Florida Judge Orders Citizens’ Arbitration to Continue, Clashing With Other Order

The legal battle over Florida’s property insurer of last resort’s use of a state agency to hear claims disputes in arbitration took new turns this week, prompting one policyholder attorney to note that a move designed to reduce courtroom time has now resulted in months of litigation across four different court venues.

“We’re playing chess now, not checkers. I move here; they move there,” said attorney Lynn Brauer, who represents Martin Alvarez, a Tampa-area homeowner, in a legal challenge against Citizens Property Insurance Corp., which is still one of the largest insurers in the state.

Citizens announced earlier this week that a Leon County Circuit judge has ordered the state Division of Administrative Hearings (DOAH) to continue hearing more than 400 pending Citizens’ claims disputes, despite a Tampa judge’s order pausing the DOAH arbitration hearings.

“Citizens’ Petition for writ of mandamus is hereby GRANTED. DOAH shall promptly resume administering proceedings as required … except as pertains to the plaintiff in Alvarez v. Citizens Prop. Ins. Corp.,” Leon County Judge Jonathan Sjostrom wrote in his Nov. 14 order.

The order differs sharply from the Hillsborough County judge’s Aug.1 order in the Alvarez case, which placed a hold on DOAH’s Citizens proceedings due to questions about the arrangement’s constiutionality and fairness to policyholders. A Citizens’ official said in a news release that numerous state court judges have agreed with the Leon County judge and have found no problem with the insurer’s arbitration process.

“Citizens remains committed to defending DOAH arbitrations because it is a fair and transparent process, allowing Citizens and policyholders to resolve claims disputes much faster than overburdened state courts (90 days on average, instead of almost two years),” wrote Michael Peltier, Citizens’ director of communications.

A number of claimants and their lawyers have said the DOAH process stacks the deck against homeowners. Cases are conducted on a tight deadline, multiple cases can be scheduled for the same week, and attorney fees are low. The vast majority of decisions have fallen in favor of Citizens, prompting more and more policyholders to settle their claims for just $250, lawyers have said. Recent DOAH data supports that contention.

The Leon County order now raises a fundamental question, Brauer said. It orders DOAH to continue hearings, but the Hillsborough order still stands, barring from Citizens from requesting DOAH arbitration.

“DOAH is authorized to proceed but Citizens is not,” Brauer said.

She plans to file a response this week to Sjostrom’s order.

Meanwhile, Citizens on Nov. 14 suddenly dropped its request to have the Alvarez homeowner policy claim dispute heard by DOAH’s administrative judges and has asked the Hillsborough judge to dismiss the Alvarez lawsuit altogether. Citizens officials could not be reached for comment on the reasons for that, but Brauer said it was likely a move by the insurer to “be rid of” Polo’s order that barred more DOAH hearings.

Citizens also had asked a state appellate court to block Hillsborough County Judge Melissa Polo from moving ahead with her order while the Alvarez case is pending. But the 2^nd District Court of Appeals on Sept. 12 denied Citizens’ motion.

In a side note to the Alvarez case, Citizens’ attorney, former state Supreme Court Justice Ricky Polston, had asked Polo to disqualify herself from hearing the litigation, contending that she had shown herself to be biased. Polo in September declined to remove herself from the case, noting the request was “legally insufficient.”

And in another development in the lawsuit, another Tampa-area homeowner intervened and filed an emergency motion for sanctions against Citizens. Christopher and Jennifer Bush argued in the motion that, despite Polo’s Aug. 1 order temporarily barring new DOAH hearings, Citizens has moved the Bush’s claim dispute to DOAH for arbitration.

Despite 2022 and 2023 actions by the Florida Legislature that ended one-way attorney fees and assignment-of-benefit agreements—statutory changes that have greatly reduced excessive claims litigation—lawsuit costs remain an issue for Citizens and other property insurers. And Brauer’s Miami-based firm, Insurance Trial Lawyers, is one of the most proficient instigators of claims lawsuits, Citizens’ data show.

The law firm, also known as Florida Insurance Law Group, now has 358 cases pending against Citizens, the insurer said this week. That’s 100 more cases than the next-busiest firm, MSPG Law Group, which has offices in Miami, Louisiana and Texas.

“I’m persona non grata with Citizens,” Brauer said.

A separate piece of litigation, a federal lawsuit challenging Citizens’ DOAH arbitration as unconstitutional, was dismissed in September.

Related: Florida Judge Blocks DOAH for Citizens Claims Disputes

While One Suit Over Citizens’ Arbitration is Dropped, Drama Builds in Another

Citizens No Longer Winning Most Arbitration Cases. They’re Settling for Next to Nil

Topics Florida Legislation