The Property Case

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Last year in Florida, the Moises Gross law firm in Coral Gables ranked sixth among law firms in Florida filing suits against property insurance companies. It was high-volume, low-damages work — tens of thousands of dollars per claim, generally. Firm co-founder Jesus “JD” Moises says his clientele is statewide but heavy on people south of Orlando, many elderly Latinos with limited English, the majority from the lower socio-economic rungs of society.

In December, the Legislature changed state property insurance law in ways that potentially ruined his firm’s business model. Historically, Florida delegated to attorneys the job of consumer protection. As far back as the 1890s, homeowners suing their property insurers — a different niche than personal injury — were allowed to recover attorney fees if they won their case.

Over time, they also could recover attorney fees if they won a settlement. But insurers, if they won, paid their own bills. The “one-way” attorney fee practice allowed people without means to hire a lawyer to fight well-heeled insurers. Plaintiffs lawyers say it gave homeowners leverage against an industry they say pays low and slow in Florida.

Mosies says the old one-way statute incentivized insurers to assess and settle cases rather than run up fees and costs. He also says that in some cases, property claimants did get hit with insurance company fees.

Insurers and state leaders say the system was abused. They say “sign ‘em and settle ‘em” litigation mills were built on a model of bringing in a high volume of clients, securing a quick settlement, collecting a fee from the insurer and moving on to the next client. Insurers blamed excess litigation and abuses for their mounting losses. Company failures, premiums four times the national average and state insurer Citizens Property’s soaring policy count brought the crisis to a head and lawmakers ended “one-way” attorney fees, among other changes.

Moises says people with tens of thousands of dollars in property damage will have to settle for whatever insurers offer or hire a lawyer on contingency, which means even if the homeowner prevails on, say, a roof claim, the lawyer will take a third, leaving the homeowner that much short on money to complete the repair.

Moises rapidly ticks through costs — a $473 filing fee, $150 per deposition or hearing for a court reporter, thousands of dollars for transcripts and expert witnesses in engineering, contracting and meteorology to support the claim and so on — to demonstrate why it will be hard to find an attorney willing to take and fund certain cases. “Anything less than $75,000 in damages would be a non-starter for most firms,” he says.

At present, Moises says his firm is plenty busy on Hurricanes Ian and Nicole claims, which pre-date the new law and are governed by the old rules. His firm has taken cases governed by the new rules while rejecting others because of the new law. He anticipates doing more commercial litigation and is urging firm attorneys to get board-certified so they can represent businesses suing businesses rather than individuals. He sees the firm doing more “catastrophic residential and general commercial insurance claims.” Says Moises, “It’s clear the state is favoring businesses over individuals, so we intend on following the trend as much as possible. Even though property insurance is going to go away, there are still going to be civil litigation trials.”

He says he tells people not to go to law school. “You’re going to die of hunger if you decide to represent people,” he says.

Tags: Government/Politics & Law, Feature