During the Florida Legislature’s celebration of sweeping insurance reforms approved last month, a legislative change slipped under the radar a bit — one that insurance lawyers say will streamline the claims process and could help reduce disputes.
Among a series of other changes, Senate Bill 2A emphasized the legality of joint settlement proposals or offers made to co-named policyholders such as husband and wife. Until now, it’s been treacherous and sometimes impossible for Florida insurers to make joint offers that would hold up in court, thanks to rules of court procedure and multiple court rulings, attorneys said.
“It was an uphill battle and a real minefield,” said Shaheen Nouri, a Tampa insurance defense attorney with the law firm Butler Weihmuller Katz Craig.
A plaintiff’s attorney, however, said the wording of the new law gives little real guidance, will require court and appellate rulings to clarify, and could stack the deck against some policyholders.
“It’s another solution looking for a problem,” said attorney Michael Redondo, of Miami, who represents policyholders in insurance claims litigation.
SB 2A, which went into effect when it was signed into law Dec. 16, also appears to give property insurers special status on bundles that auto, health and title insurance companies don’t get, Redondo said. “I’m surprised auto and health insurers aren’t asking the same now,” he said.
Property insurers have favored joint settlement offers for several reasons. But Florida courts frowned on them for years and imposed a number of restrictions on them: A joint proposal must specify the exact amount offered to each spouse, even if both spouses are listed on the deed and the insurance policy. And not allowing both parties to independently accept or reject a proposal may render the offer invalid.
“The problem in first-party lawsuits is that when you have a married couple who jointly own the property … the courts have ruled that an insurance company cannot serve a joint PFS (proposed settlement),” explained Michael Packer, an insurance defense attorney. with the Marshall Dennehey law firm.
This often required insurance companies to present a separate settlement offer to each plaintiff, which meant that one spouse could accept it, but the other would pursue litigation on the same claim. In a state that has been inundated with claims litigation, this has set off a wake-up call for insurers.
Senate Bill 2A is a sweeping 105-page reform bill. But he devoted just one sentence to the issue, leaving some to wonder how much the law really changes: “For a breach of contract action, a property insurer may make a joint offer of judgment or regulation which is conditional on the mutual acceptance of all co-officials,” reads the new law.
The change simplifies the process and now allows insurers to offer a joint offer, which will increase the likelihood of resolving lawsuits more efficiently, Packer noted.
Redondo argued that the law may be more limited in its effects than some insurance interests had hoped: Claims disputes often involve more than breach of contract actions. Does the law mean that joint submissions will continue to be rejected in disputes over claims that have not risen to the level of breach of contract? And, he noted, joint offers are already considered technically legal, even if they are difficult to enforce.
“So what does that really add?” Redondo asked.
The “true” intended effect of the law, which is said to have been drafted largely by Florida State Senator Jim Boyd, an insurance agent, is to pressure one insured to convince the other co-insured to give in to a settlement offer. , argued Redondo. If a joint offer is all on the table, both spouses or more policyholders may be more inclined to accept it and avoid litigation. But in some cases, joint policyholders have different interests and may not reside in the same property.
The joint bid section of the bill received little testimony during debate in the House and Senate during the December special session. But insurer interests have said outside Capitol Hill that the change is long overdue and frustration among insurers has been building for years.
From 2011, a Florida Bar Journal Article by lawyer Raymond Robin explained that the 1980s rules on joint offers were intended to encourage litigants to settle disputes before trial. But they had the opposite effect.
Despite some changes to the court’s rules in 2010, “litigants would do well to avoid using the joint settlement proposal because it is fraught with pitfalls and has been rendered obsolete by case law,” wrote Robin, a Keller Landsberg insurance practitioner. solidify.
Robin, contacted this week, noted that the language in SB 2A may not have gone far enough as it only applies to property insurance matters. A landmark 2010 Supreme Court decision ruled that joint offers conditional on the mutual acceptance of all co-officials are invalid, a court case known as Gorka. That case involved title insurance, so SB 2A would not have addressed the issues in that case, Robin said.
The new law would have been more practical if it applied to all insurance matters involving offers to co-insureds, he said.
But for now, for property insurance claims, the new law should be “very helpful” in getting settlements and avoiding protracted litigation, Robin added.
Joint offers should now require “the mutual acceptance of all contracting parties” with reference to Florida Statute 768.79(6) and Florida Civil Procedure Rule 1.442, attorney Nouri explained in a recent blog post.
Topics
Florida