Filing Number: 813674
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| Filing Accepted: 3/28/2025 |
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VILLA REANNA, INC.
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First Name |
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1924 W. PENSACOLA STREET |
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TALLAHASSEE,
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32304
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SLEONI@STEVENLEONI.COM |
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Insured |
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VILLA REANNA, INC. |
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First Name |
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10102762 – 1 |
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Claim #* |
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17-2940004 |
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Attorney is Applicable
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| Last Name* |
SMITH
First Name *
SHANE
Initial
S.
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777 S. HARBOUR ISLAND BLVD., STE. 950 |
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TAMPA
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FL
33602
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SSMITH@MERLINLAWGROUP.COM |
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| Insurer Type
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 Authorized Insurer
 Unauthorized Insurer
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| Insurer Name |
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| Insurer Name* |
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CONDO OWNERS RECIPROCAL EXCHANGE
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NAIC Company Code 17547 |
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| Name of individual responsible for violation (if any):*
CONDO OWNERS RECIPROCAL EXCHANGE (“INSURER”), GRISTON CLAIM MANAGEMENT (THIRD-PARTY CLAIMS ADMINISTRATOR), THOMAS MCLAUGHLIN (CLAIMS EXAMINER, GRISTON CLAIM MANAGEMENT); ROBBIE E. ROBINSON (INDEPENDENT ADJUSTER/ FIELD ADJUSTER, EDWARD ELITE LLC); WIL
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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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Unreasonable Claim Investigation
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Other
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Failure to Conduct Reasonable Investigation Based on Available Information
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Other
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Failure to Acknowledge and Act Promptly to Communications Regarding Claim
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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)(2) |
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Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made.
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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)(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)(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)(g) |
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Failing to promptly notify the insured of any additional information necessary for the processing of a claim.
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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.
The violations asserted herein regarding CONDO OWNERS RECIPROCAL EXCHANGE (hereinafter “INSURER”) bad faith actions are based on the facts and circumstances asserted in the below section, as well as violations of the portions of Florida Insurance Code and Florida Administrative Code upon which the bad faith statutes contained within Sections 624.155 & 626.9541, Florida Statutes, are based.
Specific policy language that is believed to be relevant to the violations includes but is not limited to the following:
BUILDING AND PERSONAL PROPERTY COVERAGE FORM
CP 00 10 06 07
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;
(5) If not covered by other insurance:
(a) Additions under construction, alterations
and repairs to the building or
structure;
(b) Materials, equipment, supplies and
temporary structures, on or within
100 feet of the described premises,
used for making additions, alterations
or repairs to the building or
structure.
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 do not own; and
(b) You acquired or made at your expense
but cannot legally remove;
(7) Leased personal property for which you
have a contractual responsibility to insure,
unless otherwise provided for under
Personal Property Of Others.
c. Personal Property Of Others that is:
(1) In your care, custody or control; and
(2) 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.
However, our payment for loss of or damage
to personal property of others will only
be for the account of the owner of the property.
***
3. Covered Causes Of Loss
See applicable Causes Of Loss Form as
shown in the Declarations.
. . .
E. Loss Conditions
The following conditions apply in addition to the
Common Policy Conditions and the Commercial
Property Conditions.
***
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.
***
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.
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.
***
CAUSES OF LOSS- BASIC FORM
CP 10 10 06 07
A. Covered Causes Of Loss
When Basic is shown in the Declarations, Covered
Causes of Loss means the following:
***
4. Windstorm or Hail, but not including:
a. Frost or cold weather;
b. Ice (other than hail), snow or sleet, whether
driven by wind or not; or
c. Loss or damage to the interior of any building
or structure, or the property inside the
building or structure, caused by rain, snow,
sand or dust, whether driven by wind or not,
unless the building or structure first sustains
wind or hail damage to its roof or walls
through which the rain, snow, sand or dust
enters.
FLORIDA CHANGES ENDORSEMENT
CIT CR 01 25 07 23
This endorsement modifies insurance provided under the following:
COMMERCIAL PROPERTY COVERAGE
COMMERCIAL PROPERTY CONDITIONS
COMMON POLICY CONDITIONS
***
G. 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 60 days of receiving notice of an
initial, reopened, or supplemental
property insurance claim, unless we deny
the claim during that time or factors
beyond our control.
