Civil Remedy Notice of Insurer Violations
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Filing Number:     804754
Filing Accepted:  2/3/2025
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Complainant
Last/Business Name *  
LEROY NELSON AND KARLEEN MARJORIE NELSON   First Name  
Street Address * 2943 SW 137TH AVENUE
City, State Zip * MIRAMAR, FL 33027
Email Address * KARLEEN.NELSON@YAHOO.COM
Complainant Type: * Insured
Insured
Last/Business Name*   LEROY NELSON AND KARLEEN MARJORIE NELSON   First Name  
Policy # * 79-NF-6498-8 Claim #* 59-11X8-41V
Attorney
Attorney is Applicable
Last Name* FERNANDEZ First Name * JORGE Initial
Street Address* 925 FEDERAL HWY
City, State Zip* BOCA RATON , FL 33432
Email Address * JFERNANDEZ@KPATTORNEY.COM
Violation
Insurer Type *   Authorized Insurer Unauthorized Insurer
 
Insurer Name*   STATE FARM FLORIDA INSURANCE COMPANY
NAIC Company Code 10739
 
Name of individual responsible for violation (if any):* MARIA MULHERN
Type of Insurance * Residential Property & Casualty   
Reason for Notice *
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.
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)(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.
* Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

Loss settlement provision
 
* Facts and circumstances giving rise to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

