My last report referenced “greed” as the primary ingredient disintegrating Florida’s delicate property market. Specifically: a quest for billable hours and devious and deceptive solicitations. There was also a little politics as usual. The latter manifested in a House of Representatives that not only failed to implement needed reforms but, was never given the chance to debate them.
I took issue with the excuse that more time was needed to see if past reforms were working. It’s a bogus argument constructed on the assumption that past reforms were both fully implemented and being followed, neither of which is true.
Prime example: a major section of SB-76 pertaining to roofing solicitations is under an injunction and thus, “…roofers continue mining neighborhoods for claims–hundreds, perhaps thousands, per week.” (See Facebook post). SB-1728 would’ve repaired that.
Another prime example: as reported by Politico and according to OIR data, some lawyers aren’t even bothering to file pre-suit notices required in last year’s SB-76.
“One of those is Anthony Lopez, a South Florida trial attorney who married “Real Housewives of Miami” star Nicole Martin. Since the pre-suit notification law took effect, Lopez has filed more than 2,000 lawsuits against insurance companies without filing pre-suit notice, according to Office of Insurance Regulation data. … Along with being on “Real Housewives of Miami,” Lopez’s Instagram account is full of pictures of a private jet branded “your Insurance Attorney.” Politico (See NOTE#1 below)
This numerically dovetailed with data showing another lawyer who did file Notices of Intent to Litigate (NOIL’s)–2,000 of them in just 3 months. For reference, that’s about 300% more than the average number of suits filed in America’s 49 other states…for an entire year!
This is all consistent with CaseGlide data showing property litigation is booming again—up 37% in the month of January, 40% for some of the top writers. (See NOTE #2 below)
Obviously taking “more time” only means more losses for insurers and more misery for consumers–especially Southeast Florida residents paying the highest homeowners premiums in the world.
In reality needing “more time” was never a reason to delay implementing needed reforms, it was the excuse to make sure they didn’t pass.
For more evidence things are getting worse there’s the recent Broward County Circuit Court class action–a trial lawyer alleges that Citizens failed to pay attorney fees in thousands of claims in which pre-suit notices were filed but litigation was not initiated. (See Class Action Complaint)
I’m not a lawyer so it’s a legal interpretation I’m not qualified to make but, the irony is inescapable. Pre-suit notices were designed to allow carriers whose notice of a loss was a lawsuit, 10-days to inspect and pay without owing plaintiff fees.
In its Motion to Dismiss Citizens makes the argument that attorney fees are only payable when there is actual litigation; stating in its response.. “The proposed class representative had not filed suit when Citizens offered a settlement to her…Citizens offered a settlement, not only outside of a court of law, but entirely outside of litigation ever being commenced.”
Citizens says other statutes also make it clear litigation is required for attorney fees to be paid only when there is a “judgment…Simply stated, a plaintiff cannot obtain a judgment without first filing (and prevailing in) a lawsuit.” The new one-way attorney fee statute implemented by SB-76 actually begins with the words “In a suit…” How else can the attorney fee’s be awarded if an outcome (of a suit) has not been reached? (See NOTE #3 below)
Ramifications are huge. Citizens might have to pay plaintiff fees for thousands of pre-suit notices rendered since the effective date of SB-76, July 1, 2021. Same for private insurers who, believe it or not, may have already been paying the fee’s during the 10-day pre-suit notice period. They did so, in my opinion, either to promote a settlement and/or to avoid a shock payment later–like the one Citizens faces if it loses this class action. I doubt it will lose, however. It’s just a feeling I have after reading both the Class Action Complaint and Citizens Motion to Dismiss.
Feelings aside, if attorney fees are due for work on pre-suit notices, the benefits of pre-suit notices are substantially reduced, in my opinion.
It’s also another example of why the argument of “needing more time” falls flat. The previous reforms aren’t being followed. They aren’t working. More needs to be done.
NOTE #1: The 2021 reform bill (SB 76) included a provision (within 627.70152, F.S.) requiring policyholders to provide 10-days’ notice to insurers prior to initiating litigation. It was intended to reduce insurance litigation costs by giving insurers time to reinspect damaged property without the expense of a suit. The provision also included a new attorney fee schedule similar to the one enacted in the 2019 AOB reforms—a graded fee scale based on the difference between the award and the pre-suit settlement offer.
NOTE #2: Wesley Todd, CEO of CaseGlide reports suits jumped 37% in January for Florida’s largest carriers–amounting to nearly 4,600 total in 30 days. Again, that’s 1 month yielding six times the national average for an entire year. Also, Miami-Dade had the largest AOB increase again in January, at 23% of new litigated cases; Broward followed at 17%; and Palm Beach County was at 6%–after the reforms were effective, July 1. All but one of the top 17 largest insurers showed an increase in litigation in January, according CaseGlide data. More alarming though, is that five insurers experienced more than a 40% month-over-month increase.
NOTE #3: The provision in question begins on line 1077 of SB-76, as follows…I’ve highlighted in red where both sections require a suit..
(1) APPLICATION.—This section applies exclusively to all suits not brought by an assignee arising under a residential or commercial property insurance policy, including a residential or commercial property insurance policy issued by an eligible surplus lines insurer.
(8) ATTORNEY FEES.—
(a) In a suit arising under a residential or commercial property insurance policy not brought by an assignee, the amount of reasonable attorney fees and costs under s. 626.9373(1) or s. 627.428(1) shall be calculated and awarded as follows:
- If the difference between the amount obtained by the claimant and the presuit settlement offer, excluding reasonable attorney fees and costs, is less than 20 percent of the disputed amount, each party pays its own attorney fees and costs and a claimant may not be awarded attorney fees under s. 626.9373(1) or s. 627.428(1).
- If the difference between the amount obtained by the claimant and the presuit settlement offer, excluding reasonable attorney fees and costs, is at least 20 percent but less than 50 1207 percent of the disputed amount, the insurer pays the claimant’s attorney fees and costs under s. 626.9373(1) or s. 627.428(1) equal to the percentage of the disputed amount obtained times the total attorney fees and costs.
- If the difference between the amount obtained by the claimant and the presuit settlement offer, excluding reasonable attorney fees and costs, is at least 50 percent of the disputed amount, the insurer pays the claimant’s full attorney fees and costs under s. 626.9373(1) or s. 627.428(1).
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