Florida Public Adjusters File Lawsuit to Overturn 48 Hour Solicitation Ban and Fee Caps
A lawsuit was filed by three public adjusting firms seeking to enjoin the State of Florida from enforcing the 48 hour solicitation ban and the fee caps public adjusters may charge to policyholders. The mastermind behind the lawsuit is lawyer turned public adjuster, Pat Catania of East Coast Public Adjusters. The lawsuit is not a surprise. Many public adjusters have been complaining that their business has been significantly impacted by these laws as insurance restoration companies act as surrogate public adjusters since the 48 Hour Ban does not prohibit insurance contractors from actively soliciting work from policyholders immediately after a loss.
I have recently noted the concern that some insurance restoration contractors are acting as surrogate public adjusters and not in the best interests of the policyholder in my posts, Are Insurance Restoration Contractors Ripping Off Insurers and Policyholders? and Former Restoration Insider Comes Out Swinging Against Florida's Limitation of Public Adjuster Solicitation.
The 48 hour solicitation ban was a coup of the insurance companies and Citizens Property Insurance Corporation. I attended the Citizen’s Claims Review Task Force meetings. It was obvious that Citizens claims managers and executives blamed many of their controversial claims delays and underpayments on the involvement of public insurance adjusters. The insurance industry used the Task Force as a vehicle to place before legislators a few examples of how public adjusters solicit for business following a disaster. Door hangers and the lining up of a dozen public insurance adjusters were suggested as being “unsavory’ by many. I guess the connotation is that those that get paid for professional help following a catastrophe must be taking advantage of victims. From the insurance industry’s perspective, it was a “perfect storm” to reduce the retention of pubic adjusters.
The 48 hour solicitation ban states:
A public adjuster may not directly or indirectly though any other person or entity initiate contact or engage in face-to-face or telephonic solicitation or enter into a contract with any insured or claimant under an insurance policy until at least 48 hours after the occurrence of an event that may be the subject of a claim under the insurance policy unless contact is initiated by the insured or claimant.
The lawsuit emphasizes the constitutional aspect of one’s freedom to speak and to contract.
8. By prohibiting the Plaintiffs from directly or indirectly initiating contact or engaging in face-to-face or telephonic solicitation with any insured or claimant, or entering into a contract with an insured or claimant in the first 48 hours after an event that has not been declared an emergency, subsection 626.854(6) constitutes a prior restraint on protected speech in violation of the First Amendment to the United States Constitutions and Article 1, Section 4 of the Florida Constitution.
It also points out some of the practical reasons why the laws are objectionable:
39. Subsection 626.854(6) is not narrowly tailored to further a significant government interest, and other less intrusive means are available to control or prevent any practices of public adjusters which might be needed to adequately protect the public
40. Subsection 626.854(6) is overbroad, in that it restricts the speech of all public adjusters, including Plaintiffs, who are competent, scrupulous, honest, and professional in their dealings with the public
41. Subsection 626.854(6) denies significant business opportunities for Plaintiffs and other public adjusters by denying property owners the services of a licensed public adjuster at the time they are in most distress and have the greatest need.
42. By preventing public adjusters from contacting property owners immediately following a natural disaster, subsection 626.854(6) prevents public adjusters from having any contact with the most severely damaged property owners at the only time they can be located before moving to an unknown address.
43. Section 626.854(6) amounts to an impermissible restriction on the time, place, and manner of conducting the business of public adjusting, and unduly restricts Plaintiffs' freedom of speech.
Pat Catania has done an excellent job assembling a great legal team and getting a case stated clearly. Using a Shakespearean phrase, he told me yesterday that “if they [the insurance industry] want a war, I’ll show them the war.” Pat is not a part of FAPIA or NAPIA. He is creative, bright, energetic, and I find him fun. I believe the lawsuit has a good chance of success. He asked me to let other public adjusters know that he would like to include others as plaintiffs in the lawsuit.
Catania is also a fantastic marketer and entrepreneur. He started two web sites, MySmartClaims.com and SmartClaimsPro.com which help policyholders and professionals regarding the estimating and submittal of property insurance claims. He is a passionate consumer advocate and tireless opponent. I predict he will prevail and many public adjusters will be thanking him for his efforts.
Catania also told me that his dream is to submit the final proof of loss State Farm will pay on before it leaves Florida. He considers State Farm completely unworthy to be in the insurance business because he asserts that most State Farm policyholders are not treated properly regarding claims. He has some inside information on that issue--his wife worked as a property insurance claims adjuster for State Farm.
many you will find would not so easily be convinced this is the hoped-for sure thing winner which reading between the lines would indicate is your prediction or, perhaps, guestimate of what shall result from all this; many would seek to first carefully guage and examine the bringer of the action, in terms of say past performance and past history................ further, one would would perhaps wonder whose interest these PA's, and their colleagues, hold most dear in terms of their resepctive financial interests and well-being, if I might be permitted to interject. WSIII, Coral Gables.
Hey Chip
I'll bet you lunch you are going to hear from a lot of people very soon questioning Pat Catania as the lead Plaintiff.
...
I am sure I won't be the only one who writes you about this.
Mike,
You won the bet!!
Cantania is controversial with his peers to say the least.
