How much do you pay for property insurance in Florida? Here’s some good news. | Opinion

Between 2019 and 2023, average homeowner premiums in Florida surged nearly 60%.

Gov. Ron DeSantis earlier this month revealed good news when it comes to Florida’s insurance market. Yes, good news.

During the last three years, the Florida Legislature has passed meaningful reforms to address unrestrained litigation and reign in skyrocketing attorneys’ fees, and their efforts are bringing down the cost of insurance, inviting more competition into the market and giving consumers more choice for coverage on their home and auto.

Between 2019 and 2023, average homeowner premiums in Florida surged nearly 60%. Not only were homeowners paying more for property insurance, but they had access to less coverage and fewer providers to choose from.

This was partly due to a legal environment that was too friendly to lawsuits against insurers. For a long time, Florida law allowed plaintiffs’ attorneys to recover their fees if they prevailed against insurers, even if the amount they secured through litigation was minimal; these fees were “one way” because plaintiffs faced no reciprocal risk that they would have to cover the insurance company’s attorney fees if plaintiffs lost. Assignments of benefits were also misused by third parties in order to access these statutory, “one way” attorney fees

Florida homeowners were left to foot insurance bill hikes

Unfortunately, the average Florida homeowner was left to foot the bill when insurance providers were forced to raise costs to cover excessive litigation. Many insurers determined that it was too costly to do business in Florida. By the end of 2024, more than 30 insurance providers had exited Florida’s marketplace.

The reforms began in 2021 when Senate Bill 76 required plaintiffs to notify an insurer before a lawsuit is filed. In turn, insurers are given an opportunity to reconsider a coverage denial and attempt to resolve a claim before it is the subject of litigation. The legislation also offered consumers additional protections from unscrupulous contractors.

Then in 2022, Senate Bill 2D, developed and passed during a special session called by the Governor, included additional tort reforms. This legislation prohibited assignment of the right to obtain attorney fees to anyone other than an insured or beneficiary named in the policy, thus eliminating abuse of these arrangements by third parties as a way to obtain attorney fees.

Later in 2022, another special session led to the passage of Senate Bill 2A. Senate Bill 2A eliminated the statutory right to recover attorney fees in a lawsuit arising under a residential or commercial property insurance policy.

Importantly, this legislation also implemented greater protections for consumers. The law requires insurance companies to be more responsive to their customers by limiting the time they have to respond to claims.

Building on these reforms, the Florida Legislature also passed House Bill 837 in 2023 to eliminate exorbitant attorney’s fees, strengthen negligence standards and provide stronger defense to those targeted by excessive litigation.

While our state leaders acted swiftly to develop, pass and implement solutions, we knew it would take time for these policies to stabilize the market. Now, the trends are moving in the right direction, providing much-needed relief to Florida’s homeowners.

Florida has 11 new insurance providers

In 2024, Florida had the lowest average homeowners’ premium increases in the nation, with an average statewide rate hike of just 1%. At the same time, premiums in other states have surged by more than 20%.

In addition, there are 11 new insurance providers in the market. And the providers that remain are expanding their business and filing for rate decreases.

This is only the beginning. As timelines run out for trial attorneys to pursue litigation under the more litigation-friendly law, the environment will continue to stabilize, reducing the burden of excessive litigation and bringing down costs even further.

Our state is proof that strong conservative leadership on the state level can lead to meaningful reforms. The steps our Governor and Legislature have taken are bringing stability to the market, leading to more choices and lower costs for Florida homeowners.

William Large is the president of the Florida Justice Reform Institute.

https://www.news-journalonline.com/story/opinion/columns/your-voice/2025/03/14/florida-home-property-insurance-desantis/82241314007/

Incoming Florida House speaker rolls out some rule changes for upcoming session

Jim Turner – News Service of Florida

November 12, 2020

TALLAHASSEE — Incoming House Speaker Chris Sprowls this week rolled out rule changes for the 2021 legislative session, including allowing each lawmaker to file one more bill than in the past and attempting to prevent “frivolous” amendments on the House floor.

But Sprowls, who will formally become speaker during an organization session Tuesday, quickly drew some pushback from Democrats.

The Palm Harbor Republican pointed to a need to better manage time during floor sessions, which during past years have sometimes gone without a break from before lunch to after midnight.

As part of that, Sprowls wants the Rules Committee to set procedures to manage questions and debate about every bill, according to an outline of the proposed rules. That would include allocating time for questions and debate on bills and amendments.

