Civil Remedy Notice of Insurer Violations
Login

Filing Number:     805445
Filing Accepted:  2/6/2025
         Print Filing
Complainant
Last/Business Name *  
SPATH   First Name   WAYNE
Street Address * 201 SE 12TH AVENUE
City, State Zip * FORT LAUDERDALE, FL 33301
Email Address * PLEADINGGS@WINDYLAW.COM
Complainant Type: * Insured
Insured
Last/Business Name*   SPATH   First Name   WAYNE
Policy # * 98-74-7034-3 Claim #* 5958V890Q
Attorney
Attorney is Applicable
Last Name* MOSKOWITZ First Name * LARRY Initial
Street Address* 400 SE 9TH STERET
City, State Zip* FORT LAUDERDALE , FLORIDA 33316
Email Address * PLEADINGS@WEREPREAENT YOU.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):* NONE
Type of Insurance * Residential Property & Casualty   
Reason for Notice *
Claim Delay
Unsatisfactory Settlement Offer
Unfair Trade Practice
Non-renewal
* Statutory provision(s) which the insurer allegedly violated.
 
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)(d) Denying claims without conducting reasonable investigations based upon available information.
626.9541(1)(i)(3)(e) 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.
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.
626.9541(1)(i)(3)(g) Failing to promptly notify the insured of any additional information necessary for the processing of a claim.
626.9541(1)(i)(3)(h) Failing to clearly explain the nature of the requested information and the reasons why such information is necessary.
626.9541(1)(i)(3)(i) Failing to pay personal injury protection insurance claims within the time periods required by s. 627.736(4)(b).
* Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

(1) The duty to adjust the loss with the Insured; ((2) The duty to pay the Undisputed ACV ((3) The Duty to fully investigate the claim within a reasonable period of time,
 
* Facts and circumstances giving rise to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

