Monday, November 22, 2004

Over and Under

There's a game weekend golfers sometimes play called "over and under." In some locales, poker players have been known to play a card game by the same name. And, so I have been told, there's a lover's bed game by the same name (although it's likely one that is played only in the Blue states.)

My modest point here is that "over" and "under" are prepositions with many very different meanings. A too-easy use of them can obscure meaning rather than inform.

Kimberley Blair had a go at a new version of "Over and Under" in the Sunday Pensacola News Journal for November 21. In a front page article titled 50 percent rule sparks 100 percent confusion she manages to compound the confusion she is writing about rather lessen it. [The link will not work in a few days, owing to the News Journal's fanciful conceit that you'll pay hard earned money for the privilege of reading their older articles.]

Writing about FEMA's "50 percent rule" for flood plain structures, it is to Ms. Blair's credit that in the body of the article she more or less correctly summarizes the rule this way:
If the cost of repairs amounts to more than 50 percent of the pre-disaster value of an existing building, the entire building must be reconstructed to conform to the current Florida Building Code, or what's left of the original structure must be demolished.

If the building is in a hazardous flood zone, is more than 50 percent damaged and does not meet flood zone building requirements, it must be elevated, rebuilt, relocated or demolished.
That's simple enough. In effect, she's saying that for pre-FIRM homeowners if the structure is "over" 50 percent destroyed then you have to rebuild on pilings. "Under" 50 percent and you can remodel what you have.

New confusion is introduced by Blair herself, however, when she uses the same two prepositions to describe the application of the rule in individual situations. This new confusion makes its dramatic entrance in the article's lede, or opening sentence:
Repair work came to a screeching halt at the flood-damaged Villa Venyce home of Britt and Miriam Rowland when they realized some of their neighbors' homes fell under the 50 percent rule. Like "hanging chads" after the 2000 election, the previously obscure 50 percent rule has emerged as a buzz phrase from Hurricane Ivan.

Forget the strained simile about chads. When Blair writes that the neighbors' homes "fell under the 50 percent rule" the casual reader likely will understand her to be saying that the neighbors' homes in some way fell below the 50% benchmark the rule establishes. What she really means to say, surely, is that because of the application of the "50% rule" the neighbors face the possibility of being ordered to tear down their existing structures and rebuild because the structures were more than half destroyed. Or, to put it more simply (in the way "buzzphrases" try to do) storm destruction to each of the neighbors' property was over 50 percent.

Ms. Blair risks compounding the confusion when she repeats the same mistake in a slightly different way while paraphrasing a Santa Rosa county official. Not quoting the official, but summarizing what was supposedly said, Blair writes, "Some people want their homes to fall under the 50 percent rule so they can demolish... ."

Say what? Are there no copy editors left at the Pensacola News Journal? Under the 50% rule?

Well, not exactly. What the official actually was telling Ms. Blair, one suspects, was something like, "People want to know if application of the 50% rule will require their homes to be demolished because the structures are over 50% destroyed." Put that way, Blair's source would have been repeating the same frustration homeowner Rowland expressed: "You talk to five different people about it, and you get five different interpretations."

To be sure, it is not ungrammatical to refer to someone falling "under" the 50 percent rule. In phrasing it that way, however, Ms. Blair is (inadvertently, one hopes) helping to obscure, and not expose, the source of the root "confusion" she is writing about.

The French novelist Anatole France once wrote with heavy irony in The Red Lily--
"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread."
Like France's bridge-sleeping ban, the fifty percent rule is a law. It applies to every flood zone structure alike, pre-FIRM and post-FIRM.

In itself the 50% rule isn't all that confusing. It's the uneven, inconsistent, and unfair application of that law by bureaucrats and insurance companies that causes public confusion and injustice.

The issue, then, is not any inherent confusion in the 50% rule, as Ms. Blair's article can be read to imply. After all, everyone is under the same rule. It's the grotesque failure of county government and government-subsidized flood insurance companies to consistently, fairly, and quickly apply and enforce the rule that is the cause of confusion.

Far too many people with severely damaged structures -- including thousands of homes on Pensacola Beach -- have been left in limbo by the arbitrary way the 50% rule is being applied. The particular locution Ms. Blair chose for her article covers up that reality.

Friday, November 19, 2004

Bell vs. Bryan I (1987)

There has been considerable talk about the earlier case in which both the Escambia County Circuit Court and the First District Court of Appeals ruled against county attempts to impose ad valorem taxes on Pensacola Beach leaseholds. For the convenience of interested persons, reproduced below is the actual decision as written in 1987.

