PROPERTY INSURANCE

Hundreds of Fla. homeowners reach settlement with Citizens over sinkhole claims

 

Herald/Times Tallahassee Bureau

About 300 homeowners have agreed to settle their disputed sinkhole claims with Citizens Property Insurance, the company announced Wednesday, leaving an estimated 1,800 more lawsuits still unresolved.

The settlement involves policyholders who were challenging the state-run insurance company for failing to agree to the method and cost of repair for sinkhole damage to their homes.

The company has watched as lawsuits have ballooned in recent years because most homeowners were challenging Citizens for forcing them to repair their homes by putting grout in the ground instead of underpinning their homes with steel beams, or both.

The policies included in the settlement were all represented by the Clermont law firm of Boyette, Cummins and Nailos. The cost to Citizens for making the repairs have not yet been determined, but the legal fees avoided and streamlined repair procedure is expected to save the company about $30 million, said Citizens spokesman Michael Peltier.

“Our message to policyholders and the courts is if there is a confirmed sinkhole, we do want to repair the home — but we do not want to write a blank check,’’ said Dan Sumner, Citizens general counsel, at the company’s board meeting in Orlando Wednesday.

Under terms of the agreement, the repairs would be made according to the recommendation of engineers and contractors selected from a list provided by the Citizens, Sumner said. The homeowner will not receive any money for the repairs; Citizens will pay the contractors directly.

A professional engineer will monitor the work and if the costs of the repair exceed the policy limits Citizens must make the improvements — both for above ground repairs and below ground repairs. And if a neutral evaluator has made a recommendation, Citizens will abide by the terms of the evaluation and make the proscribed repair — something the company has often refused to do.

In December, Citizens sent out letters to the hundreds of homeowners who have sued the company over their sinkhole damage urging them to settle their dispute under the company’s terms. Most of the cases involved homeowners who challenged the method of repair Citizens wanted to use, or were asking a court to intervene because the company had agreed to repairs recommended by a neutral evaluator and then failed to follow through with those repairs.

But as Citizens worked to get homeowners to drop their lawsuits, Florida legislators were working to give the company an extra advantage in court with new legislation. A bill by Sen. Wilton Simpson, R-Trilby, will force all homeowners, even those whose claims are resolved in court, to use a list of contractors selected by the company. The Senate Appropriations General Government Subcommittee approved the bill on Wednesday.

The pending legislation, and the fact that Citizens has coordinated its defense strategy in the 13 jury trials it has conducted since the letter was sent out, helped provide the impetus for these homeowners to settle, Peltier said.

In December, about the same time Citizens was writing to homeowners, its board of governors signed a $6.5 million contract to handle all of the company’s claims litigation. The firm, Ackerman, Link & Sartory P.A of West Palm Beach, had previously had a $1.5 million contract to handle only sinkhole claims. The arrangement will pay attorney Scott Link $525 an hour, up to $1.05 million a year.

Chris Gardner, chairman of the Citizens Board of Governors, said in a statement that the agreement was possible because the law firm hired to coordinate the defense strategy for Citizens, “has had great success in requiring that claim payments be used to repair sinkhole damage and having that position upheld in court.”

Gardner said the settlement will provide closure to property owners by helping them repair their homes and repaired homes will improve property values for local communities and future buyers.

The legal fees and expenses for the homeowners in the settlement will be paid by Citizens, up to $5,000 per case, at a cost of about $2 million to Citizens, Peltier said.

Read more Legislature stories from the Miami Herald

Miami Herald

Join the
Discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Marketplace

Today's Circulars

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category