CQ Roll Call – Florida Justice Reform Institute

Florida enacts changes for attorney fees in assignment of benefits suits

May 24, 2019/in CQ Roll Call

Florida enacts changes for attorney fees in assignment of benefits suits

(May 24, 2019) – Florida enacted changes to attorney fee awards that some say will solve problems related to assignment of benefits lawsuits within the state.

Gov. Ron DeSantis signed the changes (HB 7065) into law on May 23, after the legislature had passed them in April.

The new legislation sets rules for awarding attorneys’ fees in lawsuits disputing claims made under assignment of benefits agreements in residential or commercial property insurance policies.

Assignment of benefits agreements allow third parties to make insurance claims. For example, home restoration companies may offer to make repairs while telling customers they will file claims with customers’ insurance companies, David Sampson, CEO of the American Property Casualty Insurance Association, described to CQ in February.

The policyholder doesn’t pay a deductible, but also doesn’t know the amount the vendor bills the insurance, because the policyholder assigned rights to the vendor through a contract.

“In many cases it’s multiples of what it would cost to actually fix the windshield or replace the windshield,” Sampson said.

If the vendor sues the insurance company regarding the claim and wins, the insurance company then has to pay the vendor’s attorney fees. Nearly 135,000 lawsuits over assignment of benefits agreements were filed in Florida in 2018 through Nov. 9, an increase of 70 percent from the total filed over the last five years, according to the Institute’s report.

Under the new legislation, the amount of attorney fees awarded depends on the difference between the damages recovered by the repair company and the payment offer the insurance company made in response to the notice of intent to sue.

If that difference is less than a quarter of the disputed amount, the insurer can be awarded “reasonable” attorneys’ fees, the law says. If that difference is at least a quarter, but less than half of the disputed amount, neither party can receive attorneys’ fees.

If that difference is at least half of the disputed amount, the repair company can receive “reasonable” attorneys’ fees.

Commissioner David Altmaier of Florida’s insurance regulation office praised the bill signing. “We will better protect consumers from those who would take advantage of them by abusing the Assignment of Benefits process,” he said in a statement.

“Florida also has a unique attorney fee structure as it relates to AOB agreements as the current one-way attorney fee structure incentivizes abusive litigation in our insurance market,” Altmaier said in an April 11 statement after House passage of the changes.

“As a result, Florida remains unique as we are one of the only states currently battling a cottage industry that profits off the systemic abuse of AOBs. However, the impacts of this abuse are not so unique as every policyholder across our state is facing an insurance product affordability and availability crisis,” he said.

Other issues might remain, though. Florida Justice Reform Institute President William Large told CQ before the Senate’s passage that he was disappointed the House bill didn’t include a fix related to auto glass.

“All the principles that we’ve been arguing about the need for AOB reform in property litigation is just as true in windshield auto glass litigation,” he said.

The industry’s focus in lobbying might explain why auto glass was omitted. Large said, “I think Citizens Property Insurance did an excellent job of educating legislators about costs associated with property litigation. Because Citizens was focused on property insurance issues, I think legislators didn’t understand the impact … auto glass litigation was having in the state.”

By Zoe Sagalow, CQ Roll Call

https://urldefense.proofpoint.com/v2/url?u=https-3A__1.next.westlaw.com_Document_Ieb4b886b7e6611e9adfea82903531a62_View_FullText.html&d=DwMFaQ&c=14jPbF-1hWnYXveJ5rixtS_Fo3DRrpL7HUwJDAc4HIc&r=j3OEs-Fy-wXfQz8bCnLyudWUI_qJxfs3_DwuiU2vr90&m=SJVxo85ld-qYy166R-LM-Ddva_xm7hesRSg3hcsI6B0&s=3v6WW1gMmbSZ7F8pHN_VbVHDJ99eEM0Ve4_4EZmbbPI&e=

Florida assignment of benefits changes pass legislature, await governor

April 24, 2019/in CQ Roll Call

Florida assignment of benefits changes pass legislature, await governor

(April 24, 2019) – Changes in attorney fee awards in assignment of benefits lawsuits passed Florida’s legislature and now awaits the governor’s signature.

