Civil Remedy Notice of Insurer Violations
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Filing Number:     797663
Filing Accepted:  12/19/2024
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Complainant
Last/Business Name *  
LAKESIDE OF CHARLOTTE COUNTY CONDOMINIUM ASSOCIATION INC.   First Name  
Street Address * 25275 RAMPART BOULEVARD
City, State Zip * PUNTA GORDA, FL 33983
Email Address * JDELGADO@MERLINLAWGROUP.COM
Complainant Type: * Insured
Insured
Last/Business Name*   LAKESIDE OF CHARLOTTE COUNTY CONDOMINIUM ASSOCIATION INC.   First Name  
Policy # * HCP006801 Claim #* H111766
Attorney
Attorney is Applicable
Last Name* JAVIER First Name * DELGADO Initial
Street Address* 777 S. HARBOUR ISLAND BLVD., SUITE 950
City, State Zip* TAMPA, , FLORIDA 33602
Email Address * JDELGADO@MERLINLAWGROUP.COM
Violation
Insurer Type *   Authorized Insurer Unauthorized Insurer
 
Insurer Name*   HERITAGE PROPERTY & CASUALTY INSURANCE COMPANY
NAIC Company Code 14407
 
Name of individual responsible for violation (if any):* JOHN WALLACE (FIELD ADJUSTER), JAMES GAUTREAUX (CLAIMS EXAMINER) AND ALL ADJUSTERS, SUPERVISORS, MANAGEMENT AND INDIVIDUALS ASSOCIATED WITH OR RETAINED BY HERITAGE PROPERTY & CASUALTY INSURANCE COMPANY IN THE CLAIM.
Type of Insurance * Commercial Property & Casualty   
Reason for Notice *
Claim Delay
Unsatisfactory Settlement Offer
Other : Misrepresenting the terms of the insurance policy
Other : Failure to Properly Investigate Claim with Due Regard to Insured’s Interest
* 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)(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.

In addition to the Statutory violations set forth above, the specific policy language that is relevant to the violations includes, but is not limited to, the following: FLORIDA CHANGES MEDIATION OR APPRAISAL AND NEUTRAL EVALUATION (COMMERCIAL RESIDENTIAL PROPERTY) A. With respect to a loss to commercial residential property, the following replaces the Appraisal Condition: MEDIATION OR APPRAISAL If we and you disagree on the value of the property or the amount of loss, either may request: 2. An appraisal of the loss, in writing. 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. If there is an appraisal, we will still retain our right to deny the claim. However, you are not required to submit to, or participate in, any appraisal of the loss as a precondition to action against us for failure to pay the loss, if we: a. Requested mediation and either party rejected the mediation result; or b. Failed to notify you of your right to participate in the mediation program. See HC 01 12 08 14 pg. 1 of 1.
 
* 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 made on behalf of LAKESIDE OF CHARLOTTE COUNTY CONDOMINIUM ASSOCIATION INC. (“LAKESIDE”). In consideration of premium paid to it by the LAKESIDE, HERITAGE issued a commercial policy, bearing policy number HCP006801, which provided coverage for property (Location # 1, Structure # 1-22), located at 25275 Rampart Blvd, Punta Gorda, FL 33983 (the “Property”) with an effective policy period of March 25, 2022, to March 25, 2023. The Policy provides coverage on a replacement cost basis, subject to a 3% hurricane deductible, with a limit of liability in the amount of $770,000 for each building identified as Location # 1- Structure # 1-3, 7-8, 12, 13, and 16-18; and $376,000 for each building identified as Location # 1- Structure # 4-6, 9-11, 14-15, 19-20. The Policy further provides the following limit of liabilities for Structures # 21 and 22: Structure #21, Pool House Building $168,000 Contents $50,000 Swimming pools $98,000 Swimming pools $24,000 Swimming pools $9,800 Structure # 22 – Shed Building $20,400 Contents $4,000 The Policy also provides coverage for Ordinance or Law. On or about September 28, 2022, while the Policy was in full force and effect, LAKESIDE suffered a hurricane loss at the Property for Buildings 1 through 22. The windstorm caused direct physical damage to the Property including, but not limited to, the roofing systems, drywalls, insulation, soffit, stucco, and damage to the interior units. According to the Policy language, the Property is covered under all risk coverage. This covers all direct physical loss to the Property unless otherwise excluded. Under an all-risk policy, once the covered Property suffers a loss and it is reported to the insurance company, the responsibility to determine the cause(s) of loss and the amount of damage falls to the insurer. If an exclusion in the Policy applies, it is up to the insurer to investigate and determine what specific damage is excluded from coverage and the balance of the claim should be paid timely. On October 31, 2022, LAKESIDE timely reported the damages to HERITAGE and HERITAGE assigned claim number H111766 to the loss. HERITAGE retained a field adjuster, John Wallace, and