Filing Number: 813641
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| Filing Accepted: 3/28/2025 |
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OC 3711 LLC D/B/A BEACH QUARTERS RESORT
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First Name |
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3711 S. ATLANTIC AVENUE |
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DAYTONA BEACH SHORES,
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32118
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OCEANCLUBINC@AOL.COM |
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Insured |
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OC 3711 LLC D/B/A BEACH QUARTERS RESORT |
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First Name |
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8742550491 |
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Claim #* |
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05000001260 |
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Attorney is Applicable
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DANAHY
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MATTHEW
Initial
R
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901 W SWANN AVE |
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TAMPA
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36606
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SERVICE@DANDDLAW.COM |
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 Authorized Insurer
 Unauthorized Insurer
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FRONTLINE INSURANCE UNLIMITED COMPANY
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NAIC Company Code 10074 |
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| Name of individual responsible for violation (if any):*
CLAIMS DEPARTMENT, SUPERVISORS, MANAGEMENT, AGENTS, AND ADJUSTERS, INCLUDING THE FOLLOWING REPRESENTATIVE & ADJUSTER(S), CONSULTANTS AND VENDORS SPECIFICALLY: DESK ADJUSTER LORI MILAND; FIRST FIELD ADJUSTER JAMES MAJOR OF PILOT CATASTROPHE SERVICES
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Commercial Property & Casualty
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| Reason for Notice
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Claim Denial
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Claim Delay
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Unsatisfactory Settlement Offer
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Unfair Trade Practice
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Other
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Violation of Code of Ethics
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Other
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Pre-Litigation Strategy and Behavior
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Statutory provision(s) which the insurer allegedly violated.
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| 624.155(1)(b)(1) |
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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.
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| 624.155(1)(b)(3) |
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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.
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| 626.9541(1)(i)(2) |
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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.
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| 626.9541(1)(i)(3)(a) |
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Failing to adopt and implement standards for the proper investigation of claims.
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| 626.9541(1)(i)(3)(b) |
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Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue.
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| 626.9541(1)(i)(3)(c) |
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Failing to acknowledge and act promptly upon communications with respect to claims.
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| 626.9541(1)(i)(3)(d) |
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Denying claims without conducting reasonable investigations based upon available information.
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| 626.9541(1)(i)(3)(e) |
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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.
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| 626.9541(1)(i)(3)(f) |
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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.
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| 626.9541(1)(i)(3)(h) |
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Failing to clearly explain the nature of the requested information and the reasons why such information is necessary.
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Specific policy language that is relevant to the violation.
Enter all words or phrases (one at a time) that should be used to filter.
Based upon the information available to the Insured, including policy language quoted in letters the Insured, its public adjuster and its attorneys have received from Frontline Insurance Unlimited Company (“Frontline”) and its attorneys throughout the claim and through the present date, it believes the following language from its Commercial Policy with Frontline is relevant to the violations in addition to the statutory violations outlined in this notice:
COVERAGES PROVIDED:
BLDG COVERAGE LIMIT OF INSURANCE
Building Coverage $3,500,000
Business Personal Property – Contents $140,000
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Business Income Coverage with Extra Expense $400,000
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CP 00 10 06 07 - BUILDING AND PERSONAL PROPERTY COVERAGE FORM
A. Coverage
We will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss.
1. Covered Property
Covered Property, as used in this Coverage Part, means the type of property described in this section, A.1., and limited in A.2., Property Not Covered, if a Limit of Insurance is shown in the Declarations for that type of property.
a. Building, meaning the building or structure described in the Declarations, including:
(1) Completed additions;
(2) Fixtures, including outdoor fixtures;
(3) Permanently Installed:
(a) Machinery and
(b) Equipment;
(4) Personal property owned by you that is used to maintain or service the building or structure or its premises, including:
(a) Fire-extinguishing equipment;
(b) Outdoor furniture;
(c) Floor coverings; and
(d) Appliances used for refrigerating, ventilating, cooking, dishwashing or laundering;
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b. Your Business Personal Property located in or on the building described in the Declarations or in the open (or in a vehicle) within 100 feet of the described premises, consisting of the following unless otherwise specified in the Declarations or on the Your Business Personal Property – Separation of Coverage form:
(1) Furniture and fixtures;
(2) Machinery and equipment;
(3) “Stock”;
(4) All other personal property owned by you and used in your business;
(5) Labor, materials or services furnished or arranged by you on personal property of others;
(6) Your use interest as tenant in improvements and betterments. Improvements and betterments are fixtures, alterations, installations or additions:
(a) Made a part of the building or structure you occupy but you do not own; and
(b) You acquired or made at your expense but cannot legally remove;
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4. Additional Coverages
a. Debris Removal
(1) Subject to paragraphs (3) and (4), we will pay your expense to remove debris of Covered Property caused by or resulting from a Covered Cause of Loss that occurs during the policy period. The expenses will be paid only if they are reported to use in writing within 180 days of the date of direct physical loss or damage.
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E. Loss Conditions
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3. Duties In The Event of Loss or Damage
a. You must see that the following are done in the
event of loss or damage to Covered Property:
* * * *
(3) As soon as possible, give us a description of
how, when and where the damage occurred.
