How to Use Data to Combat Florida’s Insurance Litigation Nightmare

Florida has a big insurance litigation problem. Data from the National Association of Insurance Commissioners (NAIC) showed that even though Florida represented just 8% of all homeowner insurance claims in the United States in 2019, the state delivered about 76% of all litigation against homeowner carriers that year.

The problem has been getting worse, according to data mined by Roig Lawyers. There were 68,000 lawsuits filed against insurance carriers in Florida in June 2021 – an all-time high – marking an 11,000 increase from 57,000 in the month before, and more than doubling from about 30,000 in June 2020.

There was no major hurricane event or catalyst for this deluge of litigation, most of which was filed around Miami, Broward County, Palm Beach, Tampa, and Orlando. And it’s not just property claims either. We’ve seen a huge increase in personal injury protection (no-fault) litigation, property, windshield, and worker’s compensation, while health insurance carriers have also been getting sued like we’ve never seen before.

The Insurance Litigation Problem

Why is Florida such a hotbed ­– or hot mess – of insurance litigation? While recent legislative changes are trying to chip away at property litigation, they still lack teeth and do nothing to address claims besides property.

A major problem is Florida’s fee-shifting rules, which create a huge incentive for attorneys to sue insurers. At Roig, we’ve seen carriers sued for tiny amounts, but when plaintiffs win, insurers must pay their attorney’s fees, which can amount to tens of thousands of dollars. In contrast, New York requires attorney’s fees to be proportional to awarded damages.

Technologically speaking, Florida’s court systems are a little behind the times. When carriers get sued, they get a jumbled mess of information, and they have to employ people to extract data manually. It puts carriers on the defensive – how will a company address this problem at the root when it’s spending resources just putting information into a computer? When you’re talking about big insurance carriers, who are seeing thousands of lawsuits in a single month, that’s a lot of wasted time.

We had to deal with this problem at Roig. We tried to transfer information from lawsuits into our system to help our clients strategize. As the mountains of documents grew, we knew we had to find a better solution, so we developed proprietary software that mines, extracts, and organizes all the state’s litigation data to help carriers get on the offensive.

How Data Helps Inform Strategy

This litigation problem in Florida requires serious reform at the legislative level, which means insurance carriers should be trying to communicate with lawmakers. After all, expensive litigation against insurers won’t end well for consumers as insurers pull out of the market and rates increase.

Meanwhile, insurers can use data to get in front of this problem. For instance, they can look at the data and see which plaintiffs’ attorneys are filing massive amounts of lawsuits, and then communicate with them to try to get some of these issues resolved before they become lawsuits.

Another tactic is using the data to see how the plaintiffs’ attorneys are strategizing and adjust policy documents to thwart them. Take a recent example. A plaintiff attorney filed a case in Broward County. The insured lived in Brevard County, which is also where the auto accident occurred and where all the witnesses resided. But the attorney cherry-picked the venue thinking it would be more favorable for the case. With a look at that kind of data, an insurance carrier can easily head off that problem by including a venue selection clause in its policy.

Add Data to the Litigation Defense Arsenal

Data has brought Florida’s insurance litigation problems to light, and it’s also a vital tool that insurance carriers can use to manage the problem until the government puts meaningful structural reform into place.

If you want to learn more about Roig’s insurance litigation data technology solutions, contact us.

Filed under Technology

How the Surfside Condo Collapse Highlights Florida’s Insurance Issues

The tragic collapse of the Champlain Towers South condominium in Surfside, Florida, immediately brought to the fore questions about building structural integrity and safety. But as surviving condo owners filed insurance claims and started trying to rebuild their lives, the tragedy is bringing to light big insurance problems in the state.

The disaster will reveal how most property owners in Florida are underinsured, with bigger implications about the insurance market in a state that is seeing rising sea levels and increasingly severe storms with climate change, according to Kristen White, a Senior Associate and Managing Attorney of Roig Lawyers’ First-Party Property Division. Roig Lawyers is a minority-owned law firm that focuses on insurance.

Litigation and Payouts Will Take Years

Attorneys have already filed dozens of lawsuits in the wake of the collapse seeking about $1 billion in payouts, but the condo association’s policy limit of $50 million means condo owners are in the beginning of a long fight to get a share of a small pot.