The insureds, Wayne and Marlene Spath (the “Insureds”), sustained a covered cause of loss due to fire and the insured premises located at 201 SE 12th Avenue, Fort Lauderdale, Florida 33301-3637 (the “Insured Property”) on or about November 8, 2023 (the “Date of Loss”). The Insureds reported the loss on a timely basis, which was acknowledged by the insurer, State Farm Florida Insurance Company (the “Insurer” or “State Farm”), who opened up a formal claim under claim number 5958V890Q (the “Subject Claim”). The property insurance policy that is the subject of this claim (the “Subject Policy”) requires the Insureds to submit a sworn proof of loss within sixty (60) days from the date of loss (or, in this case, January 7, 2024. On November 8, 2023, legal counsel for the Insureds sent the Insurer a Letter of Representation that specifically requested whether State Farm wanted a Sworn Proof of Loss and requested the proof of loss form for the Sworn Proof of Loss. State Farm never responded to the Letter of Representation in writing and never provided the Plaintiffs with the proof of loss form. On January 29, 204, the Insureds’ legal representative sent the Insurer a follow-up correspondence alerting it to the fact that it never responded to the Letter of Representation, constituting a direct violation of Florida Statute § 627.70131(1)(a). Legal counsel also alerted State Farm to the fact that it failed to provide the Insureds with the proof of loss form as requested by the Letter of Representation dated November 8, 2023. The Insureds contend that the failure to provide them with the proof of loss form is a direct violation of Florida Statute § 627.70131(2). Lastly, Insureds’ legal representative advised State Farm that, without the proof of loss form, Insureds was unable to submit a Sworn Proof of Loss within the sixty (60) day period under the Duties After Loss in the Subject Policy. Subsequently, the Insureds were provided with State Farm’s proof of loss form after the deadline to submit the Sworn Proof of Loss had already expired. The Sworn Proof of Loss was submitted to the Insured within days on February 20, 2024. The amount of the Insureds’ Sworn Proof of Loss was $302,894.52 after the application of the deductible. Through their legal counsel, the Insureds received State Farm’s correspondence dated March 19, 2024, contending that the sworn proof of Loss submitted to State Farm on February 20, 2024, was untimely. The Insureds categorically reject State Farm’s contention that the Sworn Proof of Loss was untimely for the reasons set forth above. Florida Statute § 626.9541(1)(i)(3)(c) states that “Failing to acknowledge and act promptly upon communications with respect to claims” is evidence of a general business practice that constitutes unfair claim settlement practices. Insureds demanded that State Farm retract its rejection of the Sworn Proof of Loss by letter dated March 19, 2024, and process the Sworn Proof of Loss accordingly. The Insurer has refused to do so. Further, State Farm did not tender the undisputed damages to the insureds, Wayne and Marlene Spath, within 60 days pursuant to Florida Statute § 627.70131(5), nor has it articulated factors beyond the control of the insurer that prevented it from doing so. The failure to do so is further evidence of unfair claim settlement practices in Florida Statute § 626.9541(1)(i)(4). The Insureds contend that the conduct of State Farm thus far in this claim constitutes bad faith. Insureds argue that State Farm’s failure to provide them with the proof of loss form was intentional to avoid the Loss Payment clause of the Subject Policy that states, “Loss will be payable 60 days after we receive your proof of loss and . . . reach agreement with you.” In short, State Farm is trying to avoid paying a covered cause of loss through a hyper-technical timing strategy. Again, we submit this is a general business practice that constitutes unfair claim settlement practices. Florida Statute § 627.70131(3)(a) further provides, “Unless otherwise provided by the policy of insurance or by law, within 14 days after an insurer receives proof of loss statements, the insurer shall begin such investigation as is reasonably necessary unless the failure to begin such investigation is caused by factors beyond the control of the insurer which reasonably prevent the commencement of such investigation.” The Insurer did not inspect the Insured Property until March 25, 2023, after the deadline to commence an investigation had already lapsed. The Plaintiffs contend the Insurer’s inspection was untimely under the applicable statute. Following the Insurer’s inspection of the Insured Property by its Field Agent, the legal counsel followed up with the Insurer to inquire as to the status of the Field Adjuster’s estimate and the status of the claim. The Insurer only advised they were still reviewing the estimate with no further information or guidance. The Insureds received a payment letter on or about June 13, 2024, that contained the Insurer’s Estimate dated June 12, 2024. The Insurer’s payment letter and estimate evaluated the loss at an actual cash value of $80,116.22 after applying the deductible. The Insurer tendered a payment of insurance benefits to the Insureds in the amount of $80,116.22. The payment letter also advised the Insureds that the maximum replacement value for the loss was $125,405.98. The Insurer failed to explain to the Insureds the substantial disparity (approximately 1/3 of the Insureds’ estimate) between their estimate and the Insurer’s estimate and why the claims process took so long in a covered cause of loss. Since the Insurer’s tender of insurance benefits to the Insureds in the amount of $80,116.22, the Insurer has completely failed to adjust the loss with the Insureds or their legal representative. Despite the substantial time that has elapsed since the Date of Loss on November 8, 2023, and the Insurer's initial acknowledgment of the claim, the Insurer has conducted no further inspections, investigations, or attempts to negotiate or adjust the loss in good faith. This prolonged inaction underscores the Insurer’s disregard for its statutory and contractual obligations and constitutes additional evidence of bad faith. Due to the inordinate delay in the resolution of the claim (nearly 15 months since the date of loss), the Insureds filed a Notice of Intent to Initiate Litigation with the Florida Department of Financial Services. The Insurer responded to the Notice of Intent on January 20, 2025, asserting that the notice was premature and that the claim is still under investigation. As the above timeline demonstrates, there has been no activity by the Insurer since June 2024, and the Response to the NOI provides no explanation behind the inactivity or delay. The Insureds contend0 the delay is intentional as the loss is a major loss, that the Insurer clearly does not want to pay. State Farm can cure the above violations by retracting its position articulated in its March 19, 2024, and processing the Sworn Proof of Loss accordingly. State Farm can cure the above violations by undertaking a full investigation as required by Section 627.70131(3)(a) and adjusting the loss with the Insureds accordingly. This Civil Remedy Notice is filed as a condition precedent to a future bad faith claim. Pursuant to Florida Statute § 624.155.
Comments
User Id Date Added Comment
