Civil Remedy Notice of Insurer Violations
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Filing Number:     656367
Filing Accepted:  11/10/2022
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Complainant
Last/Business Name *  
SINH NGUYEN   First Name   CUONG DINH AND
Street Address * 5231 GANHILL COURT
City, State Zip * ORLANDO, FL 32818
Email Address * LOVELY-SINH@YAHOO.COM
Complainant Type: * Insured
Insured
Last/Business Name*   SINH NGUYEN   First Name   CUONG DINH AND
Policy # * 80-B7-V445-5 Claim #* 5925J503N
Attorney
Attorney is Applicable
Last Name* GRINER First Name * JEREMY Initial
Street Address* P.O. BOX 3245
City, State Zip* PLANT CITY , FLORIDA 33563
Email Address * JEREMY@GRINERLEGAL.COM
Violation
Insurer Type *   Authorized Insurer Unauthorized Insurer
 
Insurer Name*   STATE FARM FLORIDA INSURANCE COMPANY
NAIC Company Code 10739
 
Name of individual responsible for violation (if any):* SAMUEL LUMBSDEN
Type of Insurance * Residential Property & Casualty   
Reason for Notice *
Claim Delay
Unsatisfactory Settlement Offer
Unfair Trade Practice
* Statutory provision(s) which the insurer allegedly violated.
 
624.155(1)(b)(1) Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests.
624.155(1)(b)(3) Except as to liability coverages, failing to promptly settle claims, when the obligation to settle a claim has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.
626.9541(1)(i)(2) A material misrepresentation made to an insured or any other person having an interest in the proceeds payable under such contract or policy, for the purpose and with the intent of effecting settlement of such claims, loss, or damage under such contract or policy on less favorable terms than those provided in, and contemplated by, such contract or policy.
626.9541(1)(i)(3)(a) Failing to adopt and implement standards for the proper investigation of claims.
626.9541(1)(i)(3)(b) Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue.
626.9541(1)(i)(3)(c) Failing to acknowledge and act promptly upon communications with respect to claims.
626.9541(1)(i)(3)(d) Denying claims without conducting reasonable investigations based upon available information.
626.9541(1)(i)(3)(f) Failing to promptly provide a reasonable explanation in writing to the insured of the basis in the insurance policy, in relation to the facts or applicable law, for denial of a claim or for the offer of a compromise settlement.
626.9541(1)(i)(3)(i) Failing to pay personal injury protection insurance claims within the time periods required by s. 627.736(4)(b).
* Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

***ADDITIONAL STATUTORY PROVISIONS ALLEGED TO HAVE BEEN VIOLATED ARE AS FOLLOWS:*** §624.155(1)(B)(1) Any person may bring a civil action against an insurer when such person is damaged: By the commission of any of the following acts by the insurer: 1. Not attempting in good faith to settle claims 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 his interests; 2. Making claims payments to insures or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made; or 3. Except as to liability coverages, failing to promptly settle claims, when the obligation to settle a claim has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage. §624.155 (5) No punitive damages shall be awarded under this section unless the acts giving rise to the violation occur with such frequency as to indicate a general business practice and these acts are: (a) Willful, wanton, and malicious; (b) In reckless disregard for the rights of any insured; or (c) In reckless disregard for the rights of a beneficiary under a life insurance contract; (8) The damages recoverable pursuant to this section shall include those damages which are a reasonably foreseeable result of a specified violation of this section by the authorized insurer and may include an award or judgment in an amount that exceeds the policy limits. §627.70131 Insurer’s duty to acknowledge communications regarding claims; investigation (1)(a) Upon an insurer’s receiving a communication with respect to a claim, the insurer shall, within 14 calendar days, review and acknowledge receipt of such communication unless payment is made within that period of time or unless the failure to acknowledge is caused by factors beyond the control of the insurer which reasonably prevent such acknowledgement. If the acknowledgement is not in writing, a notification indicating acknowledgement shall be made in the insurer’s claim file and dated. A communication made to or by an agent of an insurer with respect to a claim shall constitute communication to or by the insurer. (b) As used in this subsection, the term “agent” means any person to whom an insurer has granted authority or responsibility to receive or make such communications with respect to claims on behalf of the insurer. (c) This subsection shall not apply to claimants represented by counsel beyond those communications necessary to provide forms and instructions. (2) Such acknowledgement shall be responsive to the communication. If the communication constitutes a notification of a claim, unless the acknowledgement reasonably advises the claimant that the claim appears not to be covered by the insurer, the acknowledgement shall provide necessary claim forms, and instructions, including an appropriate telephone number. (3) Unless otherwise provided by the policy of insurance or by law, within 10 working days after an insurer receives proof of loss statements, the insurer shall begin such investigation as is reasonably necessary unless the failure to begin such investigation is caused by factors beyond the control of the insurer which reasonably prevent the commencement of such investigation. (4) For purposes of this section, the term “insurer” means any residential property insurer. (5) Within 90 days after an insurer receives notice of a property insurance claim from a policyholder, the insurer shall pay or deny such claim unless the failure to pay such claim is caused by factors beyond the control of the insurer which reasonably prevent such payment. Failure to comply with this subsection constitutes a violation of this code §626.9541(i) Unfair Claim Settlement Practices 626.9744 Claim settlement practices relating to property insurance.