In my last blog, “A License to Steal”, I referenced some rarely seen public documents that prove there’s much more to Florida’s sinkhole equation than meets the eye. Sure, we see the rampant opportunism spawned by an ill-advised, poorly legislated mandate–residents of sinkhole alley, terrified by landsliding home values, filing claims for settlement cracks or, as often, for no damage at all.
We see a handful of lawyers, too. And, public adjusters and unabashed advocates bearing a false torch of consumerism–blocking sound rates and wagging indignant fingers at everyone but those responsible…themselves. And, there’s always a lawmaker or two, jumping on point or in front of the camera’s.
And, we see irrefutable statistics. The number of Citizens sinkhole claims are up three times over last year. Check the government reports and other documents behind my “Library” tab and ask yourself why are so many consumers so worried about settlement cracks or less?
Are they afraid–scared that if they don’t file a claim, they’ll be the only one on their block to wind up with nothing but a deflated home; diminished in large measure because intimidated neighbors had already gotten their share of the pie? Isn’t it intimidation when a Public Adjuster or lawyer exhorts… “If you sign here your insurance company will pay to find out if you’re safe or, if your home is imperiled by a dangerous sinkhole that could swallow your whole house! And here, just look at these pictures of the devastation that can happen to your home if you don’t..sign here!” Remember, in late 2009 Citizens testified it had never had a claim for catastrophic sinkhole collapse, ever… yet, claims for sinkhole activity are rampant!
Examples: one homeowner found a $100 bill in an envelope stuck in a driveway crack along with a Public Adjuster’s business card. “This could be the beginning of a sinkhole…call for free inspection!” the note said. In that same area, according to testimony, there were “nine” sinkhole repair trucks which, of course, double as traveling billboards, driving about, soliciting business; seven days a week. And, driving to and from work or the supermarket, these west-central Floridians suffer provocative billboards more common than, well…settlement cracks. Click to read what one Realtor had to say.
These facts easily “meet the eye”. Those that are often overlooked, however, (especially by the media), are often found at the end of the sinkhole rainbow–a huge vessel of bullion that lawyers, public adjusters and some consumer advocates climb all over themselves for…under the banner of consumerism.
In an opinion published by the Tallahassee Democrat (Sunday; November 6, 2011) the head of research for the American Consumer Institute, Steve Pociask, left little doubt who congregates at rainbows end. He said it’s those who are…
“… most vocal in getting residents upset about the proposed rate hikes, when in fact these special interests had a direct hand in driving the huge losses that caused the need for a rate hike in the first place.”
This huge pot of gold tempts beyond the shame of hypocrisy. Pociask referenced OIR testimony that attorney’s made $13.2 million between 2006 and 2009. And frankly, as you’ll see, it appears fewer than a dozen firms divvied up almost the entire booty. Public adjusters split over $8 million.
He turned media eyes to firms that are positioning themselves as…
“… advocates for consumers in fighting sinkhole rate increases, when, in fact, they are part of what’s driving Citizens’ sinkhole losses.”
Then Pociask zero’s in on Sean Shaw with the Merlin Law Group which filed 55 sinkhole claims (fourth highest) from 2006-2009 with a total claim payout of $8.4 million. He said “…The former state insurance consumer advocate is now working for a law firm in the business of suing insurance companies. One group that has been rallying against sinkhole reforms, Policyholders of Florida, has its website registered by a law firm in the business of suing insurance companies.” Policyholders of Florida, is the group Senator Fasano and Sean Shaw chaperoned during the sinkhole hearing and in chartered bus loads across Tampa Bay. See Pociask’s letter protesting an earlier press conference.
Public documents below show that some law firms filed nearly $40 million in claims, in one year, just for Citizens. I cannot tell you the outrage I felt when I first learned that such advantage could be taken of entire portions of our state; for no good reason, for greed!
To find out what a law firm might pocket from sinkholes, many would merely multiply the payout by 1/3rd. I ran this by Chip Merlin and he advised that it often varies from the 1/3rd rule of thumb; “some charge less” he said. Some, he said will waive their contingency fee and just take an hourly rate or charge only 10%. This, of course, is why it’s called a rule of thumb.
Anyway, you decide, on your own, how much of a killing is being made off of, and in the name of, consumers. Use the links below. They show the total claim “payout” for the last four years, from Citizens, for Sinkhole; HO-3s and DP (Tenant occupied) policies, broken down by Law Firm.
To ease your burden I isolated the top ten firms here by using the “average” attorney remuneration cited by OIR of $32,237 per claim, times the number of claims shown on the public documents. This means, these top-ten totals are not what a firm actually made, but only an estimated average used to identify the top ten. You can check all the numbers and the math by using the original documents via the links at the end of this blog. As you do, keep in mind that many of the individuals listed also work for a firm on the same list; which means the largesse for each firm can be much “…more than meets the eye.” And, again…it’s just for Citizens!
Top Ten Sinkhole Firms/Lawyers ( Number of Claims) x ($32,237 avg. per claim)
#1: Marshall Thomas & Burnett 680 $21,921,160
#2: Sinkhole Investigation Legal Team 200 $6,447,400
#3: Le Valley Napolitano & McMienaman 57 $1,837,509
#4: Merlin Law Group 55 $1,773,035
#5: John E “Jed” Thomas 36 $1,160,532
#6: Joseph A Porcelli 34 $1,096,058
#7: Williams Law Associates 31 $999,347
#8: Terano, Perez & Salgado 27 $870,399
#9: Danahy & Murray 25 $805,925
#10: Craig A LeValley 18 $580,266
Source: Office of Insurance Regulation & Citizens Property Insurance Corporation, as follows:
- Citizens Law Firm Report; HO-3 Policies: http://johnsonstrategiesllc.com/wp-content/uploads/downloads/2011/09/Sinkhole-Law-Firms-PDF.pdf
- Citizens Law Firm Report; DP-Policies: http://johnsonstrategiesllc.com/wp-content/uploads/downloads/2011/10/Sinkhole-Law-Firms-DP.pdf
- HO-3/DP Combined–Top ten firms highlighted, totals for “all” years with an average claim payment.
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