The proposal (HB 7065) passed the state Senate by a 25-14 vote Wednesday after passing the state House by a 96-20 vote on April 11.

Florida Insurance Commissioner David Altmaier praised the bill’s passage in a Wednesday statement, describing it as “a significant step towards stemming the insurance product affordability and availability crisis that has grown from years of compounding AOB abuse.”

The bill proposes rules for awarding attorneys’ fees “in a suit related to an assignment agreement for post-loss claims arising under a residential or commercial property insurance policy” depending on “the difference between the judgment obtained by the assignee and the pre-suit settlement offer.”

If that difference is less than a quarter of the disputed amount, the insurer can be awarded “reasonable” attorneys’ fees. If that difference is at least a quarter but less than half of the disputed amount, neither party can receive attorneys’ fees. If that difference is at least half of the disputed amount, the assignee can receive “reasonable” attorneys’ fees.

On Tuesday, an amendment to freeze 2019 rates and require rate cuts of 7.5 to 15 percent was defeated on a 17-21 vote, the Florida Justice Reform Institute told CQ.

Florida Justice Reform Institute President William Large told CQ before the Senate’s passage that he was disappointed the House bill didn’t include a fix related to auto glass. “All the principles that we’ve been arguing about the need for AOB reform in property litigation is just as true in windshield auto glass litigation,” he said.

The industry’s focus in lobbying might explain why auto glass was omitted. Large said, “I think Citizens Property Insurance did an excellent job of educating legislators about costs associated with property litigation. Because Citizens was focused on property insurance issues, I think legislators didn’t understand the impact … auto glass litigation was having in the state.

“Florida also has a unique attorney fee structure as it relates to AOB agreements as the current one-way attorney fee structure incentivizes abusive litigation in our insurance market,” Altmaier said in an April 11 statement after the House passage.

“As a result, Florida remains unique as we are one of the only states currently battling a cottage industry that profits off the systemic abuse of AOBs. However, the impacts of this abuse are not so unique as every policyholder across our state is facing an insurance product affordability and availability crisis,” he said.

Insurers have an incentive to pay “slightly inflated” claims because of the “one-way attorney’s fees” policy, the Insurance Information Institute explained in a study about assignment of benefits agreements, released Dec. 11.

Nearly 135,000 lawsuits over assignment of benefits agreements were filed in Florida in 2018 through Nov. 9, an increase of 70 percent over the last five years, according to the Institute’s report.

A related issue is policies including zero deductibles, and Large described potential downsides to zero deductibles, such as those for auto glass in Florida. “Insurance policies have deductibles for behavioral and financial reasons,” he said. “When an insurance policy has a zero deductible, it causes consumers to make decisions that they wouldn’t make otherwise. A deductible mitigates the risk that an insured party may engage in reckless behavior.”

By Zoe Sagalow, CQ Roll Call

https://1.next.westlaw.com/Document/I32da717166cf11e9adfea82903531a62/View/FullText.html

Florida Senate committee approves changes for assignment of benefits suits

April 18, 2019/in CQ Roll Call

Florida Senate committee approves changes for assignment of benefits suits

(April 18, 2019) – Changes to attorney fee awards from assignment of benefit lawsuits are one step closer to passing the Florida state Senate after the Rules Committee approved the proposal (SB 122) by an 11-16 vote on Wednesday.

Insurance Commissioner David Altmaier praised the committee’s action in an April 17 statement April 17, describing it as “a significant step towards protecting Floridians from future AOB abuse.”

The Rules Committee adopted a provision from a House bill (HB 7065) that proposes rules for awarding attorneys’ fees “in a suit related to an assignment agreement for post-loss claims arising under a residential or commercial property insurance policy” — depending on “the difference between the judgment obtained by the assignee and the pre-suit settlement offer.”

If that difference is less than a quarter of the disputed amount, the insurer can be awarded “reasonable” attorneys’ fees. If that difference is at least a quarter but less than half of the disputed amount, neither party can receive attorneys’ fees. If that difference is at least half of the disputed amount, the assignee can receive “reasonable” attorneys’ fees.

