Articles Posted in Insurance Law

consequences.jpgFor too long, Florida employers and their workers’ compensation insurance carriers have been able to accuse employees of insurance fraud without consequence if proven wrong. No longer.

Until the recent decision in Carrillo v. Case Engineering Inc./Claims Center, (Fla. 1st DCA 2-11-2011), employers and their insurance carriers were free to assert the so-called “fraud defense” without regard for any negative consequences. Accordingly, with nothing to lose and much to gain, namely, claimants losing the right to all benefits, combined with an absurdly low standard of proof, carriers have used the defense indiscriminately for many years. In far too many cases, the calculation has been simply to throw the defense on the wall and hope that it sticks. If nothing else, it was a way of leveraging injured workers to settle their cases for less than full value.

Carrillo has changed the no risk element of the defense.

One of the few ways in which injured workers (claimants) can be awarded attorneys fees against employers and their insurance carriers, a valuable benefit, is if “a carrier or employer denies that an accident occurred… and the claimant prevails on the issue of compensability.” Florida Statute section 440.34(3)(c).
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Florida Statute Section 440.09(4)(a) provides that an employee shall not be entitled to workers’ compensation benefits if the employee has intentionally or knowingly engaged in any of the acts described in s. 440.15 for the purpose of securing workers’ compensation benefits.

Knowingly presenting false ID to obtain employment is an act described in s. 440.15 as being prohibited. Will performing such an act prevent an employee injured on the job from receiving workers’ compensation benefits?

In Matrix Employee Leasing and FCIC/First Commercial v. Hernandez, 975 So.2d 1217 (Fla. 1st DCA 2008), Mr. Hernandez obtained employment by presenting an invalid social security card. The employer did not learn that the card was invalid until the day Mr. Hernandez was hurt on the job.

Relying on 440.15 and 440.09, the Employer/Carrier denied benefits. The claimant countered that because the invalid ID was used to obtain employment rather than secure workers’ compensation benefits, benefits should not be denied. The JCC [Judge of Compensation Claims] agreed, ordering the E/C to pay workers’ compensation benefits. The E/C appealed the JCC’s order.
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Since the establishment of a workers’ compensation system in Florida more than 80 years ago, business and insurance interests have steadily tried to whittle away workers’ rights with varying degrees of success. The high water mark for them arrived in the late 1990s with the election of Jeb Bush as Florida’s Governor. For the next eight years, injured workers absorbed one crippling body blow after the other from Bush and his merry band of right-wing zealots in the Florida Legislature anxious to maximize the profits of the business community at the expense of individual rights. (Jeb adopted for Florida many of the measures that his brother George before him had imposed in Texas during his reign as that state’s Governor. Get the picture?)

One of the more onerous examples of rights-limiting workers’ compensation imposed in Florida is set forth at Section 440.09(1)(b) of the Florida Statutes. This section, known as the Major Contributing Cause (MCC) Doctrine, places the burden on injured workers to prove that the industrial accident is more than 50% responsible for causing the injury. An injured worker who fails to meet this burden will be denied ALL medical care and lost wage benefits from the employer. (In contrast, the personal injury system does not summarily deny compensation to persons with pre-existing conditions whose injuries were activated, i.e., made to become symptomatic, or aggravated (permanently worsened) by an accident. Instead, the finder of fact carves out the pre-existing element from the recovery and awards the difference. Not so under Bush’s MCC system.)

The MCC is used as a defense in many cases. The E/C try to blame 50% or more of a claimant’s injury on a pre-existing condition. For older workers and those with similar prior complaints, the defense can be difficult to overcome. Sadly, many an injured worker has been denied workers’ compensation benefits because of the MCC.