The carrier was put on notice of the insureds’ windstorm/water damage claim on or about September 29, 2020. Shortly thereafter, the carrier sent Mr. David Culbreth to inspect the claim on its behalf. Based on Mr. Culbreth’s inspection, on or about October 21, 2020, the carrier rendered its coverage determination which denied coverage for the roof portion of the claim as it alleged the damages were caused by wear and tear and rendered coverage for the interior damages. Notably, Mr. Culbreth’s estimate indicated that the repairs to the interior would only cost $1,618.18 which conveniently fell below the applicable deductible for this claim. Subsequently, the insureds prepared a loss package in the amount of $121,434.99 needed to restore the property back to its pre-loss condition. In response, the carrier then proceeded with appraisal for this claim upon the parties agreement. On or about February 24, 2023, the appraisal award was entered and signed by the carrier’s appraiser and umpire. The appraisal award totaled $97,002.45 out of which the carrier only paid $19,589.81 for the interior repairs as the carrier took the position that most of the repairs notated in the award, specifically to the roof were not covered. Notably, the appraisal award for the interior portion of the claim was more than twelve (12) times more than the carrier’s original assessment of the claim. Whereas, the carrier furnished a wrongful estimate and opinion, and, having withheld the deductible, offered a deficient payment in the amount of $19,589.81 only, leaving a remainder in the amount of $77,412.64 to be paid in order to cure the breach, less any applicable policy deductible. Additionally, the carrier’s position that the roof was damaged by the tapring method utilized is unfounded and without support. The carrier was provided an opportunity to inspect the roof prior to the tarp being installed. The carrier then proceeded to deny the roof portion of the claim based on its determination that the damages were caused by wear and tear. Now the carrier is taking a different position without providing any factual or expert basis. The carrier has disregarded any evidence of wind damage to the roof, for the purpose of wrongfully low-balling the claim as a whole. The insureds have complied with all of the carrier’s requests to date and the carrier has still failed to treat this claim with good faith. This intentional delay with the claim has led to direct prejudice of the insured. About one thousand five hundred ninety days have passed since the original date of loss. The carrier has still refused to pay the fully covered amount owed under the policy. The carrier is aware of damage sustained by the insureds’ property and has not taken any meaningful ensuing action. It is clear that the carrier is not treating the insureds with good faith claims conduct; failing to pay a claim clearly owed; not adjusting the claim and evaluating the loss properly, promptly and fairly to provide full and prompt indemnity to the insureds; failing to implement proper standards for the adjustment and investigation of claims by its adjusters and placing the company’s interests before the insureds’ interests; refusing to pay the full amount owed to the insureds despite the fact that the carrier has been on notice of the damages and looking for ways to delay full recovery or any recovery to the insureds, when a reasonable carrier in a similar position would have tendered a full payment in accordance with both the policy language and statutory requirements. The carrier’s actions are in violation of Florida Statutes §§ 624.155(1)(b)(1), 624.155(1)(b)(3), 626.9541(1)(i)(3)(a); 626.9541(1)(i)(3)(b), 626.9541(1)(i)(3)(c) and 626.9541(1)(i)(3)(f), as well as Section I- Perils Insured Against, subsection 1, providing coverage for direct loss to property unless the damage was caused solely by an excluded or excepted cause of loss; and the loss payment provision under Section I- Conditions requiring payment of a claim within 90 days. All the aforementioned are part of what appears to be an ongoing pattern and practice of behavior of the carrier that it demonstrates a wanton and reckless disregard for the insureds’ rights and a pattern and practice of bad faith claims practices to its insureds across the state of Florida. Therefore, to cure the defects outlined in this Civil Remedy Notice, the carrier must: 1.) Pay the complete covered loss in the amount of $97,002.45, less any prior payments and less any applicable policy deductible; 2.) Pay the Insureds’ attorneys’ fees and costs as they have been forced to retain counsel; 3.) Pay the statutory interest on the amount of unpaid damages from the date of loss to the date payment is finally made. A copy of this letter and filed form submitted to the FDFS has been sent to the carrier. Please do not hesitate to contact the undersigned or Gloria Sanyustiz at (561)-892-9620 if you have any questions or concerns. Sincerely, Jorge Fernandez Attorney at Law
Comments
User Id Date Added Comment
krothell@flacivillaw.com 04-04-2025 Please allow the following to serve as State Farm Florida Insurance Company’s (“State Farm”) response to the second Civil Remedy Notice of Insurer Violations submitted to the Department of Financial Services by you on behalf of your clients and State Farm’s insureds, Leroy Nelson and Karleen Nelson. State Farm previously responded to a prior Civil Remedy Notice regarding this claim by letter dated April 1, 2024. Mr. and Mrs. Nelson alleged that State Farm is in violation of the following sections of the Florida Statutes: 624.155(1)(b)(1), 624.155(1)(b)(3), 626.9541(1)(i)(3)(a), 626.9541(1)(i)(3)(b), 626.9541(1)(i)(3)(c), and 626.9541(1)(i)(3)(f). Without waiving any arguments State Farm has that the Civil Remedy Notice of Insurer Violations is legally insufficient, State Farm specifically denies any wrongdoing in the adjustment and handling of the above-referenced claim. State Farm denies that it committed any acts or violated the provisions of any Florida Statutes, including those referenced in the Civil Remedy Notice of Insurer Violations. The Civil Remedy Notice of Insurer Violations fails to comply with the requirements of section 624.155, Florida Statutes, in that the notice fails to: (1) identify and explain with specificity the ways in which the cited statutes were allegedly violated (rather merely listing numerous statutes without