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Florida Justice Reform Institute

Fla. Insurance Reform Bill Will Dampen Construction Defect Subrogation Suits

June 27, 2023/in Claims Journal

Claims Journal

By William Rabb | June 27, 2023

Engineer

Florida lawmakers this year approved a measure that could help reduce liability insurance premiums for home and condo builders – and limit exposure and litigation for liability insurers.

But Senate Bill 360, which took effect in April, could also make it more difficult for property insurers to bring construction-defect subrogation suits, just as more carriers appear to be embracing the subro strategy to recoup some of the losses from years of heavily litigated roof, water and hurricane claims.

“Construction-defect subrogation is worth it. It is,” said John Henley, chief claims officer at Swyfft Insurance Co., a property insurer in Florida and four other states. He spoke this month at a panel of the Florida Defense Lawyers Association claims conference in Orlando.

Data on the volume of CD subrogation suits in Florida is hard to come by. But Courthouse News Service has reported that construction defects suits from all plaintiffs in Florida has exploded, from just 31 in 2008 to almost 1,000 in 2017. And while most large national and international carriers have been on board the subro train for years, some smaller insurers may feel that it’s not worth the cost.

“I would say that’s not the case. Insurance companies wouldn’t be doing it if it didn’t bring in money,” said attorney Josh Goodman, of Miami, chair of the Cozen O’Connor law firm’s subrogation and recovery unit.

Goodman Goodman (courtesy of Cozen)

Many insurance attorneys will handle CD subrogation claims on a contingency basis, limiting the costs for insurers, he said.

SB 360 has now changed the calculus a bit and could give insurers and their adjusters a new sense of urgency to investigate properties for issues that could be the fault of the builder or subcontractor. The bill, sponsored by state Sen. Travis Hutson, a real estate developer in northeast Florida, reduces the statute of limitations and the statute of repose on lawsuits, giving homeowners and insurance companies seven years instead of 10 to take legal action against contractors, in many cases.

Goodman said that’s an issue because many defects don’t show up until after seven years. He found it odd that the Florida Legislature would limit a tool that insurers need to help offset the cost of claims litigation that has plagued the industry in recent years and was a significant factor behind insolvencies and spiking premiums. At a Senate Judiciary Committee hearing in February, Hutson argued that the change was needed because of a sharp increase in bogus construction-defect lawsuits from homeowners, which are driving up liability insurance premiums and housing prices across the state.

Some contractors’ liability and builders risk insurance premiums have skyrocketed in recent years, supporters of the bill have said. One window installer’s premiums climbed from $2,500 a year to almost $12,000 in less than two years, supporters said at the committee hearing.

The homeowner suits have been fueled by “door knocker” engineering firms that have found reported code violations in building techniques, scaring residents into taking action, Hutson said. He compared it to similar strategies taken by some roofing companies and public adjusters during the height of the assignment-of-benefits litigation wave in Florida in recent years.

Hutson Hutson (AP Photo)

“When the contractor and the subcontractor, the carpenter, the painter, the plumber, the roofer, all have to pay on these claims, it increases the cost of a home. And we already have an affordability crisis in Florida,” said Hutson.

Hutson may have something of a vested interest in reducing construction lawsuits and keeping home prices affordable. The Hutson Companies were recognized early this year for building more than 1,000 homes in 2022 at its sprawling master-planned community in St. Johns County, making it one of the fastest-growing real estate development firms in the country, Florida Politics has reported.

The insurance industry has been a little divided on the need to revise the statute of repose on construction defects. State Sen. Jim Boyd, the owner of an insurance agency in Bradenton, said at the committee hearing that the change is long overdue. It is troubling, he said, that so many defect claims are brought several years after homes are built, which suggests that property owners have not kept up with routine maintenance.

“These people have figured out that maybe they can get it covered, that there’s a pot of money somewhere that someone can get access to,” Boyd said.

