First District Court of Appeal Renders Public Adjuster Contract Void in Dispute Between Insureds and Public Adjuster
By Kelly M. Vogt
In Monarch Claims Consultants, Inc. v. Fleming, Fleming, & Universal Property & Casualty Ins. Co., the First District Court of Appeal held that a public adjuster contract that collected a 10% fee and contained a clause that required the insureds to name their public adjuster as an appraiser in the event the parties proceeded to appraisal is void.
This lawsuit arose out of a dispute between insureds and their public adjuster regarding the insureds’ claim for damages sustained to their home as a result of Hurricane Michael. After the insureds filed suit, the public adjuster filed a motion to transfer venue based on a venue selection clause contained within the public adjuster contract. The trial court denied the motion, holding that a separate provision of the contract violated Florida law and rendered the entire contract unenforceable.
On appeal, the First District Court of Appeal affirmed the trial court’s order, finding that the public adjuster contract was invalid and thus the venue selection clause was unenforceable, because the contract violated the statutory limit on public adjuster fees in Fla. Stat. § 626.854. Specifically, the public adjuster contract provides that the public adjuster’s fee is 10% of the insurance recovery, the maximum fee allowed by Fla. Stat. § 626.854(10)(b)1. However, the contract also provides that if the loss goes to appraisal, then the insureds must appoint the public adjuster as their appraiser, thus entitling the public adjuster to another 10% of the insurance recovery. The Court held that, as the appraisal provision allowed the public adjuster to be compensated more than 10% of the insurance recovery, the contract violates Florida law and there is no enforceable venue selection clause. Therefore, the trial court properly denying the motion to dismiss or transfer venue.