on November 4, 2022, Mr. Wallace inspected the buildings for damage as a result of winds associated with Hurricane Ian. Following the inspection, Mr. Wallace prepared a damage repair estimate dated December 20, 2022, in the amount of $332,504.83 replacement cost value (“RCV”) and $274,908.45 actual cash value (“ACV”). HERITAGE waited approximately three (3) months after Mr. Wallace completed his estimate to notify LAKESIDE of its coverage decision. On March 27, 2023, HERITAGE accepted coverage under the Policy for the loss and informed LAKESIDE that it had completed its inspection of the Property determining that the association’s damage as written by the Independent Field Adjuster totals $332,504.83. After applying the applicable deductibles, HERITAGE issued a payment of $49,456.99. However, HERITAGE failed to pay statutory interest on the undisputed payment in violation of §627.70131(7)(a), Fla. Stat., which provides that any payment of an initial or supplemental claim or portion of such claim made 90 days after the insurer receives notice of the claim, or made more than 15 days after there are no longer factors beyond the control of the insurer which reasonably prevented such payment, whichever is later, bears interest at the rate set forth in s. 55.03. In the meantime, LAKESIDE retained CASA Engineering to inspect the Property for damage resulting from high winds from Hurricane Ian. On November 16, 2022, Daniel Hernandez Gonzalez, P.E. of Casa Engineering inspected the Property. Based on the inspection, Casa Engineering opined within a reasonable degree of engineering certainty that extensive damage to all roofs at all slopes and all asphalt shingles roofs needed to be replaced. LAKESIDE also retained a general contractor, Triton Renovation, Inc. (“TRITON”). LAKESIDE disputed HERITAGE’s valuation of its claim and submitted the engineer’s report and contractor’s damage repair estimate to HERITAGE in the amount of $3,624,216.78 RCV/ $3,342,004.038 ACV to aid its independent adjuster in the proper adjustment of LAKESIDE’s loss. On May 22, 2023, HERITAGE acknowledged receipt and review of LAKESIDE’s estimate. HERITAGE approved a supplemental payment of $1,098,994.00. After applying the applicable deductibles, recoverable depreciation of $116,363.88 and prior payment of $49,456.99, HERITAGE agreed to issue an undisputed payment of $595,621.37. Again, HERITAGE failed to apply statutory interest to this undisputed payment pursuant to §627.70131(7)(a), Fla. Stat. Though still deficient, HERITAGE’s acknowledgment of additional damage to LAKESIDE’s Property nearly eight (8) months after the loss was first reported, shows that HERITAGE failed to conduct a reasonable investigation based upon available information in violation of § 626.9541(1)(i)(3)(d), Fla. Stat. Had HERITAGE done a proper investigation, it would have issued the undisputed supplemental payment of $595,621.37 to LAKESIDE timely so that the insured could have commenced the repairs immediately. HERITAGE ignored covered damages during the investigation of the claim and as a result LAKESIDE was forced to retain experts to alter HERITAGE’s coverage position. On April 8, 2024, LAKESIDE informed HERITAGE that it was interested in resolving the disagreement between the parties through a binding appraisal process pursuant to the Policy’s terms (HC 01 12 08 14) and nominated its appraiser. The Policy provides in pertinent part: FLORIDA CHANGES MEDIATION OR APPRAISAL AND NEUTRAL EVALUATION (COMMERCIAL RESIDENTIAL PROPERTY) A. With respect to a loss to commercial residential property, the following replaces the Appraisal Condition: MEDIATION OR APPRAISAL If we and you disagree on the value of the property or the amount of loss, either may request: 2. An appraisal of the loss, in writing. 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. If there is an appraisal, we will still retain our right to deny the claim. However, you are not required to submit to, or participate in, any appraisal of the loss as a precondition to action against us for failure to pay the loss, if we: a. Requested mediation and either party rejected the mediation result; or b. Failed to notify you of your right to participate in the mediation program. On April 11, 2024, HERITAGE declined LAKESIDE’s request to engage into appraisal regarding its Hurricane Ian claim and misrepresented policy’s language and endorsement, stating: Heritage directs your attention to the terms of the endorsement HP 01 12 10 19 (attached) which [LAKESIDE] carries with us, which states in part as follows: FLORIDA CHANGES – MEDIATION AND APPRAISAL (COMMERCIAL RESIDENTIAL PROPERTY) With respect to a loss to commercial residential property, the following replaces the Appraisal Condition: Mediation, Appraisal Process For Named Insured And Third-Party Representatives Other Than An “Assignee”, And