If a portion of the claim is denied, then the
60-day time period for payment of claim
relates to the portion of the claim that is
not denied.
Paragraph (3) above does not form the
sole basis for a private cause of action
against us.
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.
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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.
FLORIDA STATUTES VIOLATED (continued)
627.70131(2)- Such acknowledgment shall 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 shall provide necessary claim forms, and instructions, including an appropriate telephone number
627.70131(3)- Unless otherwise provided by the policy of insurance or by law, within 10 working 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.
FLORIDA ADMINISTRATIVE CODE SECTIONS VIOLATED
69B-220.201(3) – Code of Ethics. The work of adjusting insurance claims engages the public trust. An adjuster shall put the duty for fair and honest treatment of the claimant above the adjuster’s own interests in every instance. The following are standards of conduct that define ethical behavior, and shall constitute a code of ethics that shall be binding on all adjusters:
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)(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.
69B-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.
FACTS AND CIRCUMSTANCES GIVING RISE TO THE VIOLATION
1) Failure to pay claim in full;
2) Failure to promptly investigate claim;
3) Failure to properly investigate claim;
4) Failure to adjust loss;
5) Failure to act in due diligence and good faith to resolve claim;
7) Failure to properly train, evaluate and manage adjusters;
8) Looking for ways to deny coverage, pay less, delay payment and otherwise “low ball” or “stone wall” claim;
9) The reasons for this may be attributed to improper training, supervision, and/or motivation of adjusters and claims supervisors to promptly and fairly investigate, adjust and pay full benefits available to all beneficiaries. The insurer may have failed to adopt proper standards of investigation and adjustment of losses or is otherwise not implementing those standards because full payment and prompt payment for the loss is not occurring.
This complaint is made on behalf of VILLA REANNA, INC. (the “INSURED”). The INSURED purchased a commercial property insurance policy issued by Citizens Property Insurance Corporation (“Citizens”), POLICY NO. 10102762-1, effective July 29, 2023, through July 29, 2024 (“the Policy”) which insured the property located at 1924 W. Pensacola St., Tallahassee, FL 32304 (the “Property”), known as the Villa Reanna Apartments, a student housing community. The INSURED paid all premiums on said Policy, and the Policy was in full force and effect at all relevant times herein.
In consideration of the payment of premium(s), the Policy provides coverage for direct physical loss of or damage to covered property, as a result of windstorm, occurring during the term of the Policy caused by or resulting from any covered cause of loss and ensuing peril, unless specifically excluded in the Policy, with a Building Limit of Insurance as follows: Building 1: $2,090,000.00; Building 2: $1,659,500.00; Building 3: $1,659.500.00; Building 4: $702,700.00; Building 5: $702,700.00; Clubhouse/Leasing Office: $80,900.00; Pool House and Equipment: $65,600.00; Fitness Center Building: $65,800.00; and Pool and Deck: $71.400.00. The Policy has an “All Other Perils Deductible” in the amount of $2,500.00 per building. The Policy provides a Business Personal Property (BPP) Limit of Insurance for Building 2 in the amount of $16,000.00.
On February 27, 2024, the Policy was assumed by Condo Owners Reciprocal Exchange (the “INSURER”).
On May 10, 2024, while the Policy was in full force and effect, tornados converged over Tallahassee, FL, causing widespread damage to various properties. The INSURED’s Property sustained damages to the exteriors of five (5) buildings, Clubhouse/Leasing Office, Pool House and Equipment, Fitness Center, and Pool and Deck, caused by windstorm, with resulting interior damages to the buildings. The INSURED promptly reported the claim to Citizens.
The INSURED mitigated its damages to the best of its ability. On May 16, 2024, Miller’s Tree Service moved a large pine and large limb on Building 105. The INSURED incurred $2,600.00 for this work.
On May 20, 2024, the INSURED retained the services of a public insurance adjuster, Paul Ferraro, Executive General Adjuster of Goodman-Gable-Gould/Adjusters International (“GGG”) to adjust the claim and estimate the damages to the Property.
On May 23, 2024, Citizens advised the INSURED that the policy had been assumed by INSURER, Condo Owners Reciprocal Exchange on February 27, 2024, and the INSURED needed to contact Condo Owners Reciprocal Exchange to report the loss. Mr. Ferraro submitted a Letter of Representation to INSURER on or around May 24, 2024, and requested a copy of the insurance policy.
