BeWaRe: BWR Consumer Alerts

Taylor Morrison Demands Arbitration Against Itself And Then Denies All Claims

Tampa, FL –  The late Yogi Berra once famously said, “When you see a fork in the road, take it.”  Taylor Morrison Services, Inc. (“Taylor Morrison”) has apparently taken Mr. Berra’s advice and demanded arbitration against itself.  As a bit of background, Ramon Vargas and Solange Matos purchased a home from Taylor Morrison several years ago in Ruskin, FL.  Within the last few years, the stucco on the home has begun to crack, become warped and has progressively gotten so severe that the stucco is at risk of completely falling off the home.  Earlier this year, Joshua Zudar of the firm Burnett Wilson Reeder filed suit on Mr. Vargas’ and Ms. Matos’ behalf in Hillsborough County Circuit Court against Taylor Morrison alleging that the builder violated the Florida Building Code when constructing their home. A circuit court judge ruled that a clause in the plaintiffs’ 10-year structural warranty required arbitration of the matter.  Mr. Vargas and Ms. Matos were in the process of appealing that ruling to the Second District Court of Appeal when Taylor Morrison decided to take matters into its own hands and demand arbitration against itself.  Using the Complaint filed by Mr. Vargas and Ms. Matos in the lawsuit, Taylor Morrison paid the arbitration filing fee and alleged that it had violated the Florida Building Code and breached the underlying sales contract.  Incredibly, a few days later, Taylor Morrison responded to its own demand for arbitration and denied all claims.  All the while, Mr. Vargas and Ms. Matos have watched from the sidelines as Taylor Morrison has sparred with itself. In its answering statement, Taylor Morrison criticized itself for failing to...

Citizens Still Subject to Bad Faith…But Just Barely

In a somewhat confusing opinion, the Florida Supreme Court ruled on May 15, 2015, that Citizens Property Insurance Corporation does not have to act in good faith with respect to settlement negotiations. In Citizens Property Ins. Corp. v. Perdido Sun Condominium Ass’n, Inc., 40 Fla. L. Weekly S265a (Fla. May 14, 2015), the Court held that deliberately failing to act in good faith to settle claims is not a “willful tort” and therefore does not place it on the list of statutory exceptions to the immunity given by Fla. Stat. § 627.351 (6)(s).1 This means that, in effect, Citizens can refuse to negotiate or settle a case, no matter how desperately the policyholder is deserving of a resolution, and there is no legal consequence to Citizens’ actions (other than an ordinary lawsuit, of course). Every other insurance company in the state of Florida is subject to what is known as “Bad Faith” if the insurance company refuses to negotiate reasonably. A company found to be acting in bad faith is subject to damages irrespective of, and potentially in excess of, the policy limits. This serves as a deterrent to misbehavior by insurance companies. Citizens, however, was given a pass by the Florida Supreme Court. In its opinion, the Florida Supreme Court stated, “[T]he Legislature chose to immunize Citizens for ‘any action taken by [it] in the performance of [its] duties or responsibilities under…subsection [627.351(6)(s)],’ which necessarily includes a breach of the duty of good faith.” The Court was not persuaded that failing to act in good faith is a “willful tort” at least in the full context of the statute. An Exception The Court did...

HB 501 Set NOT to Pass This Year

Although the current legislative session is not officially over, the Florida House of Representatives went home early over a Medicaid dispute. This means that unless the legislative session is extended or a special session is called, HB 501 will die in the House this year. You may recall that HB 501 was a bill aimed at shortening the statute of repose on construction defect cases from 10 to 7 years. Thus, in cases where there are hidden, or latent, defects, the outside date for filing a claim will remain at 10 years. While we may be safe in 2015, do not be surprised to see this bill come back next year. Make sure to keep checking back here as we will update you on the status of any similar bills proposed in the future....