Appraisal Process For An “Assignee” A. Mediation … B. Appraisal Process For Named Insured And Third-Party Representatives Other Than An “Assignee” If the Named Insured or the Named Insured’s agents, representatives, including any public adjusters engaged on the behalf of the Named Insured, and we fail to agree on the amount of the loss, including the amount to repair or replace each item of damaged Covered Property and the actual cash value and/or replacement cost of each item of damaged Covered Property, any party may demand an appraisal of the loss in writing. To use the appraisal process, the following condition must first be met: 1. the Named Insured or the Named Insured’s agents, representatives, including any public adjusters engaged on the behalf of the Named Insured, request appraisal in writing, we must agree to the appraisal in writing. If we request the appraisal in writing, the Named Insured or the Named Insured’s agents, representatives, including any public adjusters engaged on the behalf of the Named Insured, must agree to the appraisal in writing. The amount in dispute must be greater than $500 … The above endorsement was not updated during the policy term because the Policy’s declaration page confirms the endorsements that make up the policy. In this particular case, the endorsement HERITAGE cited as basis to decline appraisal is not part of the Policy. HERITAGE denied appraisal by misrepresenting the Policy’s terms, which forced LAKESIDE into litigation. Florida law prohibits insurers such as HERITAGE from misrepresenting insurance policy provisions relating to coverages at issue. See Florida Statute 626.9541(1)(i)(3)(b). HERITAGE violated section 624.155(1)(b)(1), Fla. Sat., when it failed to attempt in good faith to settle the claim 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 its interests. Within every insurance policy is an implicit duty of good faith and fair dealing. This duty of good faith obligates the insurer to handle its insured’s claims with “the same degree of care and diligence as a person of ordinary care and prudence should exercise in the management of his own business.” Boston Old Colony Ins. Co. v. Gutierrez, 386 So.2d 783 (Fla. 1980). HERITAGE had a duty to act in good faith and with due regard for the interests of LAKESIDE but failed to do so. Even though LAKESIDE has complied with all other post loss obligations under the Policy, HERITAGE continues to deny payment to LAKESIDE that is due and owing under the Policy. This delay continues to exacerbate the damage incurred by LAKESIDE. To date, HERITAGE has failed and/or refused to provide LAKESIDE with all the insurance benefits due and owing, despite knowing that LAKESIDE has sustained covered damages to the insured Property. Despite LAKESIDE’s repeated pleas, HERITAGE has not paid reasonable amount needed to repair the Property. The adjusters assigned to this claim have a duty to adjust and treat all claims equally. Since the beginning of this claim, the representatives on behalf of HERITAGE have approached this investigation in a manner prejudicial to LAKESIDE. HERITAGE has a contractual obligation not to make a perfunctory investigation, and to not ignore evidence that would support LAKESIDE’ claim. This is a breach of the Policy. HERITAGE has a contractual obligation not to look the other way when confronted with facts revealing the possibility of coverage and resisting reasonable interpretations of its policy. This is a breach of the Policy. This notice is given in order to perfect the right to pursue the civil remedy authorized by Florida Statute, including any and all bad faith/extra contractual, should HERITAGE fail to cure the violations set forth in this Civil Remedy Notice within the given cure period. While no specific “cure amount” is required for this Civil Remedy Notice to be valid, LAKESIDE will consider the allegations contained herein “cured” if HERITAGE, without any requirement for a release, (1) Immediately tenders to LAKESIDE damage estimate as determined by its general contractor $3,624,216.78 RCV/ $3,342,004.38 ACV, less prior payment, depreciation, and deductible, which accurately reflects the true nature and extent of the damages. (2) Immediately participates in a binding appraisal process and timely appoints its appraiser pursuant to the terms of the subject Policy. LAKESIDE continues to remain open to a fair and reasonable settlement offer from HERITAGE in an effort to avoid additional delay, costs and expenses, and hereby requests the same prior to the expiration of the statutory “cure” period. LAKESIDE has provided HERITAGE with all necessary estimates, invoices, receipts, etc., in support of its claim. HERITAGE must act fairly and honestly in its response to LAKESIDE’s request for a prompt, fair and reasonable settlement offer and resolution of its claim.