Bell v. Bryan (I)
505 So.2d 690 (Fla. 1st DCA 1987)
First District Court of Appeal of Florida

Full case name: Matt Langley BELL, III, Tax Collector for Escambia County, Florida, Escambia County, Florida, a political subdivision of the State of Florida, R.J. Hooten, and Santa Rosa Island Authority, Appellants v. R.D. BRYAN, a/k/a Ruepert D. Bryan, and Nellie B. Bryan, Husband and Wife, Don Bryan, Merrell Fairchild, William O. Wedel, a/k/a W.O. Wedel and Dorothy Thayer, Appellees.

Summary: In dispute regarding county tax assessment on leased property owned by county, the Circuit Court, Escambia County, John T. Parnham, J., granted summary judgment in favor of taxpayers, and county appealed. The District Court of Appeal, Nimmons, J., held that: (1) it was improper for tax collector to issue tax certificates on improvement on property owned by county but leased by improver to enforce tax assessments, and (2) tax assessments erroneously taxed improvements at real property rate instead of at applicable intangible personal property rate.


*690 Thomas F. Condon of Mitchell & Condon, Pensacola, for appellant Bell, Tax Collector.

J.B. Hopkins, Pensacola, and Larry E. Levy of McFarlane, Ferguson, Allison & Kelly, Tallahassee, for appellant Escambia County.
Spencer Mitchem of Beggs & Lane, Pensacola, for appellant Santa Rosa Island Authority.
M.J. Menge, of Shell, Fleming, Davis & Menge, Pensacola, for appellees.



We substitute the following for the opinion of January 23, 1987, filed in this case. Except for the modification exemplified by the amended opinion, rehearing is denied.

Appellants challenge a summary judgment entered in favor of appellees, taxpayers on Santa Rosa Island. We affirm.

Appellant, Escambia County, owns property on Santa Rosa Island which it leases to appellees through its agents, the Santa Rosa Island Authority. Each lease states in part:
(3) The above described property is leased to lessee as residential property for the purpose of constructing and maintaining a beach home or seasonal or permanent residence thereon. Lessee covenants and agrees at his own cost and expense to erect and complete a dwelling house on said property....
(4) Title to any building or other improvements of a permanent character that shall be erected or placed upon the demised premises by the lessee shall forthwith vest in said Escambia County, subject, however, to the term of years and option to renew granted to lessee under terms of this lease.

Appellees are leaseholders who improved their lots for residential purposes.

With regard to the taxes to be paid by appellees in 1982 and 1983, the County assessed no tax on the value of the leasehold *691 without improvements. This was apparently taxed by the state as intangible personal property pursuant to Section 196.199(2)(b), Florida Statutes (1981). However, taxes on the improvements made by the lessees/appellees were assessed at the full real property rate. Appellant/Tax Collector issued tax certificates on the property to enforce the assessments. Appellees filed a complaint requesting declaratory and injunctive relief. The trial court granted summary judgment in favor of appellees finding that the real property belonged to the County, thus making tax certificates an improper method of enforcing an assessment, and finding that the assessments should have been at the intangible property rate instead of the real property rate. We affirm on both grounds.

The first issue raised by appellants is that it was not improper for the tax collector to issue tax certificates on the improvements on the property owned by Escambia County.1 As the trial court found under the above quoted terms of the lease, the improvements on the Santa Rosa properties belong to Escambia County. That being the case, it is inappropriate to enforce tax assessments via sale of tax certificates. Section 197.116(8), Florida Statutes (1983). The trial court was correct in granting summary judgment on this ground.

The alternative ground suggested by appellees for granting summary judgment was that the assessments were erroneous in that they taxed the improvements at a real property rate instead of at an intangible personal property rate. The trial court agreed with this interpretation of existing law. So do we.2 Section 196.001, Florida Statutes, which has remained unchanged since 1971, provides:
Unless expressly exempted from taxation, the following property shall be subject to taxation in the manner provided by law:
(1) All real and personal property in this state and all personal property belonging to persons residing in this state; and
(2) All leasehold interests in property of the United States, of the State, or any political subdivision, municipality, agency, authority, or other public body corporate of the state.