Fortunately, the First District Court of Appeal has carved out an important exception to the MCC doctrine. In Pearson v. Paradise Ford, 951 So.2d 12 (Fla. 1st DCA 2007), the court held that an employee need not meet the rigorous MCC requirements when her or his pre-existing condition is occupationally related.
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Florida law imposes a duty on insurers to act reasonably in the discharge of the fiduciary duty they owe their policy holders. In the case of an injury claim against a policy holder (insured), the insurance company is duty bound to settle within the policy limits when it can and should do so. When the insurer fails and a final judgment is then entered against the insured in excess of the policy limits, the insurer will be responsible for satisfying the entire judgment if it is shown that it failed to act fairly and honestly towards its insured with due regard for her or his interest.

The law encourages insurance companies to settle claims that could and should be settled. The law reduces the number of cases that are forced to trial. The law protects policy holders from bearing the burden of excess judgments.

The law is important.

The law works.

The law does little to protect medical providers from excess judgments!

Florida Statute 766.1185 (2003) affords insurance carriers a safe harbor from excess judgments in medical malpractice cases. It provides that an insurer shall not be held in bad faith for failure to pay its policy limits if it tenders its policy limits by the 210th day after service of the complaint in the medical negligence action upon the insured.

The statute does not require the injured party to accept the tender. So long as the carrier tenders the limits, it is immune from any liability for an excess judgment.

Not so the medical provider.

Unless the insurance company’s tender is accepted, the medical provider remains personally liable for the excess judgment.

In essence, the insurer has relatively little to lose by having its tender declined. If the case proceeds to trial and an excess judgment is obtained, the excess is the responsibility of the medical provider rather than the insurance company. Good deal for the insurer, bad deal for the insured. When the most the insurer will ever have to pay is the policy limits, why not roll the dice? Who would not want to roll the dice with nothing on the table to lose?

Because of this, 766.1185 leaves medical providers far more vulnerable to excess judgments than insureds in non-medical malpractice cases.
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It is common practice to seek PIP benefits for an insured who has paid money out-of-pocket to satisfy a workers’ compensation lien. Is the PIP carrier let off the hook for payments when the workers’ compensation lien is waived? According to the holding in Cannino v. Progressive Insurance Co., Fla: Dist. Court of Appeals, 2nd Dist. 2010, the answer is No.

When a person is injured in a motor vehicle accident while in the course of his employment, he may be entitled to medical and lost wage benefits from workers’ compensation and PIP (personal injury protection) insurance.

The Florida Motor Vehicle No-Fault Law, sections 627.730-.7405, Florida Statutes, requires motorists to maintain a minimum of $10,000 in insurance for PIP benefits to cover loss sustained as a result of bodily injury, sickness, or death related to motor vehicles. § 627.736(1). The insurance generally covers eighty percent of medical and related expenses and sixty percent of wage loss. Id. PIP benefits are primary, except that workers’ compensation benefits “shall be credited against” PIP benefits. § 627.736(4).

The injured person may also be able to recover money from the bodily injury coverage of the at-fault party’s insurance policy for damages such as pain and suffering.

When a workers’ compensation carrier provides benefits to an injured worker, it retains a lien (i.e., right to be reimbursed) up to the value of those benefits on any money received by the workers’ compensation claimant from the bodily injury coverage of the at-fault party’s insurance policy. (Typically, the reibursement rate is not dollar-for-dollar. See the Manfredo formula for how to calculate the rate of reimbursement.) The workers’ compensation carrier is allowed to waive the lien.

In 2004, Cannino was injured in an automobile accident while in the course of his employment by West Coast Fence of Tampa. He received workers’ compensation benefits from West Coast Fence’s carrier, Pinnacle Benefits, Inc. Cannino had a personal motor vehicle insurance policy issued by Progressive, but he did not seek immediate payment of his personal injury protection (PIP) benefits under that policy.
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In our firm’s continuing effort to inform the public of important legal issues, from time to time we will reproduce in our blog letters, articles, and papers written by other people. Today’s entry, published in the March, 2011 edition of The Florida Bar Journal, was written by Rutledge R. Liles, one of the most esteemed and accomplished lawyers in Florida, regarding, perhaps, the most important legal issue being debated in Florida today. Mr. Liles knows of what he speaks.

