I have been representing insureds in first-party property insurance cases for over seven years. During that time, I have successfully won or settled approximately 415 cases, recovering almost $18 million for my clients. Close to 80 of these cases were against Universal Property & Casualty Insurance Company. One thing that has bugged me over the years is that Universal gets away with using W-2 employees of its wholly-owned subsidiary, Alder Adjusting, as its “independent adjusters.” It seems that this practice violates the clear language of section 626.855 of the Florida Statutes, which provides:

626.855. “Independent adjuster” defined

An “independent adjuster” means a person licensed as an all-lines adjuster who is self-appointed or appointed and employed by an independent adjusting firm or other independent adjuster, and who undertakes on behalf of an insurer to ascertain and determine the amount of any claim, loss, or damage payable under an insurance contract or undertakes to effect settlement of such claim, loss, or damage.

§ 626.855, Fla. Stat. (2024) (emphasis added). The language does not seem to allow an insurance company to use a W-2 employee as its independent adjuster. It seems pretty clear.

There is no dispute that Universal uses W-2 employees as its independent adjusters. They admit it. The adjusters have @universalproperty.com email addresses that are stated on the estimates they prepare. They are W-2 employees of Universal, not appointed or employed by an independent adjusting firm or other independent adjuster.

I am not aware of any other insurance company in Florida that uses this practice. In other words, the other insurance companies with whom I have litigated use independent adjusters who are, in fact, employed by an adjusting firm that is not directly controlled by the insurance company. Often they are self-employed. They have their own LLC and they are hired as independent contractors on a claim-by-claim basis.

We all know that the “independent adjusters” (aka “field adjuster”) used by insurance companies are being paid by the insurance company, and there is nothing inherently wrong with that. Public adjusters work on behalf of insureds–and hope to get paid if they recover money. Many insurance company field adjusters have testified that they are actually incentivized to find more damages for the insured, not less, because doing that increases their compensation. Fine. Perhaps that’s true.

But I’m writing here about the legal issue created by section 626.855 as it relates to Universal. Thousands of cases have been filed against Universal in the past 10 years. Many plaintiffs’ lawyers have litigated against Universal in these cases. It appears there is no appellate caselaw that addresses this argument. It could be simply that plaintiffs’ lawyers in these cases have been too busy to bring this issue to a judge, get a ruling, and then bring it to the appellate court, before cases settle.

Westlaw’s annotated statutes reveals only two reported opinions addressing section 626.855: Home Ins. Co. v. Crawford & Co., 890 So. 2d 1186 (Fla. 4th DCA 2005); and Old Republic Ins. Co. v. Von Onweller Const. Co., 239 So. 2d 503 (Fla. 2d DCA 1970).

Let’s look at these cases.

In Home Ins. Co. v. Crawford & Co., 890 So. 2d 1186 (Fla. 4th DCA 2005), the case resulted from asserted mishandling of settlement opportunities in an underlying case in which an injured person, James, sued Rinker. Rinker was insured by Home Insurance Company, which contracted with Crawford & Company to service its insurance claims. After a substantial verdict was entered against Rinker and Home, Home sued Crawford for breach of contract, fraud, and breach of fiduciary duty in connection with its handling of the claim. The trial court directed a verdict on the fraud and breach of fiduciary duty counts, and the jury returned a verdict in Home’s favor on the breach of contract count. Home appealed the directed verdict on the fraud and breach of fiduciary duty claims, and Crawford appealed the denial of its motion for directed verdict on the contract claim and the award of prejudgment interest to Home. The appellate court affirmed as to all issues, except the award of prejudgment interest.

The court noted the facts. Crawford contracted with Home to service Home’s insurance claims. Its initial authority was set at $250,000, meaning that it could settle claims for up to $250,000 without having to seek approval from Home. Home claimed that this authority was later reduced to $99,000 by a letter in 1996 to Crawford, who did not respond.

The accident that was the subject of the claim occurred in December 1992 when a Rinker cement truck collided with a vehicle in which James was an occupant. From the outset, Crawford evaluated the James claim as a case of “clear liability.” In January 1996, James made a detailed settlement offer of $950,000 that was rejected, so he filed suit against Rinker. During discovery, James produced an economist’s report setting his future economic loss between $283,000 and $876,000. Prior to trial, Crawford increased its reserve to $130,000. In July 1998, James served a formal offer of judgment for $100,000. The case was tried in September 1998. A verdict of $743,537 was returned against Rinker on October 1. Fees and costs of $165,463 were awarded. On December 7, 1998, Crawford provided the first report of any kind to Home on the James case. After receiving this information, Home settled the case for $743,537.