“Given the amount of work that must be accomplished during the regular session, we must ensure that we make the best use of our schedule,” Sprowls wrote Monday as he released the proposed changes, which will go before the House for approval during the organization session.

Another part of the proposal seeks to halt “frivolous” bill amendments that do not offer a “technical or substantive purpose.” Such amendments would be ruled out of order.

“The House floor represents the one place that we as a body come together as the representatives of the people of this state,” Sprowls wrote. “The floor can be a place for lengthy, vigorous discussion without descending into desultory or self-aggrandizing behavior.”

But Rep. Carlos Guillermo Smith, D-Orlando, noted that no definition was given of “frivolous.” He quickly said he intends to vote against the proposed changes, which he believes are an attempt “to silence the voices of Democrats.”

“Dramatically limiting floor questions on their bills & ruling amendments out-of-order they don’t like is an unacceptable attack on the millions of Floridians who elected us,” Smith, who frequently debates on the House floor, said in a Twitter post. “This means FL House GOP will limit questions, answers and debate on every bill on the floor. It’ll be easier to ram thru whatever they want, as quickly as they want before the public has a chance to see what they’re doing. Less transparency. Less accountability. More BS.”

Odessa Democrat Jessica Harrington, who unsuccessfully ran in last week’s election in House District 64 in Hillsborough and Pinellas counties, chimed in with, “Should we just change the name to the GOP Legislature with Dictator @ChrisSprowls?”

But there is likely little Democrats can do to stop Sprowls’ proposals, as the GOP picked up five seats last week to expand their majority to 78 seats in the 120-member House.

Other changes Sprowls has proposed include increasing the number of bills a member can file from six to seven; extending deadlines to file bills; allowing subcommittees to meet through the sixth week of the nine-week session, rather than the third week; and limiting proposed committee bills.

“These committee bills will be reserved for significant policy issues or required legislative housekeeping (i.e., Reviser’s Bills, Open Government Sunset Reviews),” Sprowls wrote. “The House will not be accepting routine agency packages or lobbyist-promoted bills as proposed committee bills.”  

The first of five committee weeks prior to the March 2 start of session is scheduled for the week of Jan. 11.

Sprowls noted that under the traditional calendar used for bill drafting and filing, members would have had to submit their first two proposals before Jan. 11. Under Sprowls’ schedule, Jan. 19 is the deadline to submit their first two bills for drafting and Jan. 29 is the deadline for the rest of members’ bills.

Another change is that appropriation bills filed by individual members could be handled on subcommittee consent agendas, rather than through what can be dozens of rapid-fire hearings that crowd out other issues from subcommittee agendas. However, in exchange for speeding up the reviews, Sprowls wants to require organizations requesting taxpayer dollars to file attestations with the Public Integrity & Elections Committee verifying “under penalty of perjury” the information in the bills is accurate.

SHATTERED GLASS

Windshield glass repairs will remain an issue during the 2021 session as debate continues about the controversial insurance practice known as assignment of benefits.

The Florida Justice Reform Institute, which works to rein in lawsuits, made a presentation on the issue last week at the Florida Chamber of Commerce’s Annual Insurance Summit. The presentation included an updated report about contentions that auto glass firms and their lawyers are using “new schemes” in filing windshield-replacement lawsuits that “continue draining policyholders’ benefits in 2020.”

William Large, president of the Florida Justice Reform Institute, estimated the lawsuits have grown by 30 percent in the first six months of 2020.

“Since windshields are exempt from an auto insurance policy’s deductible requirements, the prospect of a ‘no risk’ replacement has fueled a market where auto glass vendors promise consumers a free windshield — and sometimes much more — in exchange for an assignment of benefits,” a release from the institute said.

In assignment of benefits, policyholders sign over claims to contractors who then pursue payment from insurers.

Lawmakers during the 2019 session placed restrictions on assignment of benefits for property-insurance claims and debated restrictions for windshield claims.

Opponents said the potential windshield-claim restrictions would hurt small windshield-repair businesses trying to compete with larger corporations that have arrangements with insurance companies.

 https://www.news-journalonline.com/story/news/state/2020/11/12/florida-speaker-rolls-out-some-rule-changes-upcoming-legislative-seassion-politics/3762513001/ 

Ormond Heritage condos languish under a legal cloud

By Mike Finch II 
Posted Jan 17, 2018 at 6:07 PM  Updated Jan 18, 2018 at 2:28 PM

ORMOND BEACH — Paramount Disaster Recovery offered its potential clients a deal after Hurricane Matthew: Sign over your insurance claim and we’ll take care of the rest.