(4)Take all reasonable steps to protect the
Covered Property from further damage, and
keep a record of your expenses necessary to
protect the Covered Property, for consideration
in the settlement of the claim. This will not
increase the Limit of Insurance. However, we
will not pay for any subsequent loss or damage
resulting from a cause of loss that is not a
Covered Cause of Loss. Also, if feasible, set
the damaged property aside and in the best
possible order for examination.
(5) At our request give us complete inventories of
the damage and undamaged property. Include
quantities, costs, values and amount of loss
claimed.
(6) As often as may be reasonably required,
permit us to inspect the property proving the
loss or damage and examine your books and
records.
Also permit us to take samples of damaged
and undamaged property for inspection, testing
and analysis, and permit us to make copies
from your books and records.
(7) Send us a signed, sworn proof of loss
containing the information we request to
investigate the claim. You must do this
within 60 days after our request. We will
supply you with the necessary forms.
(8) Cooperate with us in the investigation or
settlement of the claim.
b. We may examine any insured under oath, while
not in the presence of any other insured and at
such times as may be reasonably required, about
any matter relating to this insurance or the claim,
including an insured’s books and records. In the
event of an examination, an insured’s answers
must be signed.
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4. Loss Payment
a. In the event of loss or damage covered by this Coverage Form, at our option, we will either:
(1) Pay the value of lost or damaged property;
(2) Pay the cost of repairing or replacing the
lost or damaged property, subject to b.
below;
(3) Take all or any part of the property at an
agreed or appraised value; or
(4) Repair, rebuild or replace the property
with other property of like kind and quality,
subject to b. below.
We will determine the value of lost or damaged property, or the cost of its repair or
replacement, in accordance with the applicable terms of the Valuation Condition in
this Coverage Form or any applicable provision which amends or supersedes the
Valuation Condition.
b. The cost to repair, rebuild or replace does not include the increased cost attributable to enforcement of any ordinance or law regulating the construction, use or repair of any property.
c. We will give notice of our intentions within 30 days after we receive the sworn proof of loss.
d. We will not pay you more than your financial interest in the Covered Property.
e. We may adjust losses with the owners of lost or damaged property if other than you. If we pay the owners, such payments will satisfy your claims against us for the owners' property. We will not pay the owners more than their financial interest in the Covered Property.
f. We may elect to defend you against suits arising from claims of owners of property. We will do this at our expense.
g. We will pay for covered loss or damage within 30 days after we receive the sworn proof of loss, if you have complied with all of the terms of this Coverage Part and:
(1) We have reached agreement with you
on the amount of loss; or
(2) An appraisal award has been made.
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7. Valuation
We will determine the value of Covered Property in the event of loss or damage as follows:
a. At actual cash value as of the time of loss or damage, except as provided in b., c., d. and e. below.
b. If the Limit of Insurance for Building satisfies the Additional Condition, Coinsurance, and the cost to repair or replace the damaged building property is $2,500 or less, we will pay the cost of building repairs or replacement.
The cost of building repairs or replacement does not include the increased cost attributable to enforcement of any ordinance or law regulating the construction, use or repair of any property.
However, the following property will be valued at the actual cash value even when attached to the building:
(1) Awnings or floor coverings;
(2) Appliances for refrigerating, ventilating, cooking, dishwashing or laundering; or
(3) Outdoor equipment or furniture.
G. Optional Coverage
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3. Replacement Cost
a. Replacement Cost (without deduction for depreciation) replaces Actual Cash Value in the Valuation Loss Condition of this Coverage Form
b. This Optional Coverage does not apply to:
(1) Personal property of others;
(2) Contents of a residence;
(3) Works of art, antiques or rare articles, including etchings, pictures, statuary, marbles, bronzes, porcelains and bric-a-brac; or
(4) “Stock”, unless the Including “Stock” option is show in the Declarations.
Under the terms of this Replacement Cost Optional Coverage, tenants’ improvements and betterments are not considered to be the personal property of others.
c. You may make a claim for loss or damage covered by this insurance on an actual cash value basis instead of on a replacement cost basis. In the event you elect to have loss or damage settled on a actual cash value basis, you may still make a claim for the additional coverage this Optional Coverage provides if you notify us of your intent to do so within 180 days after the loss or damage.
d. We will not pay on a replacement cost basis for any loss or damage:
(1) Until the lost or damaged property is actually repaired or replaced; and (2) Unless the repairs or replacements are made as soon as reasonably possible after the loss or damage.
FORM CP 00 30 06 07 - BUSINESS INCOME (AND EXTRA EXPENSE)
COVERAGE FORM
A. Coverage
1. Business Income
Business Income means the:
a. Net Income (Net Profit or Loss before income taxes) that would have been earned or incurred; and
b. Continuing normal operating expenses incurred, including payroll.
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Coverage is provided as described and limited below for one or more of the following options for which a Limit of Insurance is shown in the Declarations:
(1) Business Income Including "Rental
Value".
(2) Business Income Other Than "Rental
Value".
(3) "Rental Value".
If option (1) above is selected, the term Business Income will include "Rental Value". If option (3) above is selected, the term Business Income will mean "Rental Value" only.
If Limits of Insurance are shown under more than one of the above options, the provisions
of this Coverage Part apply separately to each.
We will pay for the actual loss of Business Income you sustain due to necessary “suspension” of your “operations” during the “period of restoration”. The “suspension” must be caused by direct physical loss of or damage to property at premises which are described in the Declarations and for which a Business Income Limit of Insurance is shown in the Declarations. The loss or damage must be caused by or result from a Covered Cause of Loss. With respect to loss of or damage to personal property in the open or personal property in a vehicle, the described premises include the area within 100 feet of the site at which the described premises are located.