Construction Defect Time Limit for Bringing Claims at Risk of Being Shortened

A very troubling bill moved one step closer to reality on February 17, 2015, when HB 501 passed a subcommittee vote by a margin of 7-6. HB 501 proposes, among other things, to shorten the time period to bring claims for latent construction defects from the current time limit of 10 years to a mere 7 years. This should be very alarming for homeowners throughout Florida as it demonstrates efforts to further nullify the ability of homeowners to seek compensation for wrongs done to them that simply do not manifest themselves for greater than seven years. The very nature of home building makes this time limit unreasonable. It can take years for water to fully infiltrate cracks, rust the lath, and then cause stucco to begin the delamination process. When this is coupled with the lack of expertise of most homeowners to recognize a serious problem, the time frame of 7 years is woefully insufficient. In 2006, the Florida Legislature did the very same thing when it reduced the time limit from 15 years to 10 years. We at BWR are receiving numerous calls from those who have homes dating back to 2003 who are just now starting to see major water leakage problems. Unfortunately, there is little that we can do for them. Now, the Legislature is considering moving even further away from the interest of homeowners and taking Florida into the minority of states with respect to its statute of repose (for those non-lawyers, a statute of repose is the ultimate last date that a person can bring a claim for a latent construction defect). There are now approximately 32 states with...

Stucco Issues In Florida Are a Major Concern

The building boom of the early to mid-2000s brought several builders a lot of profit; however, it brought new homeowners a lot of headaches. Houses were built hastily and builders took shortcuts in order to save money. When things settled down and home building went back to a more reasonable pace, builders’ bad habits did not necessarily change. One of the most pervasive problems that homeowners have faced in recent years, or are now beginning to realize, is the insufficient application of stucco to their homes. Stucco issues become noticeable at different rates so while some homeowners have already dealt with the issue (or attempted to deal with the issue), others are now just beginning to see the effects of the stucco problem. Due to the way that stucco is applied, improperly applied stucco will usually start showing itself around window frames of the second floor of two-story homes. Many single-story homes are provided some protection because in Florida, such homes are made of concrete block. Still, gables on one-story homes can certainly show evidence of defective stucco. Two-story homes, however, are where the vast majority of problems are seen in Florida. That is because two-story homes, especially in the mid to northern part of the state, are concrete block on the first floor, but wood-frame on the second floor. Wire lath is then applied to the wood frame and then stucco to the wire lath. Stucco begins to fail when water starts seeping into even the most minor of cracks. Over time, this water intrusion will cause the wire lath to rust. When that lath rusts, the stucco will begin...

2nd DCA Issues FIGA Opinion

The Second District Court of Appeal issued an opinion on February 6, 2015, that affects homeowners involved in disputes with FIGA (Florida Insurance Guaranty Association). The opinion, FIGA v. Waters, 2D13-4455 (Fla. 2d DCA February 6, 2015), is nonfinal until the time expires to file for rehearing, but considering that it is consistent with prior opinions, it is unlikely to be overturned short of an appeal to the Florida Supreme Court. The Second DCA essentially reiterated that the date of insolvency governs the version of the FIGA statute applied. As the events in this case involved a Homewise Insurance Company insolvency, the 2011 definition of “covered claim” was determined by the Court to be applicable. This is significant because the 2011 definition of “covered claim” prohibits “FIGA from paying an insured directly for a sinkhole loss.” Consequently, the appraisal portion of the policy was held to be inapplicable as it was at odds with the prohibition against paying homeowners directly. Regardless of your belief about this statute, the courts in the 1st and 2nd DCAs appear unwilling to allow a homeowner in a FIGA sinkhole case to recover money directly. So, what happens if a jury returns a verdict greater than the limits of FIGA’s statutory liability? Is the homeowner stuck doing a partial repair – one which could potentially put the home in an even worse position? There are definitely some philosophical issues with the 2011 FIGA statute as it relates to sinkholes. We shall have to wait and see how this all plays out. The second portion of the opinion has a greater reach than just sinkhole...