Civil Remedy Notice of Insurer Violations
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Filing Number:     787392
Filing Accepted:  10/17/2024
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Complainant
Last/Business Name *  
MCCABE   First Name   ROBERT
Street Address * 6010 RUM COVE BLVD.
City, State Zip * PLACIDA, FL 33946
Email Address * LITIGATION@THEFREEMANLAWFIRMPA.COM
Complainant Type: * Insured
Insured
Last/Business Name*   MCCABE   First Name   ROBERT
Policy # * 84583248 Claim #* 683-679866
Attorney
Attorney is Applicable
Last Name* FREEMAN First Name * BRIAN Initial
Street Address* 4245 FOWLER STREET
City, State Zip* FORT MYERS , FLORIDA 33901
Email Address * LITIGATION@THEFREEMANLAWFIRMPA.COM
Violation
Insurer Type *   Authorized Insurer Unauthorized Insurer
 
Insurer Name*   LEXINGTON INSURANCE COMPANY
NAIC Company Code 19437
 
Name of individual responsible for violation (if any):* CARLOS DE ARMAS SOTO
Type of Insurance * Residential Property & Casualty   
Reason for Notice *
Claim Denial
Claim Delay
Unfair Trade Practice
Other : Bad Faith
* 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)(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)(g) Failing to promptly notify the insured of any additional information necessary for the processing of a claim.
626.9541(1)(i)(3)(h) Failing to clearly explain the nature of the requested information and the reasons why such information is necessary.
* Specific policy language that is relevant to the violation.
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The Insured is in possession of a copy of his insurance policy and believes his insurance policy language relevant to the violations includes all applicable insurance policy coverages, loss payment provisions, valuation provisions and other terms and conditions of Insurance Policy No. 84583248. In particular, the Insured refers to the following insurance policy coverages included in his insurance policy: SECTION 1-PROPERTY COVERAGES A. Coverage A- Dwelling 1. We cover: a. The dwelling on the "residence premises" shown in the Declarations, including structures attached to the dwelling; and b. Materials and supplies located on or next to the "residence premises" used to construct, alter or repair the dwelling or other structures on the "residence premises". 2. We do not cover land, including land on which the dwelling is located. B. Coverage B - Other Structures 1. We cover other structures on the "residence premises" set apart from the dwelling by clear space. This includes structures connected to the dwelling by only a fence, utility line, or similar connection. 2. We do not cover: a. Land, including land on which the other structures are located; b. Other structures rented or held for rental to any person not a tenant of the dwelling, unless used solely as a private garage; c. Other structures from which any "business" is conducted; or d. Other structures used to store "business" property. However, we do cover a structure that contains "business" property solely owned by an "insured" or a tenant of the dwelling provided that "business" property does not include gaseous or liquid fuel, other than fuel in a permanently installed fuel tank of a vehicle or craft parked or stored in the structure. 3. The limit of liability for this coverage will not be more than 1 0% of the limit of liability that applies to Coverage A. Use of this coverage does not reduce the Coverage A limit of liability. I. Loss Payment We will adjust all losses with you. We will pay you unless some other person is named in the policy or is legally entitled to receive payment. Loss will be payable 60 days after we receive your proof of loss and: 1. Reach an agreement with you; 2. There is an entry of a final judgment; or 3. There is a filing of an appraisal award with us. C. Loss Settlement In this Condition C., the terms "cost to repair or replace" and "replacement cost" do not include the increased costs incurred to comply with the enforcement of any ordinance or law, except to the extent that coverage for these increased costs is provided in E.11. Ordinance Or Law under Section I - Property Coverages. Covered property losses are settled as follows: 1. Property of the following types: a. Personal property; b. Awnings, carpeting, household appliances, outdoor antennas and outdoor equipment, whether or not attached to buildings; c. Structures that are not buildings; and d. Grave markers, including mausoleums; at actual cash value at the time of loss but not more than the amount required to repair or replace. 