Civil Remedy Notice of Insurer Violations
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Filing Number:     808776
Filing Accepted:  2/27/2025
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Complainant
Last/Business Name *  
MUGNIE   First Name   SALMAN
Street Address * 6202 54TH AVENUE NORTH
City, State Zip * KENNETH CITY, FL 33709
Email Address * MUGSAL@YAHOO.COM
Complainant Type: * Insured
Insured
Last/Business Name*   MUGNIE   First Name   SALMAN
Policy # * FSF16479299 003 Claim #* KY24K3034713
Attorney
Attorney is Applicable
Last Name* KRAPF First Name * GRANT Initial W
Street Address* 2790 SUNSET POINT RD
City, State Zip* CLEARWATER , FL 33759
Email Address * GRANT@KRAPFLEGAL.COM
Violation
Insurer Type *   Authorized Insurer Unauthorized Insurer
 
Insurer Name*   WESTCHESTER SURPLUS LINES INSURANCE COMPANY
NAIC Company Code 10172
 
Name of individual responsible for violation (if any):* GLEN E. SMITH, M.S., P.E., DR. SHAUN T. KUSEK, DAVID KEE, KACIE N DITTMAR, AND ANY OTHER INDIVIDUAL FROM, OR AGENT OF, WESTCHESTER SURPLUS LINES INSURANCE COMPANY WHO WAS INVOLVED IN THE CLAIM.
Type of Insurance * Residential Property & Casualty   
Reason for Notice *
Non-renewal
Claim Denial
Other : Misrepresenting the terms of the insurance policy
Other : Not treating the Insured with good faith claims conduct
Other : Looking for ways to deny full recovery to the Insured
Other : Looking for ways to delay full recovery to the Insured
Other : Failing to properly investigate the Insured's loss
Other : Failing to provide the Insured with the full benefits awarded under the contract of insurance in a t
Other : Not training, supervising, or managing adjusters properly so that prompt and full payments are made
Other : Not adjusting claims and evaluating loss properly
Other : Shifting the burden of insuring the loss to the Insured
Other : Intentionally misstating the terms, conditions, and benefits of the insurance policy to the insured
Other : Failing to implement proper standards for the adjustment and investigation of claims
* 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)(2) A material misrepresentation made to an insured or any other person having an interest in the proceeds payable under such contract or policy, for the purpose and with the intent of effecting settlement of such claims, loss, or damage under such contract or policy on less favorable terms than those provided in, and contemplated by, such contract or policy.
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)(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.

Reference to specific policy language: The violations alleged are statutorily based and do not rely on any specific policy language. "It is an accepted principle of law that when parties contract upon a matter which is the subject of statutory regulation, the parties are presumed to have entered into their agreement with reference to such statute, which becomes a part of the contract, unless the contract discloses a contrary intention." Westside EKG Assocs. v. Found. Health, 932 So. 2d 214, 216 (Fla. 4th DCA 2005), aff'd, 944 So. 2d 188 (Fla. 2006).
 
* Facts and circumstances giving rise to the violation.
Enter all words or phrases (one at a time) that should be used to filter.

