Roofers challenging the law
Last year’s property insurance reform law under SB 76 targets the causes of the repeated double-digit rate hikes that homeowners and others are suffering. There are two ongoing legal challenges to the law in federal court – both by roofing and restoration interests – with the latest case seeking a preliminary injunction on the entire law while it sought to overturn the law on constitutionality issues. That case, Restoration Association of Florida and Apex Roofing & Reconstruction vs. Florida Department of Business and Professional Regulation, had an important order issued on January 10. Although this order is focused on preliminary matters, the questions and tone of Judge Allen Winsor are important to note. We would appreciate your feedback as you read the order and we will share our thoughts as well.
Judge Winsor ordered a motion to dismiss part of the case and deny the preliminary injunction. A preliminary injunction is normally used to preserve status quo during the litigation. Additionally, Judge Winsor dismissed the challenge to the law that would make a contractor responsible for a person acting on behalf of the contractor for compensation and those actions are “considered actions of the contractor” Florida Statutes 489.147(4)(a). The Plaintiff in the case failed to demonstrate that they had standing to challenge the issue and have a short time to cure the deficiency, but it is unlikely at best they can do so in the next few weeks as required to continue their challenge to this part of the new law.
Judge Winsor then went into analysis of the evidence before him on several of the issues in the case. He stated that a challenge to the law that would prohibit the offer of a thing of value for a contractor to conduct an inspection or file an insurance claim “cannot succeed because Plaintiffs have not shown it is likely they have standing.” Case No. 4:21-cv-263-AW-MAF. Additionally, Judge Winsor stated that Plaintiff has “not shown a likelihood of success on the merits for” excluding a notice as to limitations on their ability to offer items of value for their services as listed previously. He also reiterates that they cannot operate as unlicensed adjusters as is already in law and strengthened in Senate Bill 76. A last part of the bill addressed pertained to referrals of clients for property insurance proceeds. The order clarified that contractors would only be allowed to receive payment for work on the property, and not for the referral itself.
Again this is one of two challenges before Florida Courts on this law, and it is expected that both of the cases will go to hearing within the next few months. We will keep you apprised on the status of both cases.
LMA Newsletter of 1-24-22