Florida's Citizens Property faces class action over attorney fees
The litigation tests a new state law allowing homeowners the possibility of collecting insurance benefits as well as attorney fees and costs.
Citizens Property Insurance Corp. is facing litigation under a new law, Florida Statute 627.70152, which outlines the possibility of homeowners recovering both their insurance benefits and attorney fees and costs.
The suit comes from Hollywood attorneys Michael Citron and Igor Hernandez of MAC Legal, whose client Shanique Baker filed a putative class action on behalf of herself and other class members against defendant Citizens.
Baker alleged all residential and commercial property insurance clients who presented claims for coverage to Citizens after July 1, 2021, had their claims paid without attorney fees.
Fort Lauderdale attorney Eric M. Yesner of Shutts & Bowen, who represents Citizens Property Insurance Corp., did not respond to requests for comment.
Meanwhile, opposing counsel Citron said this is a new law that has been incorporated into a large part of his insurance practice.
“The law governs both the duties and responsibilities of both insureds and insurers, alike. Sadly, although our legislature and their constituents are often assured of invariable benefit inuring to the homeowners, the laws being passed in Tallahassee at the behest of unscrupulous lobbyists are in fact time and time again to the homeowners’ detriment,” Citron said. “Litigation costs rise because insurance companies repeatedly fail to address insurance claims, which necessitate litigation. We believe that once again Citizens [is] misusing the law as written, and that is why we have brought this class action forward.”
Hernandez suggested the new law was supposed to be a compromise under which an attorney could not sue the insurance company without giving it notice.
“At the same time, the insurance company would be also paying the lawyers so that the insured doesn’t suffer. If you’re going to force every insured to go through this pre-suit process before they are entitled to get paid from their insurance company, and then you don’t compensate the lawyer that is going to be required for that pre-suit process, the insured … is going to end up getting hurt on every single claim, because the insured is going to be forced to pay the lawyer out of the money the insured was otherwise entitled to,” Hernandez said.
Broward County Circuit Judge Michele Towbin Singer is presiding over the case.
On May 8, 2021, plaintiff Baker’s home was damaged. According to the complaint, her insurance policy allegedly provided coverage for Baker’s property against any direct physical loss. As a result, the plaintiff retained the MAC Legal law firm to assist with the prosecution of the claim.
The law firm allegedly proceeded to look into the claim and engage in the pre-suit process required by Fla. Stat. 627.70152.
As the law firm was processing the information, it sent defendant Citizens a required statutory notice. Citizens then responded with a payment that specifically excluded reasonable attorney fees.
The fees were based on the defendant’s belief that the statute did not entitle insureds to reasonable attorney fees during the pre-suit process, the complaint stated.
The plaintiff brought a class action. She believes she is among thousands of people affected since Citizens’ is the largest insurer in Florida, the complaint stated.
Baker filed a one-count complaint for declaratory judgment against the defendant.
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