—Unless otherwise provided by the policy, when a homeowner’s insurance policy provides for the adjustment and settlement of first-party losses based on repair or replacement cost, the following requirements apply: (1) When a loss requires repair or replacement of an item or part, any physical damage incurred in making such repair or replacement which is covered and not otherwise excluded by the policy shall be included in the loss to the extent of any applicable limits. The insured may not be required to pay for betterment required by ordinance or code except for the applicable deductible, unless specifically excluded or limited by the policy. (2) When a loss requires replacement of items and the replaced items do not match in quality, color, or size, the insurer shall make reasonable repairs or replacement of items in adjoining areas. In determining the extent of the repairs or replacement of items in adjoining areas, the insurer may consider the cost of repairing or replacing the undamaged portions of the property, the degree of uniformity that can be achieved without such cost, the remaining useful life of the undamaged portion, and other relevant factors. (3) This section shall not be construed to make the insurer a warrantor of the repairs made pursuant to this section. (4) Nothing in this section shall be construed to authorize or preclude enforcement of policy provisions relating to settlement disputes. FLORIDA ADMINISTRATIVE CODE SECTIONS & OTHER APPLICABLE STATUTES Fla. Stat. §626.877 Every adjuster shall adjust or investigate every claim, dam-age, or loss made or occurring under an insurance contract, in accordance with the terms and conditions of the contract and of the applicable laws of this state. Fla. Stat. § 626.878 An adjuster shall subscribe to the code of ethics specified in the rules of the department (formerly the Department of Insurance). Fla. Stat. §768.72 In any civil action, no claim for punitive damages shall be permitted unless there is a reasonable showing by evidence in the record or proffered by the claimant which would provide a reasonable basis for recovery of such damages. The claimant may move to amend her or his complaint to assert a claim for punitive damages as allowed by the rules of civil procedure. The rules of civil procedure shall be liberally construed so as to allow the claimant discovery of evidence which appears reasonably calculated to lead to admissible evidence on the issue of punitive damages. No discovery of financial worth shall proceed until after the pleading concerning punitive damages is permitted. 69B-220.201(3)(b) An adjuster shall treat all claimants equally. 69B-220.201(3)(b)(1) An adjuster shall not provide favored treatment to any claimant. 69B-220.201(3)(b)(2) An adjuster shall adjust all claims strictly in accordance with the insurance contract. 69B-220.201(3)(c) An adjuster shall not approach investigations, adjustments, and settlements in a manner prejudicial to the insured. 69B-220.201(3)(d) An adjuster shall make truthful and unbiased reports of the facts after making a complete investigation. 69B-220.201(3)(e) An adjuster shall handle every adjustment and settlement with honesty, integrity, and allow fair adjustment or settlement to all parties without any remuneration to himself except to that which he is legally entitled. 69B-220.201(3)(f) An adjuster, upon undertaking the handling of a claim, shall act with dispatch and due diligence in achieving a proper disposition of the claim. 69B-220.201(3)(j) An adjuster shall not knowingly fail to advise a claimant of the claimant’s claim options in accordance with the terms and conditions of the insurance contract. 69B-220.201(3)(k) An adjuster shall not undertake the adjustment of any claim concerning which the adjuster is not currently competent and knowledgeable as to the terms and conditions of the insurance coverage, or which otherwise exceeds the adjuster’s current expertise 69B-220.201(3)(m) An adjuster shall not knowingly fail to advise a claimant of their rights in accordance with the terms and conditions of the contract and applicable laws of the state of Florida. §626.9541(i) Unfair Claim Settlement Practices Reference specific policy language that is relevant to violation: To date, despite requests, the insurance company has failed and/or refused to provide a full copy of the policy. Based upon best belief the following are relevant: SECTION I – PERILS INSURED AGAINST COVERAGE A – DWELLING and COVERAGE B – OTHER STRUCTURES We insure against sudden and accidental direct physical loss to property described in Coverages A and B. SECTION I – CONDITIONS D. Loss Settlement J. Loss Payment Florida Statute §626.9744 which is incorporated by Ordinance and Law Coverage
 
* Facts and circumstances giving rise to the violation.