Property insurance can be a messy business, so Paramount found a willing customer in the Ormond Heritage Condominium Association. Overlooking the Halifax River, the three towers of the Ormond Heritage rise eight stories above the Granada Bridge. Its residents are mostly retirement age.

Matthew left the buildings with a damaged roof, and water found its way into some areas on the ground floor. Instead of a speedy repair job, though, the Ormond Heritage is now engaged in a $66 million court battle with its insurance company, the London-based Ariel Syndicate 1910.

Before the lawsuit, Paramount last year ordered residents to evacuate their condos because of widespread mold. The company said a section of the outside walls of every unit needed to be torn out and replaced. Many of the residents had trouble believing it.

Paramount and the insurer are now fighting in federal court over whether the mold remediation is covered by the insurance policy. But the Ormond Heritage is already paying for its decision.

“Our insurance premium tripled … for our hurricane and windstorm coverage,” said Jerry Cutter, the current Ormond Heritage association president. “It was extremely difficult to buy insurance; extremely hard to find anyone that would cover us.”

The insurance claim from Hurricane Matthew now exceeds the condo’s coverage limit by $11 million. Due to one obscure legal provision — an assignment of benefits — included in the contract with Paramount, residents have lost the power to do anything about it.

Florida law gives the insured the exclusive right to recover attorneys fees when a policy dispute is taken to court. It was intended to give a boost to consumers who go head-to-head with deep-pocketed insurers.

By having customers sign over the rights to their policy, namely the right to sue the insurer, service providers like Paramount have added a powerful tool to their arsenal of negotiation tactics.

Once an assignment of benefits is done, the vendor can assume the rights of the individual and force insurers to pony up more money or risk spending large sums on litigation. The arrangement leaves the insurer on the hook for all attorneys fees and the final cost of the claim if they lose.

Lawmakers, regulators and reform advocates have been sounding the alarm out of fear these types of cases will spread throughout the state. It’s become a major topic of concern in the property insurance world as the number of legal cases where a third party invokes the assignment of benefits has climbed four-fold in the past seven years.

They now make up more than half of all lawsuits filed against insurers, said William Large, president of the Florida Justice Reform Institute, which published a report on the issue last year.

“It’s such a good tool, it creates an extraordinary amount of leverage to anyone who has it,” Large said. “But when you’re giving that away to a third-party vendor, that’s when it leads to an abuse and literally a proliferation of these thousands and thousands of cases.”

68 suits in 2 years

“One call, we do it all” is how Paramount Disaster Recovery markets its services.

Paramount focuses on property mitigation and restoration work and is run by Francis “Frank” Buchanan, a Scottish immigrant whose first taste of the industry was as a roofing day laborer. Buchanan now holds a contractor’s license with numerous construction-related businesses in his name.

But it wasn’t Buchanan who made the pitch to the Ormond Heritage. It was Joseph Radcliff, a seasoned salesman, who authored a book on how to make money from home insurance restoration.

Radcliff won a $16.9 million judgment — the largest defamation award in Indiana history at the time — from the insurance giant State Farm. He emerged from the case, which included allegations of fraud against him, as someone who brawled with big insurance and won.

In the past two years at least, Paramount seems to be bringing the same kind of fight to various Florida courtrooms. Since 2016, Paramount Disaster Recovery LLC has filed 68 lawsuits against insurance companies. Each of them involved clients — many of them in Martin County — who signed assignment of benefits agreements.

Buchanan, when reached by phone, dismissed questions about whether the number and frequency of the lawsuits filed by his company represented the type of abuse some have complained about.

In a prepared statement, Buchanan chalked the company’s recent legal record up to tight-fisted insurers who are hesitant to pay homeowners and contractors a fair sum after catastrophic storms. Because of that, he said, the courts are the most effective place “to force insurance companies to honor their legal commitments so that properties can be properly restored.”

Mold or no mold?

Less than two weeks after Hurricane Matthew scraped Florida’s east coast in October 2016, Dr. Frank Farmer, a former state surgeon general who was the Ormond Heritage association’s president at the time, signed the contract with Paramount.

Six months later, in April 2017, condo owners were summoned to the complex’s downstairs ballroom over the PA system. They were met by the condo association attorney at the time and Radcliff, a representative with Paramount Disaster Recovery.

The condo association had hired the South Florida company to handle apparent roof damage caused by Matthew. Now, Radcliff told them there was mold, possibly toxic, that could be affecting every condo in all three of the buildings.