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5. Additional Coverages
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c. Extended Business Income
(1) Business Income Other Than "Rental
Value"
If the necessary "suspension" of your "operations" produces a Business Income
loss payable under this policy, we will pay for the actual loss of Business
Income you incur during the period that:
(a) Begins on the date property (except "finished stock") is actually repaired,
rebuilt or replaced and "operations" are resumed; and
(b) Ends on the earlier of:
(i) The date you could restore your "operations", with reasonable speed, to the level which would generate the business income amount that would have existed if
no direct physical loss or damage had occurred; or
(ii) 30 consecutive days after the date determined in (1)(a) above.
However, Extended Business Income does not apply to loss of Business Income incurred as a result of unfavorable business conditions caused by the impact of the Covered Cause of Loss in the area where the described premises are located.
Loss of Business Income must be caused by direct physical loss or damage at the described premises caused by or resulting from any Covered Cause of Loss.
B. Limits Of Insurance
The most we will pay for loss in any one occurrence is the applicable Limit of Insurance shown in the Declarations
C. Loss Conditions
The following conditions apply in addition to the
Common Policy Conditions and the Commercial
Property Conditions.
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2. Duties In The Event Of Loss
a. You must see that the following are done in
the event of loss
(6) Send us a signed, sworn proof of loss
containing the information we request to
investigate the claim. You must do this
within 60 days after our request. We will
supply you with the necessary forms.
b. We may examine any insured under oath,
while not in the presence of any other insured
and at such times as may be reasonably
required, about any matter relating
to this insurance or the claim, including an
insured's books and records. In the event of
an examination, an insured's answers must
be signed.
3. Loss Determination
a. The amount of Business Income loss will be
determined based on:
(1) The Net Income of the business before
the direct physical loss or damage occurred;
(2) The likely Net Income of the business if
no physical loss or damage had occurred,
but not including any Net Income
that would likely have been earned as a
result of an increase in the volume of
business due to favorable business conditions
caused by the impact of the Covered
Cause of Loss on customers or on
other businesses;
(3) The operating expenses, including payroll
expenses, necessary to resume "operations"
with the same quality of service
that existed just before the direct
physical loss or damage; and
(4) Other relevant sources of information,
including:
(a) Your financial records and accounting
procedures;
(b) Bills, invoices and other vouchers;
and
(c) Deeds, liens or contracts.
4. Loss Payment
We will pay for covered loss within 30 days after
we receive the sworn proof of loss, if you
have complied with all of the terms of this Coverage
Part and:
a. We have reached agreement with you on
the amount of loss; or
b. An appraisal award has been made.
FORM CP 01 25 02 12 – FLORIDA CHANGES
COMMERCIAL PROPERTY COVERAGE PART
D. The Loss Payment Condition dealing with the
number of days within which we must pay for
covered loss or damage is replaced by the
following:
Provided you have complied with all the terms of
this Coverage Part, we will pay for covered loss or
damage upon the earliest of the following:
(1) Within 20 days after we receive the
sworn proof of loss and reach written
agreement with you;
(2) Within 30 days after we receive the
sworn proof of loss and:
(a) There is an entry of a final judgment;
or
(b) There is a filing of an appraisal
award with us; or
(3) Within 90 days of receiving notice of an
initial, reopened or supplemental claim,
unless we deny the claim during that
time or factors beyond our control
reasonably prevent such payment. If a
portion of the claim is denied, then the
90-day time period for payment of claim
relates to the portion of the claim that is
not denied.
Paragraph (3) applies only to the
following:
(a) A claim under a policy covering
residential property;
(b) A claim for building or contents
coverage if the insured structure is
10,000 square feet or less and the
policy covers only locations in
Florida; or
c) A claim for contents coverage under
a tenant's policy if the rented
premises are 10,000 square feet or
less and the policy covers only
locations in Florida
To the extent Frontline and its attorneys have quoted different or additional policy language in multiple letters and email correspondence to the insured, its public adjuster and its counsel during the claim prior to this time, the insured also incorporates that policy language contained in the letters and emails from Frontline and its attorneys by reference herein.
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Facts and circumstances giving rise to the violation.
Enter all words or phrases (one at a time) that should be used to filter.
In addition of the above statutory provisions alleged to have been violated, see also the following statutes and rules which were violated by Frontline the application of which are further explained below:
624.155(1)(a)1 Any person may bring a civil action against an insurer when such person is damaged: (a) by violation of any of the following provisions by the insurer: (1) Section 626.9541(1)(i), (o), or (x)
69B-220.201(3)(b) An adjuster shall treat all claimants equally.
69B-220.201(3)(b)(2) An adjuster shall adjust all claims strictly in accordance with the Insurance contract.
69B-220.201(3)(c) An adjuster shall not approach investigations, adjustments, and settlements in a manner prejudicial to the insured.
69B-220.201(3)(d) An adjuster shall make truthful and unbiased reports of the facts after making a complete investigation.
69B-220.201(3)(e) An adjuster shall handle every adjustment and settlement with honesty and integrity, and allow a fair adjustment or settlement to all parties without any compensation or remuneration to himself or herself except that to which he or she is legally entitled.
