Apr
21
2016

What is a forced placed policy?

We see many types of insurance policies but insurance that is force placed is often the most difficult to wrap your head around. These types of policies are actually purchased by the mortgage company when the homeowner fails to get insurance on the home themselves. Essentially, the mortgage company buys insurance for itself. This means the mortgage company is the “insured”, not the homeowner. The homeowner is usually named as only the “borrower”. That means the mortgage company gets first right to any and all insurance benefits paid out and the homeowner is a spectator. That can be an especially tough pill to swallow considering most homes with forced placed policies are already in foreclosure as not paying the mortgage usually goes hand in hand with not getting insurance. These homeowners are watching the same mortgage company taking their home away collect the insurance benefits too.

In addition, the policies are often taken out only for what is owed on the mortgage and not the value of the cost to replace the home. This means if the house burns down, the mortgage company will collect what it owes on the mortgage and move on with no chance the home gets rebuilt. These policies are really meant to protect the banks own money more than to protect the house or the homeowner.

In short, if you have a a forced placed policy and can afford to get private insurance, do it immediately. These are the worst types of policies to have. If you are not sure of what type of insurance you have, the most common forced placed insurance polices are usually Balboa, QBE or American Security/Assurant. Most of these companies are actually owned by the same mortgage mortgage company on the home.

Apr
14
2016

Do homeowners have to repair their sinkhole homes?

Where or not homeowners are entitled to monetary awards or whether they are forced to actually repair their home with any insurance benefits paid out has been a hotly contested debate for years. The debate stems from language in the sinkhole statutes that says insurance companies do not have to issue payment for the “sinkhole” or below ground repairs until the homeowner enters into a contract with a contractor to start those repairs. Then, and only then, will the insurance company release that money which will payable directly to the contractors. In Florida, centuries of common law dictates that when you have a contract and someone breaches that contract, they can no longer come back and force the other person to comply with their part of the contract. That was the argument in these cases. “Look insurance company, you didn’t do what you were supposed to do first so now its too late to come tell me what I have to do”. In the past year there have been several decisions from Florida appellate courts on this issue. All of the decisions have been pretty decisive that yes, homeowners will have to repair their homes even if their own insurance breached the contract first. Unless the issue is accepted by the Florida Supreme Court, this issue is relatively established now in Florida law and insurance companies will use it to their advantage.

The law and reality are not always one in the same. The reality is some insurance companies will stand strongly behind this proposition while others not so much. It really depends on the insurance company and the situation. If it appears to be twice the policy limits to repair a home, most insurance companies would prefer not to repair it and save the money by just paying you the policy limits. Some insurance companies just flat don’t have it in their business model to spend the time and money repairing the sinkholes and would prefer to resolve their cases via a cash settlement. Others, like Citizens, absolutely stand strong behind the right to force repairs because Citizens has a very different business models than private insurance companies do. Every situation can be unique but from the Court’s perspective, if your insurance company wants to force you to repair, they can.

Apr
7
2016

Supreme Court to rule on sinkhole case soon

The Supreme Court recently heard arguments in the case of Johnson v. Omega Insurance. Kathy Johnson came to our firm with a denied sinkhole claim. Despite severe damage to the building itself, the insurance company claimed that the damage was not covered under the policy and sinkhole activity was not discovered. We identified that certain tests were deficient and hired another engineering firm to do additional testing. After that testing, clear evidence of a sinkhole problem was identified and a lawsuit was filed against Omega for denying the insurance benefits.

After the lawsuit was filed, Omega conceded that in fact there was sinkhole activity present that was not previously identified during their investigation and Ms. Johnson was able to get her home repaired at a cost of over $300,000. Our firm went to the trial judge in Ocala Florida and asked that he require Omega to pay our attorney fees and costs on behalf of Ms. Johnson. The trial judge agreed that it was fair and reasonable to do so. Omega filed an appeal.