The general method of taxation is prescribed in other parts of Florida Statutes, e.g. Chapters 193 and 200. However, within Chapter 196, entitled "Exemptions," appears Section 196.199(2)(b), Florida Statutes (1981)3 :
(2) Property owned by the following governmental units, but used by nongovernmental lessees, shall only be exempt from taxation under the following conditions:
* * *

(b) ... Such leasehold estate shall be taxed only as intangible personal property pursuant to Chapter 199 if rental payments are due in consideration of such leasehold estate. If no rental payments are due pursuant to an agreement creating such leasehold estate, the leasehold shall be taxed as real property. Nothing in this section shall be deemed to exempt personal property, buildings, or other real property improvements owned by the lessee from ad valorem taxation.

The exemption contained in this section is applicable to the instant leaseholds. All parties concede that the exemption applies to the real property on which the improvements were built. However, appellants argue the novel proposition that the improvements, which are property of Escambia County, and the development of which is the express purpose of the creation of the leasehold, are not part of that leasehold. We can find no basis in law or reason for determining that the improvements on the *692 real property are not as much a part of the leasehold as the real property itself.

The trial court correctly determined that the assessments placed on the improvements to the subject property were erroneous and should have been determined at the intangible personal property rate pursuant to the above quoted section.

Accordingly, the summary judgment in favor of appellees is AFFIRMED.

JOANOS and THOMPSON, JJ., concur.


1. Appellant/Tax Collector concedes the correctness of the trial court's findings on this point. However, the other appellants do not.

2. No constitutional challenge to this statutory taxation scheme is raised on appeal and therefore, of course, no constitutional issues are determined.

3. The statute was slightly changed in 1985. Chapter 85-342, Laws of Florida.

The Right URL

At the beach tax meeting Thursday night, someone was handing out a flyer that gives the wrong url for the new PBeachTaxSuit web site.

Click on the live link, above, or copy this:

Don't know who's doing it but over the next few days I'll see what I can find by way of relevant articles from the old web site. First I have to go fishing in the Gulf for my computer....

If I come up with anything, PBeachTaxSuit is free to borrow what they like.

Monday, November 15, 2004

Proof of Loss - Part II

Downthread, I caution readers to file a Proof of Loss by Monday, November 15, 2004, if they are in any doubt that their Hurricane Ivan casualty insurance claims have been opened. I wouldn't change my gratuitous advice, but it should be mentioned that the deadline for federally insured flood insurance claims was extended on September 24 by Acting Federal Insurance Administrator David Maurstad.

Claimants under a federal flood insurance policy now have up to one year "from the date of the loss." Presumably, that would be September 15, 2005.

The policy statement issued by Maurstad is not findable on FEMA's public web site. But a copy is available on the web at Bureau Net, the federal flood insurance web site set up for insurers and adjusters. Members of the general public can access select portions of that semi-private web site without a password -- including the September 24 bulletin, which is (sigh) available only in un-friendly pdf (Adobe Acrobat) format.

In part, that bulletin reads:
To expedite claims payments so that policyholders affected by these circumstances are not subject to undue hardship, I am waiving the requirement in VII.J.4 of the SFIP Dwelling and General Property Forms and VIII.J.4 of the SFIP Residential Condominium Building Association Policy Form for the policyholder to file a proof of loss prior to receiving insurance proceeds. Instead, payment of the loss will be based on the evaluation of damage in the adjuster’s report. This means the requirement in VII.M.1 and VIII.M.1 that losses will be payable 60 days after the insurer receives the policyholder’s proof of loss (or within 90 days after the adjuster files a report signed and sworn to by the policyholder in lieu of a proof of loss) will not apply. Instead, the loss will be payable as soon as practicable after the insurer receives the adjuster’s report. This procedure will allow the insurer to promptly adjust, settle, and pay claims based on the adjuster’s report.

The Proof of Loss requirement is not waived entirely, but the deadline is substantially extended:
In the event a policyholder disagrees with the insurer’s adjustment, settlement, or payment of the claim, a policyholder may submit to the insurer a proof of loss within one year from the date of the loss. [emphasis added] The proof of loss must meet the requirements of VII.J.4 of the SFIP Dwelling or General Property Form or VIII.J.4 of the SFIP Residential Condominium Building Association Policy Form. The insurer will then process the policyholder’s proof of loss in its normal fashion. If the insurer rejects the proof of loss in whole or in part, the policyholder may file a lawsuit against the insurer within one year of the date of the written denial of all or part of the claim as provided in VII.R of the SFIP Dwelling or General Property Form or VIII.R of the SFIP Residential Condominium Building Association Policy Form.

To repeat: The Proof of Claim waiver applies only to flood insurance claims. Homeowner insurance policies, windstorm, auto, and other policies are not affected.