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Florida Insurance Bad Faith Law: Protecting Businesses and You
by Rutledge R. Liles

This article is offered as a response to a troubling presentation on insurance bad faith by authors Young and Clark that appeared in the February Florida Bar Journal (“The Good Faith, Bad Faith, and Ugly Set-up of Insurance Claims Settlement”). (Footnote 1.) It is intended to address various misunderstandings that may have been created by that earlier discussion, and to provide a more balanced discussion of this most topical subject. To accomplish this goal, this article explains what insurance bad faith is, how it protects insureds, and why the statutory amendment suggested in that article is unfair, unworkable, and unwise.

Eight years ago, my article, “Insurance Bad Faith: The Set Up Myth” was published in The Florida Bar Journal. (Footnote 2.) The premise of the article was that “generally speaking…insurance companies set themselves up for the fall in a fashion that could easily be avoided or remedied.” That statement remains as true today as it was eight years ago. Florida law remains consistently and appropriately focused upon the conduct of insurers when determining whether they have acted reasonably in the discharge of the fiduciary duty they owe their policy holders. If insurers acted reasonably in the discharge of the fiduciary duty they owe their policy holders, we would not be spilling ink over a contrived notion that claimants and insureds can somehow control the conduct of insurers in adjusting losses, thereby “setting up” bad faith claims. This contrivance is advanced as a justification for the passage of legislation to protect the insurance industry from its own failures at the cost of Florida’s insured businesses and individuals.

Initially, it should be noted that the February article never mentions the common law duty of good faith, which the authors’ proposed statutory amendment would largely eliminate. Moreover, the article ignores the well-established principle, recognized by both the courts and the legislature, that insurers owe a fiduciary duty to their insureds. These long-established tenets of insurance law are the cornerstones that ensure that businesses and individuals receive the benefit of the protection for which they bargained and paid in their insurance contract. Otherwise, insurance companies are without accountability and Florida’s businesses, professionals, homeowners, and other insureds are left to pay the cost of careless and improper claims practices by insurers. The article makes absolutely no showing that the remedies crafted by the courts (common law) and by the legislature in F.S. §624.155 (statutory law) require the drastic revisions proposed.

The Florida Supreme Court recognized a common law action for third-party bad faith as early as 1938. (Footnote 3). Its decision to do so grew out of the realization that insurance contracts had come to “occupy a unique institutional role” in modern society, as they became an economic necessity for businesses and individuals. (Footnote 4.) Additionally, as liability policies replaced indemnity policies, the insurer’s power over the insured’s situation became greater, requiring a remedy for when that power was abused.

Under a liability policy, the insured’s role is essentially limited to selecting the type and desired level of coverage and paying the corresponding premium. Insurance coverage, theoretically, offers security and peace of mind against unforeseeable losses. As part of the contract, the insured surrenders to the insurer all control over the negotiations and decisionmaking as to claims. The insured’s role is relegated to the obligation to cooperate with the insurer’s efforts to adjust the loss. The insurer makes all the decisions with regard to claims handling and thereby has the power to settle and foreclose an insured’s exposure to liability, or to refuse to settle and leave the insured exposed to liability in excess of the policy limits. (Footnote 5.) As a result, “the relationship between the parties arising from the bodily injury liability provisions of the policy is fiduciary in nature, much akin to that of attorney and client,” because the insurer owes a duty to refrain from acting solely on the basis of its own interests in the settlement of claims. (Footnote 6.) Accordingly, and because of this relationship, the insurer owes a duty to the insured to “exercise the utmost good faith and reasonable discretion in evaluating the claim” and negotiating for a settlement within the policy limits. (Footnote 7.) When the insurer fails to act in the best interests of the insured in settling a claim, an injured insured is entitled to hold the insurer accountable for its “bad faith.”

