AOB…The Blame Game II

This is the report I promised in my last report. My last report was about roofers and homeowners playing the Assignment of Benefits (AOB) “blame game”. Like that report, this one, including the end notes, is replete with information that may take some time to digest. Lots of links to documents, video’s and so forth. I apologize for that but, it’s necessary, I believe, to show my sources (when I can) and to provide a foundation for the conclusions and opinions herein.

Maybe you saw my interview on WKMG Channel 6 Orlando with videos of bad roofers doing exactly what I implied in my last report–creating fake hail damage. Channel 6’s report also confirmed that hail “claims” have tripled, despite data from NOAA showing the number of hail storms has not increased.

Again, all enabled and incentivized by AOB!

This report is about attorneys and water extractors who may play the blame game even better than roofers.   They appear to work together, attorneys sometimes coaching, then turning a blind eye to the practices of water extractors, auto glass facilities and roofing scammers–all as a means to filing suits they can “blame” on insurers.

At the House Insurance Sub-committee workshop during the regular session, trial lawyer spokesman, Lee Jacobson, argued in support of AOB, in part, by pointing to the need to protect the elderly. But, right before I was called to speak, you can hear him on the video conclude with a little humor. Don’t tread on my AOB”, he said.

Nobody laughed.

Public records revealed Mr. Jacobson to be a leader in filing AOB lawsuits. Look at the Department of Financial Services (DFS) 99 page report  showing he personally filed 1,383 AOB lawsuits in just the last two years. He wasn’t defending elderly consumers. Almost always he was helping a for profit entity make more profit. Usually an auto glass repair facility.

And, the blame? Well, it’s certainly not his fault if the bad apples of the windshield industry stake out car washes and auto shops for stone chips and minor damage they can fix… “FOR FREE–while you wait”. Courtesy of AOB.

It’s not Mr. Jacobson’s fault if a client trolls poorer neighborhoods for damaged windshields, sometimes attempting to incentivize the creation of stone chips with cash bonuses starting around $100. Courtesy of AOB.

Just like the roofing posers in the channel 6 video who “twisted” dimes into shingles to simulate hail damage, I’m told by fraud investigators there’s a small hand held device used to create inconspicuous damage in the corner of a windshield. Holes so small the vehicle owner doesn’t notice until pointed out and accompanied with gibberish like “…how easily this small chip could suddenly shatter your entire windshield–when it’s hot–when you hit a pot hole–when you go over rail road tracks, speed bumps or a partridge in a pear tree.”

No wonder there are over 50,000 AOB lawsuits every year! It’s the same lawyers and vendors side-by-side on a litigation assembly line. (See NOTE #1 below)

So much for auto glass.

Remember my report on Noland Roofing, Inc in Clermont and Ed Nolands’ editorial blaming insurers that don’t pay their bills? It featured an end note showing Noland had some issues paying bills too, including lawsuits, bankruptcies, judgments and more; even an arrest. (See NOTE #2 below).

Well, guess who has represented Noland Roofing in 40 separate AOB lawsuits over just the last two years. Would you believe it’s Lee Jacobson? You can see that DFS report here.

To get an indication of other attorneys involved in AOB “property” lawsuits, take a look at the top ten firms with pending lawsuits against Citizens. It’s those you’d expect, including the one actually coaching water extractors on the “insider secrets” of AOB.

Cohen & Battisti is number one for Burglary & Vandalism law suits. Number one for Sinkhole law suits. Number one for Water law suits (triple that of the second place firm). And, number one for Roof Leaks and the “All Other” loss category. Cohen & Battisti is a close second in filing wind related suits against Citizens as well.

Blame it on honest mistakes. Blame it on insurers. Blame it on Citizens. Heck, blame it on the Bossa Nova but, don’t blame it on Cohen & Battisti!

What about water extractors that use AOB?

An invoice inflated with too many days of drying or too many drying machines isn’t fraud. It’s a billing error. One that many say occurs on almost every bill from those using AOB–bills inflated with line-items like 20% for “add-on” profit, $1200 check handling fee’s and surcharges for decontamination of decontamination equipment.

Don’t take my word for it. Listen to testimony from a water extractor in a YouTube video here explaining how invoices are even inflated by manipulating detection equipment and damage photo’s.

