Filing Number: 787735
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| Filing Accepted: 10/21/2024 |
| Last/Business Name
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ELECTRONIC DISPLAY NETWORKS
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First Name |
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| Street Address
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1306 EAST CERVANTES STREET |
| City, State Zip
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PENSACOLA,
FL
32501
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| Email Address
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SERVICE@LRLC.LEGAL |
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Insured |
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| Last/Business Name* |
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ELECTRONIC DISPLAY NETWORKS |
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First Name |
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| Policy # * |
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JTA2500218 |
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Claim #* |
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1030973 |
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Attorney is Applicable
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| Last Name* |
STERN
First Name *
ALEX
Initial
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| Street Address* |
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16375 NE 18TH AVE., STE. 321 |
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NORTH MIAMI BEACH
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FLORIDA
33162
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| Email Address * |
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ALEX@LRLC.LEGAL |
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| Insurer Type
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 Authorized Insurer
 Unauthorized Insurer
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| Insurer Name |
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| Insurer Name* |
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UNDERWRITERS AT LLOYD'S, LONDON
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| Insurer Name* |
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NAIC Company Code |
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| Name of individual responsible for violation (if any):*
LYNN ROTHMAN, JOHNNY WALKER, RICHARD E. ZELONKA, JR.
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| Type of Insurance
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Commercial Property & Casualty
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| Reason for Notice
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Claim Delay
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Unsatisfactory Settlement Offer
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Unfair Trade Practice
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Statutory provision(s) which the insurer allegedly violated.
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| 624.155(1)(b)(1) |
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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.
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| 624.155(1)(b)(3) |
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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.
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| 626.9541(1)(i)(2) |
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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.
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| 626.9541(1)(i)(3)(a) |
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Failing to adopt and implement standards for the proper investigation of claims.
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| 626.9541(1)(i)(3)(b) |
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Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue.
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| 626.9541(1)(i)(3)(c) |
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Failing to acknowledge and act promptly upon communications with respect to claims.
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| 626.9541(1)(i)(3)(e) |
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Failing to affirm or deny full or partial coverage of claims, and, as to partial coverage, the dollar amount or extent of coverage, or failing to provide a written statement that the claim is being investigated, upon the written request of the insured within 30 days after proof-of-loss statements have been completed.
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| 626.9541(1)(i)(3)(f) |
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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.
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| 626.9541(1)(i)(3)(g) |
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Failing to promptly notify the insured of any additional information necessary for the processing of a claim.
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| 626.9541(1)(i)(3)(h) |
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Failing to clearly explain the nature of the requested information and the reasons why such information is necessary.
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| 626.9541(1)(i)(4) |
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Failing to pay undisputed amounts of partial or full benefits owed under first-party property insurance policies within 60 days after an insurer receives notice of a residential property insurance claim, determines the amounts of partial or full benefits, and agrees to coverage, unless payment of the undisputed benefits is prevented by factors beyond the control of the insurer as defined in s. 627.70131(5).
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Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.
BUILDING AND PERSONAL PROPERTY
COVERAGE FORM
Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties and
what is and is not covered.
Throughout this policy, the words "you" and "your" refer to the Named Insured shown in the Declarations. The
words "we", "us" and "our" refer to the company providing this insurance.
Other words and phrases that appear in quotation marks have special meaning. Refer to Section H. Definitions.
A. Coverage
We will pay for direct physical loss of or damage to
Covered Property at the premises described in the
Declarations caused by or resulting from any
Covered Cause of Loss.
1. Covered Property
Covered Property, as used in this Coverage
Part, means the type of property described in
this section, A.1., and limited in A.2. Property
Not Covered, if a Limit Of Insurance is shown
in the Declarations for that type of property.
a. Building, meaning the building or structure
described in the Declarations, including:
(1) Completed additions;
(2) Fixtures, including outdoor fixtures;
(3) Permanently installed:
(a) Machinery; and
(b) Equipment;
(4) Personal property owned by you that is
used to maintain or service the building
or structure or its premises, including:
(a) Fire-extinguishing equipment;
(b) Outdoor furniture;
(c) Floor coverings; and
(d) Appliances used for refrigerating,
ventilating, cooking, dishwashing or
laundering;
(5) If not covered by other insurance:
(a) Additions under construction,
alterations and repairs to the building
or structure;
(b) Materials, equipment, supplies and
temporary structures, on or within
100 feet of the described premises,
used for making additions,
alterations or repairs to the building
or structure.
b. Your Business Personal Property
consists of the following property located in
or on the building or structure described in
the Declarations or in the open (or in a
vehicle) within 100 feet of the building or
structure or within 100 feet of the premises
described in the Declarations, whichever
distance is greater:
(1) Furniture and fixtures;
(2) Machinery and equipment;
(3) "Stock";
(4) All other personal property owned by
you and used in your business;
(5) Labor, materials or services furnished or
arranged by you on personal property of
others;
(6) Your use interest as tenant in
improvements and betterments.