Although Florida courts recognized a bad faith cause of action in the context of liability policies, they did not impose the same obligation in the context of first-party insurance contracts, when the injured party was also the insured under the insurance policy. At common law, first-party insurance policies were enforced solely through traditional contract remedies. However, in 1982, the legislature recognized that due to the same disparity in power between the insurer and the insured in first-party contracts, there was a need for a bad faith remedy in that context as well. (Footnote 8.) As a result, the legislature enacted F.S. §624.155, which established, inter alia, a first-party bad faith cause of action. It should be noted, however, that in F.S. §624.155(8), the legislature made it abundantly clear that the statute did not preempt the common law remedy. The standard for bad faith in settlement was the same as the common law standard: “Bad faith on the part of an insurance company is failing to settle a claim when, under all the circumstances, it could and should have done so, had it acted fairly and honestly towards its insured and with due regard for the insured’s interest.” (Footnote 9.)

The measure of whether an insurer has acted in good faith is, necessarily, determined by an assessment of the lengths to which the carrier went in an effort to provide the insured with the protection afforded by the insurance policy. It is for this reason that the focus in a bad faith case is upon the conduct of the insurer and not the person making the claims or presenting any opportunity for settlement. If the liability insurer undertakes a prompt investigation of the loss, timely evaluation of the legal liability of the insured, communicates to the insured the material events of the adjustment process, and acts reasonably with regard to opportunities to settle the loss and protect the assets of the insured, then it has no fear from Florida’s bad faith laws.

It is within this framework that common law bad faith actions have been allowed in Florida for over 70 years without substantial change in the governing principles, with statutory bad faith claims being allowed for almost 30 years. The previous Journal article proposes a dramatic and unwarranted change to bad faith law for which no empirical justification is offered, and its anecdotal reliance on cases it cites actually undermines its basic premise. That is, an analysis of the relevant case law demonstrates that the courts have properly and consistently defeated attempts to allow “set-up” bad faith claims which were premised on the two tactics the article identifies: 1) arbitrary and unrealistic time deadlines for acceptance imposed by claimants, and 2) settlement offers containing unreasonable terms that cannot be complied with (and will not be negotiated).

With respect to the arbitrary and unrealistic time deadlines, the authors look for support in DeLaune v. Liberty Mutual Insurance Co., 314 So. 2d 601 (Fla. 4th DCA 1975), where no support is to be found. There, the claimant made a demand for policy limits, but required payment in 10 days. Neither the court nor the jury was impressed by that unreasonable time limit, and the bad faith claim was lost at trial and affirmed on appeal. In affirming, the Fourth District specifically noted that the 10-day time limit was “totally unreasonable under these circumstances,” and that it was a charade designed to “set-up” a bad faith suit. (Footnote 10.) Subsequent cases have expanded on that and even determined that attempts to limit insurers to 30 days to verify a claim and pay limits cannot establish bad faith, as a matter of law, resulting in summary judgments against the claimants on their bad faith claims. (Footnote 11.) Thus, it is clear that the legal system has properly responded to unreasonable time demands to establish bad faith, and clearly determined it to be an ineffective tactic. Thus, established case law again completely undermines the article’s premise that any amendment to Florida’s bad faith law is needed to address a contrived concern, much less the dramatic and unwarranted amendment proposed by the authors.

The second set-up tactic that the authors rely upon involves settlement demands incapable of an insurer’s reasonable acceptance. Examples advanced include demands that contain confusing or ambiguous terms that the claimant’s attorney refuses to clarify or to otherwise cooperate with the insurer’s efforts to negotiate a settlement. Again, existing Florida law completely undermines the authors’ assertion that any amendment in bad faith law is needed to address the ability of an insurer to defend its conduct by showing that it did not have a reasonable opportunity to settle the claims. The authors suggest that insurers are hamstrung by being prevented from even presenting evidence that such offers were not made in good faith.

The article states: “Imposing the duty of good faith during settlement on only the insurer, as some courts appear to have done in light of the narrow language of the bad faith statute, is inconsistent with Florida’s strong public policy encouraging settlement of claims.” However, the authors do not cite a single case for the proposition that any court has suggested that the totality of the circumstances bearing on the ability of the insurer to settle the claims are irrelevant in a failure to settle setting. In fact, the only cases cited in the footnote to that passage relate to public policy encouraging settlement of claims. Therefore, the authors have no support for the contention that any court has precluded an insurer from showing that despite its reasonable efforts, it could not settle the claims. In fact, the courts have consistently applied existing Florida law to allow for consideration of the facts surrounding the settlement negotiations that bear on whether the insurer “could” settle.