69B-220.201(3)(f) An adjuster, upon undertaking the handling of a claim, shall act with dispatch and due diligence in achieving a proper disposition of the claim.
9B-220.201(3)(k) An adjuster shall not undertake the adjustment of any claim concerning which the adjuster is not currently competent and knowledgeable as to the terms and conditions of the insurance coverage, or which otherwise exceeds the adjuster’s current expertise.
626.877 Every adjuster shall adjust or investigate every claim, damage, or loss made or occurring under an insurance contract, in accordance with the terms and conditions of the contract and of the applicable laws of this state.
626.878 An adjuster shall subscribe to the code of ethics specified in the rules of the department. The rules shall implement the provisions of this part and specify the terms and conditions of contracts, including a right to cancel, and require practices necessary to ensure fair dealing, prohibit conflicts of interest, and ensure preservation of the rights of the claimant to participate in the adjustment of claims.
626.9744(1) When a loss requires repair or replacement of an item or part, any physical damage incurred in making such repair or replacement which is covered and not otherwise excluded by the policy shall be included in the loss to the extent of any applicable limits. The insured may not be required to pay for betterment required by ordinance or code except for the applicable deductible, unless specifically excluded or limited by the policy.
626.9744(2) When a loss requires replacement of items and the replaced items do not match in quality, color, or size, the insurer shall make reasonable repairs or replacement of items in adjoining areas. In determining the extent of the repairs or replacement of items in adjoining areas, the insurer may consider the cost of repairing or replacing the undamaged portions of the property, the degree of uniformity that can be achieved without such cost, the remaining useful life of the undamaged portion, and other relevant factors.
627.70131(1)(a) Upon an insurer’s receiving a communication with respect to a claim, the insurer shall, within 14 calendar days, review and acknowledge receipt of such communication unless payment is made within that period of time or unless the failure to acknowledge is caused by factors beyond the control of the insurer which reasonably prevent such acknowledgment. If the acknowledgment is not in writing, a notification indicating acknowledgment shall be made in the insurer’s claim file and dated. A communication made to or by an agent of an insurer with respect to a claim shall constitute communication to or by the insurer.
627.70131(2) Such acknowledgment must be responsive to the communication. If the communication constitutes a notification of a claim, unless the acknowledgment reasonably advises the claimant that the claim appears not to be covered by the insurer, the acknowledgment must provide necessary claim forms, and instructions, including an appropriate telephone number.
627.70131(3)(a) 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.
627.70131(7)(a) Within 90 days after an insurer receives notice of an initial, reopened, or supplemental property insurance claim from a policyholder, the insurer shall pay or deny such claim or a portion of the claim unless the failure to pay is caused by factors beyond the control of the insurer which reasonably prevent such payment. The insurer shall provide a reasonable explanation in writing to the policyholder of the basis in the insurance policy, in relation to the facts or applicable law, for the payment, denial, or partial denial of a claim. If the insurer’s claim payment is less than specified in any insurer’s detailed estimate of the amount of the loss, the insurer must provide a reasonable explanation in writing of the difference to the policyholder. 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. Interest begins to accrue from the date the insurer receives notice of the claim. The provisions of this subsection may not be waived, voided, or nullified by the terms of the insurance policy. If there is a right to prejudgment interest, the insured must select whether to receive prejudgment interest or interest under this subsection. Interest is payable when the claim or portion of the claim is paid. Failure to comply with this subsection constitutes a violation of this code. However, failure to comply with this subsection does not form the sole basis for a private cause of action.
624.155(5) No punitive damages shall be awarded under this section unless the acts giving rise to the violation occur with such frequency as to indicate a general business practice and these acts are:
(a) Willful, wanton and malicious;
(b) In reckless disregard for the rights of any insured; or
(c) In reckless disregard for the rights of a beneficiary under a life insurance contract
FACTS AND CIRCUMSTANCES GIVING RISE TO THE VIOLATION
The property located at 3711 S. Atlantic Ave., Daytona Beach, Florida 32118 (the “Insured Property”) was damaged by Hurricane Ian on or about September 29, 2022. Prior to the loss, the Insured had obtained a commercial policy from Frontline Insurance Unlimited Company (“Frontline”). Frontline’s administrative and mailing address is 500 International Parkway, Lake Mary, Florida 32746 and its home address is 208 South LaSalle Street, Suite 814, Chicago, Illinois 60604.
The Insured promptly filed an insurance claim with Frontline for losses resulting from Hurricane Ian. The Insured hired a public adjusting firm, Insurance Recovery, Inc. (“IR”), to assist it with the presentation and adjustment of its insurance claim. IR sent Frontline its letter of representation and a copy of its contract with the Insured on or about October 10, 2022. Frontline assigned “Senior Commercial Claims Specialist” Lori Miland to the Insured’s claim.
On or about November 5, 2022, Frontline’s first field adjuster James Majors of Pilot Catastrophe Services Inc. inspected the Insured Property. Present during Mr. Majors’ inspection was David Beasley of IR. Mr. Majors confirmed to Mr. Beasley that the Insured Property had sustained significant damage and required a roof replacement. Mr. Majors told Mr. Beasley he would prepare a damage estimate and submit that to Frontline. Mr. Beasley reviewed the scope of the loss with Mr. Majors, and Mr. Beasley was led by Mr. Majors to believe they agreed on the scope as Mr. Majors did not voice any disagreement. However, the estimate which was later prepared by Mr. Majors and provided to Mr. Beasley and the Insured indicated a significant difference in the scope of the damage and was not what the two had discussed.