With a condo, a homeowners’ insurance policy will typically cover everything in the unit inside the drywall. The condo association’s commercial policy typically covers the drywall to the outside – the expensive stuff. Further, Commercial insurers only cover specific causes of loss, and those insurers won’t start paying claims until that cause is determined, which could take years. “And some of the homeowner carriers won’t pay until the commercial policy pays out, so some of the condo owners will have to wait,” White says.

The policy limits are also what were bargained for by each condo unit owner. It will be very difficult for the owners to find a way to exceed the insurance policy limit.

“The condo owners would have to find some bad faith to prove willful actions or willful negligence where someone was criminally liable. They would have to first prove the insurance company breached contract by not paying everything, and then they would have to prove bad faith,” she says. “There are a lot of things that will have to come into play to get beyond the policy limits.”

The litigation process will drag on for years, which will not be helpful for condo owners who have lost everything.

“We’re probably going to start hearing stories once we get a cause of loss and most of the policies begin to pay out,” White predicts. “Someone with a ground floor condo, one bed and one bath, may get $20,000 from their individual homeowner’s insurance company, and that’s it. Their mortgage may be closer to $200,000. That owner will have to wait for the condo association’s insurer to pay out, and maybe they won’t cover the $180,000. What’s that condo owner going to do?”

Winning Against Insurers, Everyone Loses

If a court does rule in favor of condo owners to exceed the policy limits, it could push the insurance carriers into insolvency or out of the market altogether. Florida has already been seeing pressure on its insurance market because of climate change. Citizens insurance, the state insurer of last resort, estimated it would have over 750,000 policies by the end of 2021, up from 420,000 policies in October 2019, as other carriers leave certain areas.

“It’s going to become more difficult to get coverage in Florida,” White says. “Carriers are going insolvent, trying to balance their risk, and leaving the market, which is creating a vacuum. With the passage of SB 76, policies are going to get stricter, and insurance will get more expensive for less coverage.”

Florida property owners will see taxes and premiums increase to offset the increased costs and risks. Premiums don’t just pay for property; they pay for adjusters, underwriters, customer service, and litigation. White noted that insurance fraud will add more pressure to the market.

“Insurers are fighting lawsuits because they can’t just pay out every claim due to the terms and conditions of the policies. They have to fight the claims that aren’t legitimate so they can pay the ones that are,” White says. “That’s what’s going to happen with Surfside. There’s going to be a lot of litigation for years to figure out how much the carriers will pay. Those are all costs — for lawyers, engineers, and legal fees. Who will bear those costs? Policyholders.”

Filed under Property (Homeowners)

Law360 Ranks Roig Lawyers Second for Percentage of Minority Equity Partners

Law360 recently released its annual Diversity Snapshot, a legal industry report that provides insights into diversity statistics among law firms. This year’s report was especially anticipated given that many law firms in 2020 renewed their commitments to diversity and inclusion following a national reckoning with racial injustice.

While many firms have begun to implement new policies and practices that attempt to diversify law firm demographics, Law360’s report reflects that the industry’s efforts are moving at a slow pace, with some firms significantly outperforming others in advancing minority attorneys. To gauge this progress, Law360 took into account the minority headcounts of law firm professionals at varying levels of practice, including associates, nonequity partners, and equity partners.

Roig Lawyers tied for the second-highest representation of minority equity partnerships for firms with 100 attorneys or fewer with diverse attorneys representing 50% of its equity partnerships. This percentage was well above what Law360 found to be common among law firms as a whole, with many firms having less than 10% representation.

Roig Lawyers also scored well for other attorney tiers, with 41.7% minority representation among nonequity partners and 54.8% representation among associates.

You can read more about Law360’s Diversity Snapshot report, including its methodology, here.

Filed under Firm News

Roig Lawyers Expands Appellate Department by Welcoming Jeffrey Geldens

There are many factors a lawyer considers when making the leap to a new firm. For Roig Lawyer’s newest member of its Appellate Practice Group, the choice heavily relied on the firm’s unique culture and commitment to its values.

“People who work here stay here for years. There’s a sense of loyalty,” said Jeffrey Geldens, the firm’s newly hired Senior Associate of its Appellate Practice Group.

