New Decision: Public Adjusters (Gables Ins. v. Citizens)
November 12, 2018

When do the fees paid to a public adjuster exceed the Insurance Adjuster Law maximum in §626.854(11)(b) Fla. Stat. (2014), and whether that excess will invalidate the public adjuster’s employment agreement were at issue in Gables Ins. Recovery, Inc. v. Citizens Prop. Ins. Corp., Case Nos. 3D15-2320 & 3D16-87 (Fla. 3d DCA September 20, 2018). The Insurance Adjuster Law regulates insurance adjuster contracts, including prohibiting a public adjuster from obtaining more than twenty percent of the payments made on an insurance claim.

The contract terms were critical to the appellate court’s analysis. Homeowner Matusow and homeowner Difilippi, sought to recover water damage losses for their individual homes. In separate transactions with separate contracts each homeowner contracted with Gables Ins. Recovery, Inc., a public adjuster.

Homeowner Matusow contracted with Gables “to appraise, advise and assist” her claim, including hiring professional services of “appraisers, estimators, engineers and other experts reasonably needed….” after settlement efforts were unsuccessful. Matusow assigned Gables her entire claim, and also entered into a “Professional Services Engagement Agreement” which included an authorization for “filing of the claim in court.” Gables was entitled to recover attorney’s fees and costs in addition to the twenty percent recovery. The trial court granted Citizens a summary judgment based upon the statutory maximum payment, and related Florida Administrative Code Rule 69B-220.201(4)(d).

Homeowner Difilippi provided Gables a similar assignment and Professional Services Engagement Agreement, except that Gables was entitled to only ten percent of insurance proceeds recovered, but added fees and costs. The trial court granted Citizens’ motion for summary judgment similar to Matusow.

As a predicate, the appellate court discussed that the statute broadly defines “public adjuster” as including “negotiating for or effecting the settlement….” The homeowners’ agreements included as recovery efforts the filing of a lawsuit. Thus, filing of a lawsuit was just one part of the public adjuster’s efforts. The exception to the maximum fee for attorneys could not be utilized by Gables in light of Gables’ sworn statements and license was it that was a public adjuster, not asserting that it was an attorney. The court did not examine who would ultimately receiver the payment, for example the attorneys would receive some of all of the fees.

The Matusow agreements provided for payment to the public adjuster for attorney’s fees and costs in excess of the twenty percent payment on the face of the agreements; thus, the payments exceeded the statutory cap. As a result, the appellate court affirmed the summary judgment, holding that the assignment of claims to Gables Recovery was not valid, and without a valid agreement, Gables had no basis to bring a suit against Citizens.

The Difilippi agreements did not on their face indicate a fee greater than twenty percent. Thus, the appellate court remanded for a determination by the trial court to determine whether the the twenty percent cap would be exceeded.

A detailed dissent argued that the attorney’s fees would be paid to the attorneys, not the public adjusters, and that the statute while barring an excess fee did not state that an agreement with an excess fee would be invalid.

This decision cuts both ways for community associations. This decision, despite its seeming harshness should reinforce the maximum amount that associations must pay a public adjuster if one is retained. On the other hand, if litigation is anticipated, the agreements likely be carefully drafted to clarify how the claimant’s attorney is paid, whether through the public adjuster or directly from the client to the adjuster. This differentiation may have its greatest impact on smaller claims, perhaps resulting in unit owners relying more on their associations to pursue claims.

On a broader perspective the invalidation of the agreement may bring more attention to the decision. The majority and dissent vigorously argued this issue. It was unclear if the agreements had a severability provision. The dissent’s citations to preserve contracts may bear further review.

Many thanks to Doug Christy for providing the decision.

Michael J. Gelfand

Past Chair

Real Property, Probate and Trust Law Section

of The Florida Bar

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Note: This article is not legal advice. Statements and comments made are not those of The Florida Bar or the RPPTL Section

© 2018 Michael J. Gelfand

Michael J. Gelfand

Florida Bar Board Certified:

Real Estate Attorney

Condominium & Planned Development Law

Florida Supreme Court Certified Mediator:

Civil Circuit Court & Civil County Court

Fellow, American College of Real Estate Attorneys

The only thing necessary for the triumph of evil is for good men to do nothing.

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