On or about November 19, 2022, Ms. Miland, on behalf of Frontline, wrote to the Insured confirming that Mr. Majors’ inspection revealed damage from Hurricane Ian, including damage that would “necessitate a full roof replacement.” In her letter Ms. Miland also advised that Mr. Majors’ estimate showed building losses in the amount of $134,594.35 and Special Class Item losses in the amount of $392.94. These amounts, and Mr. Majors estimate, did not accurately reflect the building damage and did not address the other losses to the business personal property (BPP) and lost business income (BI).
Frontline subsequently made a single payment to its Insured in the amount of $4,379.27 for building damage after it deducted recoverable depreciation, “non-recoverable” deprecation, and applied the hurricane deductible. No payment has ever been made for damaged BPP and lost BI, despite Frontline being aware of those claims, being provided with documentation, reports and the Insureds testimony (in the Insureds EUO’s) to substantiate those claims
In reviewing the estimate prepared by Mr. Majors for Frontline, it omits significant damage, and the scope and pricing is woefully insufficient to bring the Insured Property back into a pre-loss condition. The payment of only $4,379.27 is insultingly low and unrealistic. Both the estimate and the resulting payment that Mr. Majors and/or Ms. Miland were not qualified to adjust the loss and/or purposefully ignored or omitted damage to which the insured was entitled for Hurricane damage to the Building, Hurricane damage to the BPP and the lost BI sustained by the Insured.
In order to mitigate its damage and to save and protect the insured property, the Insured retained Servpro to inspect the Insured Property and to provide an estimate as to amounts required for drywall demolition and subsequent water mitigation and dry out. The Insured, through its public adjuster, provided Frontline with Servpro’s estimate totaling $572,014.59 for this work.
Ms. Miland objected to the ServePro estimate, and claimed it was priced too high for the work required to remove damaged drywall and for needed water remediation. Ms. Miland advised the Insured (through IR) that Frontline wished to use its preferred mitigation vendor, Ready 5, to handle dry out of the premises once the drywall had been removed. With her agreement, the insured agreed to hire a company to remove the dry wall and, once that work was complete, to provide that invoice for payment and to then allow Ready 5 to do needed water remediation and dry out.
As such, the Insured obtained a bid from a licensed general contractor, Steve W. Van Aernam, as to the cost for drywall demolition and for the full roof replacement Frontline had agreed was necessary. Based upon Mr. Van Aernam’s proposal, he would complete removal of the drywall for $94,161.60. Mr. Van Aernam also provided an estimate for the roof replacement fin the amount of $99,360.00. All of this information was sent to Ms. Miland by Mr. Beasley.
Ms. Miland responded to this bid and advised the Insured (through Mr. Beasley), that Frontline approved Mr. Van Aernam’s quoted figure for the drywall demolition and once completed, it would then send out its own vendor, Ready 5, to complete dry out and remediation work. Ms. Miland suggested the roof and the demolition work be completed at the same time and that water mitigation could follow. Mr. Beasley advised that the mitigation could not be completed until the demolition was completed and the roof had been replaced.
The insured had the demolition work completed by J&J Arevalo Remodeling. With regard to the roof replacement, the insured also had the roof replaced but by a different company, FRC. However, the insured decided not to install the same like kind and quality roof. Instead, the insured had FRC install a more expensive metal roof in place of the damaged shingle roof. The insured is not seeking payment for the difference in the cost for the new metal roof but is seeking payment based on the agreed cost of the like, kind and quality shingle roof damaged by the Hurricane.
Based on the known dispute over the prior payment and the damage to the building prepared by Mr. Majors, Frontline, though Lori Midland, requested a reinspection of the Insured Property on January 18, 2023. She and Mr. Beasley agreed that Frontline would have their new adjuster inspect and scope the damage with Mr. Beasley. The new adjuster would then write a new damage estimate for the building and a copy of it would be given to Mr. Beasley to verify that the scope was accurate and as agreed.
Thereafter, on January 26, 2023, Frontline’s sent a second field adjuster, “Ryan”, who met Mr. Beasley at the Insured Property and who conducted the requested second inspection for Frontline. Upon information and belief, “Ryan” was employed by Pilot Catastrophe Services, Inc. which company which company does significant work for Frontline and has a financial motive to keep estimates low. During the second inspection, “Ryan” and Mr. Beasley inspected and scoped the loss together, and Mr. Beasley again understood there was an agreement with the scope as “Ryan” indicated he agreed with Mr. Beasleys scope of the damage.
Despite the prior agreement by Ms. Miland to provide this second estimate for Mr. Beasleys review, a copy of the second estimate has never been provided. However, in calls with Ms. Miland following the second inspection by “Ryan”, Ms. Miland acknowledged to Mr. Beasley that the second estimate of the building damages “Ryan” had prepared exceeded $1,000,000.00 (the exact amount of the second estimate has never been revealed).
To the insured’s knowledge, no adjustment of the BPP claim or BI claim was done by “Ryan”, Ms. Miland and no estimate or payments for these claims has ever been made by Frontline.
