Civil Remedy Notice of Insurer Violations
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Filing Number:     790421
Filing Accepted:  11/6/2024
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Complainant
Last/Business Name *  
THE CONDOMINIUM AT WATERSIDE ASSOCIATION, INC.   First Name  
Street Address * 101 NATURE’S WAY
City, State Zip * PLACIDA, FL 33947
Email Address * INSURED@MCDONALDBARNHILL.COM
Complainant Type: * Insured
Insured
Last/Business Name*   THE CONDOMINIUM AT WATERSIDE ASSOCIATION, INC.   First Name  
Policy # * ORNSPR001497-00 Claim #* R022100098
Attorney
Attorney is Applicable
Last Name* GONTRUM First Name * RYAN Initial L
Street Address* 505 S. MAGNOLIA AVENUE
City, State Zip* TAMPA , FL 33606
Email Address * TAL@MCDONALDBARNHILL.COM
Violation
Insurer Type *   Authorized Insurer Unauthorized Insurer
 
Insurer Name*   OLD REPUBLIC UNION INSURANCE COMPANY
NAIC Company Code 31143
 
Name of individual responsible for violation (if any):* GORDON WELCH AND DAVID MISTICK
Type of Insurance * Commercial Property & Casualty   
Reason for Notice *
Claim Denial
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.
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.
* 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 AS FOLLOWS:*** §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. ***Specific policy language that is relevant to the violation*** Renaissance Re – Syndicate 1458 and Old Republic Union Insurance Company (Insurers) failed to adequately adjust and pay the claim covered under the subject insurance policy. Specifically, but not limited to, Insurers failed to properly apply the Loss Payment, Valuation, and Conditions provisions of the policy. In addition to the policy sections specifically cited herein, any endorsements or changes to said sections are relevant to the Insured’s claim for civil remedy. There may be additional policy language relevant to this violation that may be discovered.
 
* Facts and circumstances giving rise to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

The Condominium at Waterside Association, Inc.’s claim results from wind and water damage from Hurricane Ian which occurred on or about September 28, 2022, to their property located at 101 Nature’s Way, Placida, FL 33947. The property was insured by a syndicate of Renaissance Re – Syndicate 1458 and Old Republic Union Insurance Company (Insurers), with policy numbers NSM-1216-01 and ORNSPR001497-00. The intense wind and rain from the storm caused damage to the Insured’s property including the roofs, exteriors, and windows of the two buildings and clubhouse. The exterior damage resulted in numerous interior leaks which caused water damage to the interiors of the apartments. The claim was reported to Insurers and both McClarens and Athens Insurance were assigned as claim administrators. The claim was given claim number R022100098 and Gordon Welch was assigned as the field adjuster. Insurers sent both Mr. Welch and an engineer to inspect the loss. After drafting two estimates, the larger of which totaling $1,511,123.24 and deducting the deductible and depreciation, Insurers have paid a total of $926,483.26 for the substantial loss. The Insured retained the services of Stellar Public Adjusting Services (Stellar) to represent their interests in the claim. Stellar inspected the property with Insurers and prepared an estimate of the damages totaling $4,220,378.23. Stellar submitted this estimate, along with photos and other supporting documentation to Insurers, and requested a reinspection. While reinspecting the property with an adjuster and loss consultant sent by Insurers, Stellar was optimistic about agreement on many of the issues needing repair. However, when a supplemental estimate was sent to Stellar, it was missing many of the items discussed. This supplemental estimate, prepared by David Mistick, totaled $2,194,240.78. Despite completing this estimate, Insurers refused to issue payment on this estimate despite that amount being clearly owed to the insured. The Insurers’ course of action has continuously delayed indemnification while the Insured’s costs continue to rise. In Florida, the work of adjusting insurance claims engages the public trust. Insurers have breached this duty in the adjustment of this loss by refusing to provide proper indemnity, failing to pay amounts clearly owed, unnecessarily delaying resolution of the claim, and failing to take into consideration documentation provided to them which would support compensation. Insurers has failed to create and implement adequate guidelines for proper investigation of claims handling and for training and supervision of employees and representatives which have resulted in some of the statutory violations set forth above. Insurers charged The Condominium at Waterside Association, Inc. a substantial premium for these coverages but has refused to tender proper payment when under all circumstances it could have and should have done so had it acted fairly and honestly. Additionally, it appears this is done companywide. The Insureds have been forced to consider legal counsel to protect their interests. Therefore, to cure the defects outlined in this Civil Remedy Notice, Insurers must: 1. Immediately tender all insurance monies due to the Insureds for the loss; 2. Act fairly and honestly towards the Insureds and with due regard for their interests in attempting to settle the claim; 3. Pay statutory interest on the amount of unpaid contractual damages from the date the claim was reported; 4. Cease and desist all present and future bad faith actions with regard to the Insureds’ claim; Failure to cure all defects during the 60-day safe harbor period may result in additional extra-contractual damages.