Improvements and betterments are
fixtures, alterations, installations or
additions:
(a) Made a part of the building or
structure you occupy but do not own;
and
(b) You acquired or made at your
expense but cannot legally remove;
(7) Leased personal property for which you
have a contractual responsibility to
insure, unless otherwise provided for under Personal Property Of Others.
...
E. Loss Conditions
The following conditions apply in addition to the
Common Policy Conditions and the Commercial
Property Conditions:
...
2. Appraisal
If we and you disagree on the value of the
property or the amount of loss, either may
make written demand for an appraisal of the
loss. In this event, each party will select a
competent and impartial appraiser. The two
appraisers will select an umpire. If they cannot
agree, either may request that selection be
made by a judge of a court having jurisdiction.
The appraisers will state separately the value
of the property and amount of loss. If they fail
to agree, they will submit their differences to
the umpire. A decision agreed to by any two
will be binding. Each party will:
a. Pay its chosen appraiser; and
b. Bear the other expenses of the appraisal
and umpire equally.
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4. Loss Payment
a. In the event of loss or damage covered by
this Coverage Form, at our option, we will
either:
(1) Pay the value of lost or damaged
property;
(2) Pay the cost of repairing or replacing the
lost or damaged property, subject to b.
below;
(3) Take all or any part of the property at an
agreed or appraised value; or
(4) Repair, rebuild or replace the property
with other property of like kind and
quality, subject to b. below.
We will determine the value of lost or
damaged property, or the cost of its repair
or replacement, in accordance with the
applicable terms of the Valuation Condition
in this Coverage Form or any applicable
provision which amends or supersedes the
Valuation Condition.
b. The cost to repair, rebuild or replace does
not include the increased cost attributable
to enforcement of or compliance with any
ordinance or law regulating the
construction, use or repair of any property.
c. We will give notice of our intentions within
30 days after we receive the sworn proof of
loss.
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FLORIDA CHANGES
...
D. The Loss Payment Condition dealing with the
number of days within which we must pay for covered
loss or damage is replaced by the following:
Provided you have complied with all the terms of
this Coverage Part, we will pay for covered loss or
damage upon the earliest of the following:
(1) Within 20 days after we receive the
sworn proof of loss and reach written
agreement with you;
(2) Within 30 days after we receive the
sworn proof of loss and:
(a) There is an entry of a final judgment;
or
(b) There is a filing of an appraisal
award with us; or
(3) Within 90 days of receiving notice of
claim, unless we deny the claim during
that time or factors beyond our control
reasonably prevent such payment. If a
portion of the claim is denied, then the
90-day time period for payment of claim
relates to the portion of the claim that is
not denied.
Paragraph (3) applies only to the following:
(a) A claim under a policy covering
residential property;
(b) A claim for building or contents coverage
if the insured structure is
10,000 square feet or less and the
policy covers only locations in Florida;
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Facts and circumstances giving rise to the violation.
Enter all words or phrases (one at a time) that should be used to filter.
This Civil Remedy Notice is brought against Certain Underwriter’s at Lloyd’s, London (“Carrier”) for violations of Florida law, including but not limited to Fla. Stat. § 624.155 and Fla. Stat. § 626.9541, resulting from the Carrier's bad faith handling of a claim for windstorm damage arising from Hurricane Sally. The Carrier’s conduct throughout the claim process exhibits a deliberate and unjustifiable failure to act in good faith toward its insured, Electronic Display Networks, Inc. (“Policyholder”), who has been significantly harmed by the Carrier’s delays, underpayments, and refusal to comply with the terms of the Policy.
