September 26, 2022


Anything but ordinary

Contractors file lawsuit over new Florida property insurance law | Jax Daily Record | Jacksonville Daily Record

By Jim Saunders | News Service of Florida

TALLAHASSEE — Fewer than a week just after Florida lawmakers rushed to make assets insurance policy improvements, a contractors group filed a constitutional problem Could 31 that targets a new restriction on legal professional service fees in lawsuits from insurance companies.

The Restoration Association of Florida and Air Good quality Assessors LLC, an Orlando business that does do the job these kinds of as mold screening and leak detection, filed the lawsuit in Leon County circuit court.

It arrived right after lawmakers handed a evaluate (SB 2-D) past 7 days to test to bolster a troubled home insurance current market that has led to householders dropping protection and viewing spiraling premiums. Lawmakers gave remaining approval to the monthly bill May perhaps 25, and Gov. Ron DeSantis signed it May perhaps 26.

Insurers have extensive blamed litigation and lawyer fees for driving up expenses. The new regulation took a sequence of measures to try out to deal with those people issues, but the constitutional problem focuses on part of the measure that discounts with what is known as “assignment of positive aspects.”

In assignment of added benefits, house owners signal more than their insurance plan claims to contractors, who then find payment from coverage firms — typically spurring lawsuits about statements and payments.

Contractors in the past have been able to recuperate their lawyer fees from insurers if they are effective in the lawsuits, a strategy acknowledged as “prevailing party expenses.” But the new legislation stripped contractors of being in a position to recover prevailing-occasion service fees when they are assigned positive aspects.

Owners continue to can recover prevailing-celebration charges if they file lawsuits straight against insurers, but the contractors can’t. The lawsuit alleges that the modify violates equivalent-defense and due-process legal rights and denies contractors access to courts.

“Claims submitted to insurers for work done by contractors less than an AOB (assignment of gain) are frequently not massive in monetary quantity,” the lawsuit stated. 

“When the insurer delays, underpays or does not pay a assert at all, contractors are pressured to begin an motion towards the insurance company to recover the total amount owing for the get the job done performed. Without the corresponding ideal to recuperate prevailing occasion service fees, SB 2-D will make it economically unfeasible for the contractor to pursue its lawful legal rights and remedies in courtroom. Invoices for function performed by contractors underneath AOBs are commonly not important more than enough for a law firm to concur to symbolize the contractor on a contingency cost basis and it is not economically sensible for the contractor to … pay out a lawyer on an hourly foundation to get better the volume(s) owed,” it said.

The lawsuit said invoices for operate performed by Air Quality Assessors and a lot of other users of the affiliation generally complete $2,500 to $3,000.

“The lack of ability to get well prevailing occasion attorneys’ fees will efficiently shut the courthouse door to plaintiffs for the reason that it will be price tag-prohibitive to pay back an legal professional for these varieties of smaller statements,” the lawsuit explained.

But William Substantial, president of the Florida Justice Reform Institute, a business-backed team that lobbies to minimize litigation, mentioned in a statement soon after the legislation passed that “property coverage lawsuits have exploded around the previous various a long time, frustrating Florida’s coverage market place.”

“Senate Monthly bill 2-D incorporates considerable litigation reforms and gets to the coronary heart of escalating costs and limited protection — lawsuit abuse,” Substantial mentioned.

Assignment of positive aspects has lengthy been a contentious challenge in the insurance policies marketplace. The Legislature in 2019 place more limits on assignment of gains, at minimum in section due to the fact of an boost in residential water-destruction claims.

Contractors contend that assignment of positive aspects allows homeowners who are unfamiliar with generating absolutely sure insurance coverage promises are handled adequately.

“AOBs are not new and have been employed for a extended time, specially all through crisis weather cases,” the lawsuit said.

“In Florida, AOBs are commonplace in the household property context when homeowners undergo harm to their house and have to have to seek the services of contractors to restore the difficulties.”

The lawsuit, which involves trying to get a preliminary injunction against the regulation, names as defendants Melanie Griffin, secretary of the point out Division of Business and Experienced Regulation, and Donald Shaw, executive director of the Building Market Licensing Board. The scenario has been assigned to Leon County Circuit Choose Layne Smith, in accordance to an online docket.


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