In Barry v. Geico General Insurance Co., 938 So. 2d 613 (Fla. 4th DCA 2006), the jury ruled in favor of the insurance company on a third-party bad faith claim. On appeal, the claimant argued, inter alia, that the insurance company was improperly permitted to present evidence as to the claimant’s motives and her attorney’s conduct in declining to settle. That argument was rejected, with the court clearly holding that such evidence was relevant and admissible, even though the focus of an insurance bad faith case is primarily on whether the insurer fulfilled its duty to the insured. (Footnote 12.) The court stated that inquiries into the prior conduct and motives of the claimant were relevant and admissible because the insurer can defend on the ground that there was no realistic possibility of settlement within the policy limits, based on the claimant’s intransigence. The Barry court stated:

The jury could have concluded that the failure of [the claimant’s] attorney to notify GEICO of his representation coupled with her refusal to meet with Stone on the settlement, among other incidents, showed that she did not want to settle with GEICO for the policy limits. Thus, GEICO did not inject irrelevant information into the case. (Footnote 13.)

Additionally, in a published federal decision, it was specifically noted that a claimant’s unwillingness to settle was “not completely ignored under Florida law,” but was a relevant factor when the insurer is attempting to prove the defense that the claimant was actually unwilling to settle for the policy limits. (Footnote 14.)

In accordance with those cases, decisions have consistently addressed the likelihood that intransigence or a failure to cooperate by a claimant in settlement negotiations will fatally undermine a bad faith claim. When a claimant failed to provide medical information to the insurer regarding his injuries, a court has ruled that there was no bad faith, as a matter of law, arising from the insurer’s failure to settle. (Footnote 15.) Additionally, when claimants have failed to respond to insurer’s attempts to settle claims within the policy limits, courts have determined that there was no bad faith claim, as a matter of law. (Footnote 16.)

Thus, the courts have properly, effectively, and firmly rejected attempts to justify bad faith claims based on either arbitrary or unrealistic time deadlines, or in response to settlement offers, with which compliance is impossible, or which were not made in a good faith attempt to reach a resolution of the claim.

The article does not cite a single case in which the tactics of unreasonable deadlines or intransigence in negotiations has resulted in a successful bad faith recovery. Instead, the authors rely on statements contained in the dissenting opinions in Berges v. Infinity Insurance Co., 896 So. 2d 665 (Fla. 2004), but the facts of that case do not support its contention that the decision encourages or allows insureds or claimants to set up bad faith claims.

In Berges, James Taylor’s wife was killed and his daughter seriously injured by a drunk driver. The insurance policy providing coverage to the drunk driver had limits of $10,000 per claimant. Mr. Taylor did not impose unreasonable deadlines in his offer and, in fact, did not even make an offer to settle until more than two months after the accident, when he hand-delivered an offer to settle for the $20,000 policy limits. At that time, the insurer had already conducted an investigation and issued a report concluding that its insured was completely at fault, and confirmed that Mrs. Taylor had died and that the daughter’s medical bills already exceeded $30,000. Although initially there was a coverage issue, six days after Mr. Taylor’s offer, the insurer concluded its coverage investigation and decided to extend coverage.
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The newspaper article reproduced below, written in 2003, does an excellent job of illustrating the importance of having strong bad faith insurance laws designed to persuade insurance companies to settle cases for fair value rather force every case to trial.

Florida’s bad faith laws impose a duty on insurance companies to act in the best interests of their insureds (customers). If an insurance company can and should settle a case within its insured’s policy limits, it should. If the insurance company refuses and a final judgment in excess of the limits is then entered against the insured, the company may be forced to pay the full judgment, not just the policy limits.