Jerry and Cecillia Cutter, longtime residents of the Ormond Heritage, slipped into the room after a neighbor mentioned the gathering.

“They would not recommend that we go back to our units; that we should leave immediately,” Cecilia Cutter said. “And not come back.”

Safety masks were placed on a table inside the lobby. Everyone present was told to evacuate right away. Farmer, the association president and once the top public health official in the state, warned residents again in a memo.

“Please be advised that you will be placing your health in jeopardy, if not severe jeopardy, if you remain in your unit (i.e. fail to vacate it) given the elevated levels of Stachybotrys, or other unsafe levels of mold spores, that currently exist in your unit,” Farmer wrote in a letter dated April 25, 2017.

Another meeting was held in May 2017. The message spread throughout the buildings. Many of the residents, including the Cutters, were skeptical of the mold claim. They wanted to see the test results with their own eyes. It took the Cutters two months before they saw the report.

“Many of us couldn’t even get a copy of the report,” Cecilia Cutter said. “And when we did get it, it was one page.”

Air Quality Assessors of Florida, based in Winter Park, found high levels of a common mold type on the first and second floors of the front lobby. Two walls inside a nearby office also had increased levels of mold because of water exposure, according to test results provided to The News-Journal.

Most, if not all of the units were tested by the same company. Residents said they often returned home to find an entire section of their living room cordoned off with plastic and tape. Sometimes holes were drilled into the ceiling or floors and an exhaust fan was left inside, but turned off.

The results varied widely. About one-third of the residents had their units re-tested independently, according to Jerry Cutter. Many of the common areas, including the ballroom where the meeting was held, were closed off afterward. A security guard started screening visitors at the front door.

Some, including Farmer, left within weeks. But many of the residents stayed.

The condo had already paid Paramount its $960,000 deductible up front. But Paramount didn’t like the price to fix the roof quoted by Ariel, the condo’s insurance company. Blue tarps covered the roofs for months as the two parties were deadlocked.

“The damage that Paramount claimed was that our two-year-old roofs were destroyed,” Jerry Cutter said. He said it didn’t take long afterward for the condo owners to learn of the “whole heart of our problem.”

On the sidelines

Although the first lawsuit filed last June in Volusia County Circuit Court lists the Ormond Heritage Management Association as the plaintiff, representatives of Paramount were actually behind it.

The grounds for the legal claim against Ariel, like many of Paramount’s other cases, was breach of contract. Signing over the benefits left the Ormond Heritage Condominium Association powerless in the fight. They’d handed over their right to negotiate with their own insurer.

Stuck on the sidelines, some residents seethed at those responsible for hiring the company. A recall petition was started to remove Farmer from his position. He resigned days before the vote.

Attempts to reach Farmer for an interview were unsuccessful, but he released a prepared statement through a spokesperson. Farmer maintains that the decision to hand over the insurance claim to Paramount was the “most effective way to force our insurance carrier to fulfill its obligation.”

The Ormond Heritage isn’t the only area property to have signed its benefits over to Paramount.

Vacant since Hurricane Matthew, the Maverick, a 138-room timeshare resort on State Road A1A in Ormond Beach, still has a Paramount Disaster Recovery trailer parked out front.

The hurricane left its patio in shambles and a large section of the roof was blown off. To make matters worse, a pipe burst in the kitchen right before the storm arrived. Most of the damage to the Maverick was obvious to the naked eye.

Curtis Cole, the Maverick’s general manager, felt like they were being low-balled by their insurance company. A number of public adjusters and contractors were already speculating in the area. Cole kept the stack of brochures they’d leave behind.

He decided on Noble Public Adjusting out of Panama City Beach, which referred him to Paramount. Cole said he was convinced by Radcliff who was “such a super salesman.”

“We signed with both and didn’t realize that the assignment of benefits was actually not our friend,” Cole said.

The agreement was inked on Nov. 1, 2016. Paramount also found a “moisture” problem at Maverick and had torn out many of the cabinets in the studio apartments and some of the walls.

“Within about 10 days after they started,” Cole said, “the insurance company was sending us threatening things which I was forwarding directly to them (Paramount).”

The first deadline for completion of repairs was at the end of January 2017. January turned to February, and then March, April, May. Paramount was locked in a battle with the Maverick’s insurer, ICAT.

Although no lawsuit has been filed against their insurance company yet, Cole said the Maverick is now looking to hire a new contractor and pay for it out of pocket just to be back in business.