The House passed its bill on April 11 by a 96-20 vote.

Previously the Senate considered a different approach: The “prevailing party” in a case could receive attorneys’ fees and that party would be determined by the court — depending on the issues, the number of claims compared with the amount recovered, “the existence of setoffs and counterclaims, if any” and “the amounts offered by either party to resolve the issues prior to or during litigation,” according to the bill. A court also “may determine” a case doesn’t have a prevailing party.

The Senate Judiciary Committee amended the bill to require AOB and other post-loss agreements be made in writing with specific details. The amended bill passed the committee on a 5-1 vote, after having cleared the Banking and Insurance Committee by a 5-3 vote earlier.

Florida Justice Reform Institute President William Large praised House passage of the bill and told CQ April 11 it “will help stabilize runaway assignment of benefits litigation and give policyholders the tools they need to better protect themselves against predatory lawyers and vendors.” He added the Institute urged the Senate to take up the House bill and pass it.

“Florida also has a unique attorney fee structure as it relates to AOB agreements as the current one-way attorney fee structure incentivizes abusive litigation in our insurance market,” Altmaier said in an April 11 statement after the House passage. “As a result, Florida remains unique as we are one of the only states currently battling a cottage industry that profits off the systemic abuse of AOBs. However, the impacts of this abuse are not so unique as every policyholder across our state is facing an insurance product affordability and availability crisis.”

Half of the assignment of benefits lawsuits related to auto glass claims in 2018 were filed by just four firms, and among the firms by just six attorneys, according a report published March 27 by the Florida Justice Reform Institute. And about 85 percent of auto glass cases were filed by nine firms, which represented 12 attorneys. These firms include Morgan & Morgan, Amorginos & Barrows, Malik Law, Emilio Stillo PA, Reeder & Nussbaum, Chris Ligori & Associates, and Hale Hale Jacobson.

Insurers have an incentive to pay “slightly inflated” claims because of the “one-way attorney’s fees” policy, the Insurance Information Institute explained in a study about assignment of benefits agreements, released Dec. 11.

Nearly 135,000 lawsuits over assignment of benefits agreements were filed in Florida in 2018 through Nov. 9, an increase of 70 percent over the last five years, according to the Institute’s report.

By Zoe Sagalow, CQ Roll Call

https://1.next.westlaw.com/Document/I3785ecbc621111e9adfea82903531a62/View/FullText.html

More civil lawsuits could be headed to county courts

April 16, 2019/in CQ Roll Call, Daily Commerical, Florida Politics

More civil lawsuits could be headed to county courts

This bill moves to the full Appropriations Committee Thursday.

By A.G. Gancarski on April 16, 2019

On Tuesday, the Senate Criminal and Civil Justice Appropriations Subcommittee moved a bill that would shunt more civil lawsuits to county courts.

The bill (SB 328) will move to the full Appropriations Committee on Thursday.

At present, there is a $15,000 limit on damages in civil suits, also called “small claims,” filed on the county level. This bill, as amended in committee, would raise that to $30,000 on Jan. 1, 2020, and to $50,000 by Jan. 1, 2022.

The current cap hasn’t been changed since 1992.

Bill sponsor Jeff Brandes, a Republican from St. Petersburg who chairs the subcommittee, noted the bill “gradually raises” those amounts, in accordance with inflation.

“This is a very important issue,” Brandes said. “The county courts are really designed to be the people’s courts.”

“More of these cases get thrown into circuit courts,” he continued.

The Florida Justice Reform Institute noted that the Supreme Court wanted a lower threshold initially, and found the increase to $50,000 to be of most concern.

“They’ve recommended an increase from 15 to 25,” said its President, William Large.

Large expects bigger case loads for circuit judges because of the legislation, with circuit courts bearing the burden of appeals from the county courts.

He argued that appeals should be heard by district courts of appeal, which handle cases coming out of circuit courts.

“I want everything to go to the DCA,” he said.

But Sen. Darryl Rouson, a St. Petersburg Democrat, said he supports the bill because “it’s time to do something different.”

“I believe the Legislature will seek the support of the Florida Supreme Court,” Rouson added.

