Taylor Morrison, a leading Florida homebuilder, is taking National Builders Insurance to federal court, alleging the insurer failed to defend it in dozens of construction defect lawsuits.
In a complaint filed Oct. 1 in the United States District Court for the Middle District of Florida, Taylor Morrison of Florida, Inc. accuses National Builders Insurance Company – formerly Vinings Insurance Company – of breaching its duty to defend the builder as an Additional Insured under liability insurance policies. The dispute centers on whether the insurer must provide a defense for Taylor Morrison in lawsuits brought by homeowners who claim their homes suffered property damage due to work performed by subcontractor Construction Coatings Group, Inc. (CCG).
The complaint describes Taylor Morrison as the general contractor for various residential developments across central Florida. On or about November 14, 2013, Taylor Morrison entered into a subcontract with CCG, requiring CCG to obtain liability insurance naming Taylor Morrison as an Additional Insured for liability arising from CCG’s work, including property damage within the “products-completed operations hazard.”
According to the complaint, CCG completed stucco installation work on homes between 2013 and 2016. National Builders Insurance issued liability insurance policies to CCG, which, according to Taylor Morrison, provided coverage for ongoing and completed operations related to property damage resulting from CCG’s work.
The policies, as quoted in the complaint, state: “We will pay those sums that the insured becomes legally obligated to pay as damages because of . . . ‘property damage’ to which this insurance applies. We will have the right and duty to defend the insured against any ‘suit’ seeking those damages ...” The policies define “property damage” as physical injury to tangible property, including loss of use, or loss of use of tangible property that is not physically injured. Coverage is afforded if the property damage is caused by an “occurrence,” defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.”
The complaint alleges that, beginning on or about March 7, 2023, homeowners in the projects began filing lawsuits against Taylor Morrison. As of the filing, Taylor Morrison was actively defending 45 such lawsuits. The lawsuits allege negligence against Taylor Morrison regarding the work performed by its stucco subcontractor, with complaints asserting that defective stucco installation resulted in property damage for which the homeowners seek damages. The lawsuits also assert a theory of vicarious liability for the work performed by the subcontractor.
Taylor Morrison claims it has repeatedly tendered these lawsuits to National Builders Insurance, demanding a defense and indemnity as an additional insured. However, the complaint alleges that National Builders either refused to provide a defense or failed to respond, resulting in Taylor Morrison incurring its own defense costs.
The complaint seeks a declaration from the court that National Builders’ duty to defend was triggered by the lawsuits, that National Builders is liable for all defense costs incurred, and that it must reimburse Taylor Morrison for attorneys’ fees and litigation expenses. Taylor Morrison also requests a declaration that National Builders has forfeited any right to control the defense due to its failure to respond.
These remain allegations, with no decision yet rendered by the court.