Paramount has already been paid at least $3 million from the Maverick’s insurance company, Cole said. The roof work is complete, but many of the individual rooms are still unfinished.

Cries for reform 

Assigning the rights to an insurance claim is a 100-year-old practice in Florida that researchers say only became popular in the last decade. The prevailing theory is that vendors and attorneys became more aware of the tactic and began deploying it with force in the vehicle and property insurance market.

“Maybe a handful of individuals figured out that they could take first-parties coverage and do the same thing as in (car insurance),” said Ashley Kalifeh, a co-author of the Florida Justice Reform Institute report.

The study showed that most of the legal activity is concentrated among a small cadre of vendors and attorneys.

“Once someone figures out a new way to do things, all the other lawyers see it and other vendors see it and it just gets mimicked,” she said.

For those schooled in the ways of property insurance, third parties seeking the best deal for their clients is really no different than if a consumer takes the insurer to court.

“The lawsuit doesn’t change whether the homeowner brings it or they assign it to a contractor,” said Lee Jacobsen, a Central Florida attorney who studied the issue for the Florida Justice Association, a trial lawyers lobbying group. “The facts of the case remain the same.”

A partner with the law firm Hale, Hale & Jacobson in Orlando, Jacobson and a handful of other attorneys were identified in the Florida Justice Reform Institute report for handling a high volume of lawsuits involving assignment of benefits.

He doesn’t doubt the number of assignment of benefits lawsuits has risen sharply and said there’s room for some “common sense reform.” Yet, he isn’t sympathetic to the lament of the insurance industry.

“What insurance companies don’t like is they’re able to bully homeowners around inside litigation,” he said.

Meanwhile, insurers are responding by raising rates.

Insurance companies like Universal Property & Casualty and the state-run Citizens Property Insurance Corporation are raising rates, at least in part, because of increased litigation from the assignment of benefits. Citizens has said it would have to raise rates by 10 percent every year if the pace of litigation doesn’t slow down.

Some say it’s only a prelude for what’s to come. Until recently, Floridians dodged major storms for a decade.

The time allowed insurance companies to take advantage of lower reinsurance rates so the “damage” of the increased litigation was “muted,” said Jeff Grady, president of the Florida Association of Insurance Agents.

“You haven’t really felt the full effect of what it might be like,” Grady said.

A report published by the Florida Office of Insurance Regulation showed that the severity of water loss claims, on average, were about one-third higher when an assignment of benefits was involved.

Regulators are looking to lawmakers for a change. However, attempts at reform in the state Legislature have all sputtered. One bill passed in the Florida House last week that would allow property owners to rescind the agreement within seven days of signing a contract and enforce other restrictions.

“It’s a very difficult issue because there are a lot of people making a lot of money off of this.” said state Sen. Dorothy Hukill, R-Port Orange. “It’s hard to get consensus.”

Hukill is sponsoring a bill that would rewrite how assignment of benefits is used in the state. The provision so SB 62 would place require policyholders to notify their insurance company when signing and assignment contract, among other things. An identical bill didn’t get a hearing during last year’s session. Nevertheless, she said the need to protect consumers is still urgent.

“Too many people don’t realize that when they sign the assignment of benefits they are going to be out of the loop,” Hukill said.

‘Back to normal’ 

The case of the Ormond Heritage took a turn last summer. The insurance company Ariel Syndicate 1910 went on the offensive, filing a lawsuit against Paramount in the U.S. District Court for the Middle District of Florida.

The legal complaint asked a judge to clarify how much insurance Paramount, “the purported assignee” of the insurance claim, was entitled to be paid. Ariel’s lawyers disputed owing money for just about everything except the roof, which they argued should only be paid after the work is complete.

Paramount alleged the company was acting in “bad faith,” and Ariel countered by asking a judge to dismiss the case. The back and forth continues with no end in sight.

Meanwhile, residents at the Ormond Heritage are living under a legal cloud. Most of Paramount’s clients who landed in court were individual property owners, not 158 in three condo towers.

Residents were so skeptical of Paramount’s claims of mold and concerned for their health that many paid for their own air quality tests. Now there are various reports that conflict with the one completed by Air Quality Assessors, said John Oliva, another condo association board member.

“All of them have been conflicting with it,” he said.

What the residents didn’t know was that the Winter Park company was also singled out for its frequent involvement in assignment of benefits cases, according to the Florida Justice Reform Institute report. Since 2014, Air Quality Assessors has been a vendor in more than 500 assignment lawsuits, the report states.

