Civil Remedy Notice of Insurer Violations
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Filing Number:     663386
Filing Accepted:  12/20/2022
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Complainant
Last/Business Name *  
MITCHELL   First Name   AMY
Street Address * 2608 STONYHILL COURT
City, State Zip * CAPE CORAL, FL 33991
Email Address * AMITCHELL1229@GMAIL.COM
Complainant Type: * Insured
Insured
Last/Business Name*   MITCHELL   First Name   AMY
Policy # * 59-CR-H229-5 Claim #* 59-39X7-63Q
Attorney
Attorney is Applicable
Last Name* KRAPF First Name * GRANT Initial
Street Address* 2790 SUNSET POINT ROAD
City, State Zip* CLEARWATER , FLORIDA 33759
Email Address * GRANT@KRAPFLEGAL.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):* NICKY JEAN, LUCAS KLOCAND, ANY INDIVIDUAL FROM STATE FARM FLORIDA INSURANCE COMPANY WHO WAS INVOLVED IN THE CLAIM AND UNKNOWN TO CLAIMANT.
Type of Insurance * Residential Property & Casualty   
Reason for Notice *
Unfair Trade Practice
Claim Denial
Claim Delay
Other : Not treating the policyholder with good faith claims conduct
Other : Placing the company’s financial interests before the policyholder’s interests
Other : Looking for ways to deny full recovery to the Claimant
Other : Failing to implement proper standards for the adjustment and investigation of claims
Other : Looking for ways to delay full recovery to the Claimant
Other : Not training, supervising, or managing adjusters properly so that prompt and full payments are made,
Other : Misrepresenting the terms of the insurance policy
* 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.
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)(d) Denying claims without conducting reasonable investigations based upon available information.
* Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

Reference to specific policy language… The violations alleged are statutorily based and do not rely on any specific policy language.
 
* Facts and circumstances giving rise to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

State Farm Florida Insurance Company, (“Insurer”) has committed the following in handling the Claimant’s claim: 1) failure to act in due diligence and good faith to resolve claims; 2) placing the financial interest of Insurer before that of the Policy Holder and Claimant; 3) looking for ways to deny benefit payments and otherwise “low ball” or “stone wall” claims; 4) not adjusting the claims promptly and fairly; 5) failing to implement proper standards for the adjustment and investigation of claims; 6) looking for ways to delay benefit payments; 7) misrepresenting the terms of the policy issued by the Insurer; 8) conducting inadequate investigations; and 9) denying a claim which it knew or should have known the policy and Florida law provided coverage for. The Claimant timely submitted a claim on October 3, 2022, to the Insurer for the damage sustained to the above-referenced insured property as a result of Hurricane Ian, which occurred on September 28, 2022. Upon the initial investigation, the Insurer’s adjuster failed to conduct a thorough and adequate investigation on December 1, 2022. As a result, the Insurer significantly underestimated the scope of the loss to the Claimant’s property; including but not limited to the necessary replacement of the Claimant’s roof and repairs to the interior. Given the nature and scope of damage, the Claimant retained a public adjuster who prepared an estimate dated November 24, 2022, detailing $341,507.49 in covered damage to the dwelling, other structured, and contents. On December 5, 2022, the public adjuster sent this estimate to the Insurer. On December 13, 2022, the Insurer sent a claims determination letter which advised the Insurer had received the estimate and was treating it as a proof of loss as they continued to investigate the loss and reconcile its estimate with the public adjuster’s estimate. However, the letter acknowledged damage to the Claimant’s roof but nevertheless denied coverage for the roof based on several policy exclusions. The Insurer misrepresented the loss and improperly denied coverage for the damage sustained to the Claimant’s roof. According to the claims determination letter, the Insurer’s field adjuster observed damage to the roof and elevations, but attributed the cause of this damage to “wear, tear, and deterioration from exposure to sunlight, heat, and normal weather conditions over time to the roof and elevations of the home.” However, the Insurer never retained a professional engineer to determine the cause of this damage. The Insurer knows or should know that when independent perils converge and no single cause can be considered the sole or proximate cause, it is appropriate to apply the concurring cause doctrine. Sebo v. Am. Home Assurance Co., 208 So. 3d 694, 697 (Fla. 2016). The concurring cause doctrine states that coverage may exist where an insured risk constitutes a concurrent cause of the loss