The Florida state judge handling litigation over the Champlain Towers South condominium collapse said Tuesday he would order insurers for the victims and condo association to attend mediation on their claims against the builders of a neighboring tower unless the insurers waive potential claims against them.
Eleventh Circuit Court Judge Michael A. Hanzman agreed to the provision for the April 27 and 28 mediation after initially expressing skepticism during a Zoom hearing he called to question the request from defendants 8701 Collins Development LLC, Terra Group LLC, Terra World Investments LLC and John Moriarty & Associates of Florida Inc.
“Have they asserted subrogation claims or is there some reason I’m ordering insurers who have already tendered their policy limits to now be attending a mediation with the remaining defendants in this case?” the judge asked. “What prompted that [proposed] order and why should I enter it?”
Jordi Guso of Berger Singerman LLP, who is representing the receiver, Michael Goldberg of Akerman LLP, told the court that two of the association’s insurers, Great American Insurance Co., which issued the commercial property and liability insurance, and Philadelphia Indemnity, which provided directors and officers coverage, have waived subrogation in writing and that the receiver is in discussions with the other insurers.
But Guso then added that after initially agreeing to the order, the receiver had since decided it would be premature to have the insurers attend the mediation on subrogation, through which they would potentially seek to recover policy benefits they already paid out from parties found to be at fault for the June 24 collapse of the 12-story oceanfront tower in Surfside. The collapse killed 98 people.
“It seems to me to be something that would overcomplicate things,” Judge Hanzman said, adding that if the mediation produces a settlement, he expects he would enter a bar order that would block subrogation claims but would first let the insurers voice objections.
But counsel for the defendants argued that the mediation is likely to be more productive either with assurances from the insurers that they will not seek subrogation or with their participation.
“To have the greatest chances of settlement, we need to have certainty with respect to the resolution and no outstanding claims,” said Michael S. Hooker of Phelps Dunbar LLP, counsel for Moriarty, general contractor on the neighboring Eighty Seven Park project.
Greenberg Traurig LLP’s David Weinstein, who is representing the Eighty Seven Park developers, said he was sure his clients’ insurance carriers want as much certainty as possible in seeking a settlement.
Weinstein also pointed out that a $6 million subrogation action has already been filed by Universal Property & Casualty Insurance Co., which had issued policies to several unit owners.
“So, these claims are real,” Weinstein said.
Rachel Furst, one of two lead attorneys for the plaintiffs, said they did not oppose the order and want to “put the pieces in place to have a productive mediation.”
“We understand that the instant motion is driven by the defendants’ desire to be able to reach a resolution with all interested parties,” she added.
In an amended complaint filed in November, the victims added claims against several entities involved in the construction of the luxury Eighty Seven Park condominium tower, which was completed next door in 2019. The receiver soon followed with similar cross-claims against the Eighty Seven Park parties on behalf of the Champlain Towers South Condominium Association, the class action’s original defendant.
The victims have already settled their claims against the condominium association’s business owner, Becker & Poliakoff PA, and Morabito Consultants Inc., the engineering firm that had inspected the building in 2018 as part of its required 40-year certification process.
Mediation with NV5 Inc., a consultant connected with the Eighty Seven Park construction, resulted in an impasse, the plaintiffs previously reported.
Last week, Judge Hanzman approved an $83 million deal that will allow property loss victims to exit the litigation and avoid possible liability under an obscure state law.