Westchester Surplus Lines Insurance Company (the "Insurer") has committed the following in handling the Insured's claim: 1) failure to act in due diligence and good faith to resolve claims; 2) placing the financial interest of Insurer before that of the policyholder and the Insured; 3) looking for ways to deny benefit payments and otherwise "low ball" or "stone wall" claims; 4) not adjusting the claims promptly and fairly; 5) not attempting in good faith to settle claims; 6) conducting inadequate investigations; 7) failing to employ policies and procedures to conduct adequate investigations; 8) denying a claim which it knew or should have known the policy and Florida law provided coverage for; 9) failing to provide an estimate that complies with the Florida Building Codes; and 10) misrepresenting the terms of the insurance policy. On or about October 9, 2024, while the subject policy was in full force and effect, the Insured's property was severely damaged by Hurricane Milton. The areas impacted include but are not limited to the roofing system, exterior, firewall, interior of suite 6202, interior of suite 6206, and interior of suite 6210. The Insured timely submitted a claim on October 9, 2024, to the Insurer for hurricane damage and the ensuing damage therefrom. Thereafter, the Insurer assigned claim number KY24K3034713 to the loss and sent a field adjuster to inspect the property on October 18, 2024. Then in a letter dated November 25, 2024, the Insurer notified the Insured that it was extending partial coverage for the loss. However, the Insurer wrongfully determined that it would only require $23,186.77 to restore the insured property to its pre-loss condition. The Insurer's lowball estimate is that of a classic under scope and under value of the claim. The Insurer also erroneously denied coverage for some of the Insured's roof damage. This coverage decision is incorrect. Denying coverage for the damage was wrongful as the damages are covered under the policy. Given the partial denial, the Insured's disagreement with the coverage decision, and the scope and nature of the damage resulting from Hurricane Milton, the Insured retained a public adjuster. After assessing the damage and the true scope of repairs, the public adjuster produced an estimate identifying $121,128.78 in covered damage to the dwelling. The foregoing estimate, photographs, and a letter of representation from the public adjuster were sent to the Insurer. In response, the Insurer sent a correspondence dated January 10, 2025, advising it was standing by its prior evaluation of the claim. Upon receiving notice of the loss, the Insurer had the duty to provide the full benefits under the policy. This includes providing the Insured with a proper investigation and the funds necessary to return the home to its pre-loss condition. However, when the Insurer conducted its inspection of the insured property, the Insurer's adjuster failed to conduct a thorough and adequate investigation, or the adjuster intentionally ignored the damage observed and failed to make truthful and unbiased reports of the facts after investigating. As a result, the Insurer breached the policy by failing to fully indemnify the Insured for the covered loss. The Insurer misrepresented the loss and wrongfully denied coverage for the damage sustained to the Insured's property. According to the claims determination letter, the Insurer's engineer observed damage to Insured's roof but attributed the cause of some of this damage to several causes excluded under the policy. The Insurer knows or should know that when independent perils converge and no single cause can be considered the sole or proximate cause, it is appropriate to apply the concurring cause doctrine. Sebo v. Am. Home Assurance Co., 208 So. 3d 694, 697 (Fla. 2016). The concurring cause doctrine states that coverage may exist where an insured risk constitutes a concurrent cause of the loss even when it is not the prime or efficient cause. Id. at 698. A covered peril that meets with an uncovered peril may still provide for coverage under a policy when the covered peril triggered the events that eventually led to the loss. Id. at 697. The Insurer intentionally ignored covered damage to deny the reported loss and wrongfully fail to pay the Insured. This is an underhanded attempt to place the financial interests of the Insurer over those of the Insured and to delay and frustrate the Insured's ability to have his claim adjusted promptly to begin restoring his property. Additionally, although there was interior water damage the adjuster did not use a moisture meter. A moisture meter can be purchased online from Amazon for around $40 before tax. The Insurer could purchase a moisture meter and assess thousands of properties with one meter. Instead, the Insurer would rather place its financial interests over those of the Insured by failing to provide the adjuster with the necessary tools to correctly inspect the loss. As a result of the inadequate investigation and surrounding circumstances it is apparent that Insurer