2. Buildings covered under Coverage A or B at replacement cost without deduction for depreciation, subject to the following: a. If, at the time of loss, the amount of insurance in this policy on the damaged building is 80% or more of the full replacement cost of the building immediately before the loss, we will pay the cost to repair or replace, after application of any deductible and without deduction for depreciation, but not more than the least of the following amounts: (1) The limit of liability under this policy that applies to the building; (2) The replacement cost of that part of the building damaged with material of like kind and quality and for like use; or (3) The necessary amount actually spent to repair or replace the damaged building. If the building is rebuilt at a new premises, the cost described in (2) above is limited to the cost which would have been incurred if the building had been built at the original premises. b. If, at the time of loss, the amount of insurance in this policy on the damaged building is less than 80% of the full replacement cost of the building immediately before the loss, we will pay the greater of the following amounts, but not more than the limit of liability under this policy that applies to the building: (1) The actual cash value of that part of the building damaged; or (2) That proportion of the cost to repair or replace, after application of any deductible and without deduction for depreciation, that part of the building damaged, which the total amount of insurance in this policy on the damaged building bears to 80% of the replacement cost of the building. c. To determine the amount of insurance required to equal 80% of the full replacement cost of the building immediately before the loss, do not include the value of: (1) Excavations, footings, foundations, piers, or any other structures or devices that support all or part of the building, which are below the undersurface of the lowest basement floor; (2) Those supports described in (1) above which are below the surface of the ground inside the foundation walls, if there is no basement; and (3) Underground flues, pipes, wiring and drains. d. We will pay no more than the actual cash value of the damage until actual repair or replacement is complete. Once actual repair or replacement is complete, we will settle the loss as noted in 2.a. and b. above. However, if the cost to repair or replace the damage is both: (1) Less than 5% of the amount of insurance in this policy on the building; and (2) Less than $2,500; we will settle the loss as noted in 2-a. and b. above whether or not actual repair or replacement is complete. e. You may disregard the replacement cost loss settlement provisions and make claim under this policy for loss to buildings on an actual cash value basis. You may then make claim for any additional liability according to the provisions of this Condition c. Loss Settlement, provided you notify us of your intent to do so within 180 days after the date of loss.
 
* Facts and circumstances giving rise to the violation.
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During the policy period, on September 28, 2022, the Insured’s home located at 6010 Rum Cove Blvd. Placida, FL 33946, owned by Robert McCabe ("Insured"), suffered hurricane/windstorm related physical and structural damage as a direct result of Hurricane Ian, a covered loss under the subject insurance policy. Please see insurance policy language above that indicates insurance coverage for hurricane/windstorm damage to the Insured’s home and roof system as a direct result of Hurricane Ian. Subsequent to Hurricane Ian, the Insured immediately reported the loss to his insurance carrier, Lexington Insurance Company, ("Insurer"). Since the beginning of the claims process, the Insured fully cooperated in the Insurer's investigation of the Insured’s hurricane/windstorm damage claim. Despite overwhelming evidence the Insured’s home and roof system had been significantly physically and structurally damaged by Hurricane Ian, all covered losses under the subject insurance policy; the Insurer unreasonably and improperly investigated, inspected, evaluated, adjusted and failed to pay the correct amount of damage to the Insured’s home and roof system as a direct result of Hurricane Ian. The Insurer performed a completely inadequate investigation of the damage to the Insured’s home and roof system. The Insurer retained independent adjuster Carlos de Armas Soto (“Mr. Soto”), to inspect the hurricane/windstorm damage to the Insured’s home and roof system. Mr. Soto documented extensive physical and structural hurricane/windstorm damage to the exterior of the Insured’s home, observation deck, and interior water damage inside the Insured’s home. However, Mr. Soto failed to document the clearly evident damage to the Insured’s roof system. In total, Mr. Soto’s damage estimate was a mere $437,726.60. The Insured retained Dave Griffey of Day Adjusting and Consulting, (“Mr. Griffey”), to inspect