Sunday, November 14, 2004

Tax Message from the PBRLA President

Gary E. Smith today posted the following message on the PNJ's Pensacola Beach message/chat board:

At yesterday’s meeting at Bamboo Willie’s, a litigation group was formed to contest taxation on beach property. Here are the highlights:

* The law firm selected is Shell, Fleming, Davis and Menge.
* The INITIAL fee is $200 per tax bill.
* The suit will be multi-plaintiff, NOT CLASS ACTION

If you wish to be included as a plaintiff, deliver or mail a check for $200, a copy of your current lease, assignment, master lease (if you have one) and tax bill, to:
The Visitor Information Center
735 Pensacola Beach Blvd.
Pensacola Beach, Fla. 32561

Make checks payable to the Pensacola Beach Tax Suit Trust Fund. ASAP. TIME IS SHORT.

The next meeting of persons participating or interested in participating will be at Bamboo Willie’s at 6:00pm on Thursday.
Spread the word as best you can. Tell your friends and neighbors and out of state owners.

Proof of Loss

" isn't worth the paper it's not written on."-- Sam Goldwyn

60-Day Proof of Loss Deadline

Anecdotal reports are that many hurricane victims on Pensacola Beach have not yet been contacted by an adjuster, or they've heard nothing further, or the adjuster is low-balling their loss claims. If you fit one of these categories, you might want to consider 'formalizing' your insurance claim by mailing, return receipt requested, a Proof of Loss to all of your storm-related casualty insurance companies.

As explained in a Q-and-A posted on the PNJ web site, the deadline for filing a formal Proof of Loss normally is 60 days from the date of the occurrence. In the case of Hurricane Ivan, that would be November 15:
Question: How much time do I have to submit my claim?

Answer: The answer depends upon your policy. Some policies provide that the proof of loss must be filed "as soon as practicable" or "within a reasonable time." Others provide that the proof of loss must be filed within a fixed period of time 30 or 60 days from the date of the loss. You should carefully review your policy to determine when the proof of loss must be filed and comply with its provisions. Flood claims under the National Flood Insurance Program and policies require that a proof of loss must be filed within 60 days from the date of the loss. THE ADJUSTER CANNOT WAIVE THIS REQUIREMENT FOR FILING A FLOOD PROOF OF LOSS WITHIN 60 DAYS!

Be sure to read your flood, windstorm, and homeowner's policies for any variation on the Proof of Loss requirement.

To be sure, Florida Citizens Windstorm does invite insureds to telephone their claims. But the language of many Florida Windstorm policies does not make an explicit exception for such an informal practice. However, the concept of 'waiver' may be a savior.

Waiver of Proof of Loss

Some beach residents have had personal conversations with their adjuster, received a copy of the 15-day "preliminary report" from him, or even have received an advance payment on their claim. (Be aware, however, that advance claims most often are made only on the personal property portion of the claim, which the adjuster may have attributed, rightly or wrngly, to one policy and not another whch you think also provides coverage.)

In such cases, the insurance company (or companies) represented by the adjuster arguably has "waived" its right to a timely sworn Proof of Loss statement, as explained in a web article by certified insurance underwriter Rick Hammond. Although he was writing from Chicago about casualty claims in general, much of what Hammond says has relevance to Florida hurricane vicitims as well:
Typically, an insured is required to submit a proof of loss in order for the insurance company to determine the extent, if any, of their liability for the claim. Zak v. Fidelity-Phoenix Ins. Co., 34 Ill. 2d 438, 216 N.E.2d 113 (1966).

In that regard, the terms of most property policies provide, inter alia, that in the event of loss, the insured must see that the following duties are performed:

a. prepare an inventory of damaged or stolen personal property. Show in detail the quantity, description, actual cash value and amount of loss. Attach to the inventory all bills, receipts and related documents that substantiate the figures in the inventory;

b. submit to [the insurer], within 60 days after the loss, a signed, sworn proof of loss which sets forth, to the best of your knowledge and belief:
(a) specifications of any damaged building and detailed estimates for repair of the damage;

(b) an inventory of damaged or stolen personal property

It is important to note that if the insurer, before demanding a proof of loss, is fully aware of facts which allows for a coverage defense and does not then insist on noncoverage but recognizes the continued validity of the policy by requiring the insured to go to the trouble and expense, if any, of preparing proofs of loss and related matter, an implied intention to waive the respective policy defense may follow. Kenilworth Ins. Co. v. McDougal, 20 Ill. App. 3d 615, 313 N.E.2d 673 (2nd Dist. 1974).

