Assignment of Benefits—United Water!

Old timers may remember the 1976 movie, “Network”, in which a frustrated TV commentator sparks a national protest by shouting the angry refrain… “I’m mad as hell and I’m not gonna take it anymore!”

It strikes me there are those who may be reaching a similar breaking point with Assignment of Benefits (AOB).

Consider this.  An editorial from the Palm Beach Post unambiguously opining that AOB is not only a crisis but, it’s not the fault of insurers, lobbyists,  Citizens Property Insurance Company (Citizens) or any of the suspects the Post usually accuses.  Rather, it’s due to “the greed” of those the Post so often relies on “… lawyers…” and their clients whom the Post called “…unscrupulous building contractors.” 

And the best part–rather than isolating a small, irrelevant act by one insurer that distracts from the data, this time the Post gets it completely right implying that holding down Citizens rates isn’t an answer.  To the contrary, as an alternative to artificial rate suppression, the Post says:

“…consumers will be far better served when lawmakers finally get serious about cracking down on a budding scam that is quickly showing the potential to raise prices for everybody.” (See Note #1 below)

Speaking of being “mad as hell.” The consumers the Post believes would be “better served” surely include Patricia Bloebaum–a feisty 86-year-old wife of a 92-year old retired military veteran fed up with water remediation “contractor” United Water Restoration.  They came to her by way of a home warranty company, American Home Shield (AHS) and the plumber she called to stop a small leak.

I received a copy of Mrs. Bloebaums letter which she also copied to her state representative, Charles McBurney (R-Jacksonville).  You can decide how “mad” she is by reading it yourself, here.   It may also help to see exactly how this wily senior citizen recounted what United Water did to her in her detailed notes.

But, the real question for United Water is; how many Mrs. Bloebaums are out there?

Quite a few if you believe the allegations of the landmark suit just filed against United Water and others in: Southern Fidelity Insurance Company, et. al. vs United Water Restoration Group, Inc. et. al.    My layman’s interpretation is that, unlike other actions against bad vendors, this one against United Water reveals a massive conspiracy with a number of affiliated companies in violation of Florida’s Unfair Trade Practices Act.  And, it names the individual owners in the scheme which, in my opinion, and if true, would make United Water the head of a massive criminal insurance fraud scheme. (See Note #2)

In essence, and according to the complaint:

Defendant/United Water…

…fraudulently induces insureds to assign all of their rights and benefits under the policy to all three United Water entities at once, and then a standardized cross-referral scheme and fraudulent/deceptive business practice is put into place.  (See Note #5 below)

Defendant/United Water…

… make(s) a practice of removing, damaging and/or disposing of a small subset of a continuous pair or set of floor tiles, cabinets, wall tile, based board, tiles, etc., before the Plaintiffs [insurers] are ever given an opportunity to inspect their insured’s home.

Defendant/United Water…

…uses the threat that the [insurer] will be subject to attorney’s fees pursuant to Fla. Stat. 627.428 if they do not promptly pay a claim that they have willingly engaged in a course of conduct that served to cause the delay in substantiating the claim.

For the specific accusations and details on how United Water carries out this alleged scheme and how its lawyers are aware of it, see note #2 below.

Of course, United Water and its alleged affiliates are entitled to their day in court and are innocent until proven otherwise.  We should all respect that.  But, it’s clear to me that similar scenarios have been present in Florida’s property market for some time, if not by United Water and those named, then by way too many others.

Interestingly, Exhibit A in the suit is a complete copy/paste from the Better Business Bureau’s (BBB) complaint page for United Water.  While some complaints are resolved, all were filed by consumers who, like Mrs. Bloebaum, sound very much like they’re equally “mad as hell!” at United Water. (See Note #3 below)

And, in what was a first for me, the BBB’s home page for United Water complaints featured the following:

“REVOKEDOn 01/22/2016 this company’s accreditation in BBB was revoked by BBB’s Board of Directors due to engaging in activities reflecting poorly on the BBB or its members.”