Others who are often on the side of the insurance industry also supported the bill. Attorney David Weber, a construction litigation specialist who represented the Florida Justice Reform Institute at the Senate meeting, said that the 10-year statute of repose made it difficult for construction companies and subcontractors. Memories fade, witnesses disappear, and documents get lost, often leaving contractors with little choice but to settle on years-old claims that may have little substance.

Significantly, the new law not only reduced the statute of repose, it also changed the date on when the clock starts ticking, further compressing the window for legal action. Under previous law, the statute of repose commenced at the latter of the date the owner takes possession or the completion of the contract by the contractor. SB 360 changed the trigger point to the earliest of a certificate of occupancy, certificate of completion, or the date a project was abandoned if it was not completed by the builder.

Critics of the bill argued that the revised window could leave some condominium unit owners with little recourse. If an owner takes possession of a unit more than seven years after it was built, they could be barred from filing suit, construction defect attorney Brian Crevasse testified.

To help manage the tighter time frame, Goodman said insurers must now move quickly to examine properties after a claim is made, and to check closely for potential construction faults and code violations. “An increase in the pace of investigations and prosecutions of subrogation claims will be needed,” he and another Cozen attorney blogged in April.

That means immediately hiring experts, including engineers, and preserving the evidence at the scene before it is repaired.

“Those who pursue subrogation at the time of loss are usually more successful,” Goodman said.

Henley, of Swyfft Insurance, said that visuals and common sense can help: If a roof is only a few years old and appears to have failed without the presence of high winds, it’s probably the fault of the contractor.

For construction defects left behind by contractors who have no liability insurance and few resources, subrogation isn’t worth pursuing, Henley explained. That makes it more important than ever for Florida lawmakers and regulators to approve and enforce state laws requiring contractors to be licensed and insured, the lawyers said.

https://www.claimsjournal.com/news/southeast/2023/06/27/317761.htm 

https://www.fljustice.org/wp-content/uploads/2024/11/fjri-news.jpg 800 800 RAD Tech https://www.fljustice.org/wp-content/uploads/2024/11/Florida-Justice-Reform-Institute.jpg RAD Tech2023-06-27 15:55:232024-12-05 15:00:13Fla. Insurance Reform Bill Will Dampen Construction Defect Subrogation Suits
Florida Justice Reform Institute

Appeal costs smoker $16 million award but at least she can recover legal fees

June 20, 2023/in Legal Newsline

Legal Newsline

cigarettes

By Daniel Fisher – Jun 20, 2023

TALLAHASSEE, Fla. (Legal Newsline) – A woman who sued RJ Reynolds over the smoking-related death of her sister can recover legal fees for an appeal that ultimately cost her a $16 million punitive-damages award because her compensatory damages were still higher than a settlement offer RJR had rejected. 

A jury awarded Brinda Coates only $150,000 in compensatory damages over the death of her sister, Lois Stucky, but $16 million in punitive damages. An appeals court reversed the punitive damages as excessive and the Florida Supreme Court affirmed in January, sending the case back to determine more reasonable punitives.

The $150,000 damages award was still more than Coates’ pretrial offer to settle for $25,000, however, meaning her lawyers could seek their fees under Florida’s offer-of-judgment statute. That law says either party can recover fees if they win at court or the judgment is 25% less than the other side’s settlement offer. 

RJR argued she wasn’t entitled to fees since the appeals court reversed her $16 million punitive damages award. Granting her lawyers fees for an unsuccessful appeal will only encourage more appeals, the company said.

Applying what it described as a “supremacy-of-the-text” approach, the Florida Supreme Court said the state’s said the statute contains two sections that undermine RJR’s arguments. First, the law refers to fee awards and costs as “penalties,” and Florida courts have consistently treated them that way. Second, the law allows defendants to recover fees even if the plaintiff wins a substantial judgment, as long as it is at least 25% less than the defendant’s final offer.

“It is not reasonable to hold that the Legislature created a prevailing-party requirement when the statute’s text allows for awards to litigants who do not prevail,” the court concluded.