his home and roof system for hurricane/windstorm damage. During his inspection, Mr. Griffey documented extensive physical and structural hurricane/windstorm damage to the Insured’s roof system, exterior damage, interior damage and damage to the Insured’s windows and doors. As a result of Mr. Griffey’s inspection, Mr. Griffey provided the Insured with a damage estimate in the sum of $1,056,871.13 RCV and $1,033,479.97 ACV. The Insurer did not extend coverage for the clearly evident physical and structural damage to the Insured’s home and roof system as a direct result of Hurricane Ian as set forth in Mr. Griffey’s damage estimate. The Insurer failed to extend full coverage for the Insured’s clearly evident hurricane/windstorm damage, indicating the Insurer does not have proper standards for investigating the proper scope and amount of damage caused by a covered loss. The Insured provided all the evidence necessary supporting the actual costs associated with the complete replacement of his roof system and the amount necessary to repair all of the interior and exterior damage to his home as a direct result of Hurricane Ian in order to restore his home to its pre-loss condition. However, despite this evidence and information, the Insurer failed and refused to pay for the Insured’s clearly evident Hurricane Ian damage in order to restore his home to its pre-loss condition. Moreover, the Insurer did not perform a legally sufficient hurricane/windstorm damage investigation by failing to perform a substantial structural damage investigation and determination as required by The Florida Building Code and failing to retain a licensed Florida Professional Engineer to investigate the full extent of both physical and structural damage to the Insured’s home and roof system as a direct result of Hurricane Ian. The Insurers failure to perform this very important substantial structural damage determination and failure to retain a licensed Florida Professional Engineer to assist the Insurer in its investigation of their hurricane/windstorm damage claim further indicates the Insurer did not comply with the basic requirements inherent in the proper investigation of hurricane/windstorm damage claims, and instead performs inadequate and incomplete investigations in order to improperly partially deny valid claims. The Insured provided the Insurer with an overwhelming amount of evidence to support the extensive physical and structural damage to his home and roof system and other Hurricane Ian related damage to his home as well as a comprehensive damage estimate from Mr. Griffey. Notwithstanding, the Insurer failed and refused to pay the amount necessary to restore his home to its pre-loss condition. The work of adjusting insurance claims in Florida engages the public trust. In the instant case, the Insurer breached this duty through its complete failure to properly investigate, inspect, evaluate, adjust and pay the hurricane/windstorm damage claim of the Insured. The Insurer's failure to properly inspect, investigate, evaluate, adjust and pay for the damage to the Insured’s home and roof system, failure to communicate with the Insured, and improper handling of the Insured’s hurricane/windstorm damage claim clearly indicates the Insurer failed to adopt and implement proper standards for the investigation, evaluation and adjustment of claims; failed to properly train, manage, supervise and promote claims adjusters so an Insured, such as the Insured in this case, receives good faith, fair and prompt adjustment of claims; and failed to conduct a full and fair investigation of this hurricane/windstorm damage claim. The Insurer furthermore failed to provide full reasons and facts to the Insured for the partial denial of his hurricane/windstorm damage claim resulting in the statutory violations as set forth in this notice. The Insurer also breached its duty to the Insured by failing to timely and promptly pay the correct indemnity owed to its Insured. This duty is owed by the Insurer to its Insured and is inherent in the insurance claims process. The Insured promptly provided all the necessary documentation, evidence and information for a timely resolution of his hurricane/windstorm damage claim, including an itemized damage estimate from Mr. Griffey and extensive documentation of the physical and structural damage to his home as a direct result of Hurricane Ian to the Insurer which clearly shows the damage to the Insured’s home exceeds the grossly inadequate undisputed amount of damage the Insurer documented to the Insured’s home and failed to provide a detailed damage estimate of such damages documented by the Insurer to the Insured. To date, the Insurer failed to provide timely and prompt payment for the correct amount of the Insured’s damage. To date, the