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You Don’t Always Get What You Want

September 15, 2023

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Florida’s First District Court of Appeal recently held a venue clause was unenforceable where the public adjuster’s contract containing the clause exceeded Florida’s statutory 10% fee cap by charging the insured a fee for separate but related services.  <em><a href="https://www.wcmlaw.com/wp-content/uploads/2023/09/Monarch-Claims-Consultants-Inc.-v.-Cliff-Jane-Fleming.pdf">Monarch Claims Consultants, Inc. v. Cliff &amp; Jane Fleming</a>,</em> Case Number 1D22-601 (Fla. 1st DCA September 6, 2023).

The Flemings’ home was destroyed by Hurricane Michael.  Monarch contracted with the Flemings to act as their public adjuster.  Monarch’s contract required the Flemings, for an additional 10% fee, to utilize Monarch as their appraiser, if the claim went to appraisal.

After doing nothing on the claim, the Flemings discharged Monarch and hired an attorney.  After the Flemings’ settled their claim, Monarch demanded payment of 10% of the gross settlement.

The Flemings sued Monarch seeking a declaration that Monarch’s fee agreement was void because it violated Fla. Stat. § 626.854(10), which caps a public adjuster’s fee to 10% of the insured’s recovery during a declared emergency.  Citing the contract’s venue clause, Monarch moved to dismiss.  Agreeing with the Flemings, the trial court found the contract void, and refused to enforce the venue provision.

On appeal, Monarch argued that the 10% adjuster’s fee complied with the statute and, because it was not seeking payment of 10% appraiser’s fee, the contract, and its venue clause, was enforceable.  Monarch also argued that the contract was valid because adjusting a claim and appraising a loss were different and, thus, two separate 10% fees were allowed.

The Flemings argued that the statute precludes public adjusters from agreeing to or accepting compensation or anything of value in excess of 10% of the insured’s insurance recovery.  The Flemings also argued in requiring the fact that Monarch was not seeking payment of the 10% appraisal fee was irrelevant because in requiring that they hire Monarch as their appraiser, Monarch received a thing of value, a promise to do something in the future, which, when added to the contract’s 10% fee, exceeded the statutory limit.

Finding that “Public adjusters violate section 626.854(10)(b) when they ‘agree to’ be compensated with any ‘thing of value’ in excess of the [statutory] fee cap.”  Slip at 9.  And that the “Flemings’ promise to appoint Monarch as their appraiser, on its own, is a ‘thing of value’ that exceeds the ten percent cap.”  Slip at 9.

Applying these findings to the case at hand, the <em>Monarch</em> Court affirmed, holding that because the contract it was based on was void, the contract’s venue clause was unenforceable.

The Take Away.  A venue clause in a void contract is unenforceable in Florida.

Thanks to Chip George for his contribution to this article.  Should you have any questions, contact <a href="cgeorge@wcmlam.com">Chip George</a>.

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