Carrier issued insurance policy number JTA2501130 (the “Policy”) to Policyholder. The Policy provides insurance coverage for a residential property owned by Policyholder located 1306 East Cervantes Street, Pensacola, Florida 32501 (the “Property”). The Policy is an “all-risks” policy meaning all loss is covered by the Policy unless specifically excluded. The Policy expressly provides coverage for loss caused by windstorm. The Policy required Carrier pay for loss covered by the Policy “upon the earliest” of various scenarios, with the applicable on here being within 90 days of the loss’s involving a residential property or a property which is less than 10,000 square feet. The Policy requires Carrier give notice of its intentions within 30 days after receiving a sworn proof of loss. The Policy also contains a mandatory appraisal clause, requiring each party to submit to an appraisal of the loss upon the demand of either party.
On or about September 16, 2020, Policyholder’s Property experienced loss covered by the Policy from Hurricane Sally causing damage to the Property’s exterior, interior, and roofing system. Policyholder timely reported the loss to Carrier who assigned claim number 1030973 (the “Claim”) in recognition of its coverage obligations. Because Policyholder reported the loss on December 18, 2020, the Policy required Carrier to make full payment for the loss no later than March 18, 2021. Policyholder substantially complied with all of the Policy’s applicable post-loss conditions including making the Property available for multiple inspections. Carrier inspected the property and acknowledged coverage for the loss but underpaid the claim by only issuing a payment of $1,317.82 after application of the $7,500 windstorm deductible. This amount was grossly inadequate to compensate for the damages sustained, as later evidenced by the appraisal award.
Policyholder then retained a public adjuster to dispute the significant disparity in the valuation of the loss. Policyholder incurred additional expenses in hiring a public adjuster that it would not have needed to pay but for Carrier’s failure to properly handle and pay the Claim. Carrier conducted another inspection of the Claim, this time with a different adjusting firm. After the reinspection, Carrier then reassigned the initial adjusting firm to the Claim without reason and without telling the original adjusting firm that a second adjusting firm had been hired and conducted a reinspection. After Carrier conducted a reinspection, Carrier did not issue any additional monies, reevaluate the amount of loss, conduct a further investigation, or reconsider its lowball estimate.
Regardless, Policyholder continued to cooperate under the Policy and on January 10, 2023, Policyholder invoked the Policy’s appraisal provision, demanded an appraisal of the loss, and provided a sworn proof of loss along with a competing estimate in accordance with the Policy’s terms. Carrier, however, failed to timely respond with notice of its intentions after receipt of the sworn proof of loss. In fact, Carrier ignored the insured's demand for appraisal for five months. Finally, in correspondence dated May 11, 2023, Carrier responded through counsel to Policyholder’s appraisal demand. Carrier’s correspondence refused to proceed with appraisal. Carrier asserted that there was no existing dispute between the parties despite Carrier’s receipt of a competing estimate and sworn proof of loss. Carrier and its counsel had already asserted this argument in other courts and lost but continued to use this specious argument to delay resolution of the Claim, the appraisal, or making any additional payment to Policyholder.
The Carrier’s refusal to honor its obligation to engage in the appraisal process forced the insured to hire an attorney and enter into costly, unnecessary litigation, increasing the insured's damages and resulting in significant attorney's fees. Policyholder moved to compel appraisal which Carrier opposed. This time however, Carrier asserted Policyholder should not be entitled to an appraisal by baselessly accusing Policyholder of committing insurance fraud, a felony in the state of Florida. Even after the court granted the insured's motion to compel appraisal, the Carrier continued to delay resolution, further extending the timeframe for the insured to receive the full benefits owed under the Policy. This conduct clearly evidences the Carrier’s failure to implement proper procedures for the timely and proper investigation and handling of claims.
The appraisal process was finally completed on July 16, 2024, resulting in an award of $146,706.55, a figure drastically higher than the Carrier’s initial underpayment. Even the Carrier's own appraiser agreed to this higher award, confirming that the Carrier’s initial evaluation was a gross miscalculation of the true extent of the damage. Carrier still, however, refused to timely pay the appraisal award leading to additional litigation.
The Carrier’s failure to promptly resolve the claim, to properly investigate the loss, and to engage in the appraisal process in a timely manner demonstrates a clear and intentional disregard for its duty to act fairly and in good faith toward its insured. These actions were in direct violation of Fla. Stat. § 626.9541(1)(i)(3)(a), which prohibits insurers from failing to adopt and implement standards for the proper investigation of claims, as well as Fla. Stat. § 624.155(1)(b)(1), which requires insurers to act in good faith in attempting to settle claims.
