The Johnson v. Omega Insurance story

Our firm has been representing Kathy Johnson in a case against Omega Insurance for a denied sinkhole claim. Johnson’s home has been severely damaged, however, the insurance company has claimed that the damage was not covered under Johnson’s policy, and that sinkhole activity was not discovered.

After analyzing the case, we identified that certain tests were deficient, and hired another engineering firm to do more testing on the home. This testing proved clear evidence of a sinkhole problem, therefore we pushed forward with a lawsuit against Omega for denying insurance benefits.

Omega’s response

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 then went to the trial judge in Ocala 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

The appeals Court disagreed with the trial judge and argued that the law in Florida is that an insured must prove that the insurance company “wrongfully” refused to pay benefits. They also argued 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

Our position was different. The law of Florida is that an insurance company should pay attorney fees when its decision to deny insurance benefits was “incorrect” despite the rationale for 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. Note that the acceptance of a case like this is extremely rare.

The arguments

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.

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