Consider also, that within this alleged conspiracy is AQA (Air Quality Assessors).  Basically, it’s accused of inspecting or certifying the air quality (dryness?) of homes remediated by United Water; even though the two companies are under common ownership, according to the suit.  In essence, charging a hefty fee to certify it’s own work. Yet, AQA’s website contains a statement which appears to say that “independence” from the remediator is not only important but, in some “jurisdictions” it’s the law. (See Notes #4 & #5 below).  A factoid worthy of mention should this case ever get to court, I would think.

So, there you have it.  Everything I could find out about United Water, and its affiliates like AQA, and the accusations against them.  And, at this point, they are just that; accusations.  All are presumed innocent until proven otherwise in a court of law.

Parting thought–this is one of the few times I’ve agreed with the Palm Beach Post on an insurance matter.  While it may be lawyers and “unscrupulous building contractors” doing the dirty deeds, the real blame, as the Post says, lies with lawmakers and by implication the voters who allow them to ignore reforms.

Maybe we should all take a page from Ms. Bloebaum’s book and let our elected officials know we too are “…mad as hell and… not gonna take it anymore!”


NOTE #1:  The Post editorial was sent to me by the Consumer Protection Coalition, a non-profit group organized by the Florida Chamber of Commerce and boasting nineteen partners from former Insurance Consumer Advocates to the Florida Realtors Association, the FAIA and many more.

NOTE #2:  The suit, filed by the insurer group of Southern Fidelity, Southern Fidelity P&C, and Capital Preferred Insurance Company, names: United Water Restoraton Group (UWG); Air Quality Assessors (AQA); United Reconstruction Group (URG); and assorted owners, Endre Banfi, Lajos Nagy, Richie Kidwell, John Peters and Zoltan Kurucz. The actual complaint is quite detailed and is so long (307 pages) it wouldn’t upload to my online AOB library.  Instead I sent it to a large-document site, here.  For the best and most accurate information on this case, laypersons should ask a licensed attorney to review the entire complaint.  But, for the curious who want to save some time, I reproduced randomly selected excerpts below.  Paragraph numbers are taken from the complaint.

  1. As putatively legitimate vendors that are attempting to assist an insured with a water loss, these AOBs purportedly allow them to “stand in the shoes of the insured,” and thereby make demands upon the Plaintiffs on behalf of the insured as described supra. The AOB’s are null and void since they are obtained pursuant to fraudulent pretenses, make false representations in relationship to the assignor and assignee and directly violate Fla. Stat. Sec 817.234, since the insured is told from the onset that they will not have to incur a deductible.
  2. As to the ongoing collusion of the three Defendants, and the fact that the creation of three separate entities is simply a sham, it has been admitted by an authorized representative of UWR that all three entities have one common owner and management.
  3. The Defendants now that the Plaintiffs’ have statutory duties to its insureds to promptly adjust and pay the claim, and they use this consideration in combination with intentional obfuscation to obtain monies from the Plaintiffs under false, deceptive and fraudulent pretenses.
  4. Furthermore, the Defendants use the threat that the Plaintiffs’ will be subject to attorney’s fees pursuant to Fla. Stat. 627.428 if they do not promptly pay a claim that they have willingly engaged in a course of conduct that served to cause the delay in substantiating the claim.
  5. The Defendants and the attorneys used by the Defendants know that their means of referring clients is unlawful pursuant to Florida Rules of Professional Conduct governing lawyers.
  6. In connections with claims that the Plaintiffs cannot duly and timely investigate due to the Defendants misconduct as described herein, through written correspondence and otherwise, the Defendants also threaten directly and/or indirectly that the Plaintiffs’ will be exposed to extra-contractual damages (a.k.a. as bad faith) due to the Plaintiff’s’ delay in making payment of the claim.
  7. Further compounding the prejudice to the Plaintiff’s in association with the Defendants’ knowing and tortious interference with Plaintiffs’ and insureds’ contractual relationship is the fact that the Defendants make a practice of removing, damaging and/or disposing of a small subset of a continuous pair or set of floor tiles, cabinets, wall tile, based board, tiles, etc., before the Plaintiffs are ever given an opportunity to inspect their insured’s home.
  8. The specific mechanisms that allow the Defendants as a collective group to enrich themselves by intentionally causing destruction to the insured’s homes as described above is that by way of fraudulently inducing the Plaintiff’s insureds to assign all of their rights and benefits under the policy to all three Defendant entities at once, and then a standardized cross-referral scheme and fraudulent/deceptive business practice is put into place by way of UWR, URG and AQA acting as supposedly independent companies that are attempting to the preserve the insureds’ home.
  9. 40. …John Peters is an officer of URG and a general contractor. URG uses his licensing and an AOB to directly demand payment from the Plaintiff’s for the cost of repair to the home that was intentionally/unjustifiably damaged by UWR during their concealed water and/or mold remediation efforts.
  10. URG, in an effort to further defraud the Plaintiff’s, knowingly submits repair proposals that assert forth patently false and grossly embellished valuations for items that need repair as a direct result of UWR’s unjustified/unnecessary remediation efforts that also serve the de facto purpose of concealing the true facts and circumstances surrounding the loss.
  11. For example, UWR will damage tile flooring as part of their concealed remediation efforts (knowing that the insurer could and should have been given an opportunity to inspect during the course thereof), and then URG will prepare and submit to the Plaintiffs a proposal that they know contains a valuation for the tile floor that typically exceeds retail value by over 600%.

