Tampa Bay Business Journal – Florida Justice Reform Institute

Florida contractors challenge new insurance law

June 1, 2022/in Tampa Bay Business Journal

Florida contractors challenge new insurance law

A contractors group filed a constitutional challenge that targets a new restriction on
attorney fees in lawsuits against insurance companies. –UNNAR PIPPEL

By Jim Saunders – The News Service of Florida
Jun 1, 2022

The lawsuit comes after lawmakers passed a measure to try to bolster a troubled property-insurance market.

Less than a week after Florida lawmakers rushed to make property-insurance changes, a contractors group Tuesday filed a constitutional challenge that targets a new restriction on attorney fees in lawsuits against insurance companies.

The Restoration Association of Florida and Air Quality Assessors LLC, an Orlando firm that does work such as mold testing and leak detection, filed the lawsuit in Leon County circuit court.

It came after lawmakers last week passed a measure (SB 2-D) to try to bolster a troubled property-insurance market that has led to homeowners losing coverage and seeing spiraling premiums. Lawmakers gave final approval to the bill on Wednesday, and Gov. Ron DeSantis signed it on Thursday.

Insurers have long blamed litigation and attorney fees for driving up costs. The new law took a series of steps to try to address those issues, but the constitutional challenge focuses on part of the measure that deals with what is known as “assignment of benefits.”

In assignment of benefits, homeowners sign over their insurance claims to contractors, who then seek payment from insurance companies — often spurring lawsuits about claims and payments.

Contractors in the past have been able to recover their attorney fees from insurers if they are successful in the lawsuits, a concept known as “prevailing party fees.” But the new law stripped contractors of being able to recover prevailing-party fees when they are assigned benefits.

Homeowners can still recover prevailing-party fees if they file lawsuits directly against insurers, but the contractors cannot. The lawsuit alleges that the change violates equal-protection and due-process rights and denies contractors access to courts.

“Claims submitted to insurers for work performed by contractors under an AOB (assignment of benefit) are generally not large in monetary amount,” the lawsuit said. “When the insurer delays, underpays or does not pay a claim at all, contractors are forced to commence an action against the insurer to recover the full amount due for the work performed. Without the corresponding right to recover prevailing party fees, SB 2-D makes it economically unfeasible for the contractor to pursue its lawful rights and remedies in court. Invoices for work performed by contractors under AOBs are generally not significant enough for a lawyer to agree to represent the contractor on a contingency fee basis and it is not economically reasonable for the contractor to … pay a lawyer on an hourly basis to recover the amount(s) owed.”

The lawsuit said invoices for work done by Air Quality Assessors and many other members of the association often total $2,500 to $3,000.

“The inability to recover prevailing party attorneys’ fees will effectively shut the courthouse door to plaintiffs because it will be cost-prohibitive to pay an attorney for these types of small claims,” the lawsuit said.

But William Large, president of the Florida Justice Reform Institute, a business-backed group that lobbies to reduce litigation, said in a statement after the law passed that “property insurance lawsuits have exploded over the last several years, overwhelming Florida’s insurance market.”

“Senate Bill 2-D contains significant litigation reforms and gets to the heart of escalating rates and limited coverage — lawsuit abuse,” Large said.

Assignment of benefits has long been a contentious issue in the insurance industry. The Legislature in 2019 put additional restrictions on assignment of benefits, at least in part because of an increase in residential water-damage claims.

But contractors contend that assignment of benefits helps homeowners who are unfamiliar with making sure insurance claims are handled properly.

“AOBs are not new and have been used for a long time, especially during emergency weather situations,” the lawsuit said. “In Florida, AOBs are prevalent in the residential property context when homeowners suffer damage to their home and need to hire contractors to repair the issues.”

The lawsuit, which includes seeking a preliminary injunction against the law, names as defendants Melanie Griffin, secretary of the state Department of Business and Professional Regulation, and Donald Shaw, executive director of the Construction Industry Licensing Board. The case has been assigned to Leon County Circuit Judge Layne Smith, according to an online docket.

https://www.bizjournals.com/tampabay/news/2022/06/01/florida-contractors-challenge-new-insurance-law.html

Florida Supreme Court revamps key legal standard

January 4, 2021/in Tampa Bay Business Journal

Florida Supreme Court revamps key legal standard

The issue in the ruling dealt with the standards that judges should use in determining whether to grant summary judgment.