On behalf of INSURER, on June 7, 2024, independent adjuster/ field adjuster Robbie Robinson inspected the Property to determine the extent of damages caused by wind. A representative from GGG was also present.
On June 13, 2024, Mr. Ferraro on behalf of INSURED, sent correspondence to INSURER, through its third-party administrator, Griston Claims Management (“Griston”), requesting a partial payment in the amount of $100,000.00 to assist the INSURED with the mitigation of its loss. In response, Mr. McLaughlin of Griston issued a letter dated June 14, 2024, advising the INSURED that the claim was still under investigation and an update would be provided once complete.
On June 20, 2024, Robbie Robinson sent an email to Daniel Van Hulst and Paul Ferraro asking for roof and wall measurements.
Eleven days after the June 13, 2024 letter, on June 24, 2024, Mr. McLaughlin issued a letter to the INSURED’s public adjuster again advising the INSURED that the claim was still under investigation and an update would be provided once complete. Mr. McLaughlin further stated: “As part of our investigation, we will be having our own engineering company inspect the property. The name of the company is Grindley Williams Engineering and they will be reaching out to you to schedule an appointment.”
On July 2, 2024, the INSURER sent correspondence for Building 1, stating that it completed its inspection and evaluation of Building 1 and based on the extent of the damage, INSURER has determined the building is a calculated total loss. INSURER further stated it was issuing payment in the amount of $7,459.25 for Building 1.
On July 2, 2024, the INSURER sent correspondence to the INSURED as to Building 1, stating that it completed its inspection and evaluation of Building 1 and based on the extent of the damage, INSURER has determined the building is a calculated total loss. The INSURER provided an estimate of damage dated June 27, 2024, in the amount of $9,959.25 replacement cost value and $8,988.89 actual cash value. INSURER further stated it was issuing payment in the amount of $7,459.25 for Building 1.
On July 2, 2024, the INSURER sent correspondence to the INSURED as to Building 3, stating that it completed its inspection and evaluation of Building 3 and based on the extent of the damage, INSURER has determined the building is a calculated total loss. The INSURER provided an estimate of damage dated June 27, 2024, in the amount of $9,088.01 replacement cost value and $8,221.35 actual cash value. INSURER further stated it was issuing payment in the amount of $6,588.01 for Building 3.
On July 2, 2024, the INSURER sent correspondence to the INSURED as to Building 4, stating that it completed its inspection and evaluation of Building 4 and based on the extent of the damage, INSURER has determined the building is a calculated total loss. The INSURER provided an estimate of damage dated June 27, 2024, in the amount of $3,282.44 replacement cost value and $2,836.93 actual cash value. INSURER further stated it was issuing payment in the amount of $782.44 for Building 4.
On July 2, 2024, the INSURER sent correspondence to the INSURED as to Building 5, stating that based on its assessment, INSURER completed an estimate to reflect the covered damages, less the applicable deductible, as a result of the reported loss. INSURER advised that the cost for the damage totals $931.29 per its field adjuster’s scope of repairs, and that the loss falls below the deductible and INSURER was closing its file. The INSURER provided an estimate of damage dated June 27, 2024, in the amount of $931.29 replacement cost value and $870.41 actual cash value.
On July 2, 2024, the INSURER sent correspondence to the INSURED as to Building 6, stating that based on its assessment, INSURER completed an estimate to reflect the covered damages, less the applicable deductible, as a result of the reported loss. INSURER advised that the cost for the damage totals $408.85 per its field adjuster’s scope of repairs, and that the loss falls below the deductible and INSURER was closing its file. The INSURER provided an estimate of damage dated June 27, 2024, in the amount of $408.85 replacement cost value and $366.01 actual cash value.
On July 2, 2024, the INSURER sent correspondence to the INSURED as to Building 7, stating that based on its assessment, INSURER completed an estimate to reflect the covered damages, less the applicable deductible, as a result of the reported loss. INSURER advised that the cost for the damage totals $993.22 per its field adjuster’s scope of repairs, and that the loss falls below the deductible and INSURER was closing its file. The INSURER provided an estimate of damage dated June 27, 2024, in the amount of $993.22 replacement cost value and $876.10 actual cash value.