NOTE #3: For the entire Orlando BBB complaint file against United Water Restoration and the company responses and/or resolutions, if any, go here. The following are some random excerpts in no particular order:

“…The work that I am being charged for has not been performed. My resolution is not to pay another dime to this company for being dishonest about their services.”

“…I just realized today that United Water Restoration Group tricked me into signing a contract with United Reconstruction Group, also. I had no idea the company that I agreed to let dry out my house would be tricking me into signing a contract to remodel my house. The remodeling contract has no information in it about what kind of remodeling they are going to do or what material they are going to use. I told them I am unable to go through with this contract right now, because I am mentally unable to proceed with remodeling that I have no control over. They told me I would be breeching the contract and I need to pay them $500.”

“…They took advantage of an old scared woman when all I wanted was my house dried out.”

“…This company and its sister company, United Water used high pressure and deceptive sales presentations to force me to sign a contract I do not want.”

“…I called United and spoke with ******** who told me that I had signed a contract for restoration work with his company and he was the only one who could perform the work. I told him that I wanted a flooring specialist to replace the damaged floor and he directed me to the fine print on the back of the contract, which indicated that I cannot break this contract unless I pay them their 30% profit for the Job. I am 84 years old and at this time of signing the documents, I was quite ill (having a severe lower respiratory condition) as well as just suffering the loss of a close family member, all I wanted was to have the water removed from my property.”

 “…The plumber called United Water Restoration without my knowledge and they showed up and the sales pitch was very high pressure to have them clean up the water. I called my insurance company and they said they would pay for water remediation services as long as they adhered industry standards but they suggested I use a different company. When I asked United Water Restoration to leave they called their office who offered a discount of half my deductible if I let them perform the work ASAP. they wanted half of my deductible charged on my credit card ($2,750) and the other half they would “eat” as a discount.”

“…They told me the final bill would be over $7000 and the $2750 would be deducted from this bill. The final bill was $7,434.43 so if you deduct $2750 from that they should be getting a total payment of $4684.43. but they are seeking to collect $7434.43. I have offered to let them explain to me what I am not understanding but they have never responded to me.”

“…I cannot have my home fixed by any other company, Im being held hostage by this company!!! My air conditioning unit is about to fall thru my ceiling into my first floor because the wood is saturated due to water damage.”