The appeal was heard by the Fifth District Court of Appeals who disagreed with the trial judge in Ocala. The appeals Court argued that the law in Florida is that an insured must prove that the insurance company “wrongfully” refused to pay benefits and that the new sinkhole statutes actually protected the insurance companies from being found “wrong” as long as they did an investigation of some sort. In other words, the appeals Court seemed to be more concerned with the process of the investigation than whether the actual result was right or not. Our position was different. The law of Florida, as cited by the Supreme Court in a 2000 case, is that an insurance company should pay attorney fees when its decision to deny insurance benefits was “incorrect” despite the rationale on why it was incorrect. After all, the insurance company holds all the power to do the investigation including who it hires to do it. We appealed this ruling on behalf of Ms. Johnson to the Florida Supreme Court who accepted the case. The acceptance of a case like this is extremely rare.

At the Supreme Court arguments it was clear the Supreme Court Justices did not agree with Omega’s position and reiterated that incorrectly denying someone insurance benefits is the same as wrongfully denying them insurance benefits. Arguments were also made that the sinkhole statutes were not intended to act as a shield to later protect the insurance companies if their decision to deny insurance benefits was incorrect. The opinion may take months to be released but the consensus amongst those who watched the arguments was that the Supreme Court was going to reverse the Appeals Court decision which would be a huge win for Florida homeowners.

Dec
16
2013

Avoid the sinkhole deductible at all costs

We are seeing more and more clients coming in with the 10% sinkhole deductible in their policies. My piece of advice is simply avoid this if at all possible. Unlike other situations where they simply deduct the 10% from the cost to repair, a sinkhole deductible can actually stop and prevent you from doing any repairs. This is typically because many insurance companies these days require you to begin the repairs before they issue any payments. This means you have to come out of pocket for the 10% deductible amount before you can even start the repairs. In other situations this is not such a big deal. For a hurricane claim for example, if you have $50,000 in damage and a $10,000 deductible they write you a check for $40,000 and now you just have to cut back on some of the repairs or get them done cheaper. With a sinkhole however, if you don’t come up with that $10,000 up front, the contractor can’t start the repair and the carrier won’t pay for their partial work. I know the deductible can save money but if you have already elected to purchase the optional sinkhole coverage you must pay the little extra to not

have a deductible or to have a very low deductible. Otherwise, this will seriously come back to haunt you.

Dec
12
2013

Citizens sends out “settlement” letters to every insured, 5 reasons why this is ridiculous

Citizens has decided to try to restore its public image and send out “settlement” offers to every one of its insureds with a confirmed sinkhole claim. The offer is three pages long and is clearly a form letter with nothing but the dates and names changed. This “offer” is a joke and here is why. 1) Citizens entitles the letter “confidential settlement proposal to put grout in the ground”. You will notice that no Plaintiff lawyers have discussed these letters because they are confidential. By law in Florida all discussions of any kind concerning settlement or negotiation of a lawsuit are confidential. There can be serious repercussions associated with violating this rule. Citizens blatantly ignored the law of Florida and went straight to the media to tell them what they offered all their insureds. Every insured should speak to their lawyer about moving for sanctions against Citizens for blatantly violating the public trust and laws of this State. I only write this blog post as a response to Citizens going public. 2) Citizens’ letter is clearly nothing more than a public relations move to attempt to restore its reputation. Why would Citizens send out “confidential” letters to all of its clients then immediately turn around and tell the media about what they did? They want the public to know about it. They want a pat on the back. Clearly the attempt here is to make a media push to show the public how Citizens is trying really hard to work out all of these lawsuits they have been criticized for recently. Citizens likely doesn’t even care if

