SEPTEMBER 2016

Florida Insurance Matters is a monthly update on Florida insurance-related legal developments by the Colodny Fass Insurance Litigation Practice, recognized as the 2014 Insurance Litigation Department of the Year in South Florida by the Daily Business Review.

About the Author

Amy L. Koltnow, a Colodny Fass Shareholder, focuses her practice on representing insurance companies in complex insurance litigation and counseling insurers on claims resolution. She has represented insurers in connection with property damage and first-party coverage litigation, claims of “bad faith,” high-risk exposures, class actions and multi-district litigation.

For more information about Ms. Koltnow, click here.

Attorney’s Fees–Multiplied?

The 5th DCA reversed another trial court order awarding a contingency fee multiplier in a dispute between insureds and their homeowner’s insurance company, finding the multiplier “unwarranted.” After the insureds prevailed in a sinkhole dispute against their insurer, the trial court awarded them attorney’s fees of $262,620 and applied a 1.5 multiplier. The appellate court reversed because the insureds did not present “sufficient evidence” a multiplier was necessary for them to obtain competent counsel. The appellate court relied on its prior holding in Federated National v. Joyce that a multiplier should only be applied in “rare” and “exceptional” cases.

Sawgrass Mutual Ins. Co. v. Mone (5th DCA Sept. 2, 2016)

The Florida Supreme Court has agreed to hear Joyce v. Federated National based on the insureds’ argument that the appellate court applied the wrong standard when it held a multiplier should only be used in “rare” and “exceptional” circumstances. The insureds also argued the appellate court’s decision conflicted with other appellate courts regarding the evidence required to support a risk multiplier.
This is an issue to watch closely. The outcome could be a game-changer for insurers when evaluating the risks of an adverse judgment.

Insured Entitled to Judgment in Their Favor for Sinkhole DamagesI

The Second District revised its prior July 2016 opinion in a sinkhole dispute to clarify that the insureds are entitled to an enforceable money judgment for damages other than subsurface repairs, as well as a judgment for subsurface repairs requiring Citizens to pay for the repairs as the work is performed pursuant to a subsurface contract.

Citizens Prop. Ins. Corp. v. Stieben, August 31, 2016 (2d DCA)

• Florida law permits insurers to include policy provisions stating that payment for subsurface repairs is not due until the insured enters into a contract to perform such repairs, and may be paid as work is performed and expenses are incurred.
• This provision must be expressly included in the policy. Know your policy and make claim payments according to the terms

Recission of HO policy upheld based on insureds’ failure to disclose prior claims

The 4th DCA upheld an insurer’s rescission of its homeowner’s policy based on the insureds’ failure to disclose two prior water claims on the policy application, as well as stating there was no unrepaired damage to the property. The appellate court rejected the insureds’ argument that there were unresolved issues of fact and held the misrepresentations were material as a matter of law. Additionally, the court held the wife’s failure to sign the application was of no importance since the policy disclaimed coverage “if one or more insureds” made the misrepresentation.

Moustafa and Ahmed v. Omega Ins. Co. (4th DCA, September 7, 2016).

• As part of your claims investigation, review the policy application including the fine print and small checked boxes. If there are any doubts, request an EUO.
• When prior unrepaired damage is discovered during inspection, make sure the information is effectively communicated to your SIU and underwriting departments.

Colodny Fass Attorneys Successfully Represent Insurance Industry in Appellate Case

Fourth District Confirms that PIP Statute Requires Affirmative Finding of Emergency Condition For Benefits to Exceed $2500

Recent attempts by medical providers to work around the $2,500 legislative cap on PIP benefits in cases where there has been no determination if the injuries constitute an “emergency condition” were shut down by the Fourth District Court of Appeal’s answer to a certified question of great public importance:

“[B]enefits above $2,500 are available only where a medical provider determines an emergency medical condition exists. Where a medical provider does not make a determination that there is an emergency medical condition benefits above $2500 are not available.”

Maria Elena Abate and Raquel Moya of Colodny Fass represented amici curiae, the Property Casualty Insurers of America and the Personal Insurance Federation of Florida.

The case is not final until the motion for rehearing has been ruled upon.

For over 40 years, Colodny Fass has represented insurers in complex and high-risk litigation including class actions, bad faith, insurance fraud, multi-jurisdictional cases, coverage matters, and fact-intensive, multi-party lawsuits. The Daily Business Review has recognized Colodny Fass as having the 2014 Insurance Litigation Department of the Year in South Florida.

About Amy L. Koltnow

Amy L. Koltnow, a Colodny Fass Shareholder, focuses her practice on insurance disputes from trial through appeals. She has represented insurance companies in federal and state courts, as well as in mediation and administrative forums. Ms. Koltnow oversees complex litigation matters and has successfully defended numerous class actions and insurance bad faith cases. She is a member of the Claims and Litigation Management Alliance, a national, invitation-only organization committed to furthering high standards of litigation and claims management in pursuit of client defense.

To view Ms. Koltnow’s complete professional biography, click here.

Contact Amy at akoltnow@colodnyfass.com or (954) 492-4010.