Home then sued Crawford and asserted claims for breach of contract, fraudulent concealment, and breach of fiduciary duty. The trial court granted Home’s motion to amend the complaint to claim punitive damages. The trial court directed a verdict on Home’s claims for fraudulent concealment and breach of fiduciary duty, eliminating any claim for punitive damages.

The jury found for Home on the contract claim in the full amount claimed for compensatory damages of $243,537, which was the amount of the James verdict less the $500,000 deductible paid by Rinker.

The verdict was returned on January 31, 2003. Home filed motions to tax attorneys’ fees, costs, expenses, and interest. Crawford filed motions to set aside the verdict and for a new trial. A final judgment was signed on February 10, awarding Home $243,537 and reserving jurisdiction to tax costs, prejudgment interest, and fees. The court later denied Crawford’s motion to set aside the verdict and for a new trial. The next day, Home filed its notice of appeal of the final judgment. Crawford filed its notice of appeal several days later.

After the appeals were filed, the trial court heard Home’s post verdict motions, and on April 14, 2003, granted prejudgment interest of $99,015. Costs and post judgment interest were awarded and attorneys’ fees denied.

Crawford moved for rehearing of these orders. On April 23, 2003, the court entered an amended final judgment awarding the original verdict plus $4,315.13 for costs and prejudgment interest of $99,015. On April 28, the court denied Crawford’s motion for rehearing. Crawford filed its notice of appeal of the amended final judgment. This court consolidated all three appeals.

Home asserted on appeal that the trial court erred in granting the directed verdict on the claims for fraud and breach of fiduciary duty. In Florida, an independent insurance adjuster owes a duty to the insurance company arising out of the contract between the company and the adjuster. King v. Nat’l Sec. Fire & Cas. Co., 656 So.2d 1338, 1339 (Fla. 4th DCA 1995). Further:

An insurance adjuster acts on behalf of the insurer. The duties of an insurance adjuster vary and are defined by the terms of the contract between the insurer and the adjuster.” Id. (citations omitted). “[B]reach of this duty subjects the adjuster to liability for the insurer’s resulting loss and the insurer can seek indemnity for liability accruing from the adjuster’s negligence.” Id. “When a[n] agent acts negligently so as to cause its principal to become liable to a third person, the principal may bring an action against the agent either in tort or for breach of contract.” GAB Bus. Servs., Inc. v. Syndicate 627, 809 F.2d 755, 759 (11th Cir.1987); see also Pegg v. Bertram, 176 So.2d 918, 921 (Fla. 3d DCA 1965).

In the case at issue, the contract between the parties, concluded the court, imposed contractual duties upon Crawford. It did not impose any fiduciary duties. The parties were dealing at arm’s length. Neither can be considered unsophisticated. There was no evidence that the failure to notify Home of the verdict for sixty-six days was anything other than negligent. A final judgment in the amount obtained was not going to be concealed. The trial court did not err in directing the verdicts that resulted in elimination of the claim for punitive damages.

Crawford cross appealed the denial of its motion for directed verdict on the contract count and for a new trial. There was ample evidence, in addition to the reporting requirement dispute, concluded the court, of negligence on which the jury could have concluded that Crawford breached the contract. Crawford also argued that there was no evidence of proximately caused damage. It maintained that the damage claimed by Home is an amorphous lost opportunity. The Home employee responsible for the file after the claim was reported testified that her routine practice was to settle cases with clear liability, damages claimed of approximately $1,000,000, and a $100,000 offer of judgment.

Did Home have to prove it would have settled or is the lost opportunity to decide sufficient? In hindsight, stated the court, the case obviously should have been settled. However, said the court, “there were many cooks in the kitchen — Crawford, Rinker, and the defense attorneys, who offered neither the amount authorized nor Crawford’s evaluation.”

Home was the absent party. The damage amount was not speculative, but was a mathematical calculation, concluded the court. The purpose of compensation for a breach of contract is to place the injured party in the position it would have been had the breach not occurred. There was sufficient evidence, concluded the court, for the jury to determine liability and damages. The court did not err, therefore, in denying the motions for directed verdict and new trial.