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anyone takes the “offer”. As long as the general public sees just how great they are, Citizens is happy. It is shameful that an insurance company uses the media to intimidate and manipulate its own clients. 3) This is a demand to surrender. It is neither a “proposal” nor a “settlement”. Citizens guises this letter as some sort of a settlement offer. The term settlement infers that the two people that have a dispute have compromised to work out their differences. Do not be fooled, there is absolutely zero, none, zilch, nil, zippo, nothing in this letter or settlement offer that shows Citizens is willing to compromise anything to help its insureds. This is not a settlement offer, it is an ultimatum to surrender. A demand to give up or else. It is a threat not a compromise. Citizens offers to repair the home. Well that is what Citizens is required to do. But, Citizens only agrees to repair the home the way they want to do it and refuses to consider any other options. In return, the lucky insured who accepts the offer gets the opportunity (in the spirit of compromise of course) to dismiss their lawsuit and pay any legal fees or fees to engineers they hired themselves out of their own pocket. In other words: SURRENDER! In return for your surrender, Citizens will give you?.well?.lets see?.they will give you exactly what they were legally obligated to give you anyways! Nothing more. There is no compromise. Let me give you an example of this in the real world. You hire a contractor and agree to pay him to build you a deck on the back of your house, one that is sturdy and will last as long as you own the house. That contractor builds you a crappy deck, using cheap wood and duct tape. You see the deck, which clearly is going to collapse the second you walk on it, and argue with him that he needs to use solid materials and build you the deck he promised he would. You argue for years about this deck. Then one day he tells you, ok, lets work this out. I have a great offer, a compromise, one that you cannot refuse. You ready for this? You agree to accept the deck exactly how it is, agree that I was right and agree to not sue me. In return I will?well?.do nothing. What a deal! 4) The letter from Citizens is riddled with lies. The first statement that jumps out to me is that Citizens swears that if you undergo a neutral evaluation, they will abide by whatever that neutral evaluator recommends. Really? When did this plan begin? Would like a list of clients of mine that have had neutral evaluators tells Citizens they were wrong only for Citizens to ignore them? Listen to me, Citizens in the past year has rejected more neutral evaluation opinions than it has in the previous 20 years combined. To promise this is insulting when it has not lived up to this promise in the past. Next, if the neutral evaluation takes place and the homeowner prevails on the dispute, Citizens swears it will pay the cost of the homeowners attorney fees. First, this is a fee required by law, not some gesture of good will. Second, Citizens NEVER pays this fee! I have an entire in-box full of letters from Citizens telling me and my clients that it will not pay for this fee and I personally have attended numerous hearings where Citizens has made me go in front of the judge to just get paid this fee. By the way, the fee is only $2,500. Citizens will notoriously spend $5,000 on its own lawyers to fight a $2,500 fee for me. Finally, if you believe that after you grout the house Citizens will listen to your concerns and problems and just take care of them with no fight, you are mistaken. Again, I can provide you with a list of Citizens insureds we represent today that have grouted their house and are still having problems fighting Citizens for remaining insurance benefits. They fight tooth and nail before, during and after you repair your home. 5)Lastly, the letter is a standard form letter which ignores the facts and circumstances of each case. If anything, this letter proves that Citizens refuses to even consider they are ever wrong. How could Citizens make the exact same offer to thousands of people? Only one way, it didn’t look at their claims and assumed every claim was the same. This is typical for Citizens. In fact, we have recently been served with pleadings from Citizens’ lawyers that claims that Citizens has no obligation to even consider any other opinions from any other engineer other than its own. Citizens does not look at cases individually nor does it evaluate what truly is the proper and safe method of repairing a home. It treats every single case as if they were all the same and this letter proves that. If Citizens was so concerned about the public safety, limiting litigation and property fixing homes, why does it say in its own paperwork that it will refuse to consider any other repair plans other than its own? ?? ??

