Filing Number: 788592
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| Filing Accepted: 10/24/2024 |
| Last/Business Name
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| Street Address
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534 LOCKBREEZE DRIVE |
| City, State Zip
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DAVENPORT,
FL
33897
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| Email Address
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JJS@WEKLAW.COM |
| Complainant Type:
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Insured |
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| Last/Business Name* |
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AGOSTO |
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First Name |
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MOISES |
| Policy # * |
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P000522053 |
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Claim #* |
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253907 |
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Attorney is Applicable
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| Last Name* |
SAIDENSTAT
First Name *
JEFFREY
Initial
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| Street Address* |
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800 EAST BROWARD BLVD. SUITE 510 |
| City, State Zip* |
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FORT LAUDERDALE
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FL
33301
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| Email Address * |
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JJS@WEKLAW.COM |
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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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SECURITY FIRST INSURANCE COMPANY
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| Insurer Name* |
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| Street Address* |
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| City, State Zip* |
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,
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NAIC Company Code 10117 |
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| Name of individual responsible for violation (if any):*
ALEXANDER WALTER; LICENSE NUMBER W621487; TODD MIGACZ
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| Type of Insurance
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Residential Property & Casualty
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| Reason for Notice
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Claim Denial
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Claim Delay
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Unsatisfactory Settlement Offer
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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)(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)(d) |
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Denying claims without conducting reasonable investigations based upon available information.
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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)(3)(i) |
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Failing to pay personal injury protection insurance claims within the time periods required by s. 627.736(4)(b).
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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.
The Loss Payment provision found in the homeowner's policy authorizes payment in the event of a covered loss to insured property.
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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.
At all times material hereto, Security First Insurance Company insured Moises Agosto’s home under a policy of insurance. The subject policy provides coverage for sudden and accidental losses and damages arising from hurricanes. The loss payment provision and governing law provides that the insurer has a fiduciary duty to in good faith promptly investigate, adjust, and issue payment of the undisputed amount of the loss and damages. See Doe v. Allstate Ins. Co., 653 So. 2d 371, 374 (Fla. 1995) (stating that the obligation of insurance company toward insured is a "fiduciary duty requiring the exercise of good faith").
Security First Insurance Company failed to pay the insured's claim under the homeowner's insurance policy when, under all of the circumstances, it could and should have done so, had it acted fairly and honestly and with due regard for the interests of insured. Security First Insurance Company issued the policy at issue, Policy No. P000522053 to Moises Agosto, for the policy period of April 14, 2022 to April 14, 2023. On March 5, 2024, Mr. Agosto filed an insurance claim with Security First Insurance Company for damages sustained by Hurricane Ian on September 29, 2022. Mr. Agosto reported this claim less than two years from the date Hurricane Ian made landfall in the State of Florida. On April 12, 2024, Security First Insurance Company summarily denied Mr. Agosto’s claim based on the assertion that a mid-term policy endorsement, applies to Mr. Agosto’s claim. In June of 2024, after Security First Insurance Company failed to indemnify Mr. Agosto for the loss, and after Moises Agosto complied with the conditions precedent to filing suit, Moises Agosto filed a lawsuit in Polk County, Florida, Case No. 2024-CA-002247.
On July 30, 2024, Security First Insurance Company field a motion to dismiss Moises Agosto's lawsuit. The basis of the motion to dismiss is the assertion that the mid-term policy endorsement applies to Moises Agosto’s claim; along with the argument that the post-amended version of § 627.70132(2) applies to Mr. Agosto's claim. Security First Insurance Company's position as it relates to Mr. Agosto's claim are both contrary to law. Florida and Federal Courts have held that policy mid-term endorsements, like the one in the matter, are invalid as to losses that preceded the endorsement. See. Security Ins. Co. v. Baad, 657 So. 2d 10, 10 (Fla. 3d DCA 1995). In regards to the argument that the post-amended version of § 627.70132(2) applies to Mr. Agosto's claim, Florida law is clear that amendments to statutes that alter a party’s substantive rights do not apply retroactively. The Florida Supreme Court has held that where the legislature passes new legislation changing an insured’s substantive rights, such legislation may only apply prospectively to insurance policies issued after the effective date of the legislation (even where the legislature expressed an intent for their legislation to apply retroactively). See Menendez v. Progressive Exp. Ins. Co., Inc., 35 So. 3d 873, 878 (Fla. 2010). Further, the application of the amended version of § 627.70132(2) would also violate the Florida Constitution, Article I, Section 10. Lastly, the endorsement Security First Insurance Company is relying on creates a material change to the terms and conditions of the original policy. As such, there are notice requirements prescribed in § 627.4133 that Security First Insurance Company has failed to comply with. For those reasons alone, the endorsement is unenforceable. See U.S. Fire Ins. Co. v. Southern Sec. Life Ins. Co., 710 So.2d 130 (Fla. 5th DCA 1998).
