Make us your home page
Instagram

Citizens agrees to settle 300 disputed sinkhole claims

TALLAHASSEE — 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 group 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 as 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 avoided legal fees 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 on Wednesday.

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

Citizens agrees to settle 300 disputed sinkhole claims 03/12/14 [Last modified: Wednesday, March 12, 2014 8:26pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Airbag maker Takata bankruptcy filing expected in Japan, U.S.

    Corporate

    DETROIT — Japanese airbag maker Takata Corp. has filed for bankruptcy protection in Tokyo and the U.S., overwhelmed by lawsuits and recall costs related to its production of faulty air bag inflators.

  2. Federal agencies demand records from SeaWorld theme park

    Tourism

    ORLANDO — Two federal agencies are reportedly demanding financial records from SeaWorld.

    Killer whales Ikaika and Corky participate in behaviors commonly done in the wild during SeaWorld's Killer Whale educational presentation in this photo from Jan. 9. SeaWorld has been subpoenaed by two federal agencies for comments that executives and the company made in August 2014 about the impact from the "Blackfish" documentary. 
[Nelvin C. Cepeda/San Diego Union-Tribune/TNS]
  3. Legalized medical marijuana signed into law by Rick Scott

    State Roundup

    TALLAHASSEE — Gov. Rick Scott on Friday signed into law a broader medical marijuana system for the state, following through on a promise he made earlier this month.

    Gov. Rick Scott signed legislation on Friday that legalizes medical marijuana in Florida.
  4. Line of moms welcome Once Upon A Child to Carrollwood

    Business

    CARROLLWOOD — Strollers of all shapes and sizes are lined up in front of the store, and inside, there are racks of children's clothing in every color of the rainbow.

    At Once Upon A Child, you often as many baby strollers outside as you find baby furniture and accessories. It recently opened this location in Carrollwood. Photo by Danielle Hauser
  5. Pastries N Chaat brings North India cuisine to North Tampa

    Business

    TAMPA — Pastries N Chaat, a new restaurant offering Indian street food, opened this week near the University of South Florida.

    The menu at Pastries N Chaat includes a large variety of Biriyani, an entree owners say is beloved by millions. Photo courtesy of Pastries N Chaat.