Nov
18
2013

Sinkhole in Dunedin, I'm sure you have heard

I am guessing I am not telling you anything you do not know if you follow sinkhole news but there was a massive sinkhole in Dunedin that opened up last week resulting in at least two homes having to be destroyed. The hole opened after several days of grouting had taken place. The hole opened to as deep as 60 feet reports stated and could take over 300 trucks of dirt to fill in. The home was insured by Citizens and sinkhole activity had been confirmed at the property previously. Luckily, no one was injured but certainly lives were destroyed by the event. This event brings about several talking points though. First, is that yes, sinkholes are in Dunedin and Pinellas County in general. The first response I have heard since last week has been “I didn't know there were sinkholes in Dunedin”. We have stressed this on countless occasions through this site that sinkholes are everywhere in Florida, and even outside of Florida. In fact, a large majority of the most catastrophic sinkholes in Florida history were not in the sinkhole heaven of Pasco and Hernando counties. Remember the largest sinkhole known in Florida was in Winter Haven and now this one in Dunedin.

The next salient point to take from this is that most collapses occur while the sinkhole is being repaired. Again, this surprises people not in the industry. When you pump grout in the ground it disturbs the soils around these large underground voids. These voids can be in a volatile state naturally and then when you disturb them with high pressure concrete flowing suddenly, the potential for collapse can be great. Many engineers when they see a such a risk will recommend underpinning a home first. They call these contingency underpins. They are not meant to necessarily re-level the home but can be used to ensure that if and when the ground collapses the house is supported. The home in Dunedin may have even be salvageable if this had taken place. At the very least, the family would have been able to save some more of their belongings. With this particular home, the homeowners own expert had recommended some different repairs than what Citizens did. These repairs may have been safer and may have even saved the home but Citizens refused and forced the homeowners to go forward with what they recommended. Guess they got what they wanted.

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Oct
24
2013

Corless Barfield win several important rulings against Citizens in Pasco County

Recently we have been faced with a carousel of new arguments from Citizens on sinkhole claims. In one large case we had in Pasco, a judge had the opportunity to hear nearly all of these arguments in one case and rule on the issues. None of the issues went Citizens way. One of the issues that often comes up in these types of cases of cases is what we call forcing repair. Many of the carriers take a hard stance that they should only pay out money if repairs are actually done. While in theory this is probably the correct statement, legally it can take several twists and turns. Our side has made the argument for years that if you, the insurance company, breach the contract (i.e. break the promises you made) with your clients, you don't get the opportunity to then point the finger back at the homeowner as if they are holding the process up. In what other world could someone sign a contract, have the other disregard the contract and breach it and then after they realized they breached try to force you to uphold your end of the bargain. I compare it to a simple contract to buy a car. You promise me $10,000 to buy my car but only if it is running in good shape. Well then I show up with my car and it wont start. How could I look at you and say where's my $10,000? I couldn't and the judge in this case ruled that neither could Citizens.

One of the other main arguments we face from Citizens these days is they really seem to complain a lot when you sue them without giving them the chance to correct their mistake. I call this the mulligan defense. Essentially Citizens wants to place itself in a position where whatever investigation it does and whatever conclusions it comes up with, it always gets a second chance. The problem with the second chance argument, besides the fact there is no law or part of the contract that supports it, is that Citizens places the burden on the homeowners to prove to Citizens it should take a second look. Isn't it the insurance companies job to perform a thorough and accurate investigation. If taking a second look is such a big deal, why does Citizens not do that itself on all claims? Do it for the homeowner and maybe Citizens would catch the obvious mistakes. But, no, Citizens blindly issues reports denying claims and then waits for the homeowner to prove them wrong. Then if the homeowner doesn't give them the mulligan before suing them, they paint the homeowner to be a crook. Well this Pasco judge did not see it that way. Summarizing: Just because the homeowner did not give you a report from a second expert showing you there was a sinkhole at their house, does not mean that there was not a sinkhole at their house. At the end of the day, this is what trial is for, resoling differences of opinions.