admin@bernstein-chackman.com 03-27-2025 Dear Wayne and Marlene Spath: This letter is to advise you that my firm represents State Farm Florida Insurance Company (hereinafter “State Farm”) in the matter referenced above. This shall serve as State Farm’s response to Civil Remedy Notice number 805445, which was submitted to the Department of Financial Services on behalf of Wayne Spath on February 6, 2025. The Civil Remedy Notice states that State Farm violated §626.9541 by doing the following: failing to adopt standards for proper claim investigation; misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;; and other alleged wrongdoings. State Farm denies all allegations of wrongdoing or violation of Florida Law. State Farm has acted in accordance with Florida law and the subject policy in its handling of this claim. Additionally, the civil remedy notice fails to comply with the requirements of Florida Statute §624.155. State Farm does not waive any deficiencies in the civil remedy notice with the filing of this response. The notice neglects to include facts which demonstrate that State Farm violated Florida law, fails to identify the specific policy language that was allegedly violated, or include a reasonable cure for the alleged violations. The purpose of the civil remedy notice is to grant the insurer an opportunity to cure the alleged violations of Florida law. Therefore, complainants must identify the specific policy provisions and statutory language that were violated. In addition, complainants must identify what actions the insurer did that violated such provisions and identify what actions must be taken to cure the violations. As such, Florida Statute §624.155(3)(b) states: The notice shall be on a form provided by the department and shall state with specificity the following information, and such other information as the department may require: 1. The statutory provision, including the specific language of the statute, which the authorized insurer allegedly violated. 2. The facts and circumstances giving rise to the violation. 3. The name of any individual involved in the violation. 4. Reference to specific policy language that is relevant to the violation, if any. If the person bringing the civil action is a third-party claimant, she or he shall not be required to reference the specific policy language if the authorized insurer has not provided a copy of the policy to the third party claimant pursuant to written request. 5. A statement that the notice is given in order to perfect the right to pursue the civil remedy authorized by this section. In this instance, civil remedy notice 805445 does not include specific facts and circumstances that demonstrate a violation as required by §624.155(3)(b)(2). The notice contains conclusory allegations that State Farm improperly and insufficiently adjusted the claim. As such, the notice fails to comply with §624.155(3)(b)(4). See Talat Enters. v. Aetna Cas. & Sur. Co., 753 So. 2d 1278 (Fla. 2000) & Julien v. United Prop. & Cas. Ins. Co., 311 So. 3d 875 (Fla. 4th DCA 2021). The insured procured policy no.: 98-74-7034-3 for the property located at 201 SE 12th Avenue, Fort Lauderdale, FL 33301-3637. This claim was reported to State Farm on November 8, 2023, with an alleged date of loss of November 8, 2023. During the quality first contact on November 11, 2023 and November 14, 2023 with the insured and his attorney, the insured reported that she is not sure what caused the fire. She stated that the property is rented to tenants. The insureds attorney then informed State Farm that fire originated in one of the property’s closets and that the property is most likely a total loss. No cause and origin invoice or report was submitted for State Farm’s review and consideration. It is unclear if a person qualified to determine the cause and origin of the fire completed an investigation on the insureds’ behalf. State Farm’s Company Adjuster, Darrin Murray inspected the property on November 28, 2023. Darrin observed severe fire damage to the primary bedroom, bathroom, and kitchen areas walls and ceiling. He observed fire damage to the roof structure and electrical wires in these areas. Darrin also observed drywall damage in the dining room, hallway and living room where drywall had been opened up. He observed minor soot in other areas of the home and evidence of soot coming out of the AC registers in several rooms. State Farm retained Grindley Williams Engineering to ascertain the extent of reported damage to the electrical wiring and roof of the property. Dana Race, PE, MRSA and Loren Pittick, CGC, MASE, EI inspected the property on January 17, 2024. They concluded that the was caused by an electrical malfunction of the A/V system. The heaviest area of damage from the fire is located in the southwest bedroom (back-left bedroom) closet where a mounted audio-visual unit was located. They also concluded that the damage was localized to the kitchen and back-left bedroom (master). Damage to the electrical wiring is localized to the kitchen and back-left bedroom. There was no observed damage to the electrical panel. State Farm’s engineer concluded that the extent of damage is less than substantial pursuant to the Florida Building Code, which means that the property can be repaired and restored to its pre-damage condition. State Farm also retained HVACi to assess the functionality of the HVAC system and to assess the effects of the fire on said system. Additionally, State Farm retained Strike Check to assess the condition of the property’s electrical system. Strike Check concluded that only the electrical wiring of the master bedroom and kitchen. State Farm received a Notice of Intent to Litigate on January 10, 2025. In response to the Notice of Intent State Farm stated that the Notice was premature as State Farm’s investigation was ongoing and the exact amount of the loss was undetermined at the time. State Farm was not provided with a signed sworn proof of loss until March 1, 2024. State Farm responded by letter dated March 19, 2024, for untimely submission of the sworn proof of loss. On June 12, 2024, State Farm sent a summary of loss and notification that payment will be sent to the insured’s attorney’s office. To date, State Farm has paid $80,118.02 in indemnity, which is the amount after application of the deductible and accounting for recoverable depreciation. The summary of loss was accompanied by an estimate that State Farm prepared for this claim. Payment was also made to the fire mitigation company. In this Civil Remedy Notice the claimant alleges that State Farm violated §626.9541(1)(i)(3)(a); §626.9541(1)(i)(3)(b) and §626.9541(1)(i)(3)(c) by failing to adopt and implement standards for the proper investigation of claims; misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue; failing to acknowledge and act promptly upon communications with respect to claims. However, as you can see above, State Farm retained multiple individuals to inspect different aspects of the property. This claim is also not a denied claim, and the insureds were paid $80,118.02. The claimant alleges that State Farm violated §626.9541(1)(i)(3)(d); §626.9541(1)(i)(3)(e) and §626.9541(1)(i)(3)(f) by 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 and 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. However, this claim was not denied. State Farm conducted more than reasonable inspections and evaluated the claim properly. Payment was then sent to the insured. The claimant alleges that State Farm violated §626.9541(1)(i)(3)(g); §626.9541(1)(i)(3)(h); §626.9541(1)(i)(3)(i), by failing to promptly notify the insured of any additional information necessary for the processing of a claim; failing to clearly explain the nature of the requested information and the reasons why such information is necessary and failing to pay personal injury protection insurance claims within the time periods required by s. 627.736(4)(b). However, this is a first party property action relating to a fire claim at the insured’s residential home. Furthermore, no information was necessary from the insured for State Farm to finalize its investigation of the claim. State Farm denies all allegations of non-compliance with Florida law or the subject policy. Furthermore, the civil remedy notice is deficient in that it does not comply with the requirements of Florida Statute §624.155(3)(b). State Farm does not waive any such deficiencies in the filing of this response. Regardless, the accusations raised within the notice are devoid of merit. Thank you for your attention to the above. Very truly yours, /s/ Brian A. Chackman Brian A. Chackman Christopher J. Edgerton
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.

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.




DFS-10-363
Rev. 10/14/2008