Instead of issuing any further payment for the building damage based on its second estimate of damages (which Ms. Miland acknowledged exceeded $1,000,000.00), Frontline instead decided to find a way to deny, avoid payment or minimize payment for the loss. It hired defense counsel at Berk, Merchant and Sims, Melissa Sims, which then sent correspondence to the Insured demanding voluminous documents and seeking an Examination Under Oath (EUO) of the insured as part of its “investigation” if the loss.
In correspondence dated March 17, 2023, counsel for Frontline requested that the Insured submit a sworn statement in proof of loss (“SPOL”) to Frontline, as part of a laundry list of twenty-one (21) categories of documents and information to be produced. The Insured was also requested to produce a corporate representative for the first of several EUO’s. Frontline’s counsel claimed that Frontlines “investigation” was needed to determine whether any claimed damages were caused by a later storm (Tropical Storm Nicole). But as there was no evidence that Nicole caused any additional or new damage, this reason was a pretext to delaying and denying payments to the Insured. In fact, the “investigation” which followed had little or nothing to do with possible additional damage caused by Nicole.
Because Frontline refused to tender any additional payments to the insured, despite the fact it knew substantial monies were owed to the Insured under the building coverage (including the drywall removal and roof replacement Lori Miland had previously approved), because it had broken its agreement to pay for the drywall removal and send Ready 5 for dry out , because it had withheld its second estimate of damages prepared by “Ryan” despite its agreement to provide same, because it had not adjusted or paid any damages for damaged BPP and lost BI, and because it had retained counsel (who requested documents including a SPOL and an EUO, the Insured was forced to retain third-party general contracting firm, Mrozek Services Group (“Mrozek”), to conduct an independent inspection of the Insured Property and to prepare a comprehensive repair estimate of damages to the building from Hurricane Ian.
In its estimate dated May 15, 2023, Mrozek determined the full measure of losses inclusive of the costs for the like kind and quality Roof Replacement by FRC and the Drywall removal done by Mr. Van Aernam (both of which had been approved by Frontline through Lori Miland), totaled $1,418,171.28 (RCV).
On that same day, May 15, 2023, the Insured timely submitted the requested SPOL to Frontline claiming Building Damages in the amount of the Mrozek estimate (i.e., $1,418,171.28) before application of the deductible. The SPOL also included Mr. Beasleys anticipated, estimated Business Interruption losses in the amount of $1,200,000 (although limits are only $400,000, and that was the most Frontline could ever be required to pay under the Policy, the insured felt that the whole amount of this loss would far exceed policy limits given the continuing and further expected claim delay). Finally, the Insureds SPOL memorialized its claim for damaged BPP in the amount of $132,871.25, before application of the deductible.
Following submission of the Insureds timely SPOL, Frontline continued to fail and refuse to tender further payments to its Insured for the building damages (including the previous amounts it has already agreed to pay when Ms. Miland approved the roof, and the drywall demolition). Further, Frontline would not issue any payments for the lost BI and damaged BPP. This is evidence that the request for a SPOL was another pretext to further delay the claim and to require the Insured to do unnecessary busy work, to adjust the claim himself, and incur additional expenses, including the cost of retaining Mrozek.
Due to Frontline’s continuing demand for an EUO, its continuing wrongful conduct and improper claim delay, the insured then hired legal counsel. On June 2, 2023, the Insured, through counsel, filed its (original) Civil Remedy Notice of Insurer Violation (“CRN”) to try and recover the contract benefits owed in sixty (60) days. No payment of any type was made or tendered during this 60 day time period, or to date.
Following the filing of the CRN, the Insured submitted to two (2) EUOs of its designated corporate representative (Pinchas Mamane) on October 10, 2023, and again on January 11, 2024, and it produced the voluminous documentation requested by Frontline to the extent it exists.
Following the EUO on January 11, 2024, counsel for Frontline (Evelyn Merchant) suggested the parties participate in mediation as a possible pathway to resolution of the claim. However, the proposal to mediate was suddenly withdrawn soon after by Frontlines counsel.
Instead, in letters dated January 26, 2024, and January 29, 2024, Frontline (through its counsel) falsely claimed that “it has not received all information necessary to make a final determination for the Insured’s claim” and it issued additional requests for more EUO’s of the person(s) who had created six (6) documents previously produced to Frontline. In addition, Frontline also requested new documents/information which were to be produced in advance of the newly requested EUO’s.
On March 1, 2024, the Insured (through counsel) responded to the January 2024 letters from Frontlines counsel by designating its office manager, Irena Pazderilov and its Public Adjuster, David Beasley, as the corporate representatives who would testify for the Insured and answer questions about the six (6) documents previously produced to Frontline. The March 1, 2024, letter also addressed the 6 new categories of documents requested by Frontline and explained in detail why those documents had either already been produced or were not available.
The additional designated representatives for the insured, Ms. Pazderilov and Mr. Beasley, provided testimony at two (2) more EUOs on June 4, 2024, and June 12, 2024, respectively. Both witnesses answered all questions asked of them by Frontlines counsel.
These EUO’s caused additional delay.
Frontline then ordered all four (4) EUO transcripts, and Mr. Mamane, Ms. Pazderilov and Mr. Beasley signed and returned their EUO transcripts to Frontline as required by the Policy. This process of ordering the EUO’s and requiring the representatives sign them caused additional delay.