By Jim Saunders – The News Service of Florida
Jan 4, 2021, 6:49am EST

The Florida Supreme Court on Thursday revamped a key legal standard as its conservative majority continued to show a willingness to undo previous decisions that have guided the state’s courts. Justices, in a 6-1 ruling, decided to scrap a state standard for determining whether lower-court judges should grant summary judgment in civil lawsuits. The Supreme Court said Florida should align with a federal summary-judgment standard — an approach backed by business groups that have pushed for ways to cut down on litigation.

“This is the Holy Grail of lawsuit reform in Florida,” William Large, president of the business-backed Florida Justice Reform Institute, said in a prepared statement after the Supreme Court issued the ruling.

Summary judgment generally involves judges being able to decide lawsuits before they go to jury trials. The issue in Thursday’s ruling dealt with the standards that judges should use in determining whether to grant summary judgment.

Justice Jorge Labarga, in a dissenting opinion, wrote that the change “discards long-settled law” in Florida and will lead to judges applying a less-restrictive federal standard in making decisions about summary judgment. The ruling, he said, “infringes upon the jury’s sacred role” in deciding lawsuits.

“The moving party’s intent in filing a motion for summary judgment is to dispose of a litigant’s claim on the basis that no genuine issue of material fact exists. For decades, Florida courts have been judicious in granting summary judgment because, as observed by one of our district courts, ‘a motion for summary judgment is not a substitute for a trial on the merits,’” Labarga wrote. “However, when the more relaxed federal interpretation is applied to a motion for summary judgment, the trial court’s analysis goes far beyond evaluating whether an issue of material fact is in dispute. Instead, the trial court assumes a role traditionally reserved for a jury and engages in weighing evidence.”

But the court’s majority said that in making the change, “we reaffirm the bedrock principle that summary judgment is not a substitute for the trial of disputed fact issues.”

“Our goals are simply to improve the fairness and efficiency of Florida’s civil justice system, to relieve parties from the expense and burdens of meritless litigation, and to save the work of juries for cases where there are real factual disputes that need resolution,” said the opinion shared by Chief Justice Charles Canady and Justices Ricky Polston, Alan Lawson, Carlos Muniz, John Couriel and Jamie Grosshans.

Thursday’s opinion was one in a series of rulings that have reflected a major philosophical shift on the Supreme Court since January 2019, when longtime Justices Barbara Pariente, R. Fred Lewis and Peggy Quince stepped down because of a mandatory retirement age.

Pariente, Lewis and Quince had been part of a relatively liberal majority that long frustrated state Republican leaders and business groups. Their retirements opened the door to Republican Gov. Ron DeSantis appointing replacements who have created a solid conservative majority.

Other examples of the philosophical shift include the court scrapping a longstanding legal requirement of reviewing death sentences to determine if they are “disproportionate” punishment; ruling that unanimous jury recommendations are not necessary before death sentences can be imposed; and tossing out a decades-old standard about circumstantial evidence in criminal cases.

Thursday’s opinion on the summary-judgment standard will change a rule for the state courts system and will take effect May 1. It came after justices asked attorneys in an Osceola County fatal traffic-accident case to submit briefs about whether the summary-judgment standard should be changed.

After opening up the issue, the Supreme Court received numerous friend-of-the court briefs, with business groups such as the Florida Chamber of Commerce, the U.S. Chamber of Commerce, Associated Industries of Florida and the Florida Health Care Association backing a change to the federal standard.

“As frequently named defendants in Florida lawsuits, the members of the U.S. Chamber and Florida Chamber have struggled with the inequity and inefficacy of Florida’s summary judgment standard,” lawyers for the chamber groups wrote in a joint brief in December 2019. “Since it was first announced 53 years ago … Florida’s standard has prevented the resolution of both meritless and meritorious litigation prior to lengthy and expensive trials, needlessly increasing costs for Florida’s business industry and consumers.”

But groups representing plaintiffs’ attorneys raised concerns about changing the standard and suggested the issue be sent to a rules committee to take input.

“The issues before this (Supreme) Court are of upmost importance to the members of our organizations, who advocate for their clients to have the right to jury trial preserved in all cases, such that this right should only be taken away in the pre-trial process after having a full and fair opportunity to oppose motions for summary judgment,” the Florida Justice Association and the American Association for Justice wrote in a joint brief in June.

https://www.bizjournals.com/tampabay/news/2021/01/04/florida-supreme-court-revamps-key-legal-standard.html

DeSantis backs liability protections amid pandemic

September 23, 2020/in Tampa Bay Business Journal

DeSantis backs liability protections amid pandemic

By Christine Sexton – The News Service of Florida
September 23, 2020

Saying that fear of lawsuits is holding back the economy, Gov. Ron DeSantis on Tuesday said he supports placing limits on coronavirus-related litigation and is willing to consider such a bill during a potential special legislative session in November.

