A Florida trial judge has ruled that the Citizens Property Insurance Managed Repair Consent Form violates policy language. 1 Here is the gist of the Order:

The Court agrees with Plaintiffs that, under the plain language of the bargained for terms of the policy, the explicitly limited and singularly unambiguous purpose of the Program Consent Form was to obtain Plaintiffs’ ‘written consent’ to participate in the MRC Program. There is no language, implied or explicit, found anywhere in the policy that suggests the Program Consent Form can be used for any other purpose. The Court also agrees with Plaintiffs that Defendant’s Form well exceeded such limited purpose. The Form used by Defendant required Plaintiffs to verify that they ‘acknowledge’ and ‘understand’ various provisions of the Policy and MRC Endorsement. Defendant argues that this was harmless because the Form was simply restating or quoting what was already in the policy and contained nothing inconsistent with the policy. The Court rejects such an argument for several reasons.

First, the Form included language warning Plaintiffs that if they modified or added terms or conditions to it, then they would be deemed to have rejected participating in the MRC Program. This language cannot be found in the policy. This is also a broad overreach that gives Defendant unrestrained power to include whatever language it so desires in a Program Consent Form. Second, even if the Form did nothing but mirror policy terms, ‘written consent’ to participate in the MRC Program cannot be reasonably interpreted to include acknowledgments and understandings of policy language. The plain language of the policy does not require Plaintiffs to re-sign contract terms or affirmatively acknowledge or understand them simply to participate in the MRC Program. The disputed redlined language contained in the Form is also self-serving for Defendant. Requiring Plaintiffs to sign a Program Consent Form affirming that they ‘understand’ policy terms appears to be nothing more than attempt by Defendant to preclude arguments over possible ambiguities contained in the MRC Endorsement. Further, while the policy may state that Defendant is not a party to the contract with the program contractor, it does not require that Plaintiffs sign a Program Consent Form acknowledging and agreeing to it. This is also entirely unrelated to ‘written consent’ to participate in the MRC Program and appears to be an attempt by Defendant to insulate itself from liability for the contractor’s action. If Defendant wanted Plaintiffs to sign a Program Consent Form requiring them to ‘acknowledge’ and affirm that they ‘understand’ various language and provisions of the policy, then it could have easily written such requirements into the policy. Alternatively, Defendant could have provided Plaintiffs with a copy of the Program Consent Form at the inception of the policy, so they knew what they were bargaining for. Defendant did neither. Instead, Defendant provided Plaintiffs with a Program Consent Form that changed the contract terms mid-stream by adding language that is wholly unrelated to ‘written consent’ to participate in the MRC Program. Adopting Defendant’s arguments and requiring Plaintiffs to sign the Form Defendant provided would be tantamount to rewriting the policy, adding meaning that is not present, and reaching a result contrary to the intention of the parties, which the Court is prohibited from doing.

Additionally, Plaintiffs were wholly within their right to redline and strike language that was inconsistent and unrelated to the policy requirement and their obligation to provide ‘written consent’ to participate in the MRC Program. Perhaps more importantly, Plaintiffs left unaltered and checked the box next to language which stated: ‘I consent and accept the offer to participate in the Managed Repair Contractor Network Program. My consent and participation in the Program is subject to the terms and conditions in the Endorsement and in my Policy.’ Not only is such language consistent with the policy, but it is exactly what Defendant bargained for under the plain language of the policy it drafted, and Plaintiffs were not required to sign a Program Consent Form containing more. Accordingly, upon signing and returning the Redlined Form to Defendant, Plaintiffs had fully complied with their policy obligation to provide written consent to participate in the MRC Program.

The policyholders argued that they did not have to sign the form as presented and were properly allowed to redline the objectionable language. The policyholders successfully argued in their motion for summary judgment:

After receiving Program Consent Form, which as set forth above went beyond obtaining Plaintiffs’ written consent, Plaintiffs redlined the language that was unrelated to written consent, signed the redlined version, and returned it Defendant. Plaintiff did not alter, revise, modify or delete any language that was related to written consent. Accordingly, Plaintiffs fully complied with their policy obligations by signing and returning Defendant’s Program Consent Form in a manner that was consistent with the bargained for terms of the Policy….

…

Pursuant to Florida law, the Program Consent Form that Defendant provided to Plaintiffs and demanded be signed and returned violated the clear and unambiguous terms of the Policy, which expressly required it to be limited to obtaining Plaintiffs’ ‘written consent’ to participate in the Managed Repair Program. Plaintiffs were not required to sign the Program Consent Form that Defendant provided as it exceeded the limited purpose expressed in the Policy. Plaintiffs complied with their obligations under the Policy by signing and returning a version of Defendant’s Program Consent Form that was limited to written consent. Defendant was required to accept that version of the form and its rejection and subsequent refusal to allow Plaintiffs to participate in the Managed Repair Program was improper.

Chances are that Citizens will do two things in response. File an appeal and have its lobbyists run to the Florida legislature for help. While a lawsuit is never over until it is over, it seems pretty clear that Citizens is unilaterally re-writing the policy with something new and not contained in the policy. My prediction is that Citizens will lose this appeal.

The legislature needs to protect consumers from Citizens choosing substandard contractors and trying to insulate itself from liability when the contractors it hand-picks fail to properly perform the work. Historically, insurers could always choose to do the repair or replacement and this election changed the insurance policy into a construction contract. With no accountability, Citizens and other insurers will certainly provide customers with the shoddiest of contractors who will charge the least amount if they can do so in the Managed Repair scenario. Florida’s legislators have bent over to appease the Florida insurance industry, but this is a step too far. Citizens is now abusing its status as a quasi-governmental actor and harming the people who are forced into having insurance with it. Accountability breeds responsibility and that is the last thing the executives at Citizens Property Insurance want to hear.

The legislature and the insurance commissioner should stop this type of arrogant executive authority currently found in the management of Citizens Property Insurance. It was not this way fourteen years ago when I was working with those executives on The Citizens Reform Task Force. Without a means to be held accountable and redress these concerns with consumers advocates on the board of citizens, this is a company out of control and this Consent Form is just the tip of the iceberg.

Thought For The Day

The government itself, which is only the mode which the people have chosen to execute their will, is equally liable to be abused and perverted before the people can act through it.
—Henry David Thoreau

1 Fraga v. Citizens Prop. Ins. Corp., No. 2022-021372-CA-1 (Fla. Cir. Ct. [Miami-Dade] May 24,2024).