Lawsuits aim to void Citizens arbitrations

 Two new lawsuits have been filed that seek to void all settlements and rulings involving customers of Citizens Property Insurance Corp. who were forced into an arbitration system funded by the state-owned company.

The suits, filed in Miami-Dade and Seminole counties, base their arguments on a Hillsborough County judge’s Aug. 2 injunction that suspended Citizens’ ability to send claim disputes to the Division of Administrative Hearings (DOAH) while a policyholder pursued his claim that the system violated his constitutional right to a fair trial. The judge in that case, Melissa Mary Polo, found that the policyholder demonstrated that their argument, that the system violates policyholders’ constitutional rights, stands a “substantial likelihood of success” of prevailing. Citizens is appealing the injunction, warning the company would be “irreparably harmed” if the suspension remains in effect. DOAH, a state agency, contracted with Citizens last year to preside over disputes through 2027. Citizens is paying $19.3 million for the service. The lawsuits challenge Citizens’ use of a state law enacted in 2023 that allows it to require new and renewing customers to accept the DOAH policy provision. That provision allows Citizens to divert claims disputes from the court system, where judges and juries decide outcomes, to a group of appointed administrative law judges who the lawsuits claim rule overwhelmingly in Citizens’ favor. One of the class action complaints, filed on Aug. 27 in Seminole County on behalf of lead plaintiff Jamie Alverio, a Sanford resident, seeks to void all settlements agreed to by Citizens customers prior to DOAH hearings.DOAH’s website shows that more than 1,200 of 1,670 cases diverted to the DOAH court since 2024 have been dismissed without a hearing. Alverio agreed to settle her DOAH claim after Citizens declined, following Hurricane Milton last October, to cover damage to her home that she blamed on the storm. The lawsuit claims that policyholders were “coerced” into agreeing to the settlements after Citizens “forced them into the proceedings” and argues that they should be voided because the DOAH process is unconstitutional. “Contracts or releases obtained through unconstitutional processes are unenforceable,” the suit states. Citizens spokesman Michael Peltier declined to comment on the lawsuits beyond stating, “State law specifically authorizes the DOAH process, and we believe that the law is constitutional.” The lawsuit argues that the Legislature amended Citizens’ enabling statute by permitting the company to apply the provision without providing reductions in premiums that private-market insurers must offer. Back to Main Citizens told the South Florida Sun Sentinel in July that it settles about 30% of cases with payments of $30,000 or more after the company discovers evidence that supports reversing its initial claim denial or payment offer https://enewspaper.sun-sentinel.com/shortcode/SUN315/edition/d9dbcf0d-c861-4f67-b775-9e0011166c8d?page=601d1b75-ee61-4545-ba49-854ed1e54d7a&utm_source=listrak&utm_medium=email&utm_campaign=trib-sun_sentinel-eNotify_am-nl&utm_term=https%3A%2F%2Fenewspaper.sun-sentinel.com%2Fshortcode%2FSUN315%2Fedition%2Fd9dbcf0d-c861-4f67-b775-9e0011166c8d&utm_content=eNotify