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Citizens' Allegations of Arson and Fraud to Deny a Fire Claim Backfire Notes Miami Homeowners Coverage Attorneys

Our homeowners insurance coverage attorneys often meet people who are given the run around by their insurance carrier when they file a claim for damage to their home. These individuals frequently assume they have no real recourse. While policyholders usually understand that they can file a lawsuit for breach of contract, they might be concerned about their ability to afford attorney fees on an out-of-pocket basis. Our law firm handles homeowners insurance claims involving denied policy benefits on a contingency fee basis. Further, Florida courts can award lucrative attorney fee awards when an insurance carrier loses a breach of contract action. In a case from the Florida 3rd DCA, Citizens Property Insurance Corp. v. Pulloquinga, the court not only granted attorney fees but applied a 1.5 multiplier to the amount of the fee award.

The insured filed a homeowner's claim with Citizens after her house was destroyed by fire. The insured promptly provided notice of the loss to her insurer and participated in an Examination Under Oath (EUO) without an attorney. At the EUO, the insured provided documents supporting her claim. Citizens issued a check for $5,000 to the insured but paid nothing more for the complete loss of her home. The insured filed suit, and the carrier defended based on allegations of arson, insurance fraud, and misrepresentation in the application. The homeowner was forced to continue paying her mortgage during the two-year period between the fire and date of trial. She also was forced to seek out meager, alternative housing and to stay with friends. Because the homeowner had to maintain her mortgage while living somewhere else, she experienced extreme financial hardships during this period.

The trial court granted summary judgment in favor of the policyholder regarding the insurance carrier's defenses. The insurer paid policy limits and the insured's attorney fees and costs the day before the trial. The insured sought a finding on the amount of attorney fees and costs. The trial court awarded attorney fees and costs to the policyholder based on a 1.5 multiplier, and the insurer appealed the application of the multiplier to the attorney fees.

On appeal, the court cited the following factors as relevant to determining whether application of the multiplier was appropriate: (1) whether a contingency fee multiplier is necessary for the insured to obtain a qualified attorney; (2) ability of the attorney to mitigate the risk of non-payment; and (3) whether factors like the result obtained, type of fee arrangement, and amount of money involved are applicable.

The appellate court found the trial court's application of the factors in applying the multiplier persuasive. In applying the first factor, the court noted the trial judge relied on testimony that no other attorney in the relevant market agreed to accept the insured's case on a contingency basis. Further, the policyholder needed the billing to be based on a contingency fee because of her complete financial loss and need to pay the mortgage, which also precluded accepting a partial settlement of her loss. Regarding the second factor, the court observed that the attorney was unable to mitigate against the risk of the insured's non-payment of fees because she had no means from which to pay fees despite the significant time involved in pursuing the case. Finally, the appellate court acknowledged the case was not a "run of the mill" case because the insurer utilized defenses that included allegations of arson, insurance fraud, and material misrepresentation in the application. Citizens also contested that the house was a "total loss," as well as the insured's "ownership interest" in the home. The carrier further argued that coverage was not appropriate because the insured allegedly ran a business out of the house. These issues required "significant high-quality time, labor and effort by her attorney" explained the court.

The court observed that the attorney obtained excellent results because the recovery was for the maximum amount sought in pursuing the claim. The court also pointed to the trial court's observation that the novelty and complexity of the issues raised by the insurer interfered with the insured's attorney's ability to work on other cases and take on new clients. The court found that the complexity of the case was compounded by the complete destruction of the insured's home and personal belonging, which left her and her family without any property or place to live. The urgency of pursuing these complex issues was magnified by the insured's dire economic straights while trying to afford both a mortgage payment and rent for alternative housing.

Based on this application of these factors by the trial court, the appellate court upheld the trial judge's decision to award attorney fees with a 1.5 multiplier. This case provides an example of the power of a court to not only award attorney fees in insurance claims disputes but to award more than the full amount of fees. Concerns about your ability to afford legal representation should never discourage you from seeking legal advice and representation in an insurance claims dispute. My clients receive a free initial consultation, and my office handles homeowners insurance claims disputes against insurance companies on a contingency fee basis. This fee arrangement means that our office only collects attorney fees when you receive a settlement or verdict.

Greenberg, Stone, & Urbano: Seeking Maximum Recovery for Policyholders from Their Homeowners Insurance Company

Our Miami homeowners claim lawyers at Greenberg, Stone & Urbano will tenaciously pursue the full compensation our clients are entitled to under the law. For over 130 collective years, our firm has assisted homeowners with damage claims across South Florida. We seek to obtain compensation for your tangible and intangible damages. Our skill and dedication have earned us an AV rating from Martindale-Hubbell and recognition as one of South Florida's top firms by the Miami Herald. Call us at (888) 499-9700 or (305) 595-2400 or visit our website to schedule your initial consultation.

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