On July 2, 2024, the INSURER sent correspondence to the INSURED as to Building 8 (Fitness Center), stating that it completed its inspection and evaluation of Building 8 and based on the extent of the damage, INSURER has determined the building is a calculated total loss. The INSURER provided an estimate of damage dated June 27, 2024, in the amount of $3,025.87 replacement cost value and $2,923.34 actual cash value. INSURER further stated it was issuing payment in the amount of $525.87 for Building 8 (Fitness Center.)
On July 9, 2024, the INSURER sent separate correspondence to the INSURED as to Building 1, Building 2, Building 3, Building 4, Building 5, Building 6, Building 7, and Building 8, formally requesting that the INSURED submit a signed, sworn Statement in Proof of Loss within 60 days.
On July 11, 2024, representatives from Grindley Williams Engineering conducted a site inspection at the Property. A representative from GGG was also present.
Seven days after the inspection by the INSURER’s engineer, the INSURER sent correspondence to the INSURED as to Building 2, pursuant to Florida Statutes, Section 617.70131, advising that INSURER was unable to pay or deny the INSURED’s claim as “we are still pending our engineer report from the inspection performed on 7/11/2024.”
On September 6, 2024, the INSURER confirmed that it was agreeable to a seven (7) day extension of time for the INSURED to submit its signed, sworn Statement in Proof of Loss, making the deadline September 15, 2024.
On September 13, 2024, Paul Ferraro of GGG, on behalf of the INSURED, sent correspondence to the INSURER in response to the July 10, 2024, correspondence requesting a Sworn Statement in Proof of Loss. The INSURED enclosed the following: (1) Executive Claim Summary in the amount of $1,755,402.82 at Actual Cash Value; (2) Measurement of damages to the buildings in the amount of $1,856,950.46 at Replacement Cost and $1,772,020.55 at Actual Cash Value; and (3) Duly executed Sworn Statement in Proof of Loss in the amount of $1,755,402.82 representing the Actual Cash Value of the building damages.
On September 16, 2024, Mr. McLaughlin acknowledged receipt of the September 13, 2024, correspondence and enclosures.
On October 15, 2024, Mr. Robinson sent an email to Mr. Ferraro, requesting a re-inspection, specifically the pool and decking and asked regarding availability on November 13, 14 or 15, 2024. On October 22, 2024, M. Ferraro responded that he was available on November 13, 2024, but inquired if he had any earlier availability. Mr. Ferraro further stated, “Also, we haven’t received any measure of damage for the main building damaged from the carrier, so if this is available please forward to me for review. I will reach out to the desk adjuster on this as well.”
Mr. Robinson responded on October 23, 2024 that he was available on November 6, 2024 and the inspection was confirmed.
On November 4, 2024, Mr. Ferraro sent an email to Mr. Robinson to inquire whether he had received the engineer’ report and whether he was authorized to provide a copy of the report. Mr. Ferraro also sent an email on this same date to Mr. McLaughlin, writing, in part:
“I have a meeting set up with the field adjuster (Robbie Robinson) for this week on Wednesday. To date we have not received a measurement of damages for the Building 2 or a report from the engineer following our inspection onsite. Please provide a copy of the current measurement of damages for Building 2 as well as a copy of the engineer’s report so that we can review the same as soon as possible and in preparation of the meeting onsite.”
On November 6, 2024, Mr. Robinson conducted a site inspection at the Property. Mr. Ferraro of GGG was also present. During the inspection, Mr. Ferraro sent an email to Mr. McLaughlin, stating:
“I did not hear back from you on this. I am onsite with Robbie Robinson now and I am being advised that he has not been authorized to address and/or provide an estimate for building 2. We need to advance this claim asap. It has been 6 months since the loss occurred and 2 months since the insureds claim was submitted and we have yet to receive any funding towards the insureds claim for damages for building 2 which totaled $1,233,535.
Please advise when we can expect to receive the carriers measurement of damages for building 2 and/or reports in support of the same and in the meantime, I am requesting the carrier issue a partial payment in the amount of $250,000.”