Even after the Court ordered Carrier to make payment, Carrier still failed to timely pay. Once Carrier did finally tender the appraisal award, Carrier failed to include interest on the past due payment. Although the appraisal award was eventually issued, the Carrier failed to timely pay the full appraisal award, requiring the insured to file additional motions to enforce payment. Even when the Carrier finally issued the payment, it failed to include interest on the delayed payment, further compounding the harm caused to the insured.
To make matters worse, the insured was in the process of attempting to sell the property, but the sale fell through due to the extent of the storm damage and the Carrier’s persistent failure to promptly and adequately compensate the insured for the loss. The Carrier's delay in properly paying the claim prevented the insured from repairing the property in time to complete the sale, causing further financial and emotional harm to the insured.
The Carrier’s bad faith actions have caused significant financial harm to the insured by forcing the insured to retain legal counsel and incur attorney’s fees, all of which would have been avoidable had the Carrier timely and fairly handled the claim. The Carrier’s actions constitute a violation of Fla. Stat. § 624.155 (Bad Faith) and Fla. Stat. § 626.9541 (Unfair Trade Practices) and demonstrate a clear pattern of claim delay, failure to properly investigate, failure to settle in good faith, and failure to adhere to the obligations under the Policy.
Had the Carrier acted in good faith, as required by Florida law, and properly investigated the claim, it would have reached the appropriate loss valuation at the outset and resolved the claim without forcing the insured into litigation. The Carrier’s handling of this claim was not only deficient but intentional in its delay and underpayment.
The insured has been deprived of full use of their property for an extended period and has incurred additional costs, damages, and attorney’s fees directly as a result of the Carrier’s bad faith and unfair claims handling. The Carrier’s actions have caused significant additional loss to the insured and are in direct violation of Florida law.
Carrier must:
Pay the full amount of the appraisal award, including all interest accrued due to the delay.
Reimburse the insured for all attorney’s fees and costs incurred as a direct result of the Carrier’s refusal to properly handle and settle the claim.
Adopt and implement procedures for the prompt and timely investigation and settlement of claims to avoid future violations of Florida Statutes.
Ensure that all future claims handling complies with Fla. Stat. § 624.155 and Fla. Stat. § 626.9541 to prevent similar occurrences.
Carrier failed to abide by the duties owed its Policyholder, committed unfair insurance trade practices, and violated Florida Statute Section 624.155 by, for example, not making good faith efforts to settle the claim when under the circumstances Carrier could and should have done so had it acted fairly and honestly toward its insured and with due regard for Policyholder’s interests because; by making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made; by 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; by making a material misrepresentation to Policyholder 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; and by failing to pay undisputed amounts of partial or full benefits owed under this first-party property insurance Policy within 90 days after an Carrier received notice of the Claim, properly determined the amounts of partial or full benefits, and agreed to coverage because Carrier failed to pay the full amounts due and owing under the Policy within 90 days of the Claim being reported. Moreover, Carrier fails to abide by the duties owed its policyholders, commits unfair insurance trade practices, and violates Florida Statute Section 624.155 with such frequency as to indicate a general business practice by, for example, failing to adopt and implement standards for the proper investigation of claims because in multiple instances including this Claim Carrier failed to conduct a thorough and proper investigation by failing to conduct an investigation designed to discover facts beneficial to Policyholder; misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue by not providing policyholders fair and adequate explanation of the coverages available, not explaining to policyholders the benefits available under an all-risks policy; failing to acknowledge and act promptly upon communications with respect to claims by not responding to policyholders’ submission of documents and requests for information; denying claims without conducting reasonable investigations based upon available information; failing to affirm or deny full or partial coverage of claims, and, as to partial coverage, the dollar amount or extent of coverage, or failing to provide a written statement that the claim is being investigated, upon the written request of the insured within 30 days after proof-of-loss statements have been completed; 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; failing to promptly notify the insured of any additional information necessary for the processing of a claim; or failing to clearly explain the nature of the requested information and the reasons why such information is necessary.
To remedy the violations described herein, Carrier must unconditionally tender all amounts due to Policyholder, including interest, lost profits for the sale, lost rents, and attorney’s fees and costs, made payable to Policyholder and Policyholder’s attorney.
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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.
Before submitting a Notice using this system, please verify that all text has been entered
correctly and completely. Once the Notice has been submitted, the text cannot be changed
or deleted.
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DFS-10-363
Rev. 10/14/2008
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