When reached, Richie Kidwell, the owner Air Quality Assessors, said the tests aren’t “apples to apples” and that his company was still owed more than $100,000 from the Ormond Heritage tests.

The condo’s new board, elected over the summer, has reopened many of the downstairs common areas that Paramount had closed off to residents. A new air quality report by a local company showed no signs of harmful mold in most places. Where there was water damage, Jerry Cutter and the building’s manager were busy one recent day doing the work of replacing pavers and walls themselves.

“We are paying for things ourselves outside of insurance,” Oliva said. “That’s just to get things back to normal.”

http://www.news-journalonline.com/news/20180117/ormond-heritage-condos-languish-under-legal-cloud

SMALL CLAIMS, BIG IMPACTS: Surge in lawsuits drives up costs for Volusia-Flagler motorists

Lawyers Keith Petrochko, left, and Todd Migacz make their arguments before Judge A. Christian
Miller at the Volusia County Courthouse in DeLand last month. Petrochko works for the Davila Law Group
while Migacz represents Windhaven Insurance which is being sued by the Davila Law Group,
which has filed thousands of small-claim lawsuits in Volusia County against insurance companies.
[NEWS-JOURNAL/JIM TILLER]

By Frank Fernandez 
Posted Sep 22, 2018 at 1:00 PM

Small claims lawsuits are typically, well, pretty small stuff. Disputes can involve claims over a few hundred dollars, sometimes even less. In 2016, such cases accounted for just under 4,500 case filings in Volusia County.

But something strange happened in 2017.

The number of small claims cases more than doubled, to over 12,000. And a single local law firm accounted for all of that increase — and then some — by filing 8,400 cases that year.

It’s part of a statewide trend that is holding through the first half of 2018, and its effects are being felt not just in Volusia but in Flagler County as well, where the clerk of court’s office struggles to keep up with the greater workload. And it’s not just overworked clerks who are affected. Some of these cases may be costing you and every Florida motorist when you renew your auto insurance.

Suddenly, small claim cases don’t seem so small-time anymore.

So what gives?

The spike in cases is part of what insurance industry experts say is a move by some lawyers to make a high-volume business out of filing claims involving motorists in personal injury protection — or PIP — cases that help pay for medical care after accidents. Under Florida law, attorneys can make thousands of dollars in fees in cases involving disputes over mere hundreds of dollars. In one local case, lawyers were awarded about $40,000 after winning $790 for their clients.

In most of the high-volume cases, the attorneys aren’t even working on behalf of the injured party. Through a practice known as “assignment of benefits,” the accident victim signs over any claim to repayment to the medical provider.

The law also provides for something called “one-way attorney’s fees.” That means if the insurance company loses the lawsuit or settles for terms unfavorable to it, it must pay the medical provider’s attorney’s fees. But if the medical provider loses, it doesn’t have to pay the insurance company’s legal bills.

The combination of assignment of benefits and one-way attorney’s fees is prompting some law firms across the state to cash in by suing insurance companies over relatively small amounts that medical providers claim they are owed, said Michael Carlson, president of the Personal Insurance Federation of Florida, an industry group that represents State Farm, Progressive, Allstate and Farmers.

“There’s a whole cottage industry of law firms that have sprung up over several decades,” Carlson said. “Their whole practice is not representing the consumer who has been hurt in a car accident. They are representing the medical provider who has provided some medical service to the consumer.”

Across Florida, PIP lawsuits shot up nearly 50 percent to a record high of more than 60,000 in 2017, according to data from the Florida Justice Reform Institute, a group that says it fights against wasteful litigation.

“The point behind the litigation is to get big attorney’s fees fighting over low dollar amounts. Unfortunately for your typical consumer of insurance, it means higher insurance premiums because of endless litigation,” said William Large, president of the Florida Justice Reform Institute.

In Volusia and Flagler counties, a single firm — Simoes Davila, with offices in DeLand, Longwood and Bradenton — is responsible for most of the uptick in small claims cases, and most of those cases involve PIP claims. The firm — with principal partners Kimberly

Simoes and David Davila — is relatively young. The Florida Department of State website shows the offices were formed between February 2017 and April 2018.

After lawyers with the firm filed 257 small claims cases in Volusia County in 2016, they filed 8,404 the following year. Through August of this year, the firm was responsible for 3,497 Volusia cases, 56 percent of all the small claims cases filed in the county. And many of the lawsuits appear to be for plaintiffs outside of Volusia County, like the 1,288 lawsuits from Back on Track, which does business as Florida Accident and Injury Center in Bradenton, which now goes by the name of Manasota Accident and Injury Center.

