Allied Asks Court to Bar Coverage for Florida Law Firm in Condo Collapse

The insurer for a South Florida law firm that represented the collapsed Surfside condominium – lawyers known for fighting off attempts to reform condo safety laws – has asked a judge to absolve the carrier of coverage responsibility for the law firm.

Allied World Surplus Lines Insurance Co., an Arkansas-based company owned by Fairfax Financial Holdings, in 2020 issued a $10 million lawyers’ professional liability insurance policy to the Becker & Poliakoff law firm. The law firm, based in Fort Lauderdale, represented Champlain Towers South and many other condominiums and their associations across the state, the federal lawsuit explains.

After the Champlain towers collapsed in June, killing 98 people, the towers and its association filed suits against Becker, charging that the lawyers were grossly negligent for failing to warn the condo owners about imminent problems, about inadequate repair reserve funds, and for ignoring engineering reports about the troubled building.

Now, Allied argues that Becker’s policy excludes coverage for legal defense costs if the law firm’s actions resulted in bodily injury or destruction of property.

“Allied World is entitled to a declaratory judgment in its favor, stating that Allied World has no liability under the policy issued to Becker for any damages or claim expenses of any kind arising out of or related to the underlying action or cross-claim because the allegations fall within the scope of the policy’s bodily injury/property destruction exclusion,” reads the lawsuit, filed Tuesday in the U.S. District Court for the Southern District of Florida.

The action was filed for Allied by Heidi Raschke of the Carlton Fields law firm in Tampa.

Becker, which also represents insureds and insurers in coverage disputes, has yet to respond to the action, and could not be reached for comment Thursday. It has previously denied liability, according to news reports.

Allied said in its complaint that it had informed the law firm last November that the exclusion applied. Despite that, Allied agreed to provide legal defense coverage, but said it would seek repayment from Becker if a court later decides that the exclusion does, in fact, bar coverage. In December, the Becker firm rejected that plan.

South Florida news reports have said that Becker for decades has lobbied against legislative reform efforts that could have required condominium associations to keep more money in repair funds and would have made it harder for condo unit owners to veto repairs.

“A lot of stuff I tried to propose, the No. 1 group that would fight me was Becker & Poliakoff,” former state Rep. Julio Robaina, R-Miami, told the Sun Sentinel newspaper last fall. “That was my nemesis.”

Becker’s co-founder, Alan Becker, served in the state Legislature in the 1970s and helped draft the condo-maintenance rules that have proven difficult to reform, according to news reports.

The firm has declined to respond to most questions from the newspaper about its lobbying efforts.

“To say our community association practice is against safety is a gross misrepresentation,” the firm’s chief marketing officer told the Sun-Sentinel.

Topics Florida