significantly underestimated the scope of the loss to the Insured's property. Insurer and its adjuster have colluded to misrepresent the true scope of damages to the insured property and the true replacement costs of the damages. This is an underhanded attempt to place the financial interest of Insurer over those of the Insured, to delay the Insured's claim, and to delay the Insured in restoring his property to its pre-loss condition. Lastly, the Insurer has elected not to renew the Insured's policy. The Insurer sent the Insured a letter advising that the policy would expire shortly and that it would not be renewed. This is the result of a directed ongoing effort by the Insurer to avoid paying for damages covered under the policy in the claims it adjusts. Specifically, this Insurer has created a systemic business practice of terminating policies shortly after they anticipate litigation. The Insurer is aware that other insurers will not provide coverage, or at best will require an exorbitant increase in rates for any coverage on insurable property. Here, this created a perilous position for the Insured as he is forced to choose between two challenging situations. The first being the pursuit of a proper recourse via litigation knowing that, for an extended period time, the property will be without insurance. The second is foregoing their right to proper recourse for an unpaid claim only to prevent the property from being without insurance. With this struggle in mind, the Insurer will continue to delay litigation and benefit from its methodology. The Insurer is tactically dropping insureds that expose it to risk. The foregoing tactics only frustrate the claim and remove the safety-net that insurance is supposed to provide. The Insurer is aware that not having insurance can result in a greater or total loss of the property and the Insurer is using this fact to its advantage. As this property resides in Florida, the foregoing risks are increased. In other words, the Insurer's new system is allowing it to deny and underpay claims only to discourage its insureds from pursuing the logical recourse of litigation because of the adverse effects that will surely result in a property without insurance. Therefore, the Insurer is not acting with due regard for the Insured's interests and has placed its financial interest over the health and safety of the Insured. There may be further wrongful conduct which has not been made known to the Insured at this moment. Certain conduct or actions may be discovered throughout discovery or cannot be verified without a review of the Insurer's claim file and standards and procedures for the adjustment and investigation of claims. In short, the Insurer is not acting with due regard for the Insured's interests or safety. In Florida the work of adjusting insurance claims engages the public trust. The Insurer has breached this trust and its duty to the Insured. The Insurer and its agents conducted cursory and inadequate investigations and wrongfully denied coverage for some of the Insured's roof damage as well as wrongfully determining that it would only require $23,186.77 to restore the insured property to its pre-loss condition. Moreover, the Insurer has engaged in bad faith practices designed to delay claims and prevent the Insured from recovering what is rightfully owed under the subject policy of insurance. The Insurer's actions and inactions have continued to frustrate and delay the resolution of the Insured claim. The Insurer's actions amount to but are not limited to the following: 1. Non-renewal 2. Claim denial 3. Claim delay 4. Not treating the Insured with good faith claims conduct 5. Looking for way to reduce recovery to the Insured 6. Looking for ways to deny recovery to the Insured 7. Not adjusting claims and evaluating loss properly, promptly and fairly to provide full and prompt indemnity to the Insured 8. Not training, supervising or managing adjusters properly so that prompt and full payments are made, but rather placing the company's interests before the Insured's interests 9. Placing the financial interest of the Insurer over that of the health and safety of the Insured 10. Failing to provide an estimate that complies with the Florida Building Codes 11. Shifting the burden of investigating onto the Insured 12. Conducting inadequate investigations 13. Making material misrepresentations Therefore, to cure the defects outlined in this civil remedy notice, the Insurer must: (1). Admit full coverage for the Insured's loss. (2). Tender full benefits owed to the Insured under the insurance contract. A copy of this form submitted to the FDFS has been sent via e-mail to the following parties providing them notice of the filing of the civil remedy notice. Please e-mail any response to this civil remedy notice to badfaith@krapflegal.com. Via E-mail: Westchester Surplus Lines Insurance Company 10 Exchange Place Jersey City, NJ 07302 property@westchester.com
Comments
User Id Date Added Comment
