Florida Law Updates & Analysis

Recent and Relevant Florida Decisions

FAA’s New Drone Pilot Regulations

On August 29, 2016, the Federal Aviation Administration (“FAA”) eased restrictions to operate commercial “unmanned aircraft” – or drones – that weigh less than 55 pounds.  Also, the Drone Advisory Committee (“DAC”) was formed with the goal to collaborate with the aviation community to integrate drone usage in the nation’s airspace. The DAC’s first meeting was held on September 16, 2016 in Washington D.C.

Under the new rules, known as “Part 107,” operators can apply for a waiver to fly drones at night, over populated areas, or beyond line-of-sight. If you do not have a waiver, then the new rules prohibit such activities.

What does Part 107 Require?

Under Part 107, an operator must obtain a remote pilot certificate. After you’re certified, Part 107 permits drone operation within the newly mandated rules.

How can I obtain a Part 107 Remote Pilot Certificate?

An operator must take the Remote Pilot Certificate knowledge test which consist of 60 multiple choice questions. A passing score requires an operator answer at least 42 questions correctly. Also, the operator must be able to read, write, and speak English and be at least 14 years old.

What does the relaxed new rules mean to me?

The FAA’s easing of the rules will lower the barriers for commercial use of drones. In turn, enterprising small businesses can provide drone services to construction companies, individuals (e.g. ariel wedding shoots), and customer entertainment.

It is estimated that the drone market will increase to $3 billion dollars by 2018.

The drone market is a relatively new sector that will see its number of legal hurdles. Today, many questions center around insurance policies to protect local businesses who do not focus on drones, but use them from time to time.  Also, construction companies may want to explore using drones to pass local inspections or document certain conditions. Please follow this blog to read our growing Drone Law series.

Questions or concerns? Contact our office today to discuss creating a business, obtaining the licenses needed (Section 333 v. Part 107?), or to explore options in growing your company while protecting your business’s legal rights. Ben Dowers is a partner with the law firm McIntosh Schwartz, PL located in Fort Lauderdale, Florida. Ben primarily practices construction litigation, maritime law, and commercial litigation. He has represented clients throughout Florida in cases involving non-competes, construction liens, construction defect claims, maritime liens, and yacht transaction disputes. In 2006, He graduated from the U.S. Merchant Marine Academy and sailed as a merchant officer before going to the University of Florida for law school. 

Florida Supreme Court to Decide Whether Florida Statute 558 Notice and Right to Repair Statute is Considered a “Suit”

Recently, the 11th Circuit Court of Appeals certified a question to the Florida Supreme Court to answer whether Fla. Stat. §558’s notice-and-repair procedure is a “suit” as defined in standard commercial general liability insurance policies.

Generally, construction and design related disputes are subject to Fla. Stat. §558.004 which provides a process for owners to place contractors and designers on notice of construction defects and gives the contractors or designers an opportunity to cure the defects. If the contractor or designer fails to correct the defects or there is no resolution, then the owner can file suit.

Fla. Stat. 558’s intention is to have the parties address construction defects before turning to costly litigation. Construction defect litigation can be one of the most expensive types of cases given its requirement for extensive discovery, need for experts (sometimes many experts), attorneys’ fees, costs, and potential to be mired in the court system for years.

The matter began when the Sapphire Condominiums – located on Lauderdale Beach just south of Oakland Boulevard in Fort Lauderdale – provided its §558 notice to the general contractor, Altman Contractors (“Altman”). In turn, Altman requested its insurer, Crum & Forster Specialty Insurance Company (“Crum & Forster”), assume its defense fees and costs associated with the §558 notice. Crum & Forster refused, and asserted the matter was not in “suit” and, therefore, its defense and indemnity obligations were not triggered. As a result, Altman filed suit in the U.S. District Court for the Southern District of Florida and claimed Crum & Forster breached its contractual duties under its insurance policy to defend and indemnify Altman. See Altman Contractors, Inc. v. Crum & Forster Specialty Insurance Company, 13-cv-80831-KAM (USDC 2015). Ultimately, U.S. District Court Judge Kenneth Marra granted summary judgment in favor of Crum & Forster, and interpreted §558 and the insurance contract holding the §558 notice-and-repair procedure did not constitute a “suit,” and, thus, Crum & Forster’s obligations were not triggered.

The court took a definitive approach in construing the plain meaning of §558. In its analysis, the court looked to Hawaii’s equivalent of Florida’s §558 notice-and-repair procedure and noted Hawaii’s statute explicitly stated that the notice-and-repair procedure did not trigger insurance coverage. Specifically, Hawaii’s relevant statute stated: “[t]he notice of claim shall not constitute a claim under any applicable insurance policy and shall not give rise to a duty of any insurer to provide a defense under any applicable insurance policy unless and until the process…is completed” Id. at 7. Also, the district court looked to the dictionary definition of “civil proceeding” and found that 558’s notice-and-repair procedure “has no ‘enforcement’, no adjudication’ and no ‘administration’ of ‘rights, remedies laws or regulations.’” Id. at 13. Being an issue of first impression, the court then looked to other circuits and drew parallels to The Cincinnati Ins. Co. v. Amsco Windows, 593 App’x 802 (10th Cir. 2014) case where the district court found Nevada’s pre-suit procedure was not a “suit” because failure to comply did not result in an “adverse judgment or obligation but rather imposes limited consequences in subsequent litigation.” Id. at 14. In light of its strict interpretation of §558’s language and relying on persuasive authority, the court granted Crum & Forster’s motion for summary judgment.

Altman appealed the decision to the 11th Circuit Court of Appeals. Since the question will affect Florida’s construction litigation, the Circuit Court of Appeals certified the question to the Florida Supreme Court.

Advocates seeking to define the §558 notice-and-repair process as a “suit” rest on the public policy argument that when insurers assume defense and indemnity obligations during the §558 process then it results in fewer delays in repairing defects and lessens the burden of the judiciary. Further, the advocates argue that currently many insurers preemptively get involved in the §558 process and retain attorneys and experts to assist the contractor in coming to a resolution through specific performance or small settlement payments. Also, early attorney involvement can result in global or blanket waivers of liability to prevent future suits. Finally, the advocates argue insurer participation is inevitable and an owner who finds himself in a situation where the §558 process is delaying remediation or results in impasse will simply file suit to trigger insurance coverage.

On the other hand, insurer supporters adopt the district court’s strict interpretation of §558. Moreover, and more importantly, insurers argue that its underwriting did not account for the §558’s process and it was not calculated in the bargain-for-exchange of setting deductibles and premiums. Its argued that permitting the §558 notices to trigger coverage, could result in significantly more claims from owners – who would know insurance money is in play – and exponential fees and costs to participate in the §558 process.

The case is one of first impression, and the Florida Supreme Court will likely hold oral argument and look to other jurisdictions with developed construction opinions for persuasive authority – e.g. California and Nevada.

While predicting the Supreme Court’s ruling may be a fool’s errand, usually there is deference to the strict statutory interpretation and adoption of legislative intent – which leans toward a holding the §558 process will not be defined as a “suit.”

Ben Dowers is a partner with the law firm McIntosh Schwartz, PL located in Fort Lauderdale, Florida. Ben primarily practices construction litigation, maritime law, and commercial litigation. He has represented clients throughout Florida in cases involving non-competes, construction liens, construction defect claims, maritime liens, and yacht transaction disputes. In 2006, He graduated from the U.S. Merchant Marine Academy and sailed as a merchant officer before going to the University of Florida for law school.