The next day, on November 7, 2024, Mr. McLauglin replied to Mr. Ferraro’s email advising that he was “waiting management approval to release the engineer report. . .” He also stated that the INSURER made a payment in the amount of $174,768.80 on September 19, 2024, and the check was sent to Mr. Ferraro’s office. Mr. McLaughlin also provided an estimate of damages dated September 9, 2024, prepared by Charles English of Grindley Williams Engineering, in the amount of $177,268.70 replacement cost value. Finally, Mr. McLaughlin stated that he received all the reinspection reports for both claims and will have them all reviewed in the next week.
On December 4, 2024, Mr. Ferraro sent correspondence to Mr. McLaughlin. In regard to the onsite meeting with Mr. Robinson on November 6, 2024, Mr. Ferraro explained: “I was of the understanding that the meeting was to address the differences between the respective estimates and address the repairs to Building 1/A, but we were advised that he was not there to address Building 1 or the differences between the respective estimates for the other buildings and the meeting was unproductive.”
Mr. Ferraro also acknowledged that the INSURED was in receipt of the September 9, 2024, estimate from Grindley Williams Engineering totaling $177,268.70 as well as the corresponding payment. Mr. Ferraro raised the following concerns regarding the estimate: “In review of the estimate prepared for Building 1, it is clear that the estimate is incomplete as it does not include any of the necessary interior repairs nor does it address an appropriate scope for the exterior/roof. I have enclosed a list of the differences between the respective estimates in support and for review (there are several tabs to the spreadsheet).”
Mr. Ferraro again requested that the INSURER provide a copy of the engineer’s report in support of the estimate.
Finally, Mr. Ferraro explained:
“It has been nearly six (6) months since the loss occurred and more that 2 months since the insured’s claim was submitted. We have conducted three (3) inspections of the property with the carrier’s representatives, and we still have not received a completed loss measurement from the carrier nor has there been any attempt to adjust the loss, which is unacceptable. The property is in disrepair due to the delays in receiving an adequate estimate and subsequent payment from the carrier and we need advance this claim.
Please advise when we can expect a completed loss measurement with supporting documentation and subsequent payment without further delay.
I am requesting your prompt attention to this matter as we need to understand the carriers position as soon as possible so that the insured can plan/proceed accordingly.”
Two days later, on December 6, 2024, Mr. McLaughlin responded that he was “pending the [field adjuster] reports” and that the “our [field adjusters] have been backed up.”
Approximately 1 month later, on January 2, 2025, as he had not received any further information from Mr. McLaughlin, Mr. Ferraro sent an email to Mr. McLaughlin asking for an updated on the status of the updated reports/estimates, and stated “We need to understand the carriers position asap so we can advance this claim.”
On January 15, 2025, Mr. McLaughlin responded, in part: “We are still actively reviewing your estimates. I think there is still some confusion regarding how you labeled the buildings on your spreadsheet and how we have the claims labeled in our system.” Mr. McLauglin requested a call with Mr. Ferraro. On January 21, 2025, Mr. Ferraro responded and stated that he tried to call Mr. McLauglin yesterday and requested a call either that afternoon or the next day.
On February 4, 2025, Mr. Ferraro sent correspondence to Mr. McLaughlin advising that after the date of loss the INSURED was informed that the Citizens policy had been assumed by Condominium Owners Reciprocal Exchange and requested a copy of the certified policy.
Mr. McLauglin responded the same day and provided a copy of the Citizens policy, and further advised: “Additionally, the review of your documents will be done this week, and I have requested revisions from our revisions departments. As soon as they are completed, I will send my reviews to you should be by the end of the week.”
On February 17, 2025, Mr. McLaughlin, on behalf of the INSURER, sent an email attaching correspondence to the INSURED as to Building 1, stating that it completed its inspection and evaluation of Building 1 and that it has issued payment for Building damage in the amount of $6,997.19. The INSURER provided an estimate of damage dated February 6, 2025, prepared by Wilbert “Wil” Turner, in the amount of $16,956.44 replacement cost value and $16,179.51 actual cash value. Mr. McLaughlin’s email transmittal also advised: “Additionally, in an effort to settle this claim I am offering a full and final settlement release to you in the amount of $10,000 New Money to finalize this claim.”