tschwartz@kelleykronenberg.com 04-23-2025 Please accept this correspondence as Westchester Surplus Lines Insurance Company’s (“Chubb”) response to Civil Remedy Notice (“CRN”) Filing Number 808776 filed by you, on behalf of Salman Mugnie (“Insured”), dated February 27, 2025. At the outset, Chubb denies that any of its actions taken with regard to the Insured’s claim has resulted in a violation of Florida’s bad faith laws as alleged in the CRN. Rather, Chubb has acted at all times in good faith in its investigation and handling of the above-claim and with regard to the best interest of our Insured. While Chubb welcomes the opportunity to respond to this CRN, and specifically denies each and every allegation contained in the CRN referenced above, Chubb requests the CRN be rejected as it fails to comply with several of the requirements of the Civil Remedy Notice of Insurer Violation document provisions as set forth in Florida Statutes §624.155, §626.9541 and Florida case law. Moreover, as only Salman Mugnie is listed as the Complainant in the CRN, it is unclear from the face of the filing whether the Notice represents the opinions of one or both of the Insureds. Based on this alone, the CRN is invalid on its face. THE CRN ALLEGATIONS The CRN asserts the following reasons for the notice: • Non-renewal • Claim Denial • Misrepresenting the terms of the insurance policy • Not treating the Insured with good faith claims conduct • Looking for ways to deny full recovery to the Insured • Looking for ways to delay full recovery to the Insured • Failing to properly investigate the Insured’s loss • Failing to provide the Insured with the full benefits awarded under the contract of insurance • Not training, supervising, or managing adjusters properly so that prompt and full payments are made • Not adjusting claims and evaluating loss properly • Shifting the burden of insuring the loss to the Insured • Intentionally misstating the terms, conditions, and benefits of the insurance policy to the insured • Failing to implement proper standards for the adjustment and investigation of claims In the CRN, the Insured alleges Chubb violated the following statutes and applicable language (as taken from the Notice of Insurer Violations): 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)(2) A material misrepresentation made to an insured or any other person having an interest in the proceeds payable under such contract or policy, for the purpose and with the intent of effecting settlement of such claims, loss, or damage under such contract or policy on less favorable terms than those provided in, and contemplated by, such contract or policy. 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)(d) Denying claims without conducting reasonable investigations based upon available information. The CRN claims the Insured suffered damage due to the impacts of Hurricane Milton to the roofing, exterior and interiors of suites 6202, 6206 and 6210 and the Insurer “wrongfully determined that it would only require $23,186.77 to restore the insured property to its pre-loss condition.” The Insured further claims the “lowball estimate is that of a classic under scope and under value of the claim…” and that the “Insurer also erroneously denied coverage for some of the Insured’s roof damage” leading to an incorrect coverage decision. As a brief background, the loss was reported on October 11, 2024 and Chubb immediately acknowledged the claim, spoke with the Insured and assigned a field adjuster to complete an inspection. This inspection occurred on October 18, 2024, wherein the adjuster observed damage to the property, and requested an engineer inspect in further efforts to find coverage for the loss and to determine the cause, origin and extent of any damages. The engineer’s inspection took place on October 28, 2024 in the presence of the Insured, a report was promptly prepared and a coverage determination was issued to the Insured on November 25, 2024 along with an estimate of damages. The estimated repairs fell below the Policy’s $31,250.00 hurricane deductible and no payment was issued. The Insured subsequently retained public adjuster Your Property Adjuster and a replacement cost estimate was submitted for consideration. This estimate was evaluated by the field adjuster and Chubb stood on its prior findings, with a follow up letter to the Insured on January 23, 2025. As set forth herein, Chubb maintained continuous communication with the Insured and their agents and the timeline is evidence of a complete investigation into the loss and claimed damages with Chubb exhausting efforts to find coverage. While the CRN includes generic and baseless allegations regarding unfair practices on the part of Westchester, along with repeated unsupported claims of misrepresentation, the claims are completely lacking in any factual support whatsoever, Westchester takes issue with these inflammatory allegations as Westchester has been transparent and forthright with the Insured since the report of the loss and has endeavored to find coverage where coverage exists. The virtual laundry list of assertions contained with the CRN are