New insight
So what of the current legal challenges to Florida’s new property insurance reform law, SB 76? I had the pleasure to sit down recently with Jose Pagan, a former fraud regulator who is now one of Florida’s leading insurance defense lawyers. He shared his views on the lawsuits filed by roofers and restoration companies in federal court, the ongoing litigation abuse and unlawful activity in the marketplace, and how consumers are ultimately losing. We recorded it as our latest episode of The Florida Insurance Roundup podcast.
Jose and I go back to the days of 1992’s Hurricane Andrew in Miami, where we worked together as insurance regulators. We discussed both lawsuits currently in federal court. The first lawsuit alleged that the section of the law dealing with prohibited advertisements and soliciting infringes on the constitutional right of free speech. Chief U.S. District Court Judge Mark Walker granted a preliminary injunction on the section in July, pending full trial scheduled for spring of 2022. Jose outlined the series of court tests the judge used, noting “Clearly, Judge Walker indicated that there was a significant government interest in attempting to address fraud and abuse in litigation…(but) that it was an infringement on commercial speech.” It’s that section that Senator Boyd aims to improve in his pending bill this coming session.
Jose Pagan, Esq. Courtesy, Walton, Lantaff, Schroeder & Carson
The second lawsuit seeks to throw-out the entire law, which includes a series of provisions, including broadening the longstanding one-way attorney fee statute formula where fees are now awarded instead based on a percentage of recovery of the disputed amount of the claim. The suit alleges the law impinges on protected free-speech rights, interferes with contract law and commerce, and due process.
“There is nothing in the legislation that hasn’t been the case for decades…whether it is regulating the contracting industry under Chapter 428, or the insurance industry under Chapter 626,” said Jose, an insurance defense lawyer with more than 25 years’ experience in the insurance industry, including as an insurance agent and fraud investigator. “Dating back as far as in the early 90s, during Hurricane Andrew and thereafter, the law was very well defined, and everyone knew or understood that you could act as a contractor, (or) you could act as a public adjuster. But unless you were licensed in both, you could not act as both a contractor and a public adjuster.” He said that “some of those lines became a little blurred” and “there have been so many different actions either taken by the courts or not taken by the regulating entities that have allowed questions to arise,” that the legislature needed to provide clarification through SB 76.
Jose also weighed-in on how the presuit settlement part of the new law is working so far. It requires that insurance companies receive a ten-day notice and demand before a lawsuit is filed by first-parties and gives carriers 10 days to respond. Jose said most of the attorneys and carriers he knows are utilizing it to settle claims before they become lawsuits. He offered some interesting insight on those cases that remain unresolved. You can listen to the podcast here or on your favorite audio platform, as well as read the show notes and check out the various links and resources we mention in this episode.
LMA Newsletter of 11-1-21