On February 17, 2025, Mr. McLaughlin, on behalf of the INSURER, sent an email attaching correspondence to the INSURED as to Building 3, stating that it completed its inspection and evaluation of Building 1 and that it has issued payment for Building damage in the amount of $6,290.37. The INSURER provided an estimate of damage dated February 6, 2025, prepared by Wilbert “Wil” Turner, in the amount of $15,378.38 replacement cost value and $14,854.63 actual cash value. Mr. McLaughlin’s email transmittal also advised: “Additionally, in an effort to settle this claim I am offering a full and final settlement release to you in the amount of $10,000 New Money to finalize this claim.”
On February 17, 2025, Mr. McLaughlin, on behalf of the INSURER, sent an email to Mr. Ferraro as to Building 6, stating, “We have reviewed your estimate for the damages for the Pool House and Equipment. The damages being claimed are less than the deductible. Therefore, no additional supplements can be issued at this time.”
On February 17, 2025, Mr. McLaughlin, on behalf of the INSURER, sent an email to Mr. Ferraro as to Building 7, stating, “We have reviewed your estimate for the damages for the Clubhouse/Leasing office. The damages being claimed are less than the deductible. Therefore, no additional supplements can be issued at this time.”
On March 27, 2025, the INSURED sent correspondence to Mr. McLaughlin, on behalf of the INSURER, providing (1) Measurement of damages to the Business Personal Property for Building 2 in the amount of $11,144.00; and (2) Updated Executive Claim Summary in the amount of $1,765,429.42 at Actual Cash Value.
To date, the outstanding amounts owed to the INSURED under the Policy, after application of the deductible and INSURER’s prior payments, are as follows:
Building
Building 1 $59,009.27
Building 2 $1,058,765.75
Building 3 $60,587.36
Building 4 $176,372.47
Building 5 $192,889.24
Fitness Center $4,363.93
Subtotal $1,551,988.02
Business Personal Property
Building 2 $10,029.62
TOTAL: $1,562.017.62
The INSURER has refused and/or failed to fully investigate the loss and tender all insurance proceeds to the INSURED upon demand. INSURER’S refusal and/or failure to settle the insurance claim when under all circumstances it could have and should have done so had it acted fairly and honestly towards the INSURED is wrongful conduct. INSURER’s adjusters and/or representatives have financially benefitted from such wrongful conduct. To date, the INSURED has not received a complete measurement of all damages from the INSURER. The INSURER has failed to prepare an estimate of damages for interior damage and failed to issue payment for an interior damages as a result of the loss, even though the INSURED has attended multiple inspections with the INSURER’s adjuster and the INSURERS’ engineer. The INSURER failed to provide specific direction to the field adjuster to address and/or account for interior damages in the estimate. This failure is a violation of Section 624.155(1)(b)(1), Florida Statutes.
The INSURER made claim payments to its INSURED without providing a statement setting forth the coverage under which the payment was being made. The INSURER’s payment in the amount of $174,768.80 was sent directly to the INSURED without any copies of an estimate and/or engineering report in support of the payment. Ultimately, this information was received, but not until well after the payment was received and the confirmation of this payment was not sent to the INSURED’s public insurance adjuster. The INSURER only sent the payment by mail to the INSURED. This failure is a violation of Section 624.155(1)(b)(2) and 626.9541(1)(i)(3)(f), Florida Statutes.
The INSURER has failed 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. The loss occurred on May 10, 2024, over ten (10) months ago and there have been multiple inspections with the INSURER’s adjuster and engineer. The INSURED still have not received a complete loss measurement from the INSURER. The re-inspection on November 6, 2024, with the INSURER’s field adjuster was presumably to address the differences between the respective estimates, yet the INSURER’s field adjuster told the INSURED’s public insurance adjuster that he was not authorized to address the damages to the Building 2, the main building that was damaged as a result of the storm. As of that point in time it had been 6 months since the loss occurred and 2 months since the INSURED’s claim was submitted and the INSURED had yet to receive any funding towards the claim for damages for Building 2 which totaled $1,233,535.00. This failure is a violation of Section 624.155(1)(b)(3), Florida Statutes.
