judgment could be maintained independently of the remaining claims;


  1. Whether one or more parties were removed from the action when the partial final judgment was entered; and


  1. Whether the claims could be separately disposed of based on the same or different facts.


With this framework in mind, the court proceeded to analyze each factor. As to the first factor, the court concluded that Florida Farm Bureau’s duty to defend was not a separate and independent cause of action from its duty to indemnify. In support of this reasoning, the court noted that the very function of a count for declaratory relief “is to afford an opportunity to obtain a final resolution of all aspects of a controversy between litigants in a single action.” Id. at *2. To bolster this conclusion, the court pointed to how both Florida Farm Bureau and Peacock file a single count of declaratory relief that encompassed Florida Farm Bureau’s duty to defend and indemnify. Accordingly, the court concluded the first factor did not weigh in favor of accepting jurisdiction.


The court easily determined the second factor did not weigh in favor of accepting jurisdiction because the partial final judgment did not “effectively remove[]” any party from the underlying trial court litigation. Finally, with regard to the third factor, the court concluded that facts necessary to Florida Farm Bureau’s duty to defend and duty to indemnify overlapped. As such, the duty to defend and duty to indemnify, while being separate legal duties, were not amenable to separate dissolution.


Accordingly, the court concluded the partial final judgment failed to meet the threshold indicators of finality and dismissed the appeal for lack of jurisdiction.


Peacock is significant for several of reasons. First, it clarified the law within the Second District Court of Appeal. Prior to Peacock, a split existed within the Second District. Some cases had held that a partial final judgment as to an insurer’s duty to defend was a final appealable order. Accord Transcontinental Ins. Co. v. Jim Black & Associates, Inc., 888 So. 2d 671 (Fla. 2d DCA 2004); Aetna Commercial Ins. Co. v. American Sign Co., 687 So. 2d 834 (Fla. 2d DCA 1996). Peacockclarified the applicability of Transcontinental and American Sign to scenarios where a partial judgment exists only as to an insurer’s duty to defend. Second, it removed the conflict that previously existed with the Fourth District Court of Appeal, which in Nationwide Mut. Ins. Co. v. Harrick, 763 So. 2d 1133 (Fla. 4th DCA 1999), held a partial final judgment that determines only an insurer’s duty to defend is not an appealable order. Id. at 1134. Finally, the Court noted that a partial final judgment addressing only an insurer’s duty to defend is neither reviewable under Rule 9.1130, Florida Rules of Appellate Procedure, nor by certiorari review.

August 18th, 2015


In Cypress Point Condominium Ass’n v. Adria Towers, L.L.C., et al. —A. 3d —, 2015 WL 4111890 (N.J. App. Div. July 9, 2005), the court held that defective construction which resulted in unintended and unexpected consequential damages caused by the work of subcontractors constituted both property and an occurrence under a post 1986 CGL Form.  In so holding, the court recognized that the New Jersey court system had historically held such risks were “business risks” and not covered.   More specifically, the Cypress Point Court distinguished two decisions: Weedo v. Stone-E-Brick, Inc.405 A.2d 788 (N.J. 1979) and Firemen’s Ins. Co. of Newark v. Natl. Union Fire Ins. Co., 904 A.2d 754 (N.J. Super. App. Div. 2006). In distinguishing Weedo and Firemen’s Ins. Co., the Cypress Point court noted that both of those opinions, and many others in New Jersey involved interpretation of the 1973 ISO Form.


In evaluating the prior decision of the New Jersey Supreme Court Weedo, the court made two specific notations. First, the court noted that under the 1973 Form, the work of subcontractors was equated to the work of the general contractor for the purpose of determining whether there was property damage and coverage.  However, the court noted the changes to the subject policy in 1986, by including the subcontractor exception, “treated consequential damages from faulty workmanship of subcontractors differently than damages cause by the work of general contractors.”  The court also specifically noted that the Weedo court had not resolved whether consequential damages resulting from subcontractors’ faulty work constituted either “property damage” or “occurrence.” Rather, theWeedo court focused only on issues related to the exclusions in the policy.  The court specifically noted, that the insurer had conceded that “but for the exclusions in the policy, coverage would obtain.”  Second, the Cypress Point Court rejected insurers’ argument that the insured’s requested at holding in the case would transform the policy into a performance bond, noting, “A performance bond guarantees the completion of a construction contractor if a contractor defaults and unlike an insurance policy, it benefits the project owner rather than the contractor.  Assuredly, unlike a liability insurer, it is also entitled to indemnification from the contractor.”


The court went on to note the intentional changes made by the Insurance Services Organization culminating in the 1986 ISO Form and the addition of the so-called subcontractor exception. The court noted that in recent years the majority rule had become that consequential damages caused by construction defects were covered citing Christopher C. French, Construction Defects: Are They “Occurrences”?, 47 Gonz. L. Rev. 1, 8–9 (2011).  Further the Court cited to the Florida Supreme Court decision in  U.S. Fire Ins. Co. v. J.S.U.B., Inc., which decision explicitly referenced circulars issued by the ISO setting forth the intended scope of coverage.  See J.S.U.B., 9379 So. 2d 871, 879 (Fla. 2007) (quoting ISO Circular, Commercial General Liability Program Instructions Pamphlet, No. GL–86–204 (July 15, 1986). Finally, the court distinguished prior decisions purporting to interrupt New Jersey law as holding that defect construction was not an occurrence cited Pennsylvania Nat’l Mut.Cas. Ins. Co. v. Parkshore Dev.Corp., 403 Fed. Appx. 770 (3d Cir. 2010).


The decision in Cypress Point is particularly important because of where it was decided.  The New Jersey Supreme Court’s decision in Weedo, was the seminal cases deciding that defective construction claims were not covered.  While these decisions were eminently correct under the 1973 ISO CGL Form, the broad business risk concepts recognized in Weedo were dependent on the then existing policy language.  The Weedocourt also cited influential articles by  G.H. Tinker,Comprehensive General Liability Insurance Prospective and Overview, 23 Fed’n Ins. Coun. Q. 217, 218-21 (1975), and Dean Henderson, Insurance Protection for Products Liability and Completed Operations What Every Lawyer Should Know, 50 Neb. L. Rev. 415, 418 (1971).  The Combination of the Weedodecision and these articles “informed” and impacted the interpretation of CGL policies for many years beyond their intended scope.  The Weedo decision and these articles all correctly informed how the 1973 ISO CGL Policy Form was intended to be interpreted.  However, when the policy changed, first by broad form property damage endorsements in the late 1970s, and later by incorporation of the broad form property damage concepts into the main line 1986 ISO CGL Form, the court systems across the country were somewhat slow to recognize the intended changes to the CGL.  That New Jersey has finally done so, shows that the “occurrence” revolution is almost complete.  As of the dictation of this posting, virtually all jurisdictions have considered the questions recognize, either by court decision, or statutory change, the defective construction can constitute an occurrence.







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