Comments
User Id Date Added Comment
ncarlisle@heritagepci.com 02-06-2025 February 6, 2025 VIA ELECTRONIC SUBMISSION Florida Department of Insurance Civil Remedy Section 200 East Gaines Street Tallahassee, Florida 32399 E-mail Correspondence: JDTeam@MerlinLawGroup.Com Javier Delgado 777 S. Harbour Island Blvd Suite 950 Tampa, FL 33602 Re: CIVIL REMEDY NOTICE OF INSURER VIOLATIONS RE: Complainant : Lakeside of Charlotte County Condominium Association, Inc. Insured : Lakeside of Charlotte County Condominium Association, Inc. Policy Number : HCP006801-3 Claim Number : H111766 Date of Loss (as claimed) : September 28, 2022 Loss Location : 25275 Rampart Blvd., Punta Gorda FL 33983 DFS Filing Number : 797663 Dear Sir or Madam: Please allow this correspondence to serve as Heritage Property & Casualty Insurance Company’s (“Heritage”) official response to the Civil Remedy Notice of Insurer Violation (“Notice”), Filing Number 797663, filed against Heritage by its insured Lakeside of Charlotte County Condominiums Association, Inc. (“Complainant”) for alleged damages sustained to the subject property on or about September 28, 2022, as a result of Hurricane Ian which was accepted by the Florida Department of Financial Services on or about December 19, 2024. This shall serve as Heritage’s response to the CRN. While Heritage welcomes the opportunity to respond to this Civil Remedy Notice of Insurer Violation and specifically denies each and every allegation contained therein, Heritage believes that the Civil Remedy Notice should be rejected and returned by the Department of Financial Services as it fails to comply with the specific statutory requirements set forth in Civil Remedy Notice of Insurer Violation document provisions as set forth in Florida Statute §624.155, §626.9541, and Florida Case law. As a preliminary matter, Complainant’s allegations stem only from Complainant’s opinions regarding the adjustment of this claim. Additionally, the tenor and inferences of the allegations in the CRN are wholly without merit and Heritage denies each and every one. Below is a brief timeline of events not included in the Complainant’s filing. Upon Complainant’s reporting of the subject claim, a representative made contact with the Insured to discuss the claim, and an independent field adjuster was assigned to perform an inspection of the subject property as soon as possible. On November 4, 5, and 11, 2022, independent adjuster John Wallace of Professional Adjusting Services, Inc. performed an inspection of the property. Present during those inspections were the Insured’s contractor Chase Ward, his assistant, as well as the Board Treasurer Liz McNeill. Upon completion of the inspections, Mr. Wallace prepared an estimate of damage, after which Heritage issued a payment to the Insured. Thereafter, upon review of the estimate prepared by Triton Renovation, Inc., Heritage issued a second payment to the Insured, along with correspondence to the Insured explaining the breakdown of the payments issued. Based on the foregoing, the Complainant’s CRN allegations that Heritage failed to properly investigate the claim is baseless, as it is clear that upon receiving its first notice of the loss, Heritage promptly inspected the subject property in order to thoroughly investigate the full extent of the Insured’s alleged damage. Heritage has handled this claim with the utmost care. Heritage has been in constant contact with the Insured from the first notice of loss, and issued two payments in an effort to fully indemnify the Insured for damage resulting from the instant loss. Under Florida Law, a Civil Remedy Notice requires the Complainant, "pursuant to section 624.155, F.S., to indicate all statutory provisions alleged to have been violated." The notice filed in this matter alleges Heritage violated the following statutory provisions: 1. 624.155(1)(b)(1): Not attempting in good faith to settle claims when, under all circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for his or her interests. Response: Heritage denies the allegation contained herein. As indicated by the facts stated above, Heritage promptly commenced its investigation, and has, at all times, acted fairly and honestly, communicated with the Insured, and proceeded with its coverage determination in good faith, issuing two payments to the Insured. 2. 626.9541(1)(i)(3)(b): Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue. Response: Heritage denies the allegations contained herein. This is an unsupported, sweeping allegation and is without merit. 3. 