In Florida, the work of adjusting insurance claims engages the public trust. INSURER has breached this duty by its failure to adequately adjust the INSURED’s claim of loss. INSURER’s handling of the INSURED’s claim and the conduct of its adjusters, supervisors, management and individuals associated with or retained by INSURER in this claim, to date, evidence that INSURER has failed to create and implement adequate guidelines for proper investigation to timely evaluate claims with due diligence and for the training and supervision of employees resulting in statutory violations set forth above. INSURER has failed to adopt proper standards of investigation and adjustment of losses or is otherwise not implementing those standards because full payment and prompt payment for the loss is not occurring. The INSURER failed to properly provide any direction to their adjuster and engineer, resulting in neither party addressing damages to the interiors which is a large component of the claim/damages. Furthermore, there has been limited/no progress towards advancing the claim and addressing the differences between the respective estimates despite the multiple attempts by the INSURED’s public insurance adjuster to do so. This failure is a violation of Section 626.9541(1)(i)(3)(a), Florida Statutes.
INSURER violated Section 626.9541(1)(i)(3)(d), Florida Statutes, through Grindley Williams Engineering’s failure to conduct a full investigation of the damages to the PROPERTY and the INSURER’s delay in retaining an expert engineer to inspect the interior of the building structures within close proximity to the date of loss.
INSURER violated Section 626.9531(1)(i)(3)(e), Florida Statutes, by failing to affirm or deny full or partial coverage of the claim, 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. The INSURED submitted a Sworn Statement in Proof of Loss on September 13, 2024. It has now been ten (10) months since the dates of loss and the INSURER has still not provided a completed loss measurement.
INSURER failed 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. The INSURED has provided written correspondence to the INSURER regarding the items omitted from the INSURER’s loss measurements including detailing differences and have largely not received specific responses addressing the items in question. This is a violation of Section 626.9531(1)(i)(3)(f), Florida Statutes.
INSURER failed to promptly notify the insured of any additional information necessary for the processing of a claim. The INSURED has provided written correspondence to the INSURER regarding the items omitted from the INSURER’s loss measurements including detailing differences and have largely not received specific responses addressing the items in question. This is a violation of Section 626.9541(1)(i)3(g), Florida Statutes.
As a direct result of INSURER’S actions, the INSURED has sustained irreparable harm. Upon information and belief, such actions complained of herein, among others, are effectuated by INSURER so often as to constitute a general business practice evidencing a motive to enhance INSURER’S profits and cause a detrimental effect to its policyholders. INSURER clearly failed to adopt and implement standards for the proper investigations of claims, most notably in its failure to capture the full value of the loss and efforts to avoid coverage and liability for the damages without merit. As a direct and proximate result of INSURER’S handling of the claim, the insured sustained extra-contractual damages, including, but not limited to, attorneys’ fees and costs.
INSURER’S delay in this matter is against the INSURED’S interests, and only exacerbates the harm and hardship sustained by the INSURED in connection with this loss. This is a violation of the Policy and Florida law, and if INSURER handles all of its claims in accordance with the way it handled the INSURED’S claim, then this evidences a systematic practice of adjusting claims without due regard for the objective best interest of its insureds.
As evidenced by the significant delta in the estimates prepared on behalf of the INSURED and the INSURER, INSURER has drastically undervalued the damages, has underpaid the INSURED for the covered damages to the Property, and has further failed to explain how it arrived at its conclusions, thereby attempting to confuse the INSURED and prevent the INSURED from evaluating the significant inadequacies of the INSURER’S damage estimates. This is further evidence that INSURER intentionally and deliberately sought to avoid providing the INSURED due and owing benefits under its Policy, even though it reasonably knew or should have known that insurance proceeds were due and owing to its INSURED. Further, it evidences that INSURER failed in exercising its duty of good faith and fair dealing to the INSURED. The INSURED has complied with all requests made by INSURER and provided all the information available to the INSURED with respect to the loss, including allowing access to the Property on multiple dates.
The concept of insurance is that insurance is the insurer’s granting of timely and prompt indemnity or security against a contingent loss. Florida Statute §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 must be made timely and promptly so that the INSURED may mitigate the damages, payment must also be sufficient to indemnify the INSURED for the actual covered damages sustained to allow the insured Property to be restored and the INSURED to be put back into the position the INSURED was in prior to the loss without unnecessary delay. The INSURER has breached this duty.
