Florida Judge Slams Universal for ‘Stonewalling,’ Demands Answers From Company

Universal Property & Casualty Insurance Co. officials are discounting the significance of recent Florida judges’ rulings that have slammed the company for violating court orders, have forced Universal to default on lawsuits, have referred a Universal lawyer for disciplinary action, and required company officials to explain what’s going on.

Those court orders are no more common than sanctions against policyholder attorneys and are largely the result of “the war” – the vast amount of claims litigation and bad-faith actions brought by plaintiffs’ lawyers in Florida in recent years, which have burdened insurers with thousands of deposition and document requests, Universal’s legal officials said.

“Before the war, a lot of things would be worked out between attorneys, through professional courtesy,” said Travis Miller, a top attorney for Universal, one of Florida’s largest property insurance carriers.

One of the court orders against Universal came last month in Nassau County. It went far beyond previous sanctions orders and has raised eyebrows across the state, according to policyholder lawyers and a Florida law professor.

The circuit judge’s order, requiring Universal’s general counsel to answer questions about corporate legal practices later this month, “is breathtaking, really,” said Robert Jarvis, a law professor at Nova Southeastern University in Fort Lauderdale.

The action by Nassau County Circuit Judge Eric Roberson is just the tip of the iceberg, said policyholder attorneys who have seen dozens of sanctions and other orders against Fort Lauderdale-based Universal in the last few years.

“In my 37 years of practice, I’ve never seen an insurance company exhibit such a contemptuous disregard for court orders,” said Matthew Danahy, of Tampa, a former insurance attorney who now represents policyholders in claims disputes and has obtained several court orders against Universal.

Others have said the alleged stonewalling practices are common among several Florida insurance companies, and have slowed down claims litigation and have frustrated policyholders. The actions also run the risk of earning Universal and the Florida insurance industry another black eye and the ire of policyholders already miffed at recent premium increases – especially if the practices and sanctions are widely reported in local news media, said Jarvis.

Several plaintiffs’ lawyers suggest that Universal’s team of in-house and law firm attorneys appear to be so overloaded that they can’t keep up with court deadlines. Either that, or it’s a deliberate strategy by the insurer to “wear out” plaintiffs, force settlements or delay payouts. In at least one pleading, a Universal lawyer blamed the missed deadline on his staff. Florida insurance defense attorneys have said that judges across the state are trying to clear away a backlog of cases that piled up during the COVID-19 shutdown, and have cracked down on missed deadlines.

Whatever the reason, earning the anger of judges has proved somewhat costly for Universal. In the Nassau County case, Judge Roberson took the unusual step of striking the pleading, or forcing the insurer to default in the underlying claims lawsuit. The final amount to be paid is confidential, but the complaint asked for more than $30,000.

The judge in that case also ordered Universal to pay the plaintiff’s attorney fees and has given the policyholder grounds for a bad-faith lawsuit claim.

The Universal attorney that Roberson referred for a Bar investigation, P. Alejandro Perez, did not return phone calls and emails from Insurance Journal. A Bar official said an investigation has been opened, but she declined to provide further information.

Roberson lost his patience with Perez in a Fernandina Beach couple’s claims dispute. One order came in October when the judge sanctioned Universal for “blatant discovery stonewalling” and failing to comply with two previous court orders.

“The two prior times apparently did not get the message through that discovery gamesmanship will not be tolerated in this court,” Roberson wrote.

He fined Universal $100 per day, up to a maximum of $7,500, paid to the Florida Bar, to be used for efforts to promote professionalism.

Less than three weeks later, Roberson found that Perez and Universal had still not disclosed all required information by the court’s deadline and Perez had displayed “a disturbing lack of candor to the court.” The judge then barred Universal’s expert witness and struck Universal’s pleading.

“This is now, without a doubt, the most egregious act of willfully defying court orders and professional obligations that the court has seen in its tenure,” Roberson wrote.

The judge also ordered Universal’s general counsel to a hearing Dec. 7 to provide answers to questions about Universal’s policies and procedures on discovery requests; its legal staffing, training, and supervision of the staff; and its record keeping on expert-witness payments. A transcript of the hearing was not available this week.

Policyholder lawyers have said Universal’s alleged mismanagement of litigation may not be that different from the case of notorious plaintiff’s lawyer Scot Strems, who became known as “Public Enemy No. 1” for the Florida insurance industry. Strems was charged with failing to properly manage thousands of claims lawsuits and for filing thousands of suits, many on the same insurance claim. He was disbarred in 2022.

The Bar declined to say what penalties Perez could face.

Veterans of the Florida insurance industry have argued that property insurers in the last half-decade have faced a flood of unnecessary claims lawsuits – so much that litigation costs became a key reason behind rate increases and at least 10 insurer insolvencies. The Florida Legislature responded in late 2022 and early 2023 with sweeping limits on litigation and plaintiffs’ attorney fees.

And just before the law took effect this year, several policyholder law firms filed more than 50,000 lawsuits, swamping insurance firms and filling court dockets, according to attorneys involved and news reports.