Other Florida statutes contain language limiting fees to the prevailing party, the court went on. The offer-of-judgment law is different, serving to penalize parties who reject a good-faith, reasonable offer and proceed to trial. 

“We do not share RJR’s concern that our interpretation of the offer-of-judgment statute will result in a flood of frivolous appeals,” the court said. A judge must still determine reasonable fees and will take into account whether an appeal was frivolous, the court said.

The Florida Justice Reform Institute (FJRI) and American Tort Reform Association (ATRA) viewed the decision eliminating the $16 million punitive damages award as a victory for the rule of law.

https://legalnewsline.com/stories/644496053-appeal-costs-smoker-16-million-award-but-at-least-she-can-recover-legal-fees 

https://www.fljustice.org/wp-content/uploads/2024/11/fjri-news.jpg 800 800 RAD Tech https://www.fljustice.org/wp-content/uploads/2024/11/Florida-Justice-Reform-Institute.jpg RAD Tech2023-06-20 15:55:232024-12-05 15:18:43Appeal costs smoker $16 million award but at least she can recover legal fees
Florida Justice Reform Institute

Gov. DeSantis names Couriel, Francis to Florida Supreme Court

June 9, 2023/in Uncategorized

June 03, 2020

BY ANA CEBALLOS – News Service of Florida

John Couriel

 

Gov. Ron DeSantis appointed John Couriel and Renatha Francis to the Florida Supreme Court, choosing two justices expected to cement the court’s conservative majority for years to come.

DeSantis said the appointments, made May 28, came two months late because he was focused on the state’s response to the coronavirus pandemic, noting that he wanted to dedicate sufficient time to properly vet the candidates.

In selecting Couriel and Francis, DeSantis tapped two justices who share his conservative views on the limited role of the courts, after a liberal-leaning bloc for years thwarted Republican lawmakers and governors on numerous high-profile policy fronts.

“The Florida Supreme Court protects the people’s liberty, and part of doing that is respecting the limited role that judges play in our constitutional system of government. As judges, we exercise neither force nor will, merely judgment,” Francis said.

Francis, a Palm Beach County circuit judge, was born in Jamaica and will become the first Caribbean-American to serve on the Supreme Court, DeSantis said. She also will be the first black justice since Peggy Quince retired early last year.

FRANCIS

“Her understanding of the Constitution reminds me of another famous Caribbean- American, Alexander Hamilton,” DeSantis said. “Hamilton articulated what Judge Francis deeply understands: that the judiciary lacks authority to indulge its legislative preferences.”

DeSantis also praised Couriel, a Miami litigator.

Francis

“One of the things that John brings is he instinctively understands the proper role of the judiciary. He understands the structural limitations in the Constitution, all those things that you would want,” DeSantis said.

Couriel, who once served as a federal prosecutor and who was recommended by U.S. Sen. Tom Cotton, R-Ark., and former Florida Gov. Jeb Bush, will bring “extensive business experience” to the court, DeSantis said.

“They (the Supreme Court justices) are all great judges, but I think John brings something additional, which will be very, very good going forward,” the governor said.

Florida Supreme Court

Florida Supreme Court

Couriel and Francis will replace former justices Barbara Lagoa and Robert Luck, who last year were appointed by DeSantis and later picked by President Donald Trump for positions on the 11th U.S. Circuit Court of Appeals.

The appointments were lauded by a legal group that works closely with business and insurance interests.

“The governor’s appointments of John Couriel and Renatha Francis as the 90th and 91st Justices continue his mission to restore the court to its proper role as the interpreter of our laws, not the author,” said William Large, president of the Florida Justice Reform Institute.

DeSantis has been able to reshape the court, in part, because Quince and former justices Barbara Pariente and R. Fred Lewis were forced to retire in January 2019 because of a mandatory retirement age. They had been part of a generally liberal majority that controlled the court.

Shortly after taking office in January 2019, DeSantis appointed Lagoa, Luck and Carlos Muniz to replace the retiring justices.