even when it is not the prime or efficient cause. Id. at 698. A covered peril that meets with an uncovered peril may still provide for coverage under a policy when the covered peril triggered the events that eventually led to the loss. Id. at 697. The Insurer intentionally ignored covered damage to deny the reported loss and wrongfully fail to pay the Claimant. This is an underhanded attempt to place the financial interests of the Insurer over those of the Claimant and to delay and frustrate the Claimant’s ability to have his claim adjusted promptly to begin restoring his property. Moreover, upon information and belief, the Insurer wrongfully denied coverage for the Claimant’s roof because it knows or should have known that the Claimant needs a new roof in order to comply with the Florida Building Code. More than 25% of the Claimant’s roof is damaged. The Insurer is refusing to pay for a full re-roof despite knowing it is obligated to do so. Florida Building Code section 708.1.1 states that not more than 25% of the total roof area or roof section of any existing building or structure shall be repaired, replaced or recovered in any 12-month period unless the entire roofing system or roof section conforms to requirements of this code. The aforementioned circumstances require that the Insurer replace the roof, yet the Insurer has refused to do so. According to Florida Statute 627.7011(1)(b), Insurers have a duty to cover all costs necessary to meet applicable laws and ordinances regulating the repair of any property. Florida Statute 626.9744 requires that the Insurer make reasonable repairs or replacement that match the quality, color or size of the items that needs repair. Lastly, although there was interior water damage the adjuster did not use a water meter. A water meter can be purchased online from Amazon for around $40 before tax. The Insurer could purchase a water meter and assess thousands of properties with one meter. Instead, the Insurer would rather place its financial interests over those of the Claimant by failing to provide the adjuster with the necessary tools to correctly inspect the loss. As a result of the inadequate investigation and surrounding circumstances it is apparent that Insurer significantly underestimated the scope of the loss to the Claimant’s property. Insurer and its adjuster have colluded to misrepresent the true scope of damages to the insured property and the true replacement costs of the damages. This is an underhanded attempt to place the financial interest of Insurer over those of the Claimant, to delay the Claimant’s claim, and to delay the Claimant in restoring her property to its pre-loss condition. In short, the Insurer is not acting with due regard for the Claimant’s interest. In Florida, the work of adjusting insurance claims engages the public trust. The Insurer has breached this duty. The Insurer has conducted poor and inadequate investigations and has wrongfully denied coverage for the Claimant’s claim. The Insurer is placing their financial interests over those of the Claimant and the Claimant’s safety. The foregoing has only delayed the Claimant’s ability to begin restoring her home to its pre-loss condition. The Insurer’s actions amount to but are not limited to the following: 1. Claim delay 2. Claim denial 3. Not treating the Policyholder with good faith claims conduct 4. Looking for ways to reduce recovery to the Claimant 5. Looking for ways to deny recovery to the Claimant 6. Not adjusting claims and evaluating loss properly, promptly and fairly to provide full and prompt indemnity to the Claimant 7. Failing to implement proper standards for the adjustment and investigation of claims 8. Not training, supervising or managing adjusters properly so that prompt and full payments are made, but rather placing the company’s interests before the policyholder’s interests 9. Misrepresenting the terms of the policy issued by the Insurer 10. Conducting inadequate investigations Therefore, to cure the defects outlined in this civil remedy notice, the Insurer must: (1) Admit full coverage for the Claimant’s loss. (2) Tender full benefits owed to the Claimant under the insurance contract. (3) Pay all attorney’s fees, costs, and interest. A copy of this form submitted to the FDFS has been sent via Electronic Mail to the following parties providing them notice of the filing of the civil remedy notice. Please email any response to this civil remedy notice to badfaith@krapflegal.com Via Electronic Mail: State Farm Florida Insurance Company 7401 Cypress Gardens Blvd. Winter Haven, FL 33888-0007 statefarmfireclaims@statefarm.com
Comments
User Id Date Added Comment
