VOLUME XVI, NUMBER 9
September/October, 2004

FROM THE CORNER OFFICE

Powers, McNalis, Torres & Teebagy is delighted to announce that Steven C. Teebagy is now a partner of the firm. Through the years of his employment, he has grown to be an integral part of our staff of attorneys. He will continue practicing in the areas of personal injury as well as fraud investigation, fraud defense, general first party defense and commercial litigation. While working with Steve over the years, we’re sure you have learned to have confidence in and rely upon his expertise and guidance. We look forward to working together for many more years, continuing to offer you the highest quality legal services available.

Congratulations Steve!

Brian C. Powers    Daniel M. McNalis   Anna D. Torres

DEPARTMENT OF FINANICAL SERVICES ISSUES EMERGENCY RULES AND ORDERS PERTAINING TO PUBLIC ADJUSTERS

Beginning on August 17, 2004, Florida’s Chief Financial Officer Tom Gallagher issued a series of Emergency Rules regarding public adjusting activities in the aftermath of the recent tropical storms and hurricanes. In part, these resulted in:

a) prohibiting public adjusters from charging in excess of 10 percent of recovery for any one insured;

b) requiring that the compensation and any terms and conditions to be clearly indicated in any public adjusting contract;

c) prohibiting the acceptance of any upfront fees or other things of value from an insured prior to the settlement of a claim;

d) prohibiting public adjusters from stating or inferring that insurers or their adjusters routinely deprive claimants of their full rights;

e) requiring a 14 day right of rescission of any public adjusting contract which fact must be communicated to the insured, and;

f) prohibiting the acceptance of a power of attorney by a public adjuster from an insured that would give said adjuster the authority to choose the repair vendors.

Conversely these same rules require that an insurer or its adjusters may not state or imply that public adjusters are unscrupulous or that engaging such an adjuster will have an adverse effect on the insured’s claim.

Specific rules pertaining to Hurricane Charley/Tropical Storm Bonnie dated 8/17/04, Hurricane Ivan dated 9/17/04, and Hurricane Jeanne dated 9/27/04 are in effect for 90 days as of their date of issuance. As of print time, no applicable rule has been located for Hurricane Frances though we have been verbally advised by the Department that one was issued, and we will report on it in the future.

Additionally, on 9/9/04 an Emergency Rule was issued which prohibited the redaction by the public adjuster of any compensation provision in public adjusting contracts in effect for any claims resulting from the 2004 hurricane season. Lastly, on 9/10/01 an Emergency Order was issued which requires insurers to report any price gouging by public adjusters and also to file with the Department (Matthew Addison, Florida Department of Financial Services, 200 E. Gaines Street, Tallahassee FL 32399 or by fax 850-488-5951) any copies of public adjusting contracts received between said adjusters and their insureds, with the policy number, name, phone number and location of the insured clear legible or included separately. Note that with regards to the above issues, this information is applicable state-wide on storm by storm basis rather than limited to certain counties. The above rules and order do contain other items of interest and can be viewed in their entirety at the Florida Department of Financial Services website at www.fldfs.com.

THE FLORIDA SUPREME COURT HOLDS THAT THE DAMAGES RECOVERABLE BY A MINOR CHILD ARE NOT LIMITED TO THE PERIOD OF MINORITY

In BellSouth Telecommunications, Inc. v. Linda Meeks,28 FLW S 775 (Fla. 2003), the Florida Supreme Court visited the certified question of whether damages recoverable by a minor child under Fla. Stat. §768.21(3)(2002) were limited to the period of minority. The claim in this case arose from the wrongful death of Herbert Meeks, and relates to the damages recoverable by his twenty-four-year-old son, Kevin Meeks. Herbert Meeks was electrocuted by downed Florida Power & Light electric wires suspended from a fallen pole owned by BellSouth. At the time of his death, Meeks was driving on a rural road. The pole had rotted at its base and fallen across the road. Meeks got out of his truck, approached the pole, and was killed. Meeks was survived by his wife and by two children, a twenty-eight-year-old daughter and a twenty-four-year-old son.

Where a decedent has a surviving spouse, Florida’s wrongful death statute permits a minor child, but not an adult child, to recover damages for loss of parental companionship and for mental pain and suffering. The statute defines a minor child as a person under twenty-five years of age. The trial court properly dismissed the claim of Meek’s daughter, who was twenty-eight-years old at the time of her father’s death since under the statute she was considered an adult at the time of Meek’s death.

As to the twenty-four-year-old child, the court allowed recovery of damages for the loss of the parent not only for the one-year period remaining of “minority,” but also into the adult years. The damages are to be based on the entire life expectancy of both the child and the deceased parent, not on the number of years the child has until he reaches the age of majority. Florida’s highest court found that the remedial provisions of §768.21(3) were to be liberally construed. Therefore, since the legislature included a limitation to the definition of minority, the omission of the limitation on the period to calculate the damages indicated an intent by the legislature that the damages should not be limited. Florida’s Supreme Court stated that had the legislature intended a minor’s damages under §768.21(3) to be limited only to the period of minority, up to the age of twenty-five, this limitation could have been expressly added, either as an absolute limitation or as a discretionary factor. Therefore, the Florida Supreme Court held that the damages recoverable by a minor child under §768.21(3) are not measured based on the minor’s remaining minority years at the time of the parent’s death, but should be calculated based on the joint life expectancies of the minor child and the deceased parent.

