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William Large

Leon County judge dismisses contractors' challenge to property insurance reform law

By Michael Carroll
Sep 8, 2022
A Leon County judge has dismissed a lawsuit filed by contractors who specialize in water, fire, and mold mitigation that argued a new property insurance reform measure trampled on their rights by restricting their ability to recover attorney fees.

Circuit Judge J. Lee Marsh handed down the opinion on Aug. 29, concluding that the defendants listed in the contractors’ lawsuit – the secretary of the Florida Department of Business and Professional Regulation, Melanie Griffin, and the executive director of the Construction Industry Licensing Board, Donald Shaw –  were not proper defendants.

In an action challenging the constitutionality of a statute, the defendant must be responsible for enforcing the law in question, have a broad constitutional duty with respect to the law and have a specific interest in the issue being litigated, according to Marsh. 

“Defendants Griffin and Shaw do not meet any of these elements,” he said. “As a result, neither are proper defendants.”

Marsh dismissed the case with prejudice, meaning the same claim cannot be refiled in the circuit court.

“The court properly dismissed the case without answering the underlying question: whether the Legislature can stop assignees – in this case water mitigation vendors – from taking and using an insured’s statutory advantage, the one-way attorney fee,”  William Large, president of the Florida Justice Reform Institute, told the Florida Record in an email. “This no-risk scheme is incentivizing the nonstop homeowner solicitation, questionable claims and litigation that’s enriching vendors and lawyers, but driving up insurance prices for the rest of us.”

The plaintiffs in the case, the Restoration Association of Florida and Air Quality Assessors, argued that the reform measure, Senate Bill 2-D, treats them differently than homeowners and insurers, in violation of the state constitution. The new law prevents contractors working under an assignment-of-benefits (AOB) situation from recovering attorney fees when they prevail in litigated claims against insurers, according to the plaintiffs’ original complaint.

“Such disparate treatment of contractors performing work under an AOB is unconstitutional under the equal protection clause of the Florida Constitution,” the lawsuit stated.

The plaintiffs have given notice that they intend to appeal the decision to the First District Court of Appeal.