Insured performed all conditions precedent required of him under his insurance policy with the Insurer and under Florida law. However, the Insurer and its agents failed and refused to properly investigate, inspect, evaluate, adjust and pay the Insured’s hurricane/windstorm damage claim and failed to tender all insurance proceeds due and owing to the Insured under the subject insurance policy. Due to the Insurer's intentional delay and insufficient investigation of the Insured’s hurricane/windstorm damage claim, the Insured was forced to obtain legal counsel at a significant cost and expense to attempt to recover what he is legally owed under his insurance policy with the Insurer. The concept of insurance is that it is the insurer's granting of timely and prompt indemnity or security against a contingent loss. Fla. Stat. § 624.02 defines insurance as a contract whereby one undertakes to indemnify another or pay or allow a specified amount or a determinable benefit upon determinable contingencies. Inherent is the fact that payment must be made timely and promptly so that an Insured may mitigate his damages and be put back into the position they were in prior to the loss as quickly as possible. Simply put, the Insurer failed to comply with its duty to indemnify the Insured and breached the insurance policy. The Insurer failed and refused to properly investigate, inspect, evaluate, adjust and pay the Insured’s hurricane/windstorm damage claim. The Insurer failed and refused to pay the correct amount of insurance proceeds to date owed to the Insured as required by the insurance policy and Florida law. Refusal and failure to pay the Insured’s hurricane/windstorm damage claim, when under all the circumstances it could have and should have done so had it acted fairly and honestly towards the Insured is a breach of the insurance policy and a violation of Florida Law. The actions taken by the Insurer in the handling and adjustment of the Insured’s hurricane/windstorm damage claim were willful, wanton, and in disregard for the rights of its Insured and occur with such a frequency as to indicate a general unfair and deceptive business practice in violation of Florida Statutes § 624.155 and § 626.9541. Based on the foregoing actions and omissions, the Insurer engaged in wrongful claims handling conduct, including but not limited to, the following: 1) Improper partial claim denial; 2) Improper claim delays; 3) Not conducting a full and fair investigation of the Insured’s hurricane/windstorm damage claim; 4) Looking for ways to deny recovery to the Insured; 5) Overlooking covered damages to the Insured’s home and roof system; 6) Failing to pay the necessary amounts due and owing to restore the Insured’s home to its pre-loss condition; 7) Not adjusting the claim and not evaluating the loss properly, promptly and fairly so as to provide full and prompt indemnity to its Insured; 8) Failing to implement proper standards for the adjustment and investigation of insurance claims; 9) Failing to pay the requisite monies owed for the Insured’s loss, despite receipt of a detailed damage estimate from Mr. Griffey and supporting documentation; 10) Not training, supervising or managing adjusters and independent contractors properly so that prompt and full payments are made, but rather placing the company’s interests before the policyholders’ interests by attempting to deny or minimize payments owed; 11) Establishing severity control initiatives and otherwise establishing a culture of not fully and promptly paying claims following losses; 12) Interfering with the appraisal process. The Insurer violated the statutes set forth above based on the conduct described herein. The Insurer failed and refused to tender insurance proceeds required by its insurance policy with its Insured. In addition, the Insurer failed to reasonably and properly pay and resolve the Insured’s hurricane/windstorm damage claim for money damages when under all the facts and circumstances, it could have and should have done so if it had acted fairly and honestly towards its Insured. The Insurer’s improper actions are well documented and have occurred with such frequency as to constitute a general unfair and deceptive business practice and were made in a reckless disregard for its Insured’s rights. The Insurer placed its interest above and before the Insured’s interest in this matter. Therefore, to cure the defects outlined in this Civil Remedy Notice, the Insurer must do the following: A. Immediately pay the Insured’s hurricane/windstorm damage claim in the amount of the Mr. Griffey’s damage estimate of $1,056,871.13 RCV, plus interest, less the applicable deductible. B. Agree to tender any recoverable depreciation once it has been incurred per the terms of the insurance policy.