Crawford also asserted error in denying its motion in limine and objections to the testimony of Home’s insurance expert. Whether a tendered expert possesses adequate qualifications is a question of fact decided by the trial court. See Carrier v. Ramsey, 714 So.2d 657, 659 (Fla. 5th DCA 1998). “Such a decision is peculiarly within the discretion of the trial court, and the trial court’s ruling will not be reversed absent a clear showing of error.” Id. It was up to the jury to evaluate the witness’s credibility and accept or reject his opinion. Based upon testimony as to his qualifications and materials reviewed, the appellate court decided that the trial court did not abuse its discretion in permitting the testimony.

Finally, Crawford asserted that the trial judge erred in granting Home prejudgment interest. Timing, said the court, was important to the resolution of this issue. The jury rendered the verdict for Home on January 30, 2003. On February 4, Home filed its motion for prejudgment interest. On February 7, Crawford filed its motions for new trial, etc. On February 10, prior to a hearing on the motions, the court entered its final judgment on the verdict, ordered execution, and reserved to determine interest. On March 10, the trial court denied Crawford’s motions. On March 11, Home filed its notice of appeal of the final judgment of February 10. On April 4, Crawford filed its notice of appeal. On April 14, the trial court entered its order awarding interest. On April 23, the trial court signed an amended final judgment including prejudgment interest. Crawford appealed this judgment.

Crawford argued that Home waived its prejudgment interest claim when it filed its notice of appeal without moving to rehear the final judgment.

In McGurn v. Scott, 596 So.2d 1042, 1044 (Fla.1992), the Florida Supreme Court ruled that it is improper for a trial judge to render an order that, in all respects, appears to be a final money judgment, but which leaves the determination of prejudgment interest for future adjudication. However, if a trial court improperly renders such a judgment, the order will be deemed to have become a final judgment requiring review by immediate appeal. Id. at 1045. The trial court then lacks jurisdiction to take further action and the parties will be deemed to have waived any matter reserved for future adjudication except for attorneys’ fees and costs. Id. In McGurn, because it was a case of first impression, the district court was directed to remand the case under Florida Rule of Appellate Procedure 9.600(b). Id.

In Emerald Coast Communications, Inc. v. Carter, 780 So.2d 968 (Fla. 1st DCA 2001), the first district expounded on McGurn. In that case, the trial judge improperly reserved ruling on prejudgment interest in a nonjury trial. The defendants filed a motion for rehearing. It was denied and they appealed. The plaintiff/appellee moved to remand for the limited purpose of assessing prejudgment interest. The first district discussed the problem of a judgment debtor immediately filing a notice of appeal to cut off prejudgment interest, but denied remand because the plaintiff had not filed a motion for rehearing to correct the error within the time allowed under Florida Rule of Civil Procedure 1.530(b). 780 So.2d at 970.

In Home, Home was the party filing the notice of appeal. Home did not move to relinquish jurisdiction to permit the trial court to award prejudgment interest. As a result of Home’s own action, the trial court had no jurisdiction to award prejudgment interest. Home, therefore, waived the claim.

The final judgment was affirmed except for the award of prejudgment interest. The case was remanded for the entry of a final judgment that did not include prejudgment interest.

So Home is not very helpful on the issue of whether an “independent adjuster” can be a W-2 employee of the insurance company. The facts of the case show that the insurance company used a truly independent “arm’s length” contractor, but the issue was not the focus of the case.

The second reported opinion disclosed by the westlaw annotations to section 626.855 is Old Republic Ins. Co. v. Von Onweller Const. Co., 239 So. 2d 503 (Fla. 2d DCA 1970). In that case, decided 54 years ago, the Second District considered a case in which the lower court had entered its summary judgment for appellee-plaintiff Von Onweller Construction Company, Inc., and ordered recovery of $979.50 plus costs from appellant-defendant Old Republic Insurance Company. In an earlier order, the trial Court had denied Old Republic’s motion to dismiss Von Onweller’s complaint and granted Von Onweller’s motion to strike Old Republic’s defense that an oral contract was barred by the Statute of Frauds. The appellate court reversed.