Jamila V. Alexander

PALM BEACH COUNTY CIRCUIT COURT DECLARES "INTOXICATION DEFENSE" CONSTITUTIONAL

On May 25, 2004, Judge Kenneth Stern declared Florida Statute §768.36, Florida’s Intoxication Defense statute, Constitutional. The court rejected arguments that the statute (1) overrides the right to have one’s suit adjudicated on the basis of comparative negligence, (2) denies due process of law, (3) denies equal protection of the laws, (4) ignores the Florida Constitution guarantee of equal access to the courts, (5) denies the right to jury trial, (6) violates the principle of separation of powers, (7) ignores Florida’s constitutional provisions about practice and procedure in the courts and, (8) the tort reform statute violates the single subject rule.

The suit, Crowell v. Crum, still pending in the circuit court is a wrongful death action by the widow of a pedestrian who was killed by the defendant’s alleged negligent operation of a motor vehicle. The defendant asserted as an affirmative defense the intoxication defense statute as a complete bar to the suit, alleging that at the time of the accident the decedent was under the influence of alcohol and was more than 50% at fault for his own harm. The constitutional issue was addressed by the court on Plaintiff’s Motion to Strike the Affirmative Defense. The court denied the motion thus opening the door for the presentation to the jury of evidence relating to the decedent’s intoxication and whether his intoxication caused or contributed to the decedent’s death.

Please call us if you would like a copy of Judge Stern’s 16 page order.

Anna D. Torres

THE MONEY PIT

Melissa Plante (“Plante”), the Plaintiff in Melissa A.Plante v. USF&G Specialty Ins. Co., 17 FLW Federal D350 (S.D. Fla. March 2, 2004) bought her dream home and purchased a homeowners insurance policy from Defendant, USF&G, in January 2000. Prior to moving in, Plante had a plumber come to inspect and repair leaks that she had found in the bathroom tub. Following the plumbers repairs, Plante went to the home and found that it had been damaged and vandalized. On March 13, 2000 Plante notified USF&G of the damage and vandalism. Plante encounterd some difficulty in having USF&G investigate her claim but eventually USF&G sent New Wave Construction to conduct the investigation.

During the time period from May 2, 2000 till June 10, 2000 Plante received four (4) separate checks from USF&G totaling $5,500.47 for damaged caused by the water leak. Subsequently, Plante was asked by an agent of New Wave to sign a work authorization and contract with New Wave and to submit a sworn proof of loss. USF&G then sent a check for $5,400.29 for damages resulting from the vandalism which was made payable jointly to Plante and New Wave.

Plante then advanced $2,700.00 to New Wave to make repairs. New Wave embarked on making repairs to Plante’s home, but when Plante visited the home in November 2000, she found that New Wave had not finished the promised repairs and had damaged her property. Then, on December 5, 2000 Plante visited her home to find the guest bathroom had been completely gutted and her alarm system had been destroyed. Plante demanded USF&G repair her alarm system and repair and return a $2,700.00 advance she had paid to New Wave. In December 2000, USF&G sent another contractor, All Claims Insurance Repairs, Inc., to inspect the home. All Claims told Plante that it would several months before repairs could begin due to permitting problems. Then in May 2001, USF&G canceled Plante’s homeowners insurance policy retroactive to January 27, 2001. Plante then received a letter in October 2001 from USF&G denying any responsibility for any additional monies beyond that which had already been paid. USF&G said that water damage preexisted the coverage period of the insurance policy.

Plante filed a complaint in November 2003 alleging two (2) claims: Statutory Bad Faith per Fla. Stat. §624.155(1)(b) and Fraud in the Inducement. USF&G filed a motion to dismiss claiming that the bad faith claim was not ripe because there had been no determination of liability and also sought to dismiss the Fraud in the Inducement claim stating that it had not been pled with specificity as required by Fed.R.Civ.P. 9(b).

As to the bad faith claim, USF&G argued that Plante was required to bring a breach of contract action first to determine whether or not USF&G was liable under the contract before bringing suit on a bad faith cause of action. However, Judge Gold of the Southern District disagreed stating that Florida law did not require that Plante establish a breach of contract through litigation. Rather, the court determined that Plante could bring a bad faith claim as long as the insurance carrier conceded liability on the claim even though the carrier disputed the amount for which it was liable. Thus, the court found that the payment on the insurance claim satisfies the prerequisite for the filing of a bad faith claim. Additionally, the court determined that any payment on a claim not just paying the policy limits, satisfied this requirement. Therefore, the court determined that Plante’s bad faith claim was ripe and denied USF&G’s motion to dismiss on this point.

However, as to fraud in the inducement, the court did grant USF&G’s motion to dismiss. The court found that Plante’s allegation of fraud in the inducement was inadequate for two (2) reasons. First, Plante’s complaint seemed to allege fraud by New Wave rather than USF&G. Second, Plante’s allegation was nothing different than a breach of contract claim. In order for there to be fraud in the inducement, Plante had to plead acts independent from breach of contract facts. Plante failed to do so.

A fraud claim meets the requirements of Fed.R.Civ.P. 9(b) “if it sets forth precisely what statements or omissions were made in what documents or oral presentations, who made the statements, the time and place of statements, the contents of the statements or manor in which they misled the plaintiff, and what the defendants gained as a consequence.” (citing Brooks v. Blue Cross and Blue Shield of Florida, 116 F.3d 1364, 1371 (11th Cir. 1997)). Because Plante failed to plead fraud in the inducement with specificity, the court granted USF&G’s motion to dismiss. Plante was permitted leave to file an amended complaint to cure the pleading defects.

Jackie A. Grady