Comments
User Id Date Added Comment
steebagy@thetmlaw.com 12-09-2024 December 9, 2024 Electronic Filing Florida Department of Financial Services Consumer Assistance/Civil Remedy Section, Larson Building 200 E. Gaines Street Tallahassee, FL 32399-0322 Re: Insured: Robert McCabe Complainant: Robert McCabe Policy No.: 84583248-01 Claim No.: 683-679866 Date of Loss: Reported as September 28, 2022 Our File No.: 4763 CRN Filing: 787392 Dear Sir or Madam: Please be advised that this law firm represents Lexington Insurance Company (hereinafter “Lexington”) with respect to the above-referenced matter. This is Lexington’s response to the Civil Remedy Notice of Insurer Violations (hereinafter “Civil Remedy Notice”) filed by Brian Freeman, Esquire on behalf of Robert McCabe on October 17, 2024. Lexington issued a policy of insured bearing number 84583248-01 with effective dates of April 12, 2022, through April 12, 2023. The insured’s property address is 6010 Rum Cove Boulevard, Placida, FL 33946. On October 10, 2022, the insured reported damage to the property as a result of Hurricane Ian. Lexington denies the allegations contained within the Civil Remedy Notice, including but not limited to alleged violations of Sections 624.155 and 626.9541 of the Florida Statutes. The alleged violations in the Civil Remedy Notice are unfounded and expressly denied by Lexington. Further, the Civil Remedy Notice misrepresents the facts and fails to accurately recount what transpired during the handling of the Claim, which is now in appraisal. Moreover, the allegations contained within the Civil Remedy Notice are not only inaccurate but are also vague, boilerplate and conclusory rendering it insufficient. The Civil Remedy Notice also recites multiple statutory provisions allegedly violated without specificity. The Civil Remedy Notice contains improper legal argument rather than any specific facts in support of its unfounded allegations. Lexington has not engaged in the conduct alleged nor can Complainant come forth with any evidence of this. The Civil Remedy Notice is factually inaccurate, overbroad, legally insufficient, fails to comply with and otherwise satisfy Florida law and further deprives Lexington of true notice with adequate opportunity to cure. CLAIM BACKGROUND This claim was reported on October 10, 2022. An initial inspection was conducted on October 15, 2022. Another inspection by Alacrity followed on October 20, 2022. Ramey Ali with Augusta Consulting Group was also present. Lexington also assigned MKA International, Inc., Construction Consultants and Engineers, to provide an opinion on the structural damages generated by the hurricane. MKA International Inc. performed an evaluation of the claimed damages to the McCabe residence to determine the cause and extent of the damage that reportedly occurred on September 28, 2022, as a result of Hurricane Ian. A site visit was performed on January 19, 2023, to document and inspect the reported damage. The investigation was of a visual nature only and no destructive testing was undertaken. The site visit was conducted by Mr. Chris Schmidt, P.E. Copies of those reports were furnished to the insured on October 12, 2022. On December 23, 2022, Lexington issued an advance to the insured in the amount of $50,000.00. On January 10, 2023, Lexington issued payment in the amount of $88,450.00 for dwelling/contents. On that same day, it issued payment in the amount of $13,000.00 in ALE. On June 14, 2023, based upon the report from engineer MKA International, Inc., the inspections and the estimate prepared by building consultant Agusta Consulting Group, Lexington issued an additional payment of $135,381.83. There was disagreement between the Parties regarding the dollar value of the covered portion of the claim and appraisal was demanded on October 15, 2023, by Robert McCabe. Under the Policy’s appraisal provision that provides as follows: E. Appraisal If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent and im­partial appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of a court of record in the state where the "residence premises" is located. The appraisers will separately set the amount of loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon will be the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of loss. Each party will: 1. Pay its own appraiser; and 2. Bear the other expenses of the appraisal and umpire equally. Each party selected an appraiser. The appraisal provision of the policy requires that the appraisers select an umpire. However, the parties could not agree, and Lexington was forced to file a Petition to Appoint Umpire. See Lexington Insurance Co. v. Robert McCabe and Patrica McCabe in the Circuit Court of the 20th Judicial Circuit in and for Charlotte County, FL, case number 24001702CA. On November 4, 2024, Judge Geoffrey Gentile issued an Order appointing Mark Buggica as the neutral umpire. The appraisal process can now move forward. CONCLUSION The Civil Remedy Notice also contains improper legal and conclusory arguments rather than any specific facts in support of its unfounded allegations. Lexington has not engaged in the conduct alleged nor has Complainant come forth with any evidence of this. Lexington has, at all time, acted in good faith. The Civil Remedy Notice fails to comply with Florida law, including the pleading requirements of Section 624.155, Florida Statutes. Further, the Civil Remedy Notice is overbroad, inaccurate, improper and insufficient as noted herein. The alleged violations and allegations of bad faith in the Civil Remedy Notice are unfounded and denied by Lexington. Lexington has handled the Claim in compliance with the Policy and Florida law. We trust that this correspondence addresses any concerns or questions that you may have regarding the Civil Remedy Notice filed. Please feel free to contact us if you have any remaining questions, comments or require any additional information. Very truly yours, The Teebagy & Medeiros Law Group, PLLC s/Steven C. Teebagy, Esq Steven C. Teebagy, Esq. s/ Helen Leen Miranda, Esq. Helen Leen Miranda, Esq. For the Firm cc: Brian Freeman, Esquire (via email: litigation@thefreemanlawfirmpa.com)
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