unfounded and not supported by any basis in fact whatsoever. As the Florida appellate courts have repeatedly upheld, a shotgun approach to drafting a Civil Remedy Notice, as the Insured has engaged in here, is wholly insufficient to support a bad faith lawsuit. Julien v. United Prop. & Cas. Ins. Co., 311 So. 3d 875 (Fla. 4th DCA 2021). The Insured is required, per Florida statute, to provide specific facts and circumstances giving rise to the allegations in the CRN. Here, the Insured has not provided even the slightest bit of factual support for any of these specious claims, including multiple allegations of misrepresentation, included in the CRN. As such, the CRN is invalid on its face. The CRN also refers to an inadequate investigation, despite Chubb sending a field adjuster and engineer, and harps on a supposed $40 moisture meter the carrier neglected to use. Besides the Insured having no knowledge of what tools the inspectors may or may not have used, Chubb afforded coverage for repairs to the interior. Thus, the statement the “insurer and adjuster have colluded to misrepresent the scope of the loss…” has no basis in fact and is nothing more than a boilerplate allegation utilized in the drafting of this generic and baseless Notice. The nonsensical claims are entirely unsupported by the clear history of the investigation. The Insured provides not even the slightest bit of factual basis for these allegations and the vague and generalized references to “collusion” are not sufficient to support bad faith. Likewise, while the CRN makes a bald and sweeping claim that the supposed bad faith conduct is within the Insurer’s “routine course of business,” this too is baseless and entirely without support in the CRN or in the factual history. In addition, the Insured’s policy expired subsequent to the loss, investigation and coverage determination and any non-renewal is entirely unrelated to the claim investigation, coverage determination or actions of Chubb throughout the course of the claims handling. This is not evidence of bad faith. Again, Chubb has operated with the Insured’s best interests at hand, conducting multiple inspections and affording coverage for the damages observed related to the storm. The facts here are clear – Chubb promptly issued a coverage determination based on a thorough inspection and the damages, if any, observed. While the findings did not coincide with the estimate of damages prepared on behalf of the Insured, this, however, is not bad faith on the part of Chubb, but rather, the results of a proper and timely investigation. The unspecific and vague allegations contained within the CRN do not rise to the level of bad faith, as Chubb has treated the Insured and its representatives fairly and honestly throughout the handling of the claim investigation. With regard to the unsubstantiated claim that Chubb has failed to satisfactorily settle this claim and denying a claim which it knew or should have known the policy provided coverage for, it is important to note, that while an insurance company is required to settle claims that should be settled, it is not required to settle claims that are legitimately contested. Florida law continually affirms the principle that an insurer has the right to investigate claims presented for payment. An insurance company is expressly afforded an opportunity to evaluate its rights and liabilities. Neither the subject policy, nor Florida law provide that a carrier must accept whatever demand for repairs it is provided by its Insured as the amount necessary to repair a loss. In the instant case, the violations alleged by the Insured revolve around the contention that Chubb did not accept and pay the full demand for repair. Again, this allegation fails to rise to the level of bad faith. The CRN also includes generic and baseless allegations regarding, amongst other things Chubb’s failure to adjust, failure to investigate, delay, looking for ways to reduce recovery, looking for ways to deny recovery, treating represented and unrepresented insureds differently, shifting the burdens of the investigation to the Insured and failure to properly train adjusters. This virtual laundry list of assertions are unfounded and not supported by any basis in fact whatsoever. The Insured is required, per Florida statute, to provide specific facts and circumstances giving rise to the allegations in the CRN. Here, the Insured has not even included the slightest bit of factual support for any of these specious claims included in the CRN. As such, the CRN is deficient on its face. The Insured does not cite to any specific facts or evidence suggesting Chubb has acted in bad faith in the investigation or in the adjustment of the loss, and Chubb denies these conclusory allegations. Accordingly, Chubb denies the alleged violations in their entirety and states that it has acted properly and reasonably in its investigation of this claim. Moreover, Chubb’s position is that the Notice is statutorily deficient in that it cites various statutory violations and does not provide the