application to full and complete claim-specific facts supporting the alleged violations); (2) identify the specific policy language that is relevant to the alleged violations (rather identifying only the “Loss settlement provision,” which is not even a coverage provision, without application to full and complete claim-specific facts supporting the alleged violations); and (3) provide the specific details to “cure” the alleged violations (other than including an unsubstantiated request for payment of “the complete covered loss in the amount of $97,002.45, less any prior payments and less any applicable policy deductible,” plus unspecified amounts of attorney’s fees, costs, and statutory interest, with attorney’s fees, costs, and interest notably not being payable under the sole policy provision cited by Mr. and Mrs. Nelson). The Florida Supreme Court has held that the purpose of a Civil Remedy Notice of Insurer Violations is to put the insurer on notice of an alleged violation, the circumstances surrounding the violation, and the details of the violation to provide the insurer with sixty (60) days to “cure” the alleged claim defects. The purpose of the statute is to provide the insurer with an opportunity to resolve first-party coverage disputes and otherwise avoid litigation. See Talat Enters., Inc. v. Aetna Cas. & Sur. Co., 753 So. 2d 1278 (Fla. 2000); Lane v. Westfield Ins. Co., 862 So. 2d 774 (Fla. 5th DCA 2003); Julien v. United Prop. & Cas. Ins. Co., 311 So. 3d 875 (Fla. 4th DCA 2021). Mr. and Mrs. Nelson made a claim to State Farm on September 29, 2020 for damages purportedly occurring on September 27, 2020 (and a separate claim bearing Claim Number 59-15X4-67C was subsequently collapsed into the subject claim). They reported wind damage to the roof causing interior leaks. During an initial claim telephone conference, they advised that they came home and saw two spots in the living room with water on the floor. They further advised that they cleaned the water and there was no damage to the floor. Subsequently, a field adjuster inspected the property on behalf of State Farm on October 11, 2020. Based on the field adjuster’s inspection and its overall good faith claim investigation, State Farm estimated for covered repairs to the living room, dining room, and rear left bedroom, totaling $1,618.18 (RCV). By letter dated October 21, 2020, State Farm advised that no payment would be issued regarding the claim because the covered repairs did not exceed the applicable deductible. State Farm also partially denied coverage for the roof. Thereafter, by letter dated July 21, 2022, State Farm invoked appraisal regarding an ongoing dispute concerning the scope and amount of the covered loss. The claim proceeded to appraisal and an appraisal award was entered on February 24, 2023. The appraisal award included a Dwelling portion of $23,410.49 (RCV)/$22,673.81 (ACV) and another Dwelling portion expressly related to improper tarping of $73,591.96 (RCV)/$67,422.30 (ACV). As a result, by letter dated March 3, 2023, State Farm issued payment in the amount of $19,589.81 which was the Coverage A portion of the appraisal award minus recoverable depreciation benefits of $736.68 and minus the deductible of $3,084. State Farm withheld payment for the improper tarping portion of the appraisal award. Pursuant to applicable Florida legal authority, it was well within the purview of the appraisal panel to make a determination regarding causation of damage, meaning roof damage that was caused by improper tarping as opposed to the reported weather event. Improper tarping, constituting inadequate workmanship, is unambiguously an excluded peril under the policy. Mr. and Mrs. Nelson then filed a Civil Remedy Notice of Insurer Violations against State Farm on February 1, 2024. Mr. and Mrs. Nelson also filed a Notice of Intent to Initiate Litigation against State Farm on January 31, 2024. Although the parties are bound by the appraisal award pursuant to the plain language of the Appraisal condition of the policy, the Notice of Intent to Initiate Litigation was accompanied by an estimate including the roof, gutters, doors, windows, painting, living/dining room, and garage totaling $121,434.99 (RCV). Inconsistently, the Civil Remedy Notice sought recovery of $97,002.45. State Farm responded to the Notice of Intent to Initiate Litigation by letter dated February 12, 2024 detailing that State Farm issued all available payment pursuant to the appraisal award and explaining that no further payment was available under the policy. State Farm likewise responded to the Civil Remedy Notice. Mr. and Mrs. Nelson then filed a breach of contract action against State Farm regarding the subject claim. In neither the Complaint nor the subsequent Motion for Summary Judgment, did Mr. and Mrs. Nelson mention or disclose the binding appraisal award. Nonetheless, Mr. and Mrs. Nelson filed the subject second Civil Remedy Notice of Insurer Violations against State Farm on February 3, 2025. State Farm has made every effort to thoroughly investigate this claim and examine the allegations in the Civil Remedy Notice of Insurer Violations filed by Mr. and Mrs. Nelson. State Farm acted appropriately in the adjustment and handling of the above-referenced claim. State Farm specifically denies all allegations of non-compliance with Florida Statutes. The Civil Remedy Notice of Insurer Violations does not constitute sufficient notice to State Farm of any acts or omissions that substantiate the allegation that State Farm has violated any statutes applicable to the loss. Furthermore, the Civil Remedy Notice of Insurer Violations is totally deficient with respect to the specific requirements of section 624.155, Florida Statutes. Nonetheless, based on its ongoing good faith investigation of the subject insurance claim, State Farm has cured the allegations of the subject Civil Remedy Notice by negotiating a full and complete settlement of the claim and lawsuit. In conclusion, State Farm Florida Insurance Company has evaluated this claim in good faith and all allegations of violation are statutorily deficient and without merit. I trust that the foregoing, without waiver of arguments regarding the lack of validity of the Civil Remedy Notice of Insurer Violations, adequately addresses any concerns that you and your clients may have regarding this matter.
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