I have received a number of private emails--one even suggesting that I am a hypocrite for indicating anything positive about Pat Catania.
Personally, I think my post is accurate. And, if I do not have something nice to say, unless it is about an insurer or their vendors, I try not to go there.
Many very good and excellent public adjusters never charge more than 10 percent--even on re-opened claims. I see them get just as good results as those that say they have to charge more to do a good job or make money. I received a few private emails from those public adjusters this morning.
a seasoned/focused jurist coupled with top notch defense counsel surely will have that as their first direct matter upon which to pay close attention to----perhaps, there shall even be some 'reading twixt the lines'/perhaps; he who seeks to draw the first blood in a battle sucy as this need make certain he can most surely be held to the strictest scrutiny and examination, and that perhaps his house not be erected just with glass; just a thought. WSIII
WSIII,
The State of Florida will certainly defend itself. It will raise many of the issues you note. And, I would not discount the very fine legal team representing the three public adjusting firms.
Commercial speech is less protected than other forms of speech. Still, the complete ban on solicitation at a time when policyholders most need the public adjuster's services seems very overbroad. I think that part of the suit has a legitimate chance of being found facially overbroad following constitutional review.
I have not researched the issue of the fee caps. I did not write much about that in my post because I am not very certain about other challenges to fee caps.
I do not want a lunch out of this like the other able commenter; I only seek to point out that perhaps this shall be one book not meant to be 'judged by its proverbial cover,' that's all; and I value that you've provided for us a clearinghouse to comment, respect, review and revere your good skill and understanding and our ability to openly remark back to you freely and openly; it is, thus, the essence of those in the know doing checks and balances via the commraderie of others equally in the know; perhaps, someday in the future all of this will become so much clearer to you and that's when the lightbulb will brighten that much more, perhaps!!
WS III
This post is directed at Mike Rump regarding his post of 9:48 a.m. today. Mr. Rump, I'll bet you lunch that if we win, you'll benefit from the outcome, and you still won't have anyhting nice to say.
Jackie,
Policyholders certainly want you to win the solicitation part of your case.
And, I cannot imagine many public adjusters hoping that you will lose. You may have a lot of well deserved "thank you" cards. You may even have a number of firms wanting to join with you to help the cause This request played a major role of me publicizing this lawsuit.
I thought the complaint was very well drafted, and you have very fine counsel. So, I am predicting a "win."
I sometimes do not have nice things said about me, either. Usually, it is by insurance claims managers.
Still, when you put yourself "out there" in areas where you need a little courage to do or say things that others disagree with, some people get upset. Believe me--they will let you know as well. Pat has had his share of disagreements with colleagues over the past. I am getting some grief from them by putting Pat in a "good light" in this Post. But, the one time I met with Pat and the call we had yesterday lead me to my impressions of him.
And, he has put together a very viable lawsuit with a great law team. Why shouldn't he get some compliments for that?
I hope you guys tear them up! I hope you show how involved the insurance lobby was in drafting and manipulating this legislation. This lawsuit may finally put some transparency on which legislators are getting information and following the insurance company line and how the insurance lobbyists work.
take it to the bank,lads and lassies, the State surely will do its due diligence and shine some hot lights where they need to be shone as to its named opponents, that is a given; for those that would surmise this to be akin to the NBA sure thing/slam dunk, trust me, many many months, perhaps years from now, we shall still be pondering and debating the likes of this civil action---so those placing their bets on the Movant/Peititoner might want to listen closely as the dealer whispers "no more bets, folks..." hopefully, by then, it won't be too late to perhaps remove some of your sure thing chips from the betting area.....perhaps. WS III.
Chip, I have so enjoyed reading your posts. I just came across this a few days ago while trying to research case law for public adjusters.
Do you know of any websites/books that may be helpful?
Well Chip; as usual you have hit the nail on the head.
The three companies that took this on maybe controversial but I applaud them for their efforts and for all the money they will be spending to get this law suit out in the forefront.
I have previously gone against Pat when I was on the other side. He is a very strong opponent and is extremely knowledgable about insurance.
I wish all three of these companies the best and all Public Adjusters should thank them as well as support them in their efforts.
I'm curious, what was the original intent of the 48 hour delay?
I assume some kind of objectionable behaviors by PA's had been observed. Is there a better way to address whatever those issues were?
Were PA's getting consumers to sign away X% of the loss settlement before the insurance company had the chance to issue full limit payments?
whether betting on the winners or the losers in this embroglio, one thing is for sure; we all got a place we can all go to to vent, bitch, piss, moan, battle, refute and and reflect and OMG it sure does help pass the dreary run of the mill common workday away--------- that is something all must surely agree on. "Stay thirsty, my friends..."
WS III.
This is obviously a lawsuit that is aimed at the statutes of the state of Florida.
If I am correct in this assumption does it really make a net difference to the FL DFS since they implement the administrative code as they see fit anyway?
My point is that restrictions of PA fees are outlined very clearly in the amendment passed last October however the DFS has gone on to restrict fees even further in the event of a state of emergency order, limiting them to ten percent of the claim regardless if it is supplemental or inception or if it is after the state of emergency order has expired or been lifted.
If I am way off base here please let me know.