Geldens was encouraged to join Roig by the head of the firm’s Miami office Nelson Bellido, who had worked with Geldens at another firm.

“Jeff came back to work with me after working with me at a previous firm, where we had a good experience,” Bellido said. “He came from the Third District Court of Appeal, recommended to me by Judge Leslie Rothenberg, who said he was outstanding.”

Geldens has dedicated over a decade of his career to appellate, including seven years’ experience in appeals for the Florida Attorney General’s Office. He joins Roig’s Appellate Practice Group Co-chair’s Veresa Jones Adams and Abbi Freifeld Carr to complete a team with extensive experience serving Fortune 500 companies in litigation at every level of the court system. To read a Q&A with Geldens, click here.

The Firm’s Clientele

Adams and Carr have extensive experience handling commercial litigation at the trial and appellate levels for high-end, blue chip companies and insurers.

For example, in her 15 years of practice, Adams has represented the world’s largest pharmaceutical, retail, rideshare, automotive, medical, and insurance companies. She has worked on large and complex multidistrict litigation, including hormone replacement, tobacco, asbestos, and airbag cases.

Attorneys at Roig enter litigation with a focus on preserving the record for potential appeals, providing full service through the entire court process. For instance, Adams represents one of the largest hospital employers in the country. In one matter, an EMS driver got into a physical altercation with a patient who sued the hospital. Questions in trial revolved around whether the patient should undergo a mental health evaluation. A trial judge awarded the evaluation, and the patient appealed to the Fourth District Court of Appeal. Adams briefed the issue, and the court affirmed, leading the plaintiff to drop the case.

The firm has also seen significant success with proposals for settlement in Florida, winning briefings on the issue, including clarification of law in the Second District Court of Appeal.

Value for Clients and Valuing the Community

Two differentiating factors separate Roig from other firms. It’s the largest minority-owned law firm in Florida, and it focuses on providing value for clients at the appellate level.

“We’re very successful and very reasonable,” Bellido said. “Most attorneys are looking to make a buck, saying let’s file briefs on appeal. We say, ‘Here’s an opportunity. If we won and there’s an appeal on the other side, maybe we can resolve the issue by picking up the phone so we don’t have to spend more money arguing the appeal.’ And we don’t charge the kind of rates big law appellate lawyers charge. We don’t take that approach. We’re trying to provide value for our clients. When you do good work and provide value, clients stay with you, and they refer you to others. That’s our approach to business.”

Companies seeking to hire a minority-owned law firm choose Roig for its excellence, value, and sincere commitment to community service through pro bono work, volunteerism, and support of causes.

An emphasis on diversity arises out of intentionality around culture, within the firm and in the community.

“Here you’re dealing with people with good hearts, and it really makes the difference in how they manage, operate, and run the firm,” Geldens said. “They are good at making sure people are fulfilled, not just in the practice itself, which makes for better and happier attorneys.”

Filed under Firm News

The Defendant Died…Now What?

Sometimes during litigation, a defendant in civil suit may pass away. If so, a cause of action is not extinguished by virtue of the defendant’s death. However, a cause of action can be extinguished by failure to comply with the Florida Rules of Civil Procedure (FRCP), which govern these circumstances.

When a defendant dies prior to the lawsuit being filed, Florida Statutes §768.20 states that a personal injury action against the defendant survives the defendant’s death and should be brought against the defendant’s personal representative in a pending action.

When a defendant dies during a lawsuit, Florida’s survival statute (F.S. §46.021) provides that “[n]o cause of action dies with the person. All causes of action survive and may be commenced, prosecuted, and defended in the name of the person prescribed by law.” In other words, a cause of action is not extinguished by virtue of a party’s death.

Once a defendant passes away during litigation, Florida Rules of Civil Procedure 1.260 require that the plaintiff must move to substitute the defendant’s estate within 90 days of the filing of a Notice of Suggestion of Death or else the action shall be dismissed against the deceased party. Should a plaintiff fail to timely move for substitution, the defendant may move for a dismissal pursuant to Florida Rules of Civil Procedure 1.420(b), which states any party may move for dismissal of an action for an adverse party’s failure to comply with these rules.