Whether or not the carrier must pay the full judgment depends on the manner in which it handled the claim. If, based on all available information, the carrier could have and should have settled the case within the policy limits, it may very well be required to pay the full judgment … as it should for needlessly exposing its insured to a significant money judgment.

Without meaningful bad faith laws, insurance companies would never settle cases within policy limits. Knowing that the most they will ever have to pay is what they should pay anyway, i.e., the policy limits, they will force every case to trial. Their purpose in taking every case to trial will be to put plaintiffs’ lawyers on notice that to avoid trial, every case must be settled for less than policy limits, even cases worth much more than policy limits.

Without strong bad faith insurance laws, the only parties that will be exposed to excess judgments will be the insureds, those who purchase the insurance coverage to avoid such a scenario.

Under Governor Rick Scott, the Florida Legislature will attempt to gut Florida’s bad faith laws. From their point of view, insurance company profits are more important than protecting individuals.

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Bad faith in the law

By MARTIN DYCKMAN Published December 21, 2003
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TALLAHASSEE – The malpractice debate last summer was an emotional roller coaster ending in bitter disappointment for Florida physicians whose leaders had convinced them that there would be no relief from high insurance premiums without a flat $250,000 ceiling on pain and suffering awards. That line came straight from the insurance lobby, which actually wanted something else a lot more, and got it.

To the insurers, the more important goal was to erode Florida’s bad-faith law, which they blame for forcing them to settle cases they say they shouldn’t. That premise is partly true; the law is intended to encourage settlements and avoid costly trials. But legislators heard only opinion, not evidence, as to whether there are really too many before agreeing to make the doctors the guinea pigs in a dangerous experiment.

To illustrate what’s at stake, let’s look at the outcome of an important trial at Clearwater earlier this month. It involved an automobile accident, not medical malpractice, but the principles are the same. My colleague William R. Levesque reported the story in the Dec. 5 St. Petersburg Times.

The plaintiff was Xiao-Cao Sha, a 41-year-old violinist who suffered severe shoulder and neck injuries in a collision that the defense conceded to be the fault of the driver who had run a red light and hit the car in which Sha was a passenger. Sha, who had left the Florida Orchestra to seek opportunities in major orchestras, can no longer play without severe pain and can practice only 15 minutes a day. The defense didn’t question that either.

The other driver was unusually well insured – for $1.75-million, says Sha’s lawyer, Tom Carey – and Carey offered to settle for that. He might have settled for even less, I gathered, but not for as little as the defendant’s carrier, Liberty Mutual, was willing to pay.

According to Carey, “they never made it to $200,000.”

So the case went to trial, where Liberty Mutual’s lawyer contended that Sha should be awarded no more than $189,000 because there was no guarantee she could have fulfilled her dreams and might never have earned more than $30,000 a year, her former salary with the Florida Orchestra. She could still have earned that, the lawyer said, by teaching and performing solos.

Imagine for a moment that the victim had been a young doctor about to start practice as a neurosurgeon and an insurance company had proposed that he or she settle for pediatrics or some other specialty that earns much less. Any red-blooded jury would have socked that company at least as hard as Sha’s did.

The jury took less than hour to award her $5-million, which included some $1,375,000 for lost future wages and $3,456,000 for pain and suffering. More than twice, all told, the limits of the policy that the defendant and her husband had paid for and Sha would have accepted.
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No type of insurance coverage is required to lawfully operate a motorcycle in Florida. The owner of a motorcycle can obtain a license plate and registration without any coverage. This is different than the law with regard to cars and trucks. The owner of either of those types of motor vehicles must, at a mimimum, have Personal Injury Protection (PIP) and Property Damage – Liability insurance to obtain a plate and registration. (PIP is no-fault coverage and can pay the policy holder and a few others up to $10,000 for medical benefits and lost wages, while PD – Liability covers property damage to the other vehicles.)