However, one court has held that, in order to establish that an insurer has waived its right to demand a proof of loss, the alleged conduct amounting to the waiver must have occurred during the time fixed by the policy for filing the proof of loss, or prior to the time of the insured's forfeiture for failure to comply with that policy condition. Conley v. Fidelity-Phoenix Fire Ins. Co. of New York, 102 F.Supp. 474 (D. Ark. 1952).

It should also be noted that at least one other court has concluded that an insured cannot be charged with "waiving a waiver" after one has occurred. For example, in Warshawky v. Anchor Mut. Fire Ins. Co., 98 Iowa 221, 67 N.W. 237 (1896), the court held that an insured may charge an insurer with waiver of its right to demand a proof of loss, notwithstanding the fact that the insured later submitted the proof out of caution.

Time Limitation for Filing and Rejecting Proofs.

As noted previously, most property polices state that the insured must submit a sworn statement in proof of loss within 60 days after the loss. An insurer's own failure to furnish proof of loss forms in a timely manner to its insured after receiving written notice of the loss could constitute a waiver of the strict compliance with that requirement. Canal Ins. Co. v. Savannah Bank & Trust Co., 181 Ga. App. 520, 352 S.E.2d 835 (Ga. Ct. App. 1987). However, at least one court has held that, in the absence of a contractual or statutory duty of an insurer to furnish to its insureds blank copies of the proof of loss, a failure to do so has been held not to constitute a waiver. Standard Life & Acc. Ins. Co. v. Strong, 13 Ind. App. 315, 41 N.E. 604 (1895).

In Dellar v. Frankenmuth Mut. Ins. Co., 173 Mich. App. 138, 433 N.W.2d 380 (Mich. Ct. App. 1988), the court held that the insured did not receive a copy of the policy from the insurer, despite repeated requests, until after expiration of the sixty-day period for the filing of the proof of loss. Moreover, the insured claims that she never received a blank proof of loss during the period before commencement of legal action. Id.

The court held that the failure of the insurer to provide such documents until after the expiration of the sixty-day period prevented the insured's compliance. The court also concluded that because there had been a full investigation, a pending criminal charge, and an examination under oath of the insured, a sworn proof of loss would add nothing and that its functional equivalent was already provided. Id.

It is interesting to note that the court in Dellar stated in dicta that--
[i]t would be better policy that, in order for an insurance company to argue in favor of a forfeiture of benefits based exclusively on the failure to file a sworn proof of loss within sixty days, the company be required to give notice of such potential forfeiture and either its own form for proof of loss or a specification in writing of what constitutes a satisfactory proof of loss.

A reasonable consequence of a waiver of the time limitation for filing a proof of loss is a finding by at least one court that states that an insurance company, upon rejecting a proof of loss and arranges with the insured for the filing of a new proof of loss, is obligated to notify the insured of its rejection in ample time to allow the insured to comply with the policy provision which sets a time limit for filing suit. Downing, 62 Ill. App. 2d at 308, 210 N.E.2d at 606.

However, an insurer does not waive the provisions regarding the time limitation for the submission of a proof of loss where it has no knowledge of the facts of the claim. Thus, an insurer is entitled to know that a demand is being made upon it under a policy issued by it, before its acts may be treated as a waiver. Nelson v. Travelers Ins., 113 Vt. 86, 30 A.2d 75 (1943).

Thus, even if it is not necessary, strickly speaking, to file a Proof of Loss by November 15 with any insurance company represented by an adjuster you have been successfully meeting or corresponding with, it still may be prudent to document your claim and leave no room for doubt the company has actual notice of it.

As Sam Goldwyn once said, famously, of a verbal contract, "it isn't worth the paper it's not written on." A Proof of Loss may be required for any other insurance companies you believe are contractually obligated to cover any portion of your losses, especially if they haven't yet acknowledged receiving your claim or had an adjuster investigate your premises.

Adjusters do screw up. They forget, mis-file things, get fired, slip into insanity, or even get sick and die. Sometimes, especially like now when so many damaged Florida properties are being assessed by 'newbie' adjusters just out of training, they can get confused or forget you altogether.

Eventually, too, a signed and notarized Proof of Loss almost certainly will be needed from every insured person who disputes the adjuster's analysis or the insurance company's compensation offer. So, create your own paper trail just in case the insurance company or adjuster has fouled up already!