Comments
User Id Date Added Comment
katie.tilka@phelps.com 01-03-2025 VIA ELECTRONIC SUBMISSION Florida Department of Financial Services Bureau of Consumer Assistance Civil Remedy Section Larson Building 200 East Gaines St. Tallahassee, Florida 32399-0322 Re: Civil Remedy Notice of Insurer Violations Insured: The Condominiums at Waterside Association Inc. Insured Named on CRN: The Condominium at Waterside Association Inc. Insurers: Certain Underwriters at Lloyd’s, London and Old Republic Union Insurance Company Subscribing to Master Policy No.: CH1SE-00001-0 Insurer Named on CRN: Old Republic Union Insurance Company Master Policy No.: CH1SE-00001-0 Old Republic’s Policy No.: ORNSPR001497-00 Date of Loss: September 28, 2022 Claim No.: RO2210098 DFS File No.: 790421 Acceptance Date: November 6, 2024 To Whom It May Concern: We represent Certain Underwriters at Lloyd’s, London (“Underwriters”) and Old Republic Union Insurance Company (“Old Republic”) subscribing to the insurance policies issued under Master Policy No. CH1SE-00001-0, as described above (collectively, the “Policy”). The Policy was effective from May 14, 2022 to May 14, 2023 and provided coverage for the property located at 101 Nature’s Way, Placida, Florida 33947 (the “Property”). We write on the Insurers’ behalf in response to the Civil Remedy Notice of Insurer Violations (the “Notice”) submitted to the Department of Financial Services, Division of Consumer Services (the “Department”) by Ryan Gontrum, Esq. on behalf of The Condominiums at Waterside Association Inc (the “Insured”) (incorrectly identified as “The Condominium at Waterside Association Inc” on the Notice). The Notice bears filing number 790421 with an acceptance date of November 6, 2024. In the Notice, Mr. Gontrum, on behalf of the Insured, alleges that the Insurers violated the following sections of the Florida Statutes with regards to the Insured’s claim under the Policy for alleged damage to the Property, which reportedly occurred on September 28, 2022: Sections 624.155(1)(b)(1), 626.9541(1)(i)(3)(a), and 626.9541(1)(i)(3)(b). The Notice generally alleges that the “Reasons for Notice” are “Unsatisfactory Settlement Offer,” “Claim Denial,” “Claim Delay,” and “Unfair Trade Practice.” I. Deficiencies in the Insured’s Notice Florida Statute § 624.155(3)(b) sets forth the requirement that the Notice shall state with specificity all of the following: (1) the statutory provision allegedly violated, including the specific language of the statute; (2) the facts and circumstances that give rise to a violation of those statutes referenced in the civil remedy notice; (3) the name of any individual involved in the alleged violation; and (4) the specific policy language that is relevant to the alleged violation. Florida courts have interpreted section 624.155(3)(b) to require that a civil remedy notice be specific enough to provide insurers notice of wrongdoing so an insurer can timely cure the alleged violations within sixty days. See, e.g., Heritage Corp. of S. Fla. v. Nat. Union Fire Ins. Co. of Pittsburgh, 580 F. Supp. 2d 1294, 1298-99 (S.D. Fla. 2008) (insured did not state with specificity the facts giving rise to the specific statutory violation so as to put insurer on notice of wrongful acts being alleged); Nowak v. Lexington Ins. Co., 464 F. Supp. 2d 1248, 1251-52 (S.D. Fla. 2006) (holding that the insured could not proceed with a cause of action based upon an alleged violation of section 626.9541 when that statute was not specifically listed in the CRN); Valenti v. Unum Life Ins. Co. of Am., No. 8:04-CV-1615-T-30TGW, 2006 WL 1627276, at *2 (M.D. Fla. June 6, 2006) (disallowing certain actions for bad faith that were not specific enough to put insurer on notice of alleged violations). The Notice is deficient for a number of reasons. The Notice incorrectly identify the Insurers as “Authorized Insurer”; the Insurers are Surplus Lines Carriers. The Notice fails to properly name the Insured. The Notice is further deficient for failing to specifically allege the Insurers’ purported violations. The Notice is vague and deficient in describing the specific policy language and the facts and circumstances giving rise to the Insurers’ alleged statutory violations. This is highlighted by the fact that the Notice itself