When reached by the News-Journal, Thomas Hynds Jr., the registered agent on corporate records for Back on Track, referred questions to Simoes and Davila. When a reporter persisted in seeking information, he hung up.

Simoes and Davila did not respond to repeated attempts to seek comment for this story. When asked before a hearing in DeLand why so many lawsuits were filed in Volusia County, one of their attorneys said, “That’s where our office is.” He declined further comment.

Small claims cases filed by lawyers working for attorneys Kimberly Simoes  and Julio “David” Davila
in Volusia and Flagler counties more than doubled, creating huge workloads for clerks dealing
with the spike in lawsuits which insurance experts say is part of statewide trend that could lead to higher premiums.    

Small claims cases broken down by attorneys who work  for Simoes and Davila, or have in the past.

While it might be easy to blame the lawyers for clogging the system or exploiting a loophole in the law, they aren’t the only players. As other lawyers point out, you can’t forget the insurance companies.

Brooke Boltz, a Seminole County attorney who used to represent an insurance company before switching sides to begin suing them, said there wouldn’t be so many cases if insurance companies paid out claims when they’re supposed to. Boltz worked briefly for Simoes and Davila.

“It’s fine to point the finger at the plaintiffs and say that we are all out trying to make money, but let’s not kid ourselves and say that the insurance companies are looking out for anyone’s interest but their own,” Boltz said in a phone interview. “They always say it causes the premiums and such to increase. If they paid their claims fairly from the outset they wouldn’t get sued.”

And the insurance industry has been in no hurry to seek reforms, objecting to efforts in the Florida Legislature to scrap the PIP system while it continues to jack up rates. And while insurers have cried long and loud over the assignment of benefits when it comes to property insurance claims, there hasn’t been a similar push from the industry when it comes to PIP, even though it’s responsible for far more lawsuits.

As a consequence, the Florida Legislature has failed to reach agreement on how to reform PIP laws or attorney’s fees, leaving consumers on the hook for higher insurance premiums.

PIP

Personal injury protection, or PIP, provides coverage of up to $10,000 under Florida’s no-fault insurance statute. In response to increasing fraud — criminals working in conjunction with fake medical clinics took to staging accidents to milk the benefits — the Florida Legislature tried overhauling PIP in 2012. Reforms included giving accident victims 14 days to seek medical treatment and banning massage therapy and acupuncture as treatments for which they could file a claim.

PIP claims decreased after the reforms, said Lynne Yeates McChristian, a communication consultant with the Insurance Information Institute. But they are now trending up again. At the end of the first quarter in 2018, the average PIP claim was $8,377.

“The average cost of claim was bumping up against the maximum,” she said.

State Rep. Erin Grall, R-Vero Beach, introduced a bill during the last legislative session to repeal Florida’s PIP statute, which the House overwhelmingly approved by a vote of 88-15. But the Senate’s version did not pass as lawmakers disagreed on how to replace PIP, according to news accounts. It was the second year in a row that the state Legislature tried and failed to tackle PIP.

The House version would have replaced PIP with mandatory bodily-injury liability coverage at $25,000 per person and $50,000 an accident. The Senate also required drivers to buy $5,000 of coverage for the driver’s own injuries, even if the driver already had health insurance coverage. A State Farm lobbyist called it “PIP version 2.0,” and warned that costs to consumers would go up.

Low awards, high attorneys fees

One-way attorney’s fees were originally intended to give individual insurance holders, the little guys and gals with the actual policies, a fighting chance against powerful insurance companies that can afford platoons of lawyers.

Some experts believe the benefit of one-way attorney’s fees should be limited to the original policyholder, saying a business like a pain clinic or chiropractor should not enjoy that advantage. Combining one-way attorney’s fees with assignment of benefits creates too much incentive for lawsuits that are more about ginning up big fees than righting a wrong, said Large of the Florida Justice Reform Institute.

The attorney’s fees can really ring up the cash register. In one example, Advantacare of Florida, represented by Kimberly Simoes, filed a lawsuit against State Farm saying the company had not paid it for services it rendered to Stephen Smith. Advantacare was awarded $789.62 according to court files. Simoes was awarded $39,985 in attorney’s fees. Attorney Mark Cederberg was awarded $3,500 for his expert testimony regarding whether Simoes’ fees were reasonable. About a month after the attorney’s fees were awarded, Advantacare dismissed the lawsuit.