The Proof of Loss Form

The actual proof of loss is not complicated. Your adjuster should have provided you with a form like this one in pdf format from Florida Citizens Property Insurance Co. But he probably didn't. Even so, you also can make your own very simply by writing a letter that states:
* Your name, address, and phone
* Address of the "loss location"
* Description of the structure (single family home, condo, etc.)
* Name of homeowner insurance company
* Name of flood insurance carrier
* Name of windstorm insurance carrier
* Name of any other casualty insurance company possibly liable to you for the property due to the same event
* Description of property damaged or lost
* Probable amount of the loss to you or your claim (or "policy limits" where applicable)

Sign the letter in front of a Notary Public, keep a copy for your records, and send the Notice of Claim off in such a way as to have written verification when it was received.

Saturday, November 13, 2004

Eavesdropping on Adjusters

Came across an Internet forum and news site for insurance adjusters. You can go directly there by clicking on Then look for "forums" along the left-hand index.

At a glance, like so many web forums, there may be a few pearls hidden among all the worthless oyster shells. Some posts seem genuine, some not. Some (putative) adjusters seem like decent people, others not so much.

Just remember --

On the Internet nobody knows you're a dog

Friday, November 12, 2004

Emergency Insurance Adjustment Rule

On October 26, 2004, an emergency rule was adopted by the Florida Cabinet setting deadlines for insurance companies to assess, process and settle 2004 hurricane claims. As explained in a press release from the office of Chief Financial Officer Tom Gallagher:

“Floridians who responsibly purchase insurance and pay premiums expect service. ... Firm deadlines will give thousands of Floridians peace of mind in getting their storm claims handled and set a goal that insurance companies must meet.”

Gallagher requested the emergency rule in response to numerous calls to the department’s hurricane hotline at 1-800-22-STORM from storm victims who have yet to see an adjuster or are waiting for an adjuster to return to do a damage assessment.

For Hurricane Ivan victims (among others), the emergency rule establishes a deadline of December 8 for insurance companies "to make initial damage assessments, process and settle claims, including paying additional living expenses to Floridians unable to remain in their homes due to storm damage."

"According to Gallagher, insurance companies who fail to meet the deadlines face an administrative penalty of $2,500 per day."

Click here to access the Notice and Full Text of the emergency rule.

Parts pertinent for Ivan victims are excerpted below:

RULE NO.: Claims Adjustment Requirements 69OER04-19

* * *
On September 16, 2004, Hurricane Ivan caused massive damage in the Florida Panhandle. Hurricane Ivan impacted the Gulf Coast as a Category 4 Hurricane with sustained winds up to 130 miles per hour. The eye made land fall just west of the western Florida state line, bringing hurricane force winds to much of the Florida Panhandle. The hurricane also produced tornados that destroyed and damaged structures in the Florida Panhandle. There was extensive damage in the Pensacola area, which was hit by the strong northeast quadrant of the storm as it made landfall.

This emergency rule is also necessitated by the damage resulting in Florida from Hurricane Jeanne, which made landfall near Stuart, Florida, the night of September 25, 2004, as a Category 3 Hurricane with sustained winds up to 120 miles per hour. On September 26, 2004, the storm made a path northwest across the state.

The Governor of Florida has issued four orders declaring a state of emergency due to the storms (Executive Orders 04-182, 04-192, 04-206, and 04-217). The President of the United States has declared most of Florida a federal disaster area.

In response, the Office of Insurance Regulation has implemented a data call to gather statistics on reported claims, and has instituted methods to monitor insurer performance with regard to the number of claims settled and average days for settlement.

* * *
... [C]omplaints filed with the Department of Financial Services indicate that in thousands of cases no adjuster or other insurance representative has, as yet, met with the claimant; and in many instances where the consumer has met with a company representative, claim payment to repair the damaged property has not been made. The failure to resolve claims, and the resultant inability of insureds to repair damage to residences, poses an immediate threat to public safety and welfare.

* * *
Stephen C. Fredrickson, Assistant General Counsel, Legal Services, Office of Insurance Regulation, 200 East Gaines Street, Tallahassee, FL 32399-4206, (850) 413-4144.

From the full text of the emergency rule:

69OER04-19 Claims Adjustment Requirements

* * *
(4) For all personal lines residential property claims which have been filed with an insurer subject to this rule through the close of business on November 8, 2004, as a result of Hurricane Ivan, or Hurricane Jeanne, the insurer shall have completed the following actions no later than the close of business on December 8, 2004:

(a) All insureds entitled to additional living expenses will have been advanced appropriate funds; and
(b) All damage will have been evaluated and an initial assessment of loss will have been made; and
(c) A good faith and reasonable effort will have been made to settle all claims, and, when applicable, earnest negotiations toward settlement of disputed claims will have begun.