On October 14, 2024, Mr. Agosto's attorney filed a response to Security First Insurance Company's Motion to Dismiss. On October 15, 2024, Mr. Agosto's attorney sent Security First's attorney a 57.105 letter and motion in regards to Security First's Motion to Dismiss. Civil Remedy Notice 786907 was also filed on October 15, 2024. On October 23, 2024, Security First Insurance Company withdrew its Motion to Dismiss, filing thereafter on the same day, an Answer and that contained twelve (12) affirmative defenses. The eighth affirmative defenses raises the same arguments Security First made in its Motion to Dismiss: the assertion that the mid-term policy endorsement applies to Plaintiff’s claim. As stated above, Security First's position is not supported by fact or law. Further, the remaining affirmative defenses contain avoidances that were not raised by Security First Insurance Company prior to litigation. Security First Insurance Company raised post-loss obligation defenses for the first time in its Answer and Affirmative Defenses. More specifically, Security First Insurance Company’s Seventh, Tenth and Eleventh Affirmative Defenses raise post-loss obligation defenses not previously raised by Security First prior to litigation ensuing. Security First Insurance Company raised policy exclusion defenses for the first time in its Answer and Affirmative Defenses. Specifically, the Third, Fourth, Ninth and Twelfth Affirmative Defenses raise policy exclusions not previously raised by prior to litigation ensuing. Further, the Fifth Affirmative Defense asserts Mr. Agosto's roof was not damaged; an allegation not previously raised prior to litigation ensuing. The Mend the Hold Doctrine Prohibits Security First Insurance Company from raising defenses not raised before litigation.
The “mend the hold” doctrine prohibits a party to a contract from changing his reasons for refusing to perform on the contract after litigation has begun. Harbor Ins. Co. v. Continental Bank Corp., 922 F.2d 357, 362 (7th Cir. 1990). Florida courts have likewise applied the “mend the hold” doctrine to preclude parties from changing their position during litigation in an attempt to create a “catch 22" situation for their adversary. O’Bryan v. Linton, 41 So. 2d 169, 171 (Fla. 1949) (party cannot assert new grounds for defense after litigation has commenced); Salcedo v. Asociacion Cubana, 368 So. 2d 1337, 1339 (Fla. 3d DCA 1979) (defendant attempted to change its position regarding applicable statute of limitations); Heimer v. Travelers Ins. Co., 400 So. 2d 771, 772-774 (Fla. 3d DCA 1981) (defendant attempted to avoid the admissions contained in its answer after having its answer stricken for failure to comply with discovery orders).
The “mend the hold” doctrine has been applied most frequently to insurance companies that change their reasons for refusing to pay a claim after litigation commences. Harbor Ins. Co., supra, 922 F.2d at 363. The “mend the hold” doctrine bars the Insurance Company from adding to its grounds of denial. As noted by the Seventh Circuit in Harbor Ins. Co., the doctrine is connected to “considerations of good faith and ethical obligations in contract considerations,” particularly in the realm of insurer obligations. Id. 36. Similarly, the court in Employers Ins. of Wassau v. Bodi-Wachs Aviation Ins. Agency, Inc., 846 F. Supp. 677, 685 (N.D. Ill. 1994) (emphasis added), held:
[T]he doctrine that teaches that when a party initially asserts a specific reason or reasons for its being freed from an otherwise binding contractual obligation, it will not be allowed to advance any different or additional grounds during the course of litigating the matter.
The Bodi-Wachs Aviation court found that the insurer could not assert that the policy was violated by the insured’s failure to provide timely notice where “the total omission of [that] contention from [the] original declination of coverage creates a ‘mend your hold’ type of bar.” Id.
Security First Insurance Company has a regular business practice of failing to adequately adjust its policyholder’s claims and undervalues the claims to save itself money. It is clear that the insurer’s general business practice of willful, wanton, immoral, deceptive and bad faith claim handling policies, procedures, adjusting, investigating has caused the insured to suffer further harm and extra-contractual damages which have accrued, and will continue to accrue. That said, and even though Security First Insurance Company knows that it has a fiduciary duty to promptly adjust insurance claims, it failed to institute the necessary policies, procedures, guidelines and protocols to adjust insurance claims promptly and pursuant to the policy’s Loss Payment Provision. By way of the cited legal authorities and considerations, Security First Insurance Company knew that it had an obligation to treat all insureds equally and honestly. However, and for their own financial interest, they will only start to fully consider their obligations as stated herein if the insured retains legal representation and pursues a legal action which exposes them to liabilities and costs. Even then, they will withhold monies owed in an unjust effort to limit/delay their liabilities in relation to the statutory considerations and otherwise.
To cure the above stated immoral, deceptive, unlawful and generally described bad faith conduct which is part of a general business practice that is knowingly being utilized by Security First Insurance Company for self-gain, Security First Insurance must:
(1) withdraw the affirmative defenses listed above;
(2) accept coverage for the subject claim;
(4) promptly make payment pursuant to the policy’s Loss Payment Provision for covered damages in the amount of $71,181.00
(4) tender interest on any overdue payments; and
(5) acknowledge liability for taxable cost and reasonable attorneys in the pending lawsuit.
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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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