Insurers should be forgiven for making mistakes or “fighting back” while trying to handle an overwhelming number of legal actions, some in the industry have said. Others on the insurance side said that it would be counterproductive for an insurance carrier to purposely flaunt judges’ orders as a way to wear down the other side.

“It’s not deliberate. That would be absurd,” said Matt Lavinsky, president of the Florida Defense Lawyers Association. He added that he had never seen FDLA members engage in such tactics.

Universal officials said the fault lies in part with overzealous claimants’ lawyers. So many requests for depositions of corporate representatives have led to a scheduling and logistical nightmare, which has led to missed deadlines, Universals’ lawyers said.

And plaintiffs’ attorneys have been hit with just as many, if not more, sanctions orders in recent years, some for misrepresenting the facts or exaggerating the amount of damage in claims – a major violation in the eyes of most judges. In other cases, jury awards ended up being the same as or less than what Universal had offered early on in settlement attempts, showing that some claims litigation is completely unnecessary and costly to policyholders, Miller explained.

The plaintiffs’ lawyers have brought the recent Universal sanctions orders to the attention of the news media in an attempt to disparage insurers and fuel a reversal of the 2022 and 2023 tort-reform legislation, said Lavisky, of the defense lawyers association.

“The increased frequency of plaintiffs blanketing various outlets with information they purport to ‘prove’ a point is a deliberate attempt to paint a picture that is grossly one-sided and misleading and detrimental to the market and its insurance-buying consumers,” Universal’s Miller said in an email.

Members of the plaintiffs’ bar have said there’s little chance of Florida’s lawmakers changing course anytime soon. Danahy and Robert Jameson, the claimants’ attorney in the Nassau County case, said the alleged stonewalling practices have gone on for years, all around the state, and have little to do with the recent flood of claims suits. Danahy, Jameson and others provided Insurance Journal with more than 40 judges’ orders since 2017, imposing sanctions on Universal or demanding that its lawyers comply with court orders.

Here’s a sampling of the orders, confirmed through county clerks of court:

• In 2017, in Palm Beach County, a circuit judge ordered Universal to pay a $700 settlement, after the deadline had passed, along with a $1,000 penalty.
• In 2018 in Miami-Dade County, a circuit judge was so fed up with Universal’s lack of response to discovery requests that he threatened to strike the pleading and decide the case in favor of the homeowners. Two weeks later, the Universal attorney notified the plaintiffs that he had complied.
• In 2022 in Broward County, a judge entered a default judgment against Universal after violation of court orders and a failure by the insurer’s attorney to coordinate mediation or provide a corporate representative for deposition.
• In 2023, a Broward judge struck Universal’s pleading, awarding $93,000 in damages to the insured. Earlier, the judge found that “defendant’s blatant and inexcusable failure to comply with numerous court orders was ‘so egregious and pervasive that there (was) no remedy short of striking of its pleadings that could restore the prejudice to plaintiff and protect the integrity of the judicial process.'”

“I’ve never heard of any defendant that has caught the attention of judges like this and has been sanctioned by so many judges,” said Jarvis, the law professor.

To be sure, charges of improper behavior can be found on both sides of the divide. A number of plaintiffs’ attorneys besides Scot Strems have faced their own sanctions and Bar investigations through the years. One attorney who has obtained judges’ orders against Universal in recent years, for example, was reprimanded by the Bar in 2014 for failing to supervise his staff and failing to read affidavits before filing them.

Miller provided more than 60 examples of orders against plaintiffs lawyers, including a 2022 jury verdict that found that a plaintiff had made false statements.

But claimants’ lawyers insist that Universal’s tactics have moved well beyond being isolated incidents. Danahy has gone so far as to file a petition with the Florida Office of Insurance Regulation, asking it to revoke Universal’s certificate of authority.

See Sidebar: Florida Court Rulings, Legislation Could Impact Insurers’ Claims Practices

Universal had failed to pay up on a judgment in Miami-Dade, Danahy said in his Oct. 23 letter, and state law requires that, when an insurer does not pay a final judgment within 60 days after it is entered, “the office shall forthwith revoke the insurer’s certificate of authority.”

Danahy’s letter argued that statutes also require the revocation or suspension when an insurer engages in conduct that is hazardous to policyholders or the public.

A spokeswoman for OIR said only that the case is ongoing and the agency continues to monitor developments. Miller said that the delayed settlement payment was the result of some quirky procedural issues with the court, along with extenuating circumstances that should soon be resolved.

As far as legal staffing goes, Miller and Lewis noted that Universal has about 250 attorneys – two-thirds of which are in-house. The carrier currently has about 9,800 claims suits pending, or roughly 38 cases per lawyer.

The Florida Bar said it does not have rules on a maximum number of cases per lawyer. By comparison, 38 claims would be far below the hundreds of cases that the Strems law firm attorneys were each said to be handling in 2019 and 2020.

But compared with Citizens Property Insurance Corp., the largest carrier in the state, the number of Universal lawyers seems low. Citizens has about 18,300 lawsuits pending as of September, officials reported at a recent board meeting. And it has about 1,022 lawyers, at any given time, on average. Most of them with outside firms.

That’s about 18 cases per attorney for Citizens, half the load carried by Universal litigators.