The comments marked the first time DeSantis has publicly supported limiting lawsuits for Florida businesses that are grappling with the COVID-19 pandemic.

DeSantis said the Legislature could consider a bill to give liability protections to “run-of-the-mill businesses” during a session that also could involve his controversial plan to crack down on disorderly protesters. DeSantis unveiled the plan about protesters Monday and suggested Tuesday that a special session could be held when lawmakers return to Tallahassee for a Nov. 17 post-election organization session.

“There is a lot of concern about liability,” DeSantis said. “I believe it holds the economy back.”

The governor did not clearly explain what types of protections he would support, talking in sentence fragments when discussing the issues with reporters.

“”If you just have a store and someone … you cannot be held liable … first of all, how would you even prove someone was …. so we’ve never done that with any other type of virus where you could be sued,” DeSantis said.

The governor said “there’s some stuff going on that’s a little different than run-of-the-mill business” that wouldn’t qualify for protections and mentioned clinical laboratories.

Attempts to limit lawsuits — an issue commonly known as tort reform — often spur fierce political battles in Tallahassee, with plaintiffs’ attorneys squaring off against business and health-care groups. Opponents of such limits generally contend that they penalize people who are injured because of the actions of businesses or health-care providers.

DeSantis’ remarks were welcomed by business groups that have been pushing the governor to provide lawsuit protections during the pandemic. Businesses across the state closed down or scaled back in March and April to try to prevent the spread of COVID-19, with reopening efforts gradually starting in May.

“This is the first time I have heard the governor publicly support this, but I think he supports getting the economy open and getting everyone back to work,” said William Large, president of the Florida Justice Reform Institute, a business-backed group that lobbies on liability issues. “He’s a trailblazer in this respect. He is leading the way on the need to protect businesses from difficult causation lawsuits about how COVID-19 was transmitted. Businesses are in fear that if they open up they are going to be sued.”

Bill Herrle, executive director of the National Federation of Independent Business in Florida, also praised DeSantis.

“Business owners have been thrust into the role of being a public health officer. Every day they run their business they need to make decisions about whether Joe can come into work because he says that he’s not feeling well. Should we send Joe home?” said Herrle, whose group is made up of small businesses. “Or Joe comes in and says, ‘My wife, Mary, tested positive.’ So do we send Joe home? So it’s all those hundreds of day-to-day decisions. It is, but it’s not, alone, just the concern for exposure to liability for having caused someone to contract COVID. It’s all the hundreds of decisions we make that are being driven by COVID as well. So we are very happy to see him do this.”

DeSantis said he thought the liability issue would be settled by the federal government as part of a COVID-19 relief package. But Congress has been bogged down and unable to reach a deal on new legislation.

“The grand bargain was supposed to be liability protection for business and then aid to states,” DeSantis said. “The Dems wanted aid to states, and the Republicans wanted liability. But that hasn’t happened.”

Following DeSantis’ remarks, Florida Chief Financial Officer Jimmy Patronis late Tuesday issued a statement outlining what he identified as his three guiding principles for liability protections.

https://www.bizjournals.com/tampabay/news/2020/09/23/desantis-backs-liability-protections-amid-pandemic.html

DeSantis stays quiet on liability issues

July 22, 2020/in Tampa Bay Business Journal

DeSantis stays quiet on liability issues

Gov. Ron DeSantis – FLORIDA GOVERNOR’S OFFICE

By Christine Sexton – The News Service of Florida
July 22, 2020

Twenty-one Republican governors sent a letter this week to congressional leaders arguing that businesses, health care workers and schools need lawsuit protections because of the Covid-19 pandemic, but Florida Gov. Ron DeSantis did not sign on.

Congress is considering another Covid-19 relief package, and many Republicans contend that liability protections need to be part of any legislation that is ultimately passed and sent to President Donald Trump.

“To accelerate reopening our economies as quickly and as safely as possible, we must allow citizens to get back to their livelihoods and make a living for their families without the threat of frivolous lawsuits,” the letter to House Speaker Nancy Pelosi, House Minority Leader Kevin McCarthy, Senate Majority Leader Mitch McConnell and Senate Minority Leader Charles Schumer said. “As public policymakers, it is our duty to provide clarity, consistency, and stability to our citizens and their businesses, and the uniformity that federal law provides is critical to America’s industries that work across state lines.”