Another case involved Boltz. The PIP lawsuit by Advantacare of Florida in Daytona Beach against Windhaven Insurance Co. was for an amount not exceeding $5,000 for treating Christian Washington for his injuries in a traffic accident, according to the complaint. Boltz’s fees award: $22,995.

Boltz lay the blame with the insurance company, noting that if it had paid the initial bill, there wouldn’t have been any attorney’s fees for her to collect.

“We are deriving a benefit for our client,” Boltz said. “We are pursuing payment for our client and we are also pursuing payment for ourselves. I’m not a nonprofit. I’m an attorney. I’m looking to make a business. I’m looking to grow a business.”

The $22,995 award is unusual, she said. In other cases, she won fees ranging from $3,000 to $5,000 with awards that ranged from $8,000 to $10,500. She added that while insurance companies may complain about the assignment of benefits clause, it helps doctors and other providers collect their fees. There are plenty of times an insurance company will refuse to pay anything on a $10,000 PIP claim, Boltz said.

“Until I sue them, and until I did their deposition, and until I made it apparent to them they erroneously denied these bills, they weren’t going to pay,” Boltz said.

Starting in the 1990s insurance companies became more aggressive in paying less on claims and outright denying claims, said Jay M. Feinman, a law professor at Rutgers University who wrote a book entitled “Delay, Deny, Defend: Why Insurance Companies Don’t Pay Claims and What You Can Do About It.”

He said some insurance companies will delay paying claims because that allows them to make more money off of the interest from the investments they’ve made with the money consumers pay for their policies. Delaying payments also increases the chances that a policyholder will settle for less or just go away, Feinman said in a phone interview.

Attorney Steven Robinson of Daytona Beach once defended insurance companies and has opposed Kimberly Simoes in court. He said a large increase in lawsuits probably means a lot of insurance companies aren’t paying.

“In many instances, the insurance companies don’t pay the doctors what they are owed, so a lot of lawsuits get filed by doctors who don’t get paid,” Robinson said.

‘Crushing’ caseload

Until Florida lawmakers can get a handle on PIP insurance and attorney’s fees, industry insiders say they can expect two trends to continue: higher premiums for Florida consumers and the avalanche of lawsuits straining the resources at the clerk of courts’ offices.

Volusia County Clerk of the Circuit Court Laura Roth said she’d never seen anything like the increase in small claims cases that started in 2017.

“It is unusual. I’m not really aware of any other case type coming from one firm where we’ve seen such drastic numbers,” Roth said.

“It really overwhelms your staff to triple your numbers in less than a year’s time,” Roth added. “It really burdens your staff. We’ve got it under control now, but it was really hard on us at first.”

In Flagler County — which has seen 1,577 small claims cases so far this year, more than the previous two full years combined — the increase necessitated bringing in retired senior judges to help handle the caseload. One was set to preside over 153 pre-trial hearings for Simoes and Davila cases in a single day.

Flagler County Clerk of Courts Tom Bexley said the spike is overwhelming to his two clerks who handle all the county civil cases in Flagler.

“When you multiply activity of this kind by 500, it’s crushing to the County Civil Division,” Bexley wrote. “I am hopeful these cases will move quickly and we can continue with business as usual.”

Lawyers Keith Petrochko, left, and Todd Migacz, right, talk shop outside the
courtroom before presenting their cases before Judge A. Christian Miller
at the Volusia County courthouse in DeLand on Aug. 24. Petrochko is with the
Davila Law Group, which has filed a lawsuit against Windhaven Insurance
represented by Migacz. [NEWS-JOURNAL/JIM TILLER]


The Davila Law Group representing Advantacare of Florida LLC filed a lawsuit against Windhaven Insurance
on March 21, 2017 claiming Windhaven owed up to $5,000 in unpaid medical bills from a 2016 auto accident.
On Dec. 7, 2017, the Davila Law Group was awarded $27,437.50 in attorneys fees on the case. That broke down
to $750 for David Davila, $2,567.50 for Joseph Engel Jr., $1,125 for Keith Petrochko, and $22,995 for Brooke
Boltz, who is no longer with the firm. Mark Cederberg, an Orlando attorney, was awarded $8,085 to serve as an
expert witness on attorneys’ fees. The grand total including the expert fee is $35,522.50.
//www.news-journalonline.com/news/20180922/small-claims-big-impacts-surge-in-lawsuits-drives-up-costs-for-volusia-flagler-motorists