The INSURER has refused and/or failed to comply with the Policy’s Loss Payment provision. Under the Policy, INSURER was to pay the value of lost or damaged property or pay the cost of repairing or replacing the lost or damaged property to INSURED. INSURER has failed and/or refused to pay the full amount of the value of the damaged property or the cost of repairing/replacing the damaged property. This is a breach of the Policy.
As INSURER must admit, implied within every insurance policy is a duty of good faith and fair dealing. This duty of good faith obligates the insurer to handle its insured’s claims with “the same degree of care and diligence as a person of ordinary care and prudence should exercise in the management of his own business.” Boston Old Colony Ins. Co. v. Gutierrez, 386 So.2d 783 (Fla. 1980). In an insurance contract, each party is prevented from interfering with the other’s right to benefit from the contract. The obligations of good faith and fair dealing encompass qualities of decency and humanity inherent in its responsibilities as a fiduciary. INSURER is bound to conduct itself with the utmost good faith for the benefit of the INSURED. However, INSURER has failed to properly comply with the obligations in connection with this claim. Instead, INSURER has looked for ways to deny coverage thereby delaying indemnification owed under the insurance policy. These actions have been to the detriment of the INSURED.
An adjuster shall adjust all claims strictly in accordance with the insurance contract. As of this date, the known damages to the interiors of the buildings have not been addressed by INSURER. Thus, INSURER violated Florida Administrative Code, Chapter 69B-220.201(3)(b)(2).
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. As of this date, the known damages to the interiors of the buildings have not been addressed by INSURER. Thus, INSURER violated Section 626.877, Florida Statutes.
The INSURER’s adjusters upon undertaking the handling of the INSURED’s claim failed to act with dispatch and due diligence in achieving a proper disposition of its claim. The payments issued by INSURED have been woefully inadequate to restore the Property to its pre-loss condition, evidencing the lack of due diligence taken in adjusting the claim. The INSURER’s adjusters made a mistake in not addressing damage to the interior and it was evident that neither the field adjuster or the engineer thought it was their responsibility. These clear miscommunications between the parties resulted in significant delays to the claim adjustment. Thus, the INSURER violated Florida Administrative Code, Chapter 69B-220.201(3)(f).
INSURER violated Section 627.70131(2), Florida Statutes by failing to provide acknowledgments responsive to communications and INSURER failed to provide necessary claim forms, and instructions. The INSURER’s adjuster told the INSURED’s public insurance adjuster for over two months that he was pending field adjuster reports, resulting in the claim being at a standstill.
INSURER violated Section 627.70131(3), Florida Statutes by failing, within 10 working days after receipt of the INSURED’s proof of loss, to begin its investigation and the failure was not caused by factors beyond the control of the INSURER which reasonably prevent the commencement of such investigation. Although the INSURER acknowledged receipt of the proof of loss several days after the submittal the INSURER was not effective in advancing the investigation or adjustment of the claim, despite the INSURED’s efforts.
Due to INSURER’S failure to properly adjust the claim, the INSURED was forced to retain the professional services of the undersigned attorneys to aid the INSURED in obtaining contractual benefits due and owing under the Policy and to further protect the rights of the INSURED.
The INSURED has provided INSURER with all necessary documentation in support of its claim. While no specific “cure amount” is required for this Civil Remedy Notice to be valid, the INSURED will consider the allegations contained herein “cured” if INSURER without any requirement for a release, immediately completes the following in full: (1) tenders all indemnity benefits due and owing on this claim in the amount of $1,562.017.62 and (2) tender payment to the INSURED for the reasonable attorneys’ fees and costs incurred as a result of the actions/inactions perpetrated by INSURER.
If INSURER disagrees with the extent of the cure requested or asserts that the payment of any of the above cure categories may not be required, INSURER should cure to the extent it believes it must under the Policy and governing laws to correct the allegations of bad faith contained herein.
This notice is given in order to perfect the right to pursue the civil remedy authorized by Florida Statute, including any and all bad faith/extra contractual damages should INSURER fail to cure the violations set forth in this Civil Remedy Notice within the given cure period.
The INSURED has been and continues to remain cooperative to assist INSURER with reaching the appropriate claim determination, indemnifying the INSURED sufficiently to allow the INSURED to restore the Property to its pre-loss condition, and to avoid additional delay, costs and expenses. INSURER must act fairly and honestly in its response to the INSURED for a prompt, fair and reasonable resolution of the claim.
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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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