There are literally thousands of examples comparing the bad invoices with the normal ones. I’ve received many line item comparisons, as well, showing real-life overcharges and comparing them to standard rates and practices. (See NOTE #3 below).

But, courtesy of AOB, nobody’s to blame!

Perfect example. In a recent TV interview, Laura Pearce told of her experience with a Tallahassee based water extractor, “Bone Dry Restoration”. Owner Jeff Grant is not only an officer and spokesperson for the Florida Association of Restoration Specialists (FLARS) (See NOTE #4 below) but, was ubiquitous during AOB committee hearings, persistently testifying that he would go out of business if he couldn’t use AOB. He was often interviewed by the media and appeared on TV a few times, and once on WFSU along with yours truly.

Unfortunately, Laura Pearce spent considerable time trying to get Bone Dry to do her water extraction the way she wanted it done. Get the gist by watching the report from Bay News 9 here.

Know this: she refused to sign Bone Dry’s AOB contract and inserted her own language stating AOB didn’t apply. Then, after the work was done Bone Dry presented her with another contract, one without her original hand written note. She refused to sign, again.

Then, she got her invoice which, had three errors. Bone Dry charged for an emergency visit even though there was none. It charged for more days than were actually necessary and, despite carpet disposal services being free from local garbage collection services and despite being told not to dispose of it, Bone Dry disposed, and charged for the disposal of, wet carpet.

After numerous calls the billing “mistakes” were all corrected. But, here’s the thing. If Bone Dry’s AOB contract had been signed it’s likely the bill and possibly notice of a suit would’ve gone to an insurer, by-passing the consumer and, setting the stage for the payment of an inflated claim and/or add-on attorney fees ranging between $3,500 to $7,500.

If you accepted Jeff Grants legislative testimony at face value, all of this would be the insurance company’s fault.

Worse…while Bone Dry has only filed two AOB lawsuits since 2013, one vendor, United Water Restoration, has filed 257.  And, there are way to many, that way too often, find it necessary to sue–again, most with the same firms and lawyers.  Courtesy of AOB.

All of this is public information available from DFS. You can see more on the top AOB water extractors and their lawsuits, including the insurers they file them against below. (See NOTE #5).

And so, once again, it’s likely I’ve given you more than you really wanted to know about the attorney and water extraction blame game. Thanks for reading this far.

My next report will show how AOB enables and incentivizes dangerous, even life threatening, activities by some public adjusters and attorneys.

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NOTE #1: DFS Service of Process records show that in 2005 and 2006 there were only 9,424 AOB lawsuits. In 2007 and 2008 AOB lawsuits jumped to 19,154. In 09/10 25,155 were filed. And, in 11/12 lawyers filed 85,137 suits. And in 2013 and 2014 attorneys filed 92,521 suits where the client, usually a water extractor, roofer or auto glass repair facility, was the “assignee of” proceeds from someone else’s insurance policy. The total number likely exceeds 100,000 in two years or 50,000 per year due to data entry issues. Rarely is the beneficiary of an AOB lawsuit an individual consumer. AOB is overwhelmingly used as a tool to increase profits of “for-profit” enterprises–at least according to the data. For example(s):

  • During 2013 and 2014, Lee Jacobson (Hale, Hale & Jacobson) brought 699 suits on behalf of one company, Express Auto Glass, 315 suits on behalf of Atlas Auto Glass, and 144 suits on behalf of a company named Auto Glass and More. See DFS report here.
  • Richard Hale, (Hale, Hale & Jacobson), filed 986 AOB suits in 2013-2014–all on behalf of businesses–out of 986 AOB suits none were on behalf of an individual consumer. See DFS report here.
  • Jayme Buchanan, with Cohen & Battisti, has represented only 3 policyholders out of the 980 suits filed from 2013-2014. That’s a total of nearly 2 a day and 72% of the time, about once every work day, Buchanan sues an insurer for building, construction, or emergency repairs. See DFS report here.
  • Imran Malik–out of 323 AOB suits less than 5% (16) were brought by actual policyholders. See DFS report here. In fact, 36% of the time, about once a week, Malik sues on behalf of the same carpet cleaning company. See DFS report here.

