Florida contractors who engage in weather-related home repairs have taken steps to appeal a Leon County judge’s ruling that dismissed their challenge to a property insurance reform restricting their ability to recover attorney fees.
The Restoration Association of Florida and Air Quality Assessors LLC are moving to have the First District Court of Appeal review an Aug. 26 opinion by Circuit Judge J. Lee Marsh. Marsh did not rule on the merits of the case challenging provisions of Senate Bill 2-D, but the judge concluded that the lawsuit did not list defendants with adequate responsibilities for the enforcement of the new law.
The plaintiffs argued in their response to the defendants’ motion to dismiss the case that SB 2-D violates the rights of contractors who are parties to assignment-of-benefits contracts with homeowners. The law prevents such contractors from recovering attorney fees when they prevail in litigated claims against insurers.
“Rather than address factors within the property-insurance industry that has led to its problematic volatility, the Florida Legislature chose to violate the constitutional rights of contractors – the individuals and businesses that repair the homes and commercial buildings owned by Floridians damaged by extreme weather events such as hurricanes,” the plaintiffs’ response states.
SB 2-D supporters, however, have criticized the state’s one-way attorney fee rule as an incentive for third parties to file questionable claims and engage in legal actions that drive up the cost of property insurance premiums.
“The reason the attorney-fee issue is so important is that insurance companies wrongly deny legitimate claims with astonishing frequency,” Robert Peck, president of the Center for Constitutional Litigation P.C. and one of the attorneys representing the plaintiffs, told the Florida Record. “By removing the availability of attorney fees for successful litigation to require the insurer to follow the policy, the law creates a perverse incentive for insurers to continue that practice without consequence.”
Under SB 2-D, insurance companies would have a freer hand to deny contractors’ legitimate claims for modest repair jobs, typically capped at $3,000, since there would be no way to enforce such contracts without the ability to recover attorney fees, according to Peck.
The reform bill was passed in a May special session of the Legislature that Gov. Ron DeSantis called to address massive financial losses in Florida’s property insurance industry.