advises that “[t]here may be additional policy language relevant to this violation that may be discovered.” This renders the Notice deficient as a matter of law. The Notice is also deficient because it fails to state with specificity what the Insurers must do to “cure” the alleged violations as required by Florida law. Further, the Notice is impermissibly vague for a failure to allege any facts that would support a determination that the Insurers engaged in any prohibited conduct or violated the statutes referenced in the Notice. Additionally, a Notice that cites numerous statutes with no factual support fails to meet this specificity requirement. See Julien v. United Prop. & Cas. Ins. Co., No. 4D19-2763, 2021 WL 824438 (Fla. 4th DCA Mar. 3, 2021). II. The Insurers’ Good Faith Investigation and Due Regard for the Insured’s Interests Regardless of the deficiencies in the Notice, the Insurers adamantly deny that they, or any of their representatives, violated any of the statutes listed in the Notice or engaged in any prohibited conduct with respect to this claim. The Insurers acted and continue to act in good faith, without delay, and with due regard for the interests of the Insured during the investigation, handling, and adjustment of the claim. The Policy provides coverage for 11 different scheduled locations/buildings for a total insured value of $8,764,038.00 with a relevant total deductible of $438,201.90. The Loss was reported on or about October 3, 2022, and was described as wind damage as a result of Hurricane Ian. The Insurers retained Athens Program Insurance Services as the third-party administrator (“TPA”) and McLarens was retained as the independent adjuster (“IA”) to investigate the loss. The Insurers retained Unified Building Sciences & Engineering, Inc (“USBE”) as their engineer, and DND Construction Services (“DND”) as their building consultant. The initial inspections occurred in October of 2022. Following the initial inspections, on or about February 6, 2023, the Insurers tendered an advance totaling $195,000.00. On December 30, 2022, USBE released its engineering report, and DND prepared an estimate based on the USBS engineering report. Based on the investigation, the Insurers tendered an additional undisputed payment totaling $234,008.21 on or about May 15, 2023. After the Insurers tendered the additional undisputed payment, the Insured retained Michael Blanco of Stellar Public Adjusting Services (the “PA” or “Stellar”) as its Public Adjuster. The Insured also retained Mr. Damien Marks of Florida Engineering, LLC. Mr. Marks is not an engineer. Further, the Insured retained Phil Sloan of Harper Littler Construction Management to begin repairs. Based on the continued adjustment of the claim, on October 18, 2023, the Insurers tendered an additional undisputed payment totaling $490,187.57. Thus, the Insurers have tendered undisputed payments totaling $919,195.78. Following the release of the Insured’s roofing report from Roof Advisors, Inc., USBE re-inspected the Property, and issued a second supplemental report. Insurers are currently evaluating USBE’s report in conjunction with DND. The Insured’s Notice references that DND sent a supplemental estimate to the Insured’s public adjuster and states that the Insurers have refused to issue payment on this estimate. DND’s estimate states in bold letters on page 1 that it is “For discussion only. Final scope and estimate subject to carrier’s approval.” The Insurers have timely considered the facts and, upon presentation, have approved a supplemental undisputed payment of $772,661.08. This supplemental undisputed payment was tendered and delivered to the Insured’s PA on December 31, 2024. Thus, the Insurers have valued this loss at over $2.4 million. III. The Arbitration Provision If the parties are unable to resolve their differences informally, the Insurers reserve their right to invoke binding Arbitration to resolve “all matters in difference” between the Insured and the Insurers relating to this claim. The Policy’s Arbitration clause provides as follows: Condominium Association Coverage Form – Coastal Condo *** E. Loss Conditions *** 2. Arbitration All matters in difference between you and us (hereinafter referred to as "the parties") in relation to this