Trade Association Sues to Block Enforcement of Special Session Law Targeting Contractors

Home repair contractors are upset at legislation that was passed by the Florida Legislature, claiming the bill is unconstitutional and it unfairly their industry.

The Restoration Association of Florida (RAF) filed suit in Leon County Circuit Court saying the new law, SB 2-D, improperly singles out contractors by stripping them – and only them – of legal rights in cases over repair work involving assignments of benefits (AOBs).

RAF said the law doesn’t address the real underlying causes of Florida’s property insurance crisis.

The new law that was passed last month prevents contractors who hold AOBs from recovering their attorneys’ fees if they prevail against insurance companies.

RAF said lawsuit shows that homeowners and insurers retain their right to recover prevailing party fees, but the new law denies those rights only to contractors violates the equal protection clause of the Florida Constitution.

“Most of the claims that contractors submit to insurers under AOBs are for relatively small amounts of money. But when the insurers delay, underpay, or deny payment for valid claims, these businesses have little choice besides taking them to court,” said RAF President Richie Kidwell.

Kidwell said by denying contractors the right to recover reasonable attorney fees, the new law makes it economically unfeasible for contractors to pursue legal remedies in court and gives insurers even more incentive to stall payments.”

The lawsuit wants the court to declare that the new law violates the Florida Constitution and issue an injunction blocking the law so contractors can “continue to engage in their licensed professions and businesses with the assurance their constitutional rights will not be violated.”

The lawsuit was filed against Department of Business and Professional Regulation Sec. Melanie Griffin and Donald Shaw, the executive director of the Construction Industry Licensing Board. The complaint maintained the new law unconstitutionally singles out AOB contracts between a homeowner and his or her contractor of choice.

“Rather than address factors within the property insurance industry that have led to its problematic volatility, the Florida Legislature chose to violate the constitutional rights of contractors – the individuals and businesses that repair the homes and commercial buildings owned by Floridians damaged by extreme weather events such as hurricanes,” the complaint noted.

In a separate action, RAF is also suing the state insurance commissioner and two insurance companies, asserting that Commissioner David Altmaier improperly allowed the companies to circumvent state law in order to change customers’ policies, in violation of Florida law and the Florida Constitution.

According to the lawsuit, which remains pending, those changes require claims disputes to be arbitrated and prohibit the filing of lawsuits to vindicate the rights of homeowners and their assignees. The changes also require a homeowner to obtain prior approval before hiring a contractor to perform work, a condition that allegedly violates Florida’s Homeowner Claims Bill of Rights and existing Florida law.

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