In a letter on September 5, 2024, almost two (2) years after the Hurricane had damaged the Insureds building and BPP, and had caused the BI loss (which was continuing) Frontline (though its counsel) requested still more information and documents from the Insured regarding financials and the repairs/ remodeling of the property from a prior water loss which was ongoing at the time of the Hurricane Ian loss. This information was part of the EUO’s of Mr. Mamane in October 2023 and January 2024. If this information was truly needed by Frontline it would have been requested long before this time.
In further compliance with the policy duties, the Insured again complied. It responded to this new request by letter dated September 27, 2024, and again provided all responsive documentation and information in its possession. At this point, two (2) years after Hurricane Ian, the claim “investigation” by Frontline was finally complete and no other information was requested by Frontline.
As the “investigation” was now complete, the Insured (through counsel) wrote to Frontlines counsel and requested undisputed payments and a coverage decision on the substantial additional building damage (which far exceeded the deductible and Frontlines small prior payment), the damage to the BPP which had never been paid, and the lost BI which had been incurred by the Insured but never paid.
Rather than comply with the Insureds request for payment and a coverage decision, on October 23, 2024, new counsel for Frontline, Hope Zelinger of Bressler Amery & Ross, wrote to the Insured (through its counsel). Ms. Zelinger did not provide the insured the requested coverage position or advise if further payments would be made. Instead, she requested the parties participate in mediation to try to resolve the claim.
On October 28th, the Insured (through counsel) responded to Ms. Zelinger and again requested Frontline provide its coverage position on the Insured’s claims and issue any undisputed payments before agreeing to participate in mediation. After all, the claim investigation was complete and there was no legitimate reason why a coverage decision and undisputed payments should not be issued to the Insured.
After receiving no response from Frontline or Ms. Zelinger, the Insured (through counsel) made subsequent requests that Frontline provide its coverage position and issue all undisputed payments on several additional occasions: November 5, 2024, November 12, 2024, November 19, 2024, November 20, 2024, and November 25, 2024.
When no coverage decision or undisputed payments were made for two months after the investigation was complete and the Insured (through counsel) made its original request, the Insured felt it had no choice but to participate in mediation and agreed to the same in order to get needed funds to repair its building and save its business. Thereafter the parties attended mediation on January 6, 2025, to try and resolve this claim (and a prior, unrelated claim). Mediation resulted in an impasse and further delay, to the detriment of the Insured and to the benefit of Frontline.
Following the impasse at mediation, Mrozek Services Group revised its estimate to reflect the repairs to the roof and for the drywall removal, and other partial repairs for Hurricane damage made by the Insured in the past 2 ½ years. The revised Mrozek estimate of building damages totals $1,418,171.28 and his been provided to Frontline with a Notice of Intent to Initiate Litigation. After application of the Policy deductible and small prior payment, the Insured’s outstanding Building damage which remains owed is total $1,308,792.01.
IN addition, nothing has been paid for damaged BPP previously claimed in the SPOL, which totals $128,671.25 after the application of the deductible. Further, the outstanding claim for Lost BI is $400,000 (policy limits) as the actual damages far exceed the policy limits for this coverage.
As of the filing of this CRN, Frontline has failed and/or refused to provide its coverage position on the remaining building damages, the BPP claim and the BI claim. It has failed and refused to make any further payments on the claim, including damages its adjuster agreed to pay for the roof and the drywall, or which its field adjuster “Ryan” identified in his estimate which Ms. Miland has admitted exceeds 1,000,000.00. Frontline has never made any payment other than its original payment of $4,379.27 made over 2 1/2 years ago.
In order to try and obtain the insurance benefits it desperately needs, and which have been wrongfully withheld for 2 1/2 years since the loss, the insured has fully complied with the policy, produced all available records and documents, provided a SPOL, sat for 4 EUO’s, and participated in voluntary mediation suggested by Frontline. However, Frontline has done nothing to resolve the known dispute.
The Insured has filed a Notice of Intent to Initiate Litigation (NOI) in this claim (as Frontline has also done in the unrelated claim for BI resulting from a prior water loss). As it did in response to the NOI for the unrelated claim, it is believed Frontline here will again demand yet another mediation in response to the insureds NOI, which will further delay of the claim.
The Insured Property was damaged by a covered loss. The Insured timely reported the damage to Frontline. Frontline conducted a deficient investigation and improperly underpaid, undervalued, and constructively denied all or part of the covered loss. The fact Frontline has delayed providing a coverage decision and additional building damage payments (or any decision or payments for damaged BPP and lost BI) for 2 ½ years, and is continuing to delay the claim and to deny benefits to the insured since its “investigation” was completed in September 2024, is evidence that its conduct has been and is wrongful. There is simply no explanation consistent with good faith conduct that can explain the wrongful conduct toward its insured.
Frontline delayed the claim through a pretextual investigation which lasted for over two (2) years, and which includes requests for voluminous documents and four (4) EUO’s of the insured. It now continues to delay the claim and refuses to issue undisputed payments to its insured or provide a coverage decision. This has been and is wrong.
Frontline has failed to create and implement adequate guidelines for proper claims investigation, claims evaluation, claims handling, and for training and supervision of employees and independent contractors’ handlings its claims resulting in statutory violations as set forth above. Frontline has failed and/or refused to thoroughly, accurately, and completely investigate and evaluate the Insured’s claim for damages.