Substitution of a party after the death of a party is governed by Florida Rules of Civil Procedure 1.260(a)(1). This statute provides: 

(a)     Death.  (1)     If a party dies and the claim is not thereby extinguished, the court may order substitution of the proper parties. The motion for substitution may be made by any party or by the successors or representatives of the deceased party and, together with the notice of hearing, shall be served on all parties as provided in rule 1.080 and upon persons not parties in the manner provided for the service of a summons. Unless the motion for substitution is made within 90 days after the death is suggested upon the record by service of a statement of the fact of the death in the manner provided for the service of the motion, the action shall be dismissed as to the deceased party.

The suggestion of death is the triggering mechanism for the 90-day window to begin to run, during which the substitution must occur. Following the suggestion of death, counsel for a deceased party may move to dismiss the action if a motion for substitution has not been made after the expiration of the 90-day deadline.

Should a plaintiff not comply with timely filing a Motion for Substitution within 90 days of the filing of the suggestion of death and the defendant moves for a dismissal, a plaintiff may attempt to argue that it should be relieved from such dismissal due to excusable neglect. Florida Rules of Civil Procedure 1.540(b) provides that on a showing of excusable neglect a party may be relieved from dismissal. However, relief under this rule is not appropriate should a party completely fail to take action.

Courts will liberally apply the rules when the party against whom dismissal is sought made some effort to comply. See Scott v. Morris, 989 So. 2d 36 (Fla. Dist. Ct. App. 2008). In Scott, the Court held that plaintiff’s motion asking defense counsel to identify the proper party to be substituted was sufficient to satisfy the rule requiring a motion for substitution. However, a party may not avoid dismissal after having done nothing.

The requirements that a Motion to Substitute Parties must be filed within 90 days of the party’s death does not require opening of parties’ estates or designation of a personal representative of the estate within 90 days. The absence of a known personal representative is no excuse for not filing a timely motion to substitute. See Eusepi v. McGruder Eye Ist., 937 So. 2d 795, 798-799 (Fla. Dist. App. 2006).

In Eusepi, the court held that the rule requiring that a Motion to Substitute Parties be filed within 90 days of a party’s death did not require opening of the estate and appointment of a personal representative of the estate within 90 days of suggestion of death. This is since it is not uncommon for the deceased successor in interest to not be apparent or easily contacted, or for the deceased to be a defendant whose relationships are unknown or family members have no interest in facilitating the litigation. See Martin v. Hacsi, 909 So. 2d 935, 937 (Fla. 5th DCA 2005).

A plaintiff may attempt to argue excusable neglect because the deceased estate did not timely open a probate estate. Reliance on the status of the decedent’s estate is not grounds for excusable neglect. See Kash N’ Karry Food Stores, Inc. V. Smart, 814 So. 2d 530, 532 (Fla. Dist. Ct. App. 2002).

In Kash N’ Karry, the plaintiff did not file a Motion for Substitution or for Enlargement of Time prior to the expiration of the 90-day period. Id. at 532. The court also could not identify any showing of excusable neglect, as the only explanation in the record for requesting an extension of time to substitute the party is contained in counsel’s motion, wherein he asserted that “[n]o formal administration of the plaintiff’s estate had occurred thus precluding the appointment of a legal representative and thus a successive party.” Id. at 532. The 2nd District Court of Appeal held that the trial court departed from the essential requirements of law in allowing the substitution of party and in failing to grant Kash N’ Karry’s motion to dismiss with prejudice. Id. at 533.

Additionally, extenuating circumstances may not avoid dismissal. See RJ Reynolds Tobacco Co. v. Lacey, 2767 3d 103 (Fla. Dist. Ct. App. 2019).

In RJ Reynolds Tobacco, the plaintiff’s widow defeated dismissal when she was not substituted as the proper party after her husband’s death. She explained her extenuating hardship to the court, including two significant surgeries after her sole counsel had withdrawn and her successor counsel was also hospitalized. Here, the defendant was not aware of any such circumstances affecting the plaintiff’s ability to move the court in a timely fashion. In addition, ignorance of the law is not grounds for excusable neglect.

Any filing after the suggestion of death are a legal nullity.  See De La Riva v. Chavez (Fla. App. 2020).

