Florida’s Bad Actors…The Tip of the Ice Berg!

It finally happened–during a Citizens board meeting (11/27/12) convened in part to address pending ethics issues, someone (in this case, board member John Rollins) went out on a public limb by pointing to the really “bad actors” in Florida’s property market.

The word “timely” doesn’t do justice to his comments which, for the most part, were directed at a handful of plaintiff’s law firms that exploit and mischaracterize virtually any occurrence or attempt to reform, in order to protect their cash cow.  They do this with cozy media relationships, their own paid public relations firms, or via consumer groups they create as fronts for their operations.

While certain to spawn feigned indignation from those he accused, including one reporter that appears to depend almost exclusively on trial lawyers for his information, Rollins comments are also consistent with what goes on in the private market.

For example, last week’s notice from the Florida Insurance Guaranty Fund (FIGA) levying an assessment on member carriers of .09% appears to be caused by the same culprits.  According to FIGA, this assessment, like the insolvency of Homewise Preferred, is almost exclusively due to frivolous sinkhole claims filed by virtually the same array of….BAD ACTORS!  (See Note #1 below)

It’s a dozen or so law firms and their public adjuster sidekicks, who scour Florida’s delicate property market, most especially Citizens, searching for pocketbook opportunities.

In a far more polite fashion than I, Rollins correctly mentioned the founder of Policyholders of Florida (POF), Sean Shaw as one  whose firm benefits from Citizens and has a stake in seeing that its rates are subsidized and it’s policy count remains high.  While having an opinion on Citizens ethics issues is certainly appropriate for Shaw (click to read), misdirecting the media away from his firms largesse at the expense of Citizens, is not okay!

Almost simultaneously with Rollins comments, Kevin Cate, the head of a campaign and media firm tweets:

Citizens now attacking Sean Shaw who has no financial interest, business or otherwise, with Citizens rates. Lies, lies, lies.

Lies, Mr. Cate?

In a number of my previous blogs, “License to Steal” and  “Lawyer’s and Money–more than meets the eye!”, I circulated public documents proving that Shaw’s employer, the Merlin Law Group, is one of the premier Citizens sinkhole law firms in Florida, literally making millions off of Florida’s last resort insurer.  Sean Shaw works for Chip Merlin.  Sean Shaw, along with Chip Merlin, founded Policyholder’s of Florida (POF).

There’s more!

Even though I knew POF was a front for trial lawyers, like most people I thought it was a non-profit organization.

Apparently I was wrong!

According to the Division of Corporations POF is a FOR PROFIT corporation.

There’s no consumer running the show. Chip Merlin is its head, and his employee Sean Shaw does the leg work which, like with any for-profit corporation, involves keeping the profits flowing.

I’m told Kevin Cate is a  spokesman for POF and likely a paid component of Merlin’s for-profit venture, just like Sean Shaw.

Heck, there’s no telling who else is in cahoots!

The revenues exposed in my blogs mentioned above were from a year ago. But, after the comments today from John Rollins it’s safe to ask if the Shaw/Merlin firm is still raking in those amounts?

I certainly don’t know, but…whatever the amount,  it’s apparently enough to risk some subterfuge or being outed as a hypocrite.

Based on information available from Citizens on its  “Pending Sinkhole Litigation” Merlin/Shaw and company are one of only twelve(12) law firms responsible for 2/3rds of Citizens total sinkhole claims.

Again, this is just sinkholes, just for Citizens, and just for 2012.  (See NOTE #2 below)

Perhaps only FIGA knows how many sinkhole claims Merlin/Shaw  filed in the private market; including those that contributed to the demise of Homewise  and the resulting assessment nearly all of Florida’s policyholders will now pay as a result.  

Frankly, I think John Rollins comments may be just the “Tip of the Ice Berg”.  Either way, it’s clear to me that Sean Shaw and company need to come clean and Citizens needs to gather more information on whose responsible for its litigation and why.

And…the media needs to start following the money trail!

After all, unlike the private market, those who pay for Citizens are not just the policyholders of one company–they are the taxpayers of an entire state.

Next up: non-sinkhole suits filed by the same BAD ACTORS!


NOTE #1: FIGA’s transmittal letter to Commissioner Kevin McCarty specifically mentioned 750 sinkhole claims it received as a result of the November 2011 liquidation of Homewise Preferred, totaling $148 million. Total to be assessed: $142 million.

NOTE #2: According to the Sinkhole Update delivered to Citizens Claims Committee as of September Citizens has approximately 5,697 pending sinkhole claims.

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