dbeckman@kelleykronenberg.com 02-07-2023 February 7, 2023 Via Electronic Submission Florida Department of Insurance Civil Remedy Section 200 East Gaines Street Tallahassee, FL 32399 Insured: Amy Mitchell Complainant: Amy Mitchell Insurance Carrier: State Farm Florida Insurance Company Claim No.: 59-39X7-63Q Policy No.: 59-CR-H229-5 Date of Loss: September 28, 2022 CRN Filing No.: 663386 CRN Filing Date: December 20, 2022 Property Location: 2608 Stonyhill Court, Cape Coral, FL 33991 To whom it may concern: This is State Farm Florida Insurance Company’s (“State Farm”) formal response to the Civil Remedy Notice of Insurer Violations (“CRN”) filed on behalf of Amy Mitchell by attorney Grant Krapf, as it relates to Claim number 59-39X7-63Q. The Department of Financial Services (“DFS”) accepted the CRN on December 20, 2022 and assigned it filing number 663386. The following reply was uploaded to the Department of Financial Services. After reviewing the CRN, State Farm denies all allegations contained in the insured’s CRN. State Farm conducted a thorough review of its handling of the insured’s claim, Subject Claim No.: 59-39X7-63Q. State Farm denies that it has violated any of the statutes as alleged in the CRN. At all times, State Farm acted in good faith, fairly and honestly and with due regard for the insured’s interests. State Farm also argues the CRN fails to adequately describe the alleged violations and fails to provide sufficient information to allow State Farm to correct the alleged violations. The CRN requires the insured to “indicate all statutory provisions alleged to have been violated," pursuant to section 624.155, F.S. The notice filed on behalf of Amy Mitchell by Grant Krapf, Esq., in the above-referenced matter includes statutory provisions that could be claimed against an insurance company regardless of whether they are relevant or applicable to the alleged facts contained in the Notice. Because the CRN fails to identify the specific facts applicable to the listed statutes that were allegedly violated with respect to the subject claim, State Farm is unable to properly respond and said CRN should be rejected and returned. Specifically, the insureds allege the following violations of Florida Statutes: • § 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 and his interests. State Farm strictly denies any violation of any section of Florida Statute § 624.155(1) (b) (1). • § 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. State Farm strictly denies any violation of any section of Florida Statute § 626.9541(1) (i) (2). • § 626.9541(1) (i) (3) (a): Failing to adopt and implement standards for the proper investigation of claims. State Farm strictly denies any violation of Florida Statute §626.9541(1) (i) (3) (a). • § 626.9541(1) (i) (3) (b): Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue. State Farm strictly denies any violation of Florida Statute §626.9541(1) (i) (3) (b). • § 626.9541(1) (i) (3) (d): Denying claims without conducting reasonable investigations based upon available information. State Farm strictly denies any violation of Florida Statute §626.9541(1) (i) (3) (d). State Farm specifically denies the insured’s allegations State Farm violated the above referenced statutes, any portion of the administrative code, or any Florida Statute referenced in the instant CRN. Also, the CRN fails to set forth any specific policy language alleged to have been violated in accordance with Florida Statute §624.155(3) (b) (4). It is this failure to identify the specific policy provision(s) that is(are) allegedly relevant to the alleged violation(s) that prevent(s) State Farm from addressing any issues regarding the subject claim and policy. Furthermore, contrary to the requirement to “describe the facts and circumstances giving rise to the insurer’s violation as you understand them at this time,” the purpose of which is “to enable the insurer to investigate and resolve [the] claim,” the CRN itself only provides unsupported, vague, ambiguous, and incorrect allegations with no basis in fact or circumstances. Aside from the fact the allegations are devoid of any specific facts, the tenor and inferences of the allegations are wholly without merit and State Farm denies each and every one. Importantly, the Notice fails with respect to its requirement to specify how State Farm may “cure” the alleged violations. The purpose of a Civil Remedy Notice is to provide a carrier with one last opportunity to “cure” the alleged violations. Assuming arguendo, the real “cure,” sought by the insured is payment of all insurance proceeds demanded, notwithstanding State Farm’s right to investigate and adjust the loss, the method for curing the violations alleged in a civil remedy notice are not determined by the insured. Section 624.155 does not impose on an insurer the obligation to pay whatever the insured demands. Section 624.155(2)(d) would have no effect or purpose under such an interpretation. In Talat Enterprises, Inc. v. Aetna Casualty and Surety Co., 753 So.2d 1278 (Fla. 2000), the Florida Supreme Court accepted and quoted the reasoning of the court below in its opinion which stated in relevant part, as follows: Section 624.155 does not impose on an insurer the obligation to pay whatever the insured