An interesting exchange occurred during last week’s hearing of the House Subcommittee for Civil Justice’s debate on HB 427, a bill to protect insurance companies from bad faith claims.
After the bill sponsor and all the other speakers for and against had delivered their pitch, the last presenter of the meeting, from the Taxpayers Against Insurance Bad Faith, announced, “I have figured it out.” The problem, he suggested, was that Representative Kathleen Passidomo distinctly misunderstood the effect of her own bill.
Repeatedly she had suggested that a Civil Remedy Notice could be filed by the policy holder or claimant at any time – “the claimant can file that the second the accident occurs,” she said. That would effectively mean that only insurance companies who offered their limits within 60 days could be guaranteed the immunity her bill granted.
Representative Kiar, himself an attorney, questioned this, asking essentially how a policy holder or claimant could fill out a Civil remedy Notice before the carrier was even given a chance to settle the claim. However, Passidomo, glancing over at the representatives from the carriers present, was absolutely adamant.
Ranking Member Richard Steinberg (D-Miami Beach) persisted with the questioning, suggesting this seemed completely inconsistent with the elements of the statute Passidomo quoted that required the filing to “state with specificity the facts and circumstances giving rise to the violation” if the claimant didn’t believe bad faith had been committed. Passidomo responded that “they just put down whatever they feel would be required to get the notice out,” which prompted a comment by Steinberg about not getting a straight answer.
The last person to address the committee was the president of the Taxpayers Against Insurance Bad Faith, a lawyer named Dale Swope, who has specialized in representing policy holders in bad faith claims for 25 years. Swope confirmed the Representative’s belief that Passidomo was completely, dead wrong.
He pointed to a Supreme Court decision, called Talat Enterprises vs. Aetna, which confirmed that the purpose of the 60-day period under the statute is to “cure” bad faith that has already occurred. The court wrote “It is plain that the 60 day period was a time in which the insurer could act to cure (emphasis added) a violation … about which it had been noticed.”
The actual name used in the statute for a Civil Remedies Notice, in fact, is “Notice of Insurer Violation.” However, there can be no notice of a violation until there is a violation. Furthermore, there can be no 60 days to cure bad faith until there is bad faith.
Of course, a piece of paper can be filed, Swope said, but it will have absolutely no legal effect to file it the day of the accident, or at any other time before the insurer has committed bad faith. That means this bill would give every insurance company ‘one free bite’ of bad faith on every single claim. “You are inviting every single claim against a Florida business to be handled in bad faith with a special get out of jail card that lets the insurance company escape with immunity, which its policy holder is left to pay the entire loss out of its own pocket,” Swope said.
Despite the power of this logic, and the obvious and clear words of existing law, Passidomo clung stubbornly to her statement that a valid Civil Remedy Notice could be filed “even a second after the claim,” so that the bill was nothing more than a 60-day safe harbor period for insurers to get claims settled. She seemed, genuinely, to believe this was true. But how could she?
One of the lobbyists who appeared to speak in favor of her bill was Charlie Wells, a lawyer who used to sit on the Supreme Court. He WROTE THE OPINION in the Talat case. He had to know Passidomo’s belief that a valid Notice of Insurer Violation could be filed ‘at any time’ was just wrong.
Presumably they worked together to get the bill ready for filing and presentation, and even to prep her to be able to explain it. So…did he ever accurately explain to her how her bill would actually work? And if not, was that her fault or his?
Most importantly, when Wells spoke to the committee after hearing the bill sponsor make such a glaring mistake about whether a Notice of Insurer Violation can be properly filed before an insurer violation occurs, why did he not correct the error? As the judge who wrote the very opinion that said the purpose of a Civil Remedies Notice is to give the carrier an opportunity to cure what it has (already) done wrong, how could he allow her and possibly others to remain confused about that?
It reminds one of the unintended consequences of term limits that keep legislators from being able to develop the same level of expertise as they previously had, basically forcing them to rely on paid lobbyists for that expertise. That new power elevates the importance of these paid lobbyists, even beyond the power of the moneyed interests they represent.
And with great power comes great responsibility.
Members of the House Civil Justice Committee who voted in favor of Passidomo’s bill included Chairman Eric Eisnaugle (R), Vice Chairman Larry Metz (R), Bill Hagar (R), Scott Plakon (R), Kelly Sturgel (R) and Michael Weinstein (R).
Members who voted against this bill include Richard Steinberg (D), Joseph Abruzzo (D), Bernard Mack (D), Matt Gaetz (R), Shawn Harrison (R), Martin Kiar (D), Jose Oliva (R), and Darren Soto (D).