Combined with remaining conservative justices Charles Canady, Ricky Polston and Alan Lawson, the three newcomers immediately created a conservative majority.

Even with the elevation of Lagoa and Luck to the 11th U.S. Circuit Court of Appeals, the court has retained a four-member conservative majority, with Justice Jorge Labarga dissenting on some high-profile issues.

Labarga often joined with Pariente, Lewis and Quince in the past.

Gov. DeSantis names Couriel, Francis to Florida Supreme Court

 

https://www.fljustice.org/wp-content/uploads/2024/11/fjri-news.jpg 800 800 Becky Lannon https://www.fljustice.org/wp-content/uploads/2024/11/Florida-Justice-Reform-Institute.jpg Becky Lannon2023-06-09 19:46:222025-07-09 19:46:49Gov. DeSantis names Couriel, Francis to Florida Supreme Court
Florida Justice Reform Institute

DeSantis signs the Windshield Repair Bill into law

June 7, 2023/in Florida Record

FLORIDA RECORD

Michael Carlson

Carlson | LinkedIn
By Juliette Fairley
Jun 7, 2023
 

Gov. Ron DeSantis signed Senate Bill 1002 into law last week with the goal of ending assignment-of-benefit (AOB)-related litigation involving cracked windshields.

Also known as the Windshield Repair Bill, SB 1002 aims to prevent glass repair shops and attorneys from exploiting a law meant to encourage motorists to repair or replace damaged windshields.

“This is an important win for the health of the marketplace and Florida consumers,” said Michael Carlson, president and CEO of the Personal Insurance Federation of Florida and a “Fix the Cracks” partner. “Eyes have been opened to the cottage industry of predatory claims and litigation. The signing of SB 1002 means Florida can reset and even become an example to other states tackling this type of exploitation.” 

The abusive windshield litigation reportedly led to exorbitant legal fees.

As previously reported in the Florida Record, ending AOB litigation is expected to reduce the number of lawsuits filed, lower loss costs, and minimize the comp coverage component of auto insurance policies.

“Ultimately, it should impact auto insurance rates but of course, you’re gonna have to go through one cycle to see the reduction in outlays regarding this before the actuary affects policyholders,” said Tom Gaitens, Florida executive director of Citizens Against Lawsuit Abuse (CALA).

In Florida in 2011, there were 591 windshield lawsuits filed compared to 37,000 in 2022, according to data from Fix the Cracks, an initiative that aims to protect consumers from predatory auto glass claims and litigation.

“This is an egalitarian issue,” Gaitens told the Florida Record. “It affects every consumer in Florida who drives obviously and who has auto insurance. The average claim in the United States was under $300 per windshield claim, and in Florida, it was about $160 more per person on average.”

The bill was sponsored by Sen. Linda Stewart (D-Orlando) and Rep. Griff Griffitts (R-Panama City Beach).

The American Property Casualty Insurance Association (APCIA), the Coalition Against Insurance Fraud, the Florida Justice Reform Institute (FJRI), the International Association of Special Investigation Units (IASIU), and the National Insurance Crime Bureau (NICB) all supported the Windshield Repair Bill. 

“In 2011, there were almost 600 claims filed related to these windshields and it grew to 28,000 by 2021,” Gaitens added. “Last year, claims jumped to 37,000. It’s the same issue we had with roofing where it became a cottage industry for these frivolous lawsuits. In Florida specifically, 90% of the lawsuits that were filed related to windshield claims and they were filed by 20 attorneys.” 

https://flarecord.com/stories/643592147-desantis-signs-the-windshield-repair-bill-into-law 

https://www.fljustice.org/wp-content/uploads/2024/11/fjri-news.jpg 800 800 RAD Tech https://www.fljustice.org/wp-content/uploads/2024/11/Florida-Justice-Reform-Institute.jpg RAD Tech2023-06-07 15:55:232024-12-05 15:28:46DeSantis signs the Windshield Repair Bill into law
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