However, in the event of an accident resulting in death or personal injury, if the uninsured motorcyclist or car/truck owner with only PIP/PD is charged with causing the accident, his/her drivers license and all vehicle registrations will be suspended. Sections 316.066(3)(a)1 and 324.051(2)(a) of the Florida Statutes. Taking it one step further, these consequences will also result to the inadequately insured owner even if he/she was not operating the vehicle, if the accident was caused by a permissive user. This is because Florida considers vehicles used on its roads and highways to be dangerous instruments, subjecting its owners to the same liability for accidents as the permissive operators.
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We are frequently asked if insurance premiums will be increased or policies canceled or non-renewed because of a motor vehicle accident. If the insured was not substantially at faulpretty answer is No. See Florida Statute 626.9541(1)(o)3. An insurance company’s violation of this statute may subject it to a civil lawsuit and government fines for engaging in an unfair and deceptive act.

Further consumer protection is afforded by Florida Statute 626.9702, which provides as follows:

(1) No insurer shall impose or request an additional premium for automobile insurance, or refuse to renew a policy, solely because the insured or applicant was convicted of one or more traffic violations which do not involve an accident or do not cause revocation or suspension of the driving privileges of the insured, without adequate proof of a direct, demonstrable, objective relationship between the violation for which the surcharge was imposed and the increased risk of highway accidents.
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Reproduced below is a letter published in the September/October 2010 issue of The Florida Bar Journal. It was written by my friend, collegue, superb trial lawyer, and advocate for the underprivileged, Cris Boyar. The letter exposes the dirty propaganda disseminated by the insurance industry regarding PIP (Personal Injury Protection) lawsuits. A must read.

Elimination of PIP Multipliers Response

I read the slanted article, “Putting the Lid Back on Pandora’s ‘Jar’: A Clarion Call for the Elimination of Contingency Risk Multipliers in Florida PIP Litigation,” by insurance defense lawyers Douglas Stein and Donald Blackwell in the July/August issue. While it is long on words, it is clearly short on reality. The article fails to mention that insurance companies drive up legal fees by causing expensive and protracted litigation. In the real world, insurance companies not only routinely and unreasonably deny valid claims, but when sued, the insurers file frivolous defenses, deny admissions that should be admitted, propound significant discovery, object to basic discovery, force countless hearings, schedule numerous unnecessary depositions of collateral witnesses, and demand jury trials that can last for days. If the insurer loses, it demands attorneys’ fees hearings and files appeals. Then, after all of the litigation that it caused, the insurer complains the legal fees awarded against it are too high and do not bear a relationship to the amount in controversy. The hypocrisy is obvious to those who sue insurance companies for denying valid claims.

If an insurer wants to limit its exposure to legal fees and costs, it can simply pay valid claims timely. It could also pay the claim in response to the statutorily mandated presuit demand letter, which allows 30 additional days to pay without risk of paying attorneys’ fees. If it is sued for not paying a claim, it can instruct its defense lawyers to agree to a bench trial, admit allegations and admissions, and agree to narrow the issues. If the insurer believes it will lose the case, the insurer, at any time, can simply confess judgment to stop the clock. Alternatively, the insurer can file an offer of judgment. If the insurer then prevails in the litigation, the insurer will be reimbursed its attorneys’ fees and costs by the insured or the medical provider.

Rather than fall prey to insurance industry propaganda, the public should realize the insurance industry has embarked on a strategic campaign designed specifically to poison the pool of potential jurors and bar its insureds’ access to courts, while at the same time filling its coffers with premiums Florida citizens are legislatively mandated to pay.

It must be pointed out that multipliers are very rarely awarded in PIP cases. Most lawyers who handle PIP claims reject a significant number of cases for various reasons. The unfortunate result is that many insureds and medical providers have no recourse when the insurers wrongly and routinely deny valid PIP claims. This is exactly what some of the billion dollar insurance companies hope to accomplish. Accepting premiums and denying claims is a very profitable business model.

The multiplier is the only tool available to encourage competent counsel to accept the most difficult cases that virtually every other lawyer would reject. The applicability of the multiplier should be preserved by the legislature. The trial judges, observing the conduct of counsel for both sides, should be trusted to make the correct decision based on existing Florida law.
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