In De La Riva, the plaintiff filed a lawsuit against James P. Todd, however, Todd passed away five months after the suit was filed. Counsel for Todd timely filed a suggestion of death. The next day, the plaintiff requested that the estate of James P. Todd be substituted as party defendant. After receiving no information as to the status of the estate, the plaintiff filed a Motion to Compel seeking defense counsel to disclose the status of the Todd estate. The trial court ordered the plaintiff to “properly set up estate for defendant” and to “substitute the defendant estate” for defendant Todd. In the meantime, the Todd estate was open in probate court, and no personal representative was appointed.

Nonetheless, in the civil case the plaintiff filed an amended complaint identifying “John Doe” as the personal representative of Todd’s estate and substituting “John Doe” for Todd as the party defendant. Thereafter, the complaint was served on defense counsel but not on any representative of the estate. Even after the probate court named Lian de la Riva as curator of Todd’s estate, with full authority to defend and initiate all lawsuits on behalf of the estate, the plaintiff failed to substitute Lian de la Riva for “John Doe” as the party defendant in the personal injury case.

In De La Riva, the plaintiff filed a proposal for settlement (PFS). The PFS identified the estate of James P. Todd as party defendant, it was emailed to State Farm counsel and Lian de la Riva. Thereafter, the defendant apparently filed a Motion to Dismiss for the plaintiff’s failure to properly substitute the party defendant. The trial court granted the defendant’s Motion to Dismiss without prejudice and ordered the plaintiff to properly substitute the estate as the party defendant. The next day, the plaintiff filed its second amended complaint identifying the defendant as “Lian de la Riva, Esq., as Curator of the Estate of James P. Todd, deceased.”

After the trial, the plaintiff filed a motion for attorney’s fees and costs pursuant to the previously filed PFS. The defendant opposed the plaintiff’s motion arguing that the prior PFS was a legal nullity because the first amended complaint failed to properly name the curator as the defendant.

In De La Riva, the Fourth District Court of Appeals analyzed Florida Rule of Civil Procedure 1.260(a)(1) and found that “If an indispensable party to an action dies, ‘the action abates until the deceased party’s estate, or other appropriate legal representative, has been substituted pursuant to [R]ule 1.260(a)(1).’” Schaeffler, 38 So. 3d at 799 (quoting Cope v. Waugh, 627 So. 2d 136, 136 (Fla. 1st DCA 1993)).

Moreover, in De La Riva, the Fourth District Court of Appeals stated “[f]ailure to substitute the proper representative or guardian nullifies subsequent proceedings.” Id. at 800; see also Ballard v. Wood, 863 So. 2d 1246, 1249 (Fla. 5th DCA 2004) (finding that a failure to substitute pursuant to Rule 1.260(a)(1) nullified the subsequent proceedings). De La Riva v. Chavez (Fla. App. 2020). As a result, a plaintiff’s failure to properly file a Motion to Substitute Party pursuant to FRCP 1.260 nullifies the pleadings filed with the court after the filing of the Suggestion of Death.

Simply amending the pleadings to add the estate is not sufficient. In De La Riva, the Fourth District Court of Appeals stated “[i]t is well-settled that ‘an “[e]state” is not an entity that can be a party to litigation. It is the personal representative of the estate, in a representative capacity, that is the proper party.” De La Riva citing Spradley v. Spradley, 213 So. 3d 1042, 1045 (Fla. 2d DCA 2017) (quoting Ganske v. Spence. 129 S.W. 3d 701, 704 n.1 (Tex. App. 2004)). “[O]nly when the proper party is in existence may it then be properly served and substituted….” Stern v. Horwitz, 249 So. 3d 688, 691 (Fla. 2d DCA 2018). Id.

In De La Riva, the court found that the PFS was a legal nullity and invalid due to the plaintiff’s failure to follow proper procedure of FRCP 1.260(a)(1). Because there was not a proper substitution of the party, the PFS filed was a legal nullity as the party which the PFS was addressed was not properly before the court when the PFS was filed, and as a result, the PFS was a legal nullity.

FRCP 1.260(a)(1) states a court shall dismiss an action for failure of a plaintiff to timely seek substitution of a deceased defendant within 90 days of the filing of a suggestion of death. Understanding these rules and cases may assist in obtaining a dismissal of a suit after a defendant dies and a plaintiff fails to act properly in substituting a party as the defendant in the case.