insurance, including its formation and validity, or the value of the property or the amount of loss, and whether arising during or after the policy period of this insurance, shall be referred to an Arbitration Tribunal in the manner hereinafter set out. Unless the parties agree upon a single Arbitrator within thirty days of one party receiving a written request from the other party for Arbitration, the Claimant (the party requesting Arbitration) shall appoint its Arbitrator and give written notice thereof to the Respondent. Within thirty days of receiving such notice, the Respondent (the party not requesting Arbitration) shall appoint his Arbitrator and give written notice thereof to the Claimant, failing which the Claimant may nominate an Arbitrator on behalf of the Respondent. If the Arbitrators cannot agree to an Umpire, both parties must request that selection be made by a judge of the New York Supreme Court, New York County, New York Unless the parties otherwise agree, the Arbitration Tribunal shall consist of persons employed or engaged in a senior position in insurance underwriting or claims. The Arbitration Tribunal shall have power to fix all procedural rules for the holding of the Arbitration, including discretionary power to make orders as to any matters which it may consider proper in the circumstances of the case with regard to pleadings, discovery, inspection of documents, examination of witnesses or any other matter whatsoever relating to the conduct of the Arbitration and may receive and act upon such evidence whether oral or written strictly admissible or not as it shall in its discretion deem fit. Each party will pay its chosen Arbitrator, and also bear the other expenses of the Arbitration and Umpire equally. The Arbitration shall take place in New York, New York and the Arbitration Tribunal shall apply the law of the State of New York. The Arbitration Tribunal may not award exemplary, punitive, multiple or other damages of a similar nature. A decision agreed to by any two members of the Arbitration Tribunal shall be binding. The award of the Arbitration Tribunal shall be in writing and binding upon the parties who covenant to carry out the same. If either of the parties should fail to carry out any award, the other may apply for its enforcement to a court of competent jurisdiction in any territory in which the party in default is domiciled or has assets or conducts business (NSM 9347 (8-2020), Page 10 of 15). Once the Arbitration Clause of the Policy is invoked, “all matters in difference” between the Insured and the Insurers relating to this matter will be resolved via binding Arbitration. Moreover, there is no cause of action for bad faith under section 624.155, Florida Statutes, under New York law, nor does the Policy authorize recovery of exemplary, punitive, multiple, consequential, or other damages. Thus, the Notice was prematurely filed and is defective. IV. Conclusion Based on the foregoing, the Insured has not alleged in the Notice any facts that would support a determination that the Insurers engaged in any prohibited conduct or violated the statutes referenced in the Notice. At all times, the Insurers acted with honesty, candor and with due regard for the Insured’s interests. The Notice was filed without sufficient factual or legal basis. The Insurers promptly and thoroughly investigated all aspects of the Insured’s claim and acted in good faith and with due regard for the Insured’s interests in its investigation, evaluation, handling, and adjustment of the claim. The Insurers categorically deny that they, or any of their representatives, engaged in any prohibited conduct or violated the statutes referenced in the Notice. Despite the deficiencies in the Notice, the Insurers acted in good faith, without delay, and with due regard for the Insured’s interests at all times during the investigation, handling, and adjustment of the Insured’s claim, to resolve the dispute pursuant to the terms of the Policy. If the Department has any questions or requires any additional information, please contact us. Regards, /s/ Michael McGriskin /s/ Katie Tilka Martinez Michael McGriskin Katie Tilka Martinez CC: Via E-Mail: TAL@MCDONALDBARNHILL.COM DBARNHILL@MCDONALDBARNHILL.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