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Sep
24
2013

Miami Herald and Tampa Bay Times bash Citizens litigation tactics

The Miami Herald printed an article on September 21st that was soon followed up by the Tampa Bay Times the next day bashing Citizens for the litigation tactics and for denying claims. I appreciate the articles mostly because it exposes Citizens for what we see everyday in the legal community. Citizens has taken the stance that it will fight every case out there and pay nothing. If you have heard the term that someone cut off their nose to spite their face….this is the perfect example. Citizens issues monthly newsletters and holds frequent meetings where they do nothing more than pat themselves on the back for how much money they have saved by not paying claims. I would encourage readers to look in on some of these meetings, they are public record and will often expose some of the number-fudging they do. Simply put, this is a shell game where people working the claims move money around to make what they are doing look good. Kind of like when you buy a car and they tell you they will offer you more on your trade then just add another dealer fee to the total price. Of course if you havent settled any claims you havent paid out much money in the past two years. I think thats obvious to everyone. The question is what happens when all the claims you have avoided settling suddenly come to a head? Citizens has essentially created a traffic jam and the cars keep piling up. Eventually the cars will start moving again and they will run right over Citizens. best antivirus software for windows 7 The articles discuss that Citizens collects about $2 billion in premiums a year and has an operating budget of about $205 million. The articles also estimate that currently Citizens is spending about $30 million a

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year in legal fees fighting claims. While this may be surprising to outsiders, not to lawyers on the inside. The articles discusses in large part the rise in water loss claims coming from Miami Dade but also discusses the increase in sinkhole litigation. The article also points out something that gets forgotten sometimes. Citizens used to have a clause in the policy that triggered appraisal. It is a system similar to a binding arbitration and it would avoid litigation when requested.They took that out of their policies around 2010 and since then have dealt with more lawsuits. Again, why is anyone surprised by this? Finally, a bit of good news we hope. The article discusses comments made by the CEO of Citizens wherein he admits that they are looking at the numbers and re-revaluating their strategies. Maybe this is the first sign that the are realizing that the strategy is not working.

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Sep
24
2013

What happens after I repair my house but my home has still lost value?

What happens even if you repair the property or do any type of job and the value of your property and the land  is nothing.
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Unfortunately, nothing is the short answer. Your insurance policy does not provide coverage for any lost value to the home. This to me is the biggest catch 22 in the entire sinkhole scheme. Insurance companies want nothing more (supposedly) than for the homeowners to repair their homes. The whole premise of an insurance policy is to place the homeowner back in the same position as if the loss never occurred. If everyone agrees that is the goal why does it never happen? Most insurance companies make a huge stink about forcing their insureds to repair but none ever offer to pay them additional money for the lost value to their property. Of course they are not required to but, has any insurance company stopped to think that if they offered it to their insured, they would truly be doing what is in their clients best interest and truly making them whole again. No. Because that would cost money and money comes before customer service in this industry. So we continue to deal with the hypocrisy of insurance companies calling homeowners cheats and frauds while they in turn take no steps to actually do the right thing. My personal opinion is this would be one of the most forward thinking changes the legislature could make. If you are going to force homeowners to repair why not provide them that small additional compensation of the lost value as well. Otherwise every homeowner that repairs will come out a loser. There is absolutely no debate about this. Why do we have a system that punishes innocent insureds when they suffer a loss. Maybe the legislature should consider how many fewer lawsuits there would be. My guess is a lot. Loss of value with no ability to recover is one of the biggest concerns my clients always have and there is no solution for them.

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Sep
6
2013

Tower Hill admits they were wrong but, not until a year after trial

We tried a case against Tower Hill last year where the sole issue was does chemical grout need to be performed at the property in addition to the compaction grout that the insurance company’s engineer recommended. The engineer for Tower Hill was SDII and at trial SDII testified that no way would chemical grout be required and that their proposed plan would fix all the issues. Well, we lost the trial. Our client went on to repair her home the way SDII recommended. Wouldn’t you know it, after the repairs were complete, SDII took another look and sure enough they now recommended chemical grout be performed. After all that, trial and testimony, Tower Hill will be paying for the chemical grout anyways. Seems like it would have saved everyone a ton of time and money to just have fixed it right the first time around. Oh well.