DeSantis’ office didn’t immediately respond to The News Service of Florida’s request for comment or explain why he didn’t sign onto the document, which was touted by the Republican Governors Association. DeSantis was one of five Republican governors who did not sign on to the request, along with the governors of Georgia, Massachusetts, South Dakota and Vermont.

It wasn’t the first time that DeSantis, who is an attorney, has been mum on the issue of lawsuit protections.

DeSantis received letters in April from associations representing hospitals and nursing homes asking him to issue an executive order protecting their members from liability amid the pandemic. The Florida Health Care Association, the state’s largest nursing-home association, sent a letter to DeSantis on April 3 requesting he provide nursing homes with civil and criminal protections, including safeguards from suits stemming from staffing or resource shortages.

Florida Health Care Association spokeswoman Kristen Knapp on Tuesday declined to comment on this week’s letter. “We’re going to keep our focus on ensuring our facilities have the resources they need to keep their residents safe and protected right now,” Knapp said in an emailed statement to the News Service.

The Florida Hospital Association sent a similar letter to DeSantis on April 22 requesting that he temporarily provide legal protections to hospitals. The association proposed that the protections from civil and criminal suits last through Oct. 1. Attempts to contact the hospital association Tuesday were not immediately successful.

The first groups to ask DeSantis for protections amid the pandemic were doctors. The Florida Medical Association and the Florida Osteopathic Medical Association joined with the Florida Justice Reform Institute, an organization that focuses on lawsuit limits, and asked DeSantis in March to issue an executive order limiting liability and providing sovereign immunity protections for doctors who were complying with emergency orders that shut down optional health-care services. The letter also asked DeSantis to extend the state’s “Good Samaritan Act” to apply to physicians working during the pandemic.

DeSantis did not issue any of the requested executive orders and avoided answering media questions about the requests.

Despite DeSantis’ lack of action on the issue during the pandemic, Florida Justice Reform Institute President William Large said Tuesday that legal protections still are necessary.

In part, Large said a timeframe people have to file lawsuits against businesses or health care providers should be shortened from the current four years to one year. Large also said evidentiary standards and culpability standards also need to be heightened to provide protections businesses need.

While DeSantis didn’t approve the requests, Large said he remains optimistic that the governor supports lawsuit protections.

“The first opportunity the Legislature addresses any subject dealing with Covid-19, such as the budget, we will ask for appropriate liability (protections) ” Large said.

https://www.bizjournals.com/tampabay/news/2020/07/22/desantis-stays-quiet-on-liability-issues.html

Florida House could shield equipment firms from liability

March 6, 2019/in Tampa Bay Business Journal

Florida House could shield equipment firms from liability

By News Service Florida staff
March 6, 2019

After a Florida Supreme Court ruling last year in a case involving a worker whose finger was severed, state House members Wednesday began moving forward with a bill that could help shield heavy-equipment owners from liability in such situations.

The bill (HB 355), approved by the House Civil Justice Subcommittee, focuses on companies that lease heavy equipment to other people or businesses and deals with a legal issue known as the “dangerous instrumentality doctrine.”

A divided Supreme Court in September ruled that Caterpillar Financial Services Corp. could be held liable in a case stemming from injuries suffered by worker Anthony Newton, who had been hired by C&J Bobcat and Hauling LLC to help clear a lot.

Newton and another man used a multi-terrain loader that had been leased from Caterpillar and was used to dump debris into a trailer for disposal, the Supreme Court decision said.

Newton was inside the trailer when the other man released a stump from the bucket’s loader, with the stump rolling onto Newton’s hand and severed a finger.

Newton filed a lawsuit in Pinellas County alleging that Caterpillar was liable because the loader was a dangerous instrumentality. A circuit judge and the 2nd District Court of Appeal turned down the argument, but the Supreme Court, in a 4-3 decision, overturned the appeals court.

The House bill, filed by Rep. Tom Leek, R-Ormond Beach, would make a series of changes, but a key would be to help protect equipment-leasing companies such as Caterpillar from liability.

Under the bill, such companies would not be liable if they lease equipment to other people or businesses who carry minimum levels of liability insurance.

The proposal is supported by groups such as the Florida Chamber of Commerce, Associated Industries of Florida and the business-backed Florida Justice Reform Institute. Christine Graves, an attorney representing the Florida Justice Reform Institute, said equipment-leasing companies currently can be held liable while not being involved in negligence by equipment operators.

https://www.bizjournals.com/tampabay/news/2019/03/06/florida-house-could-shield-equipment-firms-from.html

Florida Justice Reform Institute

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