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Cuong Ding and Sinh Nguyen (hereinafter “insureds”) have faithfully paid premiums to their insurer, State Farm Florida Insurance Company (hereinafter “insurance company”) on Policy Number 80-B7-V445-5 (hereinafter “the policy”). On May 4, 2021, during the policy period, a storm producing high winds and hail impacted the insured property, 5231 Ganhill Court, Orlando, Florida 32818 (hereinafter “insured property”). The insured property’s roof sustained damage to the extent it necessitates replacement. The insureds promptly reported the loss to the insurance company. The insurance company assigned Claim Number 5925J503N (hereinafter “the claim”). Despite wind damaged shingles on multiple slopes of the insured property’s roof (17 shingles are damaged and not disputed by the insurance company), the insurance company failed to properly adjust the loss as it denied coverage for a replacement. Had the insurance company performed a proper investigation, it would understand that the insured property’s roof sustained wind and hail damage and cannot be repaired. Even if, for sake of argument, the existing shingles were sufficiently pliable for repair, the existing shingles cannot be matched, pursuant to Section 626.9744(2), Florida Statutes. The existing shingles are also no longer manufactured. In sum, simply replacing the damaged shingles is not an option. It is also interesting to note the insurance company paid for a “spot repair” of exactly 17 shingles. Industry standards are a 2:1 ratio, so even if the insurance company properly paid to indemnify the insureds (which they did not), they failed to pay for a proper repair. Despite evidence of a covered loss during the policy period, the insurance company wrongfully adjusted this claim in bad faith. The insurance company refused to properly investigate the claim. The insurance company intentionally ignored damage, confirmed by its own adjuster and wrongfully ignored the Florida Statutes. Discovery will likely reveal that the insurance company is continually, and as a business practice, immediately invoking the appraisal clause of the subject insurance policy once it receives notice of a dispute from its policyholders. This is done in order to delay payment of actual cash value benefits due and owing. It also forces its insureds to spend thousands in out of pocket costs to hire an appraiser, and therefore, is done to discourage insureds from contesting valid claims. It should be noted here that the insurance company should have paid actual cash value for a roof replacement at the time of loss and failed to do so, breaching the subject policy. As a result of its poor claims handling practices and breach of contract, the insurance company forced its insureds to retain an attorney to obtain their insurance monies under the policy. In order to cure its bad-faith conduct, the insurance company must tender all monies due and owing to the insureds.
Comments
User Id Date Added Comment
krothell@flacivillaw.com 01-09-2023 Please allow the following to serve as State Farm Florida Insurance Company’s (“State Farm”) response to the Civil Remedy Notice of Insurer Violations submitted to the Department of Financial Services by you on behalf of your clients and State Farm’s insureds, Cuong Dinh and Sinh Nguyen. The insureds alleged that State Farm is in violation of the following sections of the Florida Statutes: 624.155(1)(b)(1); 624.155(1)(b)(3); 626.9541(1)(i)(2); 626.9541(1)(i)(3)(a); 626.9541(1)(i)(3)(b); 626.9541(1)(i)(3)(c); 626.9541(1)(i)(3)(d); 626.9541(1)(i)(3)(f); and 626.9541(1)(i)(3)(i). Without waiving any arguments State Farm has that the Civil Remedy Notice of Insurer Violations is legally insufficient, State Farm specifically denies any wrongdoing in the adjustment and handling of the above-referenced claim. State Farm denies that it committed any acts or violated the provisions of any Florida statutes, including those referenced in the Civil Remedy Notice of Insurer Violations. Additionally, the insureds also alleged in the “policy language” section of the Civil Remedy Notice that State Farm violated the following sections of the Florida Administrative Code: 69B-220.201(3)(b); 69B-220.201(3)(b)1.; 69B-220.201(3)(b)2.; 69B-220.201(3)(c); 69B-220.201(3)(d); 69B-220.201(3)(e); 69B-220.201(3)(f); 69B-220.201(3)(j); 69B-220.201(3)(k); and 69B-220.201(3)(m). State Farm denies that it committed any acts violating any provisions of the Florida Administrative Code. Nonetheless, the Civil Remedy Notice is deficient in that alleged violations of administrative rules are not an enumerated basis for recovery under section 624.155, Florida Statutes. Because the civil remedy statute is in derogation of common law, it must be strictly construed. See Talat Enters., Inc. v. Aetna Cas. & Sur. Co., 753 So. 2d 1278 (Fla. 2000). In addition to the above noted deficiencies, the Civil Remedy Notice of Insurer Violations further fails to comply with the requirements of section 624.155, Florida Statutes, in that the notice fails to: (1) identify and explain with specificity the ways in which the cited statutes were allegedly violated (rather merely listing numerous statutes without application to claim-specific facts supporting the alleged violations, in addition to inconsistently identifying additional statutes in the “policy language” section of the Civil Remedy Notice); (2) identify specific policy language that is relevant to the alleged violations (rather merely naming