“We have an overburdened circuit court at this point,” added Sen. Gayle Harrell, a Stuart Republican.

Sen. Annette Taddeo, a Miami Democrat, likewise spoke in support.

In his closing statement, Brandes allowed that there may be further tweaks regarding the appellate process, and that he’s willing to refine the language with Supreme Court staff.

And, he said, “this is an ongoing conversation with our partners in the House.”

___

The News Service of Florida contributed to this post.

http://floridapolitics.com/archives/293797-civil-lawsuits-in-county-courts

Florida House passes assignment of benefits bill limiting fee awards

April 11, 2019/in CQ Roll Call

Florida House passes assignment of benefits bill limiting fee awards

(April 11, 2019) – The Florida House passed its bill setting requirements and limitations for assignment of benefit agreements and changing rules for attorney fee payments in AOB lawsuits, sending it to the Senate, which is considering its own proposed changes to the law.

By 96-20 vote Thursday, the House passed a bill (HB 7605) that includes an amendment by sponsor Rep. Bob Rommel adopted the day before.

The House bill proposes rules for awarding attorneys’ fees “in a suit related to an assignment agreement for post-loss claims arising under a residential or commercial property insurance policy” — depending on “the difference between the judgment obtained by the assignee and the pre-suit settlement offer.”

If that difference is less than a quarter of the disputed amount, the insurer can be awarded “reasonable” attorneys’ fees. If that difference is at least a quarter but less than half of the disputed amount, neither party can receive attorneys’ fees. If that difference is at least half of the disputed amount, the assignee can receive “reasonable” attorneys’ fees.

The Florida Senate is considering a different approach.

Under its bill, the “prevailing party” in a case could receive attorneys’ fees and that party would be determined by the court — depending on the issues, the number of claims compared with the amount recovered, “the existence of setoffs and counterclaims, if any” and “the amounts offered by either party to resolve the issues prior to or during litigation,” according to the bill.

A court also “may determine” a case doesn’t have a prevailing party.

The Senate Judiciary Committee amended the bill (SB 122) to require AOB and other post-loss agreements be made in writing with specific details. The amended bill passed the committee on a 5-1 vote, after having cleared the Banking and Insurance Committee by a 5-3 vote earlier. It now awaits action by the full Senate.

The bill would prohibit the right to receive payment for attorney fees when an insured person or beneficiary wins a case against an insurer.

Florida Justice Reform Institute President William Large praised House passage of the bill and said it “will help stabilize runaway assignment of benefits litigation and give policyholders the tools they need to better protect themselves against predatory lawyers and vendors.” He added that the Institute urges the Senate to take up the House bill and pass it.

Insurance companies have an incentive to pay “slightly inflated” claims because of the “one-way attorney’s fees” policy, the Insurance Information Institute explained in a study about AOB agreements last year.

Nearly 135,000 lawsuits over AOB agreements were filed in Florida in 2018 through Nov. 9, an increase of 70 percent over the last five years, according to the Institute’s report.

By Zoe Sagalow, CQ Roll Call

https://1.next.westlaw.com/Document/Icb1895505c9c11e9adfea82903531a62/View/FullText.html

Report: Four firms filed half of 2018 Florida assignment of benefits suits

April 1, 2019/in CQ Roll Call

Report: Four firms filed half of 2018 Florida assignment of benefits suits

(April 1, 2019) – In Florida, half of the assignment of benefits lawsuits related to auto glass claims in 2018 were filed by just four firms, and among the firms by just six attorneys, according a new report.

And about 85 percent of auto glass cases were filed by nine firms, which represented 12 attorneys, the Florida Justice Reform Institute wrote in its report, published March 27. These firms include Morgan & Morgan, Amorginos & Barrows, Malik Law, Emilio Stillo PA, Reeder & Nussbaum, Chris Ligori & Associates and Hale Hale Jacobson.

Insurance lawsuits have increased since 2000 as a percentage of Florida’s population, and so have assignment of benefits lawsuits in particular.