The concept of insurance is that it is the insurer's granting of timely and prompt indemnity or security against a contingent loss. Fla. Stat. § 624.02 defines insurance as a contract whereby one undertakes to indemnify another or pay or allow specified amount or a determinable benefit upon determinable contingencies. Inherent is the fact that payment is made timely and promptly so that insureds may mitigate their damages and be put back into the position they were in prior to the loss as quickly as possible. Frontline has failed to comply with its duty to timely adjust and fully indemnify its Insured.
Frontline has refused and/or failed to pay the full insurance proceeds owed to the Insured for building damage caused by the Hurricane as required by the policy and law. And it has refused to provide a coverage decision or issue any payments for the damage to the insured BPP and lost BI. There is no explanation for this conduct, which has been and is wrong.
Refusal and/or failure to settle the Insured’s claim when under all the circumstances it could have and should have done so had it acted fairly and honestly towards the Insured. This wrongful conduct has been done without regard for its insured and the devastating impact on the insureds business, and shows Frontline continues to place its own interests over that of its insured, contrary to Florida law.
The actions taken by Frontline in the handling and adjustment of its Insured’s claim was and is willful, wanton, and in complete disregard for the rights of its Insured and occurs with such a frequency as to indicate a general business practice, and further, is in violation of Florida Statutes § 624.155 and § 626.9541.
Based on the foregoing actions and omissions, Frontline has engaged in wrongful conduct. That wrongful conduct includes, but is not limited to, the following:
1. Constructive denial of portions of the Insured’s claim for additional building damage, lost BI and damaged BPP.
2. Improper claim delay.
3. Improper claim denial.
4. Improperly undervaluing and underpaying the Insured’s claim.
5. Looking for ways to deny recovery to its Insured.
6. Looking for ways to delay recovery to its Insured.
7. Not adjusting the claim and not evaluating the loss properly, promptly, and fairly so as to provide full and prompt indemnity to its Insured.
8. Failing to implement proper standards for the adjustment and investigation of insurance claims.
9. Making misrepresentations to the Insured about coverage.
10. Making misrepresentations to the Insured about facts.
11. Making misrepresentations to the insured about the need for documents.
12. Making misrepresentations to the insured about the need for EUO testimony.
13. Making misrepresentations to the insured about the dry out and water remediation, including that it would send Ready 5 to the property once the demolition of the dry wall was complete.
14. Making misrepresentations that it would provide the insured with estimates.
15. Failing to share important information with its insured, including its estimates and coverage decisions on discrete issues including building damage, BPP and BI.
16. Not training, supervising, or managing adjusters and independent contractors properly so that prompt and full payments are made, but rather placing the company’s interests before the policyholders’ interests by attempting to deny or minimize payments owed.
17. Establishing severity control initiatives and otherwise establishing a culture of not fully and promptly paying claims following losses.
18. Ignoring submitted claim documentation and information from the Insured.
19. Not timely communicating with the Insured and its agents.
20. Withholding important claim information and documentation such as its prior estimate prepared by “Ryan”, which Frontline has admitted exceeds $1,000,000.
21. Having a general business practice of invoking appraisal to delay and to try to underpay claims, including not paying interest to its insureds on withheld benefits resolved through appraisal.
22. Using appraisal as a substitute for proper claim adjustment.
23. Breaking agreements with the insured related to the water remediation and the use of its vendor, Ready 5.
24. Breaking its agreement to provide Ryans estimate to the insured and its agents.
25. Failing to timely provide a certified copy of the policy to the insured and its agents.
26. Failing to provide a coverage position on the discreet coverage issues in the building damage claim for over 2 1/2years.
27. Failing to pay interest on withheld policy benefits owed to the insured.
28. Damaging the insureds business by refusing to timely and fully indemnify the insured for its Hurricane losses.
29. Causing the insured to incur business interruption/ loss business income losses through its claims delay, failure to timely adjust and issue payments and other wrongful conduct.
30. Failing to issue a coverage decision or payment on the BI claim.
31. Failing to issue a coverage decision of payment on the BPP claim.
32. Using mediation to delay the insureds claim.
33. Putting its interests above those of its insured.
34. Failing to give the insured the benefit of the doubt on disputed issues.
Therefore, to cure the defects outlined in this Civil Remedy Notice, Frontline must:
Tender all insurance monies owed to the Insured for the Hurricane Ian loss to the Insured Building, the damaged BPP and the lost BI.
A copy of this form has been submitted to the FDFS and has been printed out and mailed to the following parties providing them notice of the filing of the Civil Remedy Notice:
Frontline Insurance Unlimited Company, via Certified Mail R.R.R.
Ms. Lori Miland, Frontline Insurance Unlimited Company, via Certified Mail, R.R.R.
Claims Department, Frontline Insurance Unlimited Company, via U.S. Mail.
James Majors c/o Pilot Catastrophe Services Inc, via US Mail
“Ryan” c/o Pilot Catastrophe Services Inc, via US Mail
David Beasley, Insurance Recovery, Inc., via email.
OC 3711 LLC d/b/a Beach Quarters Resort, via email.
Melissa Sims, Berk Merchant and Sims, via US mail.
Evelyn Merchant, Berk Merchant and Sims, via US mail.
Christopher Tracey, Berk Merchant and Sims, via US mail.
Hope Zelinger, Esq., Bressler Amery Ross, via U.S Mail.
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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.
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DFS-10-363
Rev. 10/14/2008
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