If you’re involved in a matter in which the defendant has died and you’re uncertain about the next steps, contact William Pratt at wpratt@roiglawyers.com.

Filed under Uncategorized

CPT Code 99072, Introduced for COVID-19, Finalized as Bundled Service by CMS

In a time when a trip to the nail salon requires a temperature check before entry, it comes as no surprise that medical providers across the globe have implemented extra protocols to keep physicians and their patients safe.  Since the start of the COVID-19 pandemic, medical providers have been forced to incur additional (and sometimes, substantial) costs associated with increased sanitization measures and personal protective equipment (PPE).

In an effort to alleviate COVID-19-related costs, the American Medical Association (AMA) created an additional supply code under CPT Code 99072, defined as: “Additional supplies, materials, and clinical staff time over and above those usually included in an office visit or other non-facility service(s), when performed during a Public Health Emergency (PHE) as defined by law, due to respiratory-transmitted infectious disease.”[1] According to the Centers for Medicare & Medicaid Services (CMS),  the COVID-19 PHE was determined to exist nationwide as of January 27, 2020.[2]

Code 99072 became effective on September 8, 2020.  It is intended to be reported only once – per – encounter by a physician or other non-facility, only during a PHE, and only for “additional items required to support a safe in-person provision of evaluation, treatment, or procedural service(s),” which could include “the additional time required by clinical staff to provide the service safely.” [3]

Insurers and third-party payers can expect to receive reimbursement requests for 99072.  The AMA provided one clinical example of appropriate billing for 99072, as follows: “A 65-year-old female presents to the physician’s office, requiring care for an illness, acute injury, or ongoing care for a chronic condition. The encounter occurs during a Public Health Emergency (PHE), as defined by law, due to respiratory-transmitted infectious disease.”[4] The AMA CPT Assistant does not specify what documentation would be sufficient to substantiate reimbursement of 99072, but notes that the required documentation for reimbursement of 99072 will likely vary between third-party payers and individual insurers.

[1]           See American Medical Association (AMA) CPT Assistant, Special Edition September Update, (Vol. 30, Sept. 2020) https://www.ama-assn.org/system/files/2020-09/cpt-assistant-guide-coronavirus-september-2020.pdf.

[2]           See Centers for Medicare & Medicaid Services (CMS), Health and Human Services (HHS), 2021 Medicare Payment Fee Schedule (MPFS) Final Rule, 85 FR 84472, 84692 (Dec. 28, 2020) https://www.federalregister.gov/documents/2020/12/28/2020-26815/medicare-program-cy-2021-payment-policies-under-the-physician-fee-schedule-and-other-changes-to-part

[3]           See American Medical Association (AMA) CPT Assistant, Special Edition September Update, (Vol. 30, Sept. 2020) https://www.ama-assn.org/system/files/2020-09/cpt-assistant-guide-coronavirus-september-2020.pdf.

[4]           Id.

 

Filed under Healthcare, Personal Injury Protection (PIP)

Miami Chiropractor Charged With COVID Relief Fraud, Health Care Fraud And Money Laundering

 Click here for full article.

Filed under Fraud, Healthcare

10 Charged in $1 Billion Medical Insurance Fraud

Ten people have been indicted in a complex scheme to allegedly defraud private insurance companies of more than $1 billion for medical testing. The Justice Department unsealed the indictments Monday in Jacksonville, Florida. Eight of the defendants are from Florida. The others are from Atlanta and Chicago. The charges include conspiracy to commit health care fraud and money laundering.

Click here for the full article.

Filed under Fraud, Healthcare

How COVID-19 Might Change The Insurance Market

COVID-19 will change our world in many ways, some good and some bad. The same holds true for the insurance marketplace. From property policies, workers compensation, business interruption and general liability, the following considerations should be noted.

Click here for the full article.

Filed under Uncategorized

Florida Dive Shop Alleges Insurer Breach of Contract, Bad Faith in BI Denial Suit

A dive shop in South Florida is one of the first businesses in the state to file suit against its insurer for the denial of a business interruption claim initiated because of the current coronavirus pandemic.

Click here for the full article.

Filed under Uncategorized