(5) If any claim, as specified in Subsection (4) above, has not been resolved by December 8, 2004, and mediation of such claim has not been initiated under Emergency Rule 69BER04-18, the claim shall be considered a disputed claim for purposes of that rule.

(6) As to any personal lines residential property claim, filed on a date subsequent to the dates indicated in this rule, and arising from any 2004 tropical storm or hurricane, the insurer is required to complete the actions required by paragraphs (a) through (d) of subsections (2) and (4) no later than 30 days from the date that the claim is filed.

(7) If any claim, as specified in Subsection (6) above, has not been resolved within 60 days of filing, and mediation of such claim has not been initiated under Emergency Rule 69BER04-18, the claim shall be considered a disputed claim for purposes of that rule.

(8) The failure of an insurer to comply with the requirements of Subsections (2), (4) and (6) shall be prima-facie evidence in any administrative proceeding, that an insurer has failed to act promptly upon communications with respect to a claim.

(9) All insurers subject to this rule shall file Form OIR-B1-1608, “Affidavit,” rev. 10-04, which is hereby adopted and incorporated by reference to attest to their compliance with this rule. * * * As to claims filed through November 8, 2004, for Hurricane Ivan and Hurricane Jeanne, Form OIR-B1-1608, Part II shall be furnished to, and received by, the Office no later than the close of business on December 15, 2004. The forms shall be submitted by US mail to:

Bureau of Market Investigation, Office of Insurance Regulation
200 East Gaines Street
Tallahassee, FL 32399

or by electronic submission. The form is available at

(10) As to any claim... resulting from Hurricane Ivan or Hurricane Jeanne filed after November 8, 2004, Part III of the form shall be filed, and received by the Office, filed on or before January 1, 2005, and the first day of each month thereafter.

* * *
(12) Pursuant to the provisions of Section 626.9521, Florida Statutes, any insurer which does not comply with the reporting deadlines will be assessed an administrative fine of $2,500.00 for each day the affidavit has not been received by the Office.

(13) Nothing in this rule shall be construed to create a private cause of action.

Specific Authority: 120.54(4), 624.308, 626.9611 FS.

Thursday, November 11, 2004

Local Weather Forecast

The hard rain starting early Thursday morning is the first substantial precipitation since Hurricane Ivan, except for one brief light rain during Tropical Storm Jeanne. Today's hard rain is exposing more roof leaks, sagging many of the blue roofs, bringing down exposed ceilings, flooding eroded yards and vulnerable roads, and surfacing other problems which were overlooked or which have deteriorated because of the hurricane.

"FEMA where are you?" is a cry that will lift up across the county today.

The good news is, the National Weather Service doesn't expect more rain for at least another eight days after tonight:

Thursday: Scattered thunderstorms this morning, then mainly cloudy during the afternoon with thunderstorms likely. High 74F. Winds SSE at 10 to 15 mph. Chance of rain 80%.
Thursday night: Thunderstorms likely. Low 66F. Winds SW at 5 to 10 mph. Chance of rain 80%.
Friday: Partly to mostly cloudy. High near 75F. Winds WNW at 5 to 10 mph.
Friday night: A few clouds. Low 57F. Winds N at 5 to 10 mph.
Saturday: Partly cloudy. Highs in the low 70s and lows in the low 50s.
Sunday: Partly cloudy. Highs in the upper 60s and lows in the low 50s.
Monday: Mix of sun and clouds. Highs in the low 70s and lows in the mid 50s.
Tuesday: Partly cloudy. Highs in the low 70s and lows in the low 60s.
Wednesday: Considerable cloudiness. Highs in the mid 70s and lows in the low 60s.

Wednesday, November 10, 2004

Beach Taxation Litigation

Below, we reprint Gary Smith's message of Wednesday, Nov. 10 as it appears on the PNJ message board for beach residents)

Last night at its regularly scheduled monthly membership meeting, the Pensacola Beach Residents and Leaseholders Association discussed taxation on the beach. Here are the highlights:

The deadline to file protest suits is December 18. The Pensacola Beach Chamber of Commerce, one large developer as well as at least one private leaseholder are planning individual suits. At this time, no class action suits are planned. The estimated cost of litigation is in the range of $100,000 to 250,000, based on the cost of the Navarre suit. The Navarre suit will probably be decided at the 1st DCA in the Spring/Summer of ’05.


There will be lawyers from Clark, Partington, et al (the Navarre suit) and Shell, Fleming, et al (the 1980s suit) to answer questions.