“Florida seems to be living up to its national reputation as one of the worst tort systems in the country, as litigation growth is much steeper than population growth,” the Institute wrote. “Looking specifically at AOB, what used to amount to little more than a few one-hundredths of a percentage point as a fraction of Florida’s population is now nearing a full three-quarters of a percent.”

The FJRI is led by William Large, a former malpractice defense lawyer primarily representing hospitals who was one of former Gov. Jeb Bush’s chief counselors on that administration’s efforts to rewrite Florida’s medical malpractice laws.

The Institute used Florida’s Service of Process Database for the report, which includes lawsuits filed against insurance companies.

Both chambers of the Florida state legislature are working on changes to assignment of benefits.

The House Judiciary Committee passed a proposal (HB 7065) on a 14-3 vote on March 28, after its Insurance and Banking Subcommittee approved it 14-1 on March 19. It was co-sponsored by Rep. Bob Rommel and Rep. Michael A. Caruso, both Republicans.

The House bill proposes rules for awarding attorneys’ fees “in a suit related to an assignment agreement for post-loss claims arising under a residential or commercial property insurance policy” — depending on “the difference between the judgment obtained by the assignee and the presuit settlement offer.” If that difference is less than a quarter of the disputed amount, the insurer can be awarded “reasonable” attorneys’ fees. If that difference is at least a quarter but less than half of the disputed amount, neither party can receive attorneys’ fees. If that difference is at least half of the disputed amount, the assignee can receive “reasonable” attorneys’ fees.

The Florida Senate is considering a different approach. The “prevailing party” could receive attorneys’ fees and that party would be determined by the court depending on the issues, the amount of claims compared with the amount recovered, “the existence of setoffs and counterclaims, if any” and “the amounts offered by either party to resolve the issues prior to or during litigation,” according to the bill text. A court “may determine” a case doesn’t have a prevailing party.

The Senate Judiciary Committee amended the bill (SB 122) to require assignment of benefits and other post-loss agreements be made in writing with specific details. The amended bill passed the committee on March 18 on a 5-1 vote after clearing the Banking and Insurance Committee March 4 by a 5-3 vote. It now awaits action by the full Senate. The bill would prohibit the right to receive payment for attorney fees when an insured person or beneficiary wins a case against an insurer.

By Zoe Sagalow, CQ Roll Call

https://1.next.westlaw.com/Document/Ia71b94ff54bf11e9adfea82903531a62/View/FullText.html

AOB lawsuits outpacing population growth

March 27, 2019/in CQ Roll Call, Daily Commerical, Florida Politics, Roundtable Politics

AOB lawsuits outpacing population growth

Florida is growing fast. AOB lawsuits are growing faster.

By Drew Wilson on March 27, 2019

Florida is growing fast.

The state is already the third-largest in the union and recent research from the Florida Chamber of Commerce estimates 1,100 people move to the Sunshine State every day — that’s amounts to 5 million new residents by 2030.

But another statewide metric is accelerating faster: assignment of benefits lawsuits.

“While Florida is a growth state, AOB lawsuits are growing much faster than population, going from little more than a few hundredths of a point as a fraction of Florida’s population to nearly a full three-quarters of a percent now,” said Capital City Consulting lobbyist and FJRI counsel Ashley Kalifeh.

AOB is a process where policyholders sign over their insurance benefits for a quick repair after their property — be it a home, car windshield or something else — is damaged.

The contractor or attorney who receives those benefits often attempts to collect a payout from insurers in court. AOB reform advocates say those lawsuits lead to inflated payouts which in turn drive the cost of insurance premiums for all Floridians.

According to the Florida Justice Reform Institute, AOB lawsuits made up more than half of all lawsuits filed in Florida in 2018 — the eighth year in a row they’ve held the majority.

Additionally, the quantity seen 18 percent growth year-over-year.

A report produced by Kalifeh shows AOB suits increased by over 900 percent between 2008 and 2018. Total lawsuits increased by a little over 400 percent during the same stretch.

“Unfortunately, rampant AOB lawsuits threaten our confidence in the state’s legal climate,” said FJRI President William Large. “The legislature can help the people of Florida by standing up to the trial lawyers and passing meaningful AOB lawsuit reform.”