“…In addition my insurance company has also requested an itemized estimate for the water extraction which they have refused to send, they only send a bill with a final amount NO BREAK DOWN! What type of company cannot itemize a bill?”

“…I had water damage resulting in damage to my home. Had a plumber come out and as a “courtesy” he contacted United Water Restoration Group’s Pompano office. My wife panicked when they told her $1000 max to run dehumidifiers, however they assured her that amount would only be charged if the insurance company settled. The employees also mentioned the contract that was being signed was for the dehumidifiers only. They are now charging $2482.35. They also charged for work that was done before they arrived. I tried multiple times to settle this matter and to pay the agreed upon amount to no avail.”

“…As for the claim I spoke with the owner of United, the representative *** claimed at fist to be an owner who was “good friends” with the plumber. I never hung up on anyone from that company it’s the other way around. I was hung up on multiple times after trying to solve this matter.”

“…all one has to do is look at the complaints on the BBB website for similar complaints, and see they do take advantage of people during stressful times.”

“…Technician submitted a false claim to his superiors and the billing department then submitted a claim to our insurance for work not completed.”

“…This work was not performed at all and I was told by the Technician that the first 24 hours was complimentary and then he decided to charge me for 3 days of work that was never performed.”

“…I was not comfortable with the whole ordeal and asked my insurance how much the charge was for the job, when USAA told me $5,048.99 I told them NOT to pay them, that was highway robbery.”

“…I am not the only person in the development that has had problems with them, whoever had the misfortune of having them after a flood caused by burst pipes had the same difficulties.
I am 66 years old, still work to survive, never asked for government assistance and I am SICK and tired of being abused by crooks. Please, do something.”

“…I was not thinking standing in my house that day there stood heartless men there to take full advantage people like me and all those who they already deceived.”

“…as far as the “accurate invoice”, it contained at least two errors, charging for 8 days of dehumidifiers when there were only 6, 2 dehumidifiers for 2 days, and 1 dehumidifier for the remaining 2 days, and 4 days of monitoring when the technician did not come on one of the days.”

“…Bottom line, did they remove the moisture? Probably. Was the bill many times what it should have been? Absolutely! Was the company representative honest? No. This is a scam to talk homeowners into signing a contract that assigns their rights under their homeowner’s policy to “United Water Restoration Group Inc.”, and giving them a blank check to charge whatever they want. The insurance companies know about the scam, as does the Florida Division of Insurance Fraud.”

“I believe their actions were manipulative and deceptive. The simple fact is they convinced me to sign a contract that I should have never signed that relinquished my rights as the policy owner of my insurance, and they were dishonest regarding the cost of the service provided.”

“…United Restoration Group, won’t admit their way of conducting business, there’s dishonesty any lies being said in their attempt to justify what happen, there’s two sides mine the home owner and then there’s the contractor, they are out to make money no matter at what cost.”

NOTE #4: The allegations against AQA, which according to the suit, is also the Kidwell Group owned by Richie Kidwell, is that its affiliations with UWG and UWR created a conflict of interest—it was, in essence, being paid to inspect or certify work that its affiliates (and thus Kidwell itself) had performed.  While I do not know if there is any relevance, particularly from a legal standpoint, I did find language on AQA’s website which seemed to state such affiliations should be avoided and that they were also against the law in “…some jurisdictions”.  You can read that entire page here.

NOTE #5:  Also, as partial testament to the recurring nature of AQA’s involvement with UWG and/or UWR is a recent decision won by Groelle & Salmon granting summary judgement to Tower Hill Preferred Insurance Company.  Judge Robert Crown in the Collier County Court found that the insured had already assigned “any and all insurance rights, benefits, and proceeds” to URG before executing the subsequent AOB to AQA.  Thus, AQA had no standing to bring a cause of action against Tower Hill, because there were no remaining rights to assign.  Since AQA had previously rejected a proposal to settle the case this allows Tower Hill to seek reimbursement for its attorney fees and costs.

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