demands. . . . Section 624.155(2)(d) would have no effect or purpose under such an interpretation. The law does not support such an expansive and illogical reading of Fla. Stat. Ann. §624.155(2)(d). . . . [t]o cure an alleged violation and to avoid a civil action, an insurer must pay the claim . . . before the sixty days expire. Talat, 753 So2d at 1282 citing Talat Enterprises Inc. v. Aetna Cas. & Sur. Co., 952 F.Supp. 773, 777-778 (M.D. Fla. 1996). For the aforementioned reasons, the Civil Remedy Notice is insufficient as a matter of law. State Farm acted in good faith, fairly and honestly in the adjustment of the instant claim. State Farm was contacted on or about October 3, 2022 and was informed of a claimed loss from Hurricane Ian at the subject property, the loss reportedly occurring on or about September 28, 2022. State Farm promptly initiated a claim investigation, including setting up an inspection(s) to determine the cause of loss, and if appropriate, cost to bring the property back to pre-loss condition. Specifically, at State Farm’s request, the property was inspected by a licensed adjuster on December 1, 2022 and an estimate was completed for the replacement of 29 roof tiles, rescreening of the patio/pool enclosure, replacement of the mailbox post and interior repairs to the office, foyer/entry, living room/kitchen, daughter’s room, daughter’s bathroom and hall bathroom. The estimate totaled $9.590.88. After application of the Insured’s deductible of $11,568.00, the cost of repairs fell below the deductible and no payment was issued to the Insured. Additionally, through correspondence of December 13, 2022 from State Farm, the insured was advised of the above, and was further advised, based on the investigation and site inspection, State Farm found scattered storm damage to the Insured’s roof and elevations; however, no covered accidental direct physical loss to the remaining portion of the Insured’s roof or the elevations of the property. Specifically, no damage was observed to the left or right elevation; however, damage was observed to the mailbox which is located on the front elevation. Furthermore, no damage was observed in the bar room nor hallway. Additionally, the Insured was notified evidence of wear, tear and deterioration from exposure to sunlight, heat and normal weather conditions over time to the roof and elevations of the home were observed during the inspection thus coverage was not extended to the entire roof or elevations. The Insureds were also notified damages attributed to rot and rust were not covered under the terms of the policy. It is important to note, while an insurance company is required to settle claims that should be settled, it is not required to settle claims that are legitimately contested. Florida law continually affirms the principle that an insurer has the right to investigate claims presented for payment. An insurance company is expressly afforded an opportunity to evaluate its rights and liabilities. Neither the subject policy nor Florida law provide that a carrier must accept whatever demand for repairs it is provided by its insured as the amount necessary to repair a loss. In the instant case, the violations alleged by the insured all revolve around the contention State Farm did not accept and pay the full demand. While this response is intended to be comprehensive, State Farm’s response above is based upon the limited information provided in the CRN and the information State Farm has to date. If the insured, or Grant Krapf, Esq., are in possession of information or facts State Farm is not in possession of, State Farm requests all such information or facts be provided to it immediately. Please note, State Farm’s response is not necessarily exhaustive and does not preclude it from asserting any other valid reason for seeking rejection and return of the CRN, including but not limited to deficiencies in any AOB document, pursuant to F.S. 627.7152. Also, this letter or any act or failure to act on the part of State Farm or any agent or representative of State Farm should not be construed as a waiver of any rights or defenses available to State Farm by contract or at law as all such rights and defenses are hereby specifically reserved. In closing, State Farm takes the position the CRN should be rejected and returned by the Department of Financial Services due to its failure to comply with Florida Statute §624.155 and Florida Case law, and regardless of the rejection, State Farm denies all allegations contained in the CRN and submits there are no violations to the insureds. We trust this response addresses the allegations of insurer violation alleged in the CRN of Insurer Violation. Should you have any questions regarding this matter or need anything further, please do not hesitate to contact the undersigned. Very truly yours, Kathryn E. Thomson, Esq. Kathryn E. Thomson, Esq. KET/amh cc: Counsel (via email)
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