NOTE #2: In an Orlando Sentinel editorial Carol Dornan, a retired Detroit police-department detective and Greg Noland owner of Noland Roofing both blamed AOB problems on insurance companies and their lobbyists. They urged roofers to unite against AOB reforms but ignored the fact that the vast majority of roofers, the ethical ones who never use AOB, have also directed their lobbyist to support an outright ban against the practice. In addition to DBPR information showing Greg Noland with a disorderly conduct arrest in 2005, tax liens, at least one bankruptcy and a judgment for $22,252,56, there’s an internet site called “The Rip Off Report” that also has at least one very unflattering complaint against Noland Roofing. Unsubstantiated comments from only one customer but, none the less, consistent with other reports on roofers who use AOB and promise “Free Roofs.” 

NOTE #3: here are just four side-by-side comparisons showing how water extractors inflate their invoices–some are from members of FLARS and/or those testifying during recent legislative hearings. Click each “Example” to see empirical line item comparisons.

Example 1: Inflated by nearly 250% or $10,357.52. See yellow highlights for: excessive drying days and additional charges such as “Overhead & Profit” roughly 20% or $2,410.42.

Example 2: An 874 sq. ft. home over-billed by $13,904.31 or nearly 500%. Some highlights are excessive drying days and charges for overhead of $1,426.68, profit of $1,569.31; and, get this… a check handling fee of $1,250.

Example 3: A 1,329 sq. ft home inflated by 300% or $10,216.14. Highlights are excessive number of drying days and add-on profit/overhead of $2,501.44.

Example 4: A 1,183 sq. ft. home with excessive drying days inflated by over 350% or $12,792. See highlights for overhead & profit of $2,947.86 and a separate fee for “Equipment decontamination” of 28 units at $35 each. This was a Category 1 claim from a leaky “laundry room sink”. No decontamination should be necessary. Such fee’s shouldn’t be in addition to a separate “overhead” fee.

NOTE #4: FLARS appears  to have a connection with the Cohen & Battisti law firm. I engaged in a deliberate exercise to speak to a representative of FLARS but, none are listed on its website. My investigation found internet corporate listings showing Jeffrey Grant is a director of FLARS and owns Bone Dry Restoration and Cleaning, Inc. located in Tallahassee. Jon Lavender is also a FLARS director and owner of Insurance Fire & Water Restorations, LLC located in Fort Myers. Both gentlemen tout their FLARS membership and heavily advocate the use of AOB to lawmakers. The FLARS website contains no “contact us” tab usually found on corporate websites. There was a phone number but, no one ever picks up and none of a half dozen messages I left were ever returned. I found an email address using the internet registration, but, my email was not returned. I was, however, eventually contacted by a lawyer after I called the office of Bone Dry. He would not tell me the number of FLARS members. You can find more information on FLARS at the Division of Corporations including its original and amended Articles of Incorporation.

NOTE #5: I asked a number of sources (insurer’s, service providers, water extractors, agents, et al) who were the top 5 AOB water extractors that, in their opinion, appeared to overcharge in their billing practices the most. Note: there were a lot more than five given to me, but…there are only 24 hours in a day. Anyway, I randomly selected five names and secured DFS reports (Years 2013/14 only) showing how many AOB suits each filed and with which carriers. If, for example, it was only one carrier then maybe it’s that carriers’ problem. But, as you’ll see, the problem appears to be evenly spread amongst all carriers. Let me know if you have a water extractor or emergency remediator, carpet cleaner, etc whose report you would like me to pull and publish in the future. Click the vendors name below for details and a copy of their DFS report.

Restorations Unlimited: 37 lawsuits filed against 21 insurers.

Nextgen: 26 lawsuits filed against 14 insurers.

Emergency Services 24: 30 lawsuits filed against 15 insurers

Speed Dry Inc: 40 lawsuits filed against 15 insurers.

United Water Restoration: With the help of Jayme Buchanan and her firm, Cohen & Battisti, this water extractor has filed 257 lawsuits against a wide array of insurers in 2013/14. Jayme Buchanan, represented only 3 consumers out of the 980 AOB suits she personally filed from 2013-2014. That’s a total of nearly 2 a day and 72% of the time, about once every work day, Buchanan sues an insurer for building, construction, or emergency repairs. See DFS report here.

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