It is time to organize a litigation group. Using the numbers set out above, this will probably cost in the neighborhood of $1000 per taxable property; less if more people participate. It is now time to put up or shut up.

Gary E. Smith

Worth, Wind & Water

As the Board of Directors of Florida Windstorm recognized during its October meeting, Hurricane Ivan, "while restricted to a more condensed region, presented staff with the issues of total loss of property and high frequency of combined wind/flood losses."

One reason this was notable for the board is that a few weeks before Ivan struck Pensacola Beach an important court ruling was published that addresses the very question so many beach residents are now facing: To what extent does my windstorm policy cover losses made "total" by enforcement of the "50% rule" when they are telling me flood damage was involved?

The SRIA has been circulating a legal memorandum that calls attention to the case, which is titled Mierzwa v. Florida Windstornm Underwriting Assn., 877 So.2d 774 (4th DCA 2004). Ask at the SRIA for a copy of the "Levin legal memo."

Also available on-line is a full copy of the entire decision (in pdf format). To access the full opinion, go to Fourth DCA Opinions Released 06-23-04 and click on "Zennon Mierzwa v. Florida Windstorm Underwriting Assn."

Finally, the general counsel for Florida Windstorm provided the board of directors with a summary of the decision at its July monthly meeting. That summary is on-line right here. Below, the same public report is repeated:

Zennon Mierzwa v. Florida Windstorm Underwriting Association
A recent opinion from the Fourth District Court of Appeal may impact payment of claims where there is a constructive total loss caused by multiple perils. We are in the process of evaluating the impact of this ruling and may seek Supreme Court review if rehearing is denied.

On June 23, 2004, the Fourth District Court of Appeal issued an opinion reversing a final summary judgment entered in favor of the FWUA and directing that judgment be entered for the insured. In this case, Mierzwa, the insured suffered a loss to his residence as a result of Hurricane Irene. The building was condemned by the local authorities upon a determination that the costs of repairs for the total damage exceeded half the value of the building – thus creating a constructive total loss.

The insured possessed windstorm coverage from FWUA in the amount of $281,000. The FWUA policy expressly excluded flood damage. The insured purchased separate flood insurance from another insurer. Claims were made under both policies.

The damage to the property was attributed to both windstorm and flood. FWUA decided that its liability for the wind damage repairs amounted to $64,807, plus $8,370 for debris removal, permits and repair inspection. The flood carrier paid $54,485.

The insured sued, seeking full policy limits under the valued policy law, Section 627.702, Florida Statutes, which provides in pertinent part:
In the event of the total loss of any building, structure, mobile home as defined in s. 320.01(2), or manufactured building as defined in s. 553.36(12), located in this state and insured by any insurer as to a covered peril, in the absence of any change increasing the risk without the insurer's consent and in the absence of fraudulent or criminal fault on the part of the insured or one
acting in her or his behalf, the insurer's liability, if any, under the policy for such total loss shall be in the amount of money for which such property was so insured as specified in the policy and for which a premium has been charged and paid.

FWUA asserted that its anti-concurrent clause (“ACCC”) excluded its liability for the face amount of the policy under the valued policy law because the total loss was caused in part by a peril excluded under the FWUA policy. The Fourth District disagreed, holding that the valued policy law “does not require that the covered peril be the covered peril causing the entire loss; it need merely be a covered peril.” (emphasis added). Since the policy was silent on whether the FWUA’s liability under the ACCC becomes merely pro rata with other coverage, or whether the valued policy law takes precedence over the ACCC, the Fourth District found that there was a conflict between the ACCC and the valued policy law, creating an ambiguity in the policy which must be construed in favor of the insured.

The Fourth District also held that the insured was entitled to Ordinance and Law coverage, as the exclusion clause relied upon makes it clear that the exclusion does not apply to “other coverages.” The applicable Ordinance and Law coverage was found in the section of the policy labeled “other coverages.”

A motion for rehearing has been filed.

[Ed. - The motion to reconsider was denied in August. The case may be on appeal to the state supreme court.]

Saturday, November 06, 2004


Where the heck IS everybody?

And is everyone going to next Tuesday evening's PBRLA meeting? As much as I want to, I'm not even sure I'll be able to go myself. In any event I hope we'll be able to receive a report of what transpired. Am on the way to the PNJ message board right now to see whether Gary Smith was able to find an indoor spot for the meeting (rather than the announced beach pavilion), since it's actually getting kinda chilly outside these nights.

(Later note: Found nothing on that message thread about any change of location.)