several sections of the policy without application to claim-specific facts supporting the alleged violations despite also asserting that State Farm failed to provide a full copy of the policy even though one was provided to the insureds at the time of initial policy issuance and to the insureds’ public adjuster by e-mail dated August 5, 2021 in response to his request); and (3) provide the specific details to “cure” the alleged violations (other than requesting an unspecified and unsubstantiated tender of “all monies due and owing to the insureds”). The Florida Supreme Court has held that the purpose of a Civil Remedy Notice of Insurer Violations is to put the insurer on notice of an alleged violation, the circumstances surrounding the violation, and the details of the violation to provide the insurer with sixty (60) days to “cure” the alleged claim defects. The purpose of the statute is to provide the insurer with an opportunity to resolve first-party coverage disputes and otherwise avoid litigation. See Talat Enters., Inc. v. Aetna Cas. & Sur. Co., 753 So. 2d 1278 (Fla. 2000); Lane v. Westfield Ins. Co., 862 So. 2d 774 (Fla. 5th DCA 2003); Julien v. United Prop. & Cas. Ins. Co., 311 So. 3d 875 (Fla. 4th DCA 2021). The insureds made a claim to State Farm on May 4, 2021 for a loss purportedly occurring on the same day. They reported wind damage to the roof. During an initial claim telephone conference, they advised that shingles were on the ground after a storm on April 10, 2021, but that no other damages were observed. Thereafter, a field adjuster inspected the property on behalf of State Farm regarding the claim on May 18, 2021. Based on the field inspection and its overall good faith claim investigation, State Farm estimated for covered repairs to the roof totaling $659.29 (RCV). By letter dated May 20, 2021, State Farm advised that no payment would be issued for the claim because the covered repairs did not exceed the applicable deductible. State Farm also denied coverage for other damages to the roof caused by excluded perils, specifically “normal age wear, tear, defect, and deterioration as consistent with evidence of daily, historical weather elements over time.” Subsequently, in July 2021, State Farm received a Letter of Representation submitted by the public adjuster on behalf of the insureds. However, State Farm’s records do not reflect receipt of any other documentation from the public adjuster. Thereafter, the insureds filed the subject Civil Remedy Notice of Insurer Violations against State Farm on November 10, 2022. On the same day, the insureds also filed a breach of contract lawsuit against State Farm, which was served on State Farm on November 21, 2022. Your office thereafter provided the public adjuster’s estimate to our office. The estimate includes a greater scope and amount of claimed damages than estimated by State Farm, specifically a roof replacement and perimeter/exterior painting, totaling $28,467.78 (RCV). Thereafter, specifically by letter dated December 29, 2022, State Farm provided the insureds with written, itemized documentation of a specific dispute as to the amount of the loss, identifying separately each line item being disputed. State Farm subsequently invoked appraisal in a Motion to Compel Appraisal filed in defense of the lawsuit on January 9, 2023. State Farm has made every effort to thoroughly investigate this claim and examine the allegations in the Civil Remedy Notice of Insurer Violations filed by the insureds. State Farm acted appropriately in the adjustment and handling of the above-referenced claim. State Farm specifically denies all allegations of non-compliance with Florida Statutes or administrative rules. The Civil Remedy Notice of Insurer Violations does not constitute sufficient notice to State Farm of any acts or omissions that substantiate the allegation that State Farm has violated any statutes or rules applicable to the loss. Furthermore, the Civil Remedy Notice of Insurer Violations is totally deficient with respect to the specific requirements of section 624.155, Florida Statutes. Based on its good faith investigation of the subject insurance claim, State Farm resolves to cure the Civil Remedy Notice of Insurer Violations by proceeding with appraisal to resolve the remaining dispute regarding the scope and amount of this covered loss. Through the contractual appraisal process, the parties will be able to reconcile the scope and amount of the additional covered damages, if any, which may not total the unspecified amount sought by the insureds in the Civil Remedy Notice. However, State Farm specifically reserves any applicable non-causation coverage challenges or defenses, including as they relate to rooms/items not included in State Farm’s estimate and as set forth in correspondence dated May 20, 2021 and December 29, 2022. In conclusion, State Farm Florida Insurance Company has evaluated this claim in good faith and all allegations of violation are statutorily deficient and without merit. I trust that the foregoing, without waiver of arguments regarding the lack of validity of the Civil Remedy Notice of Insurer Violations, adequately addresses any concerns that you and your clients may have regarding this matter.
Acknowledgement
* The submitter hereby states that this notice is given in order to perfect the rights of the person(s) damaged to pursue civil remedies authorized by Section 624.155, Florida Statutes.

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DFS-10-363
Rev. 10/14/2008