626.9541(1)(i)(3)(d): Denying claims without conducting reasonable investigations based upon available information. Response: Heritage denies the allegation contained herein. At all times material to the ongoing investigation of this claim Heritage has made all efforts to obtain the full scope of alleged damage and assess the same. Furthermore, Heritage has inspected the subject property and reviewed estimates to properly evaluate and substantiate the reported damages to allow for a proper valuation of the claim as a whole. As detailed by the facts stated above, Heritage did not violate any of the aforementioned statutory provisions. Notwithstanding, Heritage has and continues to diligently investigate the subject claim, including providing updates regarding its investigation and adjustment of the claim (as admitted various times by Complainant in the subject CRN). Finally, the purpose of the Civil Remedy Notice is to provide the insurer notice of the issue its insured has with the claim and what it is seeking to remedy that issue. However, it is important to note that Insurers are not required to pay any amount demanded by their insureds to avoid a bad-faith claim. Rousso v. Liberty Surplus Ins. Corp., 2010 U.S. Dist. LEXIS 82328, at *14-15 (S.D. Fla. Aug. 13, 2010). It is unclear how Heritage could comply with the Complainant’s demanded cures. Specifically, Complainant demands: LAKESIDE will consider the allegations contained herein “cured” if HERITAGE, without any requirement for a release, (1) Immediately tenders to LAKESIDE damage estimate as determined by its general contractor $3,624,216.78 RCV/ $3,342,004.38 ACV, less prior payment, depreciation, and deductible, which accurately reflects the true nature and extent of the damages. (2) Immediately participates in a binding appraisal process and timely appoints its appraiser pursuant to the terms of the subject Policy. See CRN 797663 at p. 7 of 7. Complainant’s demanded cure(s) to “tender to LAKESIDE damage estimate . . .” and then also participate in a binding appraisal process are inapposite from a practical perspective. The monetary amount being demanded by Complainant, if any, is unclear to Heritage. Heritage is further confused by Complainant’s then demanded non-monetary cure of entering into binding appraisal, with Heritage to pay an unknown monetary figure being purportedly jointly sought by Complainant. Moreover, the Florida Supreme Court has held that an insurer's appropriate response to a Civil Remedy Notice filed pursuant to Fla. Stat. 624.155 is “based upon the insurer's good-faith evaluation of what is owed on the insurance contract.” Vest v. Travelers Ins. Co., 753 So. 2d 1270, 1275 (Fla 2000). Therefore, the only appropriate “cures” that a Complainant may properly demand in a Civil Remedy Notice, must be based on the insurer’s contractual obligations set forth in the insurance policy at issue. The Florida Supreme Court further stated, “What is owed on the contract is . . . governed by whether all conditions precedent for payment contained within the policy have been met.” Id. For its part, an insurer “must evaluate a claim based upon proof of loss required by the policy and its expertise in advance of a determination by a court or arbitration.” Id. at 1275-76. The Complainant is seeking extra contractual cures that are not proper for a CRN. In short, the Notice reflects a shotgun-blast effort to hit a lot of targets with a single salvo. This approach is contrary to the purpose of the statute. The Notice must reflect a good-faith effort to inform Heritage of how it has fallen short of its obligations under the policy and what it can do to fix its shortcomings. Thus, the Notice is insufficient as a matter of law. Under § 624.155, Heritage is entitled to a clear proposed solution and more details about how Heritage fell short of its obligations to provide additional coverage pursuant to the terms of the insurance agreement. As such, the Notice is deficient, and the Insured has failed to comply with several conditions precedent to bringing a claim under § 624.155. In closing, Heritage first believes that 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, Heritage denies all allegations contained in the CRN and submits there are no violations. While this response is meant to be comprehensive, Heritage’s response above is based upon the limited information provided in the CRN and the information we have to date. If the Complainant feels that we are not in possession of all the facts, please inform us immediately. Please note that Heritage’s response is not necessarily exhaustive and does not preclude us from asserting any other valid reason for seeking rejection and return of the CRN. Also, this letter or any act or failure to act on the part of Heritage or any agent or representative of Heritage should not be construed as a waiver of any rights or defenses available to it by contract or at law as all such rights and defenses are hereby specifically reserved. Again, Heritage has handled the claim in accordance with the insurance contract, Florida law, and all statutory and regulatory requirements. Should the Department have any questions, concerns, or require any additional information regarding this matter, please feel free to contact the undersigned at your convenience. Sincerely, /s/ Alex Boehm Alex Boehm, Esq. Staff Counsel Heritage Property & Casualty Insurance Co.
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