requisite specificity as to how they were violated. In large part, the cited provisions appear to be nothing more than boilerplate and conclusory language that have no application to the governing facts or law of this claim. The CRN requires the Complainant to make “reference to specific policy language that is relevant to the violations, if any.” The CRN does not contain any specific policy language in which Chubb allegedly failed to comply. Instead, the CRN states the Insured is relying on statutory violations, yet as discussed herein, there is no support for any such allegations. This fails to meet the requisite specificity and without description of any language violated, Chubb is not properly placed on notice of any alleged violations. Moreover, any cure set forth in the CRN is merely illusory as the CRN states “admit full coverage” and “tender full benefits” in order to cure the defects alleged. As such, Chubb cannot properly formulate any method of cure. Additionally, the CRN is insufficient on its face and should be rejected since, contrary to the requirements of Section §624.155, the CRN does not specifically describe the facts or circumstances giving rise to each specific violation alleged against Chubb. Instead, the CRN makes broad, general and erroneous allegations. As seen from the facts of this claim, these allegations are baseless and wholly without merit. Further, as mentioned, the CRN provides no meaningful method of cure. Thus, the CRN is purposefully drafted in a manner which does not provide Chubb proper notice of the allegations or any meaningful opportunity to respond and/or evaluate the claims being asserted. Based upon the foregoing, the CRN is insufficient on its face and should be rejected. Talat Enterprises Inc. vs. Aetna Cas. & Sur. Co., 753 So. 2d 1278 (Fla. 2000); Lane v. Westfield Ins. Company, 862 So. 2d 744 (Fla. 5th DCA 2003). In response to each statutory violation alleged, Chubb states: Chubb conducted a complete, thorough, and timely investigation of the loss utilizing a field adjuster and engineer to inspect the property and determine the scope of damages. Based on the adjuster and engineer’s inspection and overall investigation, coverage was afforded for the storm related damages. Therefore, no violations of §624.155(1)(b)(1) have occurred. Chubb denies any violation of 626.9541(1)(i)(2) as there have been no material misrepresentations made during the adjustment of the instant loss. The Insured has not cited to any facts supporting this supposed violation and Chubb has acted reasonably and in the best interest of the Insured at all times. Chubb has adopted all proper and best practices and standard operating procedures for claims-handling with regard to §626.9541(1)(i)(3)(a). Chubb conducted a complete, thorough, and timely investigation. Accordingly, Chubb denies any violations of §626.9541(1)(i)(3)(a). Chubb denies any violation of §626.9541(1)(i)(3)(b). Chubb conducted a complete, thorough, and timely investigation. At no point did Chubb misrepresent pertinent facts or insurance policy provisions, nor has the Insured set forth any facts providing information regarding any such misrepresentations. Chubb therefore denies any violation of §626.9541(1)(i)(3)(b). Chubb conducted a complete, thorough, and timely investigation of the loss utilizing an independent adjuster and engineer to inspect the Property and determine the scope of damages. Chubb promptly communicated with the Insured and its representatives and issued a coverage determination. Accordingly, Chubb denies any violations of § 626.9541(1)(i)(3)(d). In closing, Chubb’s actions in handling the Insured’s claim were prompt, thorough, conducted in accordance with the insurance policy and Florida law, and most importantly, in good faith. Furthermore, Chubb complied with all obligations under the insurance policy and the Florida Statutes. Chubb promptly retained a field adjuster and an engineer to evaluate the claimed damages and attempted to obtain all facts and circumstances of the loss through its investigation of the claim. Therefore, Chubb denies each and every allegation contained in the Notice. Chubb first requests that the CRN be rejected for its failure to comply with Florida Statute §624.155, §626.9541 and Florida case law. Regardless of the rejection, as demonstrated above, Chubb has, at all times, acted in good faith, with due diligence, and in accordance with the terms of its insurance policy and Florida Statutes with respect to the requests made by its Insured and their representatives. Chubb respectfully disagrees with all of the assertions made and expressly denies all allegations contained in the CRN. We trust this response adequately addresses the allegations of violation alleged in the CRN. In addition, you will find a copy of the response submitted to the Florida Department of Financial Services on its website. Should you have any questions regarding this matter or need anything further, please do not hesitate to contact the undersigned.
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