Since there are way too many people, mostly trial lawyers, public adjusters, roofers, etc., mischaracterizing the negatives in Florida’s property market as proof recent tort reforms aren’t working, I find it necessary to highlight “some” of what necessitated those reforms in the first place.
This piece from the Scot Strems disbarment saga (an article first published in 2020 titled “Patterns of Deceit.”), is the perfect example. You’ll find it and other stories of consumer abuse from the pre-reform era, in my upcoming book, “Collapse of an Evil Empire!”
Check back here for the book (available soon) and enjoy the following excerpt.
December 5, 2020–With Judge Denaro’s ruling and my separate investigations it’s more apparent that the Strems case is a looking glass to Florida’s property litigation problem—fortified by nefarious pursuits of way too many public adjusters (PA’s) and their posers, including corrupt water remediation firms and rebuild contractors.
Frankly, the story line I’m hearing elevates PA’s from mere puppets in someone else’s grand scheme, to puppet masters in a diabolical plan of their own concoction.
There are several sources for this emerging opinion.
First, a June 9th suit by Citizens requesting a jury trial on matters involving the Strems firm, Scot Strems personally, Contender Claims Consultants of South Miami (CCC) and its president Guillermo Saavedra; and All Insurance Restoration Services (AIR’s) of Miami and its president Cesar Guerrero and operations manager, Derek Parsons. All allegedly profiting from interlocking relationships to circumvent attorney fee sharing prohibitions and statutory fee caps for public adjusters.
Citizens allegations are similar, if not identical, to the allegations by the two judges during the Strems hearing, including the filing of different lawsuits to avoid consolidation and to maximize fees to the Strems firm and its “feeders.”
Keep in mind, PA’s can knock on doors but can’t control the litigation. Attorneys can control the litigation but can’t knock on doors. This hand-in-glove begs the question: did the circle of corruption begin with an attorney looking for doorknockers or a public adjuster looking for a bigger piece of the action?
One trial lawyer, specializing in 1st party homeowner claims, argues that Florida’s problem stems from “…fraud…routinely perpetrated through unscrupulous ‘arrangements’ between corrupt public adjusters and attorneys.” And, he specifically referenced a scheme involving global settlements.
The Scheme of Global Settlements–Simply, a global settlement is when an insurer writes one big check to settle a controverted claim, leaving the allocation of funds entirely to the plaintiff attorney. Often the attorney firm itself required the global approach. Other times insurers, like Citizens for example, routinely acquiesce, or may even demand a global settlement. It’s easier to allow (or force) the opposing attorney to perform the calculations necessary to allocate settlement funds to the various parties: a PA, a homeowner, a mortgagee, an AOB vendor, an insurance counselor and the attorney firm for fees and costs.
Feeding the Feeders–On the downside, global settlements are often designed to enable a PA to receive more than the statutorily permissible fee cap of 20% “of insurance claim payments.” The feeders need to be fed and, in some instances, they get more than the entire indemnity paid to the homeowner. “Ethical lawyers,” my attorney friend says… “generally attempt to bifurcate the indemnity from the fees and costs in order to properly compensate the public adjuster. Unethical lawyers push for ‘global’ settlements in order to control the disbursement and overcompensate the public adjuster (who is the referral source to the attorney).”
It gets worse! According to the trial attorney who wished to remain anonymous…
Having had a number of public adjusters boldly show up at my office and unashamedly solicit our firm to participate in “the global settlement arrangement” disgusts me. Time and again we have heard “I can refer you guys all the claims you want if and only if you promise to settle the claims globally.” It was just as shocking to read what was recently alleged against Strems and his partner. Again, all this illicit activity that is poisoning the first-party property insurance market has to be stopped. (See charts and the entire original redacted email)
To keep a fresh supply of claims flowing, other sources told me that some trial lawyers actually “prop up” PA firms. A Miami public adjuster said…
Your anonymous source is 100% correct. There are litigation firms doing that and also recruiting new young people, training them, supporting them until they obtain a PA License then the new PA starts knocking on doors to get new claims, frivolous claims. (See Redacted Source email)
Epilogue–And so… the circle of corruption spirals outward to more parts of the state, to more homeowners (both unsuspecting and complicit) and to more hungry feeders needing to be fed.
And Florida’s rates climb in lockstep!
And my question is still unanswered…Did the corruption begin with an attorney looking for doorknockers or a public adjuster looking for a bigger piece of the action?
NOTE: this post is just one example (published December 5, 2020) of what the tort reforms of 2022/23 were designed to stop. Keep an eye out for the book “Collapse of an Evil Empire!” And, tell your elected representatives “Thank you” for a job well done.
IMPORTANT: If you enjoyed this post you’re invited to subscribe for automatic notifications by going to: www.johnsonstrategiesllc.com. Enter your email address where indicated. If you’re already on the website at Johnson Strategies, LLC, go to the home page and enter your email address on the right-hand side. Remember, you’ll receive an email confirming your acceptance, so…check and clear your spam filter for notifications from Johnson Strategies, LLC. ENJOY!