“This updated report details how out-of-control AOB lawsuits based on the one-way attorney fee continues to accelerate, driving up overall litigation and costs for policyholders.”

The report also found that about 85 percent of those suits were filed by nine law firms. Just one attorney — Gregory Gudin of Landau & Associates — filed more than 30,000 AOB lawsuits last year.

Most of those suits were filed in a handful of counties, too. Miami-Dade and Broward accounted for nearly half of property AOB suits, while Hillsborough County alone was home to more than 50 percent of auto glass AOB suits.

FJRI supports measures moving through the House and Senate that would make changes to AOB rules.

Among those reforms is an end to one-way attorney’s fees in AOB cases. Currently, the losing side of an AOB case has to cover the attorney’s fees for the prevailing party.

Opponents of the reforms say AOB suits would slow down if insurance companies green lit repairs faster and used higher quality contractors, especially in the case of water damage.

http://floridapolitics.com/archives/291981-aob-lawsuits-outpacing-population-growth

No-fault insurer prevails in attempted class action over Medicare reimbursement

September 26, 2018/in Capitol News Service, CQ Roll Call, Daily Commerical, FlaNewsOnline, Florida Politics, Florida Trend, Florida Watchdog, Orlando Political Observer, Roundtable Politics, Tallahasssee Reports, wctv.tv

No-fault insurer prevails in attempted class action over Medicare reimbursement

Michael Moline – September 26, 2018

A state appeals court has rejected a class action filed by a Medicare Advantage organization seeking double reimbursements for its costs of providing care that should have been covered by a no-fault auto insurer.

In a unanimous ruling, the 3rd District Court of Appeal said such organizations would have to establish each claim separately against Ocean Harbor Casualty Insurance.

The court overruled Miami-Dade Circuit Judge Samantha Ruiz-Cohen, who had certified a class potentially including 37 Florida Medicare Advantage organizations, or MROs.

The lead plaintiff was an entity called MSPA, an assignee of the defunct MRO Florida Healthcare Plus Inc.

“Proof that certain medical bills paid by MSPA’s alleged assignor should have been paid by Ocean Harbor as a primary payer will not establish that other medical bills paid by a different MAO should also have been paid by Ocean Harbor as a primary payer,” Judge Thomas Logue wrote.

“To the contrary, proof to establish liability will necessarily devolve into a series of mini-trials under Florida no-fault law … which precludes a finding of predominance and renders this case inappropriate for class action treatment,” Logue wrote.

“Accordingly, we reverse the provisions of the certification order under review in conflict with this opinion.”

MAOs are private companies that contract with Medicare to provide coverage at a flat rate per enrollee. They profit to the degree they provide the required coverage for less than the flat rate.

The coverage is meant to be secondary to other, primary, coverage, including personal injury protection policies.

Miami plaintiffs’ attorney John Ruiz argued that he could establish the common claims necessary to sustain a class action using an algorithm that analyzes police reports of accidents and other records that Ocean Harbor must report under state and federal law.

He argued that Ocean Harbor’s obligation to pay was automatic once his client established that it had made payments reimbursable by the insurer.

The 3rd DCA disagreed.

“We reject the notion that MSPA claims reimbursement rights are not governed by Florida law relating to the recovery of benefits under a PIP policy, and are therefore automatic,” Logue wrote.

“Instead, MSPA must demonstrate that, in addition to any requirements of federal law, Ocean Harbor was required to make the payment in the first instance under Florida no-fault law for each reimbursement it claims.”

William Large, president of the tort-reformer Florida Justice Reform Institute, praised the outcome.

“The plaintiff has filed dozens of copycat cases against Florida insurers raising the same claims — this case was simply the first to reach the class certification stage,” Large said in a written statement.

“In certifying the class, the trial court failed to rigorously apply Florida’s class action certification requirements, which are necessary to protect defendants’ due process rights. The 3rd DCA recognized this overreach and ruled appropriately.”

http://floridapolitics.com/archives/275876-no-fault-insurer-prevails-in-attempted-class-action-over-medicare-reimbursement

No-fault insurer prevails in attempted class action over Medicare reimbursement

Florida Justice Reform Institute

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