A Florida judge temporarily halted Florida’s Citizens Property Insurance Corp. from sending claims disputes to a state arbitration agency, but a notice of appeal by Citizens automatically suspended the judge’s order.
Hillsborough County Circuit Judge Melissa Polo said the homeowner’s lawsuit had raised legitimate concerns about the constitutionality of a quasi-state-owned company sending claims dispute to a state agency for arbitration and resolution.
“Plaintiff has demonstrated a substantial likelihood of success on the merits of his constitutional claims, including alleged violations of the Due Process and Equal Protection Clauses of the Fourteenth Amendment,” Polo wrote in the order, issued Friday.
Citizens officials disagreed with the ruling, which, for now, should not impact claims disputes scheduled to be handled by the Florida Division of Administrative Hearings.
“We have received the order, and our legal team is working on a response,” said Citizens spokesman Michael Peltier. “State law specifically authorizes the DOAH process and we believe that the law is constitutional. Beyond that, we do not comment on pending litigation.”
The judge’s order was automatically stayed when Citizens indicated it will appeal the injunction. The homeowner, Martin Alvarez, asked the judge to drop the automatic stay, but she declined.
“The matter is not an emergency and should be handled in the normal course,” Polo wrote in her Monday order.
Alvarez filed the lawsuit July 11, making it at least the second suit filed over Citizens’ DOAH endorsement. Citizens’ board of governors in 2022, at the height of the Florida claims litigation wave, approved the endorsement to homeowner policies, allowing either side to send claims disagreements to DOAH.
The insurer, Florida’s largest property insurance carrier, has met with some success at the state arbitration agency, which employs administrative law judges to settle disputes. In June, Citizens officials said that since July 2024, about 664 Citizens cases opened with DOAH have been closed. The average legal spending per case was $8,384, about 60% less than the average cost of cases that are heard in state courts. And cases are usually resolved much faster – in an average of 85 days as opposed to 621 days for litigation.
Citizens’ board announced in June that it now plans a similar policy endorsement for commercial policies, giving the insurer or the insured the option of having disputes heard by DOAH judges.
But some attorneys and policyholders have complained. About the time that Alvarez filed suit in state court, a 92-year-old homeowner in Miami filed a federal lawsuit. Stainton Williams made arguments similar to Alvarez’ in his complaint in U.S. District Court for South Florida, contending that DOAH lacks independence and transparency.
The impact of the DOAH move has been staggering, with Citizens prevailing in almost every DOAH case, Williams’ attorneys argued. The federal case is still pending.
Alvarez’ suit in Hillsborough County notes that his Tampa home suffered a loss in October 2024, and he is asking for at least $82,000 in damages and attorney fees.
“Plaintiff also established that he and similarly situated Citizens policyholders will suffer irreparable harm absent injunctive relief,” Judge Polo wrote. “Specifically, enforcement of the arbitration clause at issue compels insureds into a forum that lacks neutrality, discovery, motion practice, and meaningful judicial review.”
The Alvarez suit was filed by Miami attorneys Isaiah Harvey and Lynn Brauer, of the Florida Insurance Law Group. This week, former Florida Supreme Court Justice Ricky Polston and other lawyers with the Shutts & Bowen law firm gave notice that they are representing Citizens.
Topics
Carriers
Florida
Legislation
Claims
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