The appellate court set forth the facts:

Old Republic issued a policy of insurance to Richard A. Otto and Betty C. Otto insuring their interest and the interest of First National Bank in Fort Lauderdale as first mortgagee in property located in St. Petersburg. A fire occurred resulting in damage to the dwelling which was occupied by Lois A. Traylor. Insurance Adjuster Howard, who was stipulated to be the agent of Old Republic, investigated the fire loss and learned that there was a question of coverage because the named insured was not the same as the owner of record. He reported this to Old Republic but did not advise Mrs. Traylor or Von Onweller at that time. Howard contacted Von Onweller and requested him to submit an estimate of the repairs. Upon submission of the estimate, Howard told Von Onweller: “If it is O.K. with the owner of the property, it is O.K. with me.” He also gave Von Onweller the plat and page number designating Mrs. Traylor as owner. Von Onweller obtained Mrs. Traylor’s authority to make the repairs and started to work immediately. He completed the work and sent the bill to Mrs. Traylor. Some time later he was advised by Howard that there was a coverage mix-up.

The affidavit of Mr. Gene Sexton, a casualty claims adjuster for seven years, indicated that he was familiar with custom and usage in the insurance adjusting trade and in adjusting losses and was familiar with statements made by insurance adjusters to the effect that “if it is O.K. with the owner of the property it is O.K. with me,” in regard to repairing damaged property; and that such statement is generally regarded as in fact an authorization from the insurance company for the repairing organization to repair the damaged property.

The court stated:

An insurance adjuster is a special agent for the company and his powers and authority are prima facie coextensive with the business intrusted to his care, 18 Fla.Jur., Insurance, § 360; 44 Am.Jur.2d, Insurance, § 1702, which is ascertaining and determining the amount of any claim, loss or damage payable under an insurance contract, and/or effecting settlement of such claim, loss or damage. F.S. §§ 626.0404 and 626.0405, F.S.A. The acts of an adjuster within the apparent scope of his authority are binding on the company without notice to the insured of limitations on his powers. 16A Appleman Ins. L. & P., § 9369; 45 C.J.S. Insurance § 1102. See also Guarantee Mut. Fire Ins. Co. v. Jacobs, Fla. 1952, 57 So.2d 845; English and American Ins. Co. v. Swain Groves, Inc., Fla.App. 1969, 218 So.2d 453.

Von Onweller’s deposition revealed that he knew that the adjuster’s function was to agree to the reasonableness of the estimate and that the owner’s function was to authorize repairs on the premises. He further testified:

“A. * * * Of course, it is customary to consult with the adjuster who handles the case and if he agrees to a figure then that is what the company will pay.

Q. To the owner, of course?

A. That is right. That is anybody’s name who is on the policy, including mortgagees.”

He also stated that the bill for the repairs was sent to Mrs. Traylor, since it was customary to send it to the owner because the check will come payable to the owner and not to the contractor; that Howard did not personally guarantee payment; that “Mrs. Traylor authorized the work as owner, which is customary, because the insurance company is not in the repair business and it is up to the owner of the property to authorize repairs.” Mr. Howard testified that he never advised Von Onweller whether or not he would pay him, and that the company never pays the contractor directly.

There was a question of fact as to whether or not Von Onweller had notice that it was not within the scope of Howard’s authority to contract with the construction company to make the repairs.

The appellate court held that the lower Court was correct in striking Old Republic’s defense that the oral contract was in violation of the Statute of Frauds. Von Onweller alleged a direct contract with Old Republic — not a contract to pay the debt of the owner of the dwelling or anyone else.

The lower Court was also correct, said the appellate court, in denying Old Republic’s motion to dismiss the complaint on the grounds that it failed to specify the terms of the contract and failed to allege that all conditions precedent to the contract had been performed. A reading of the complaint, reasoned the appellate court, revealed that it sufficiently alleged performance of conditions precedent and the terms of the contract. The court cited Plowden & Roberts, Inc. v. Conway, Fla.App. 1966, 192 So.2d 528; R.C.P. 1.120(c), 30 F.S.A.

While this case also does not squarely address the issue I am raising–can Univeral use W-2 employees as its “independent adjusters” under section 626.855?–I have to admit that it creates an argument against my argument. The field adjuster is an “agent” of the insurance company. At least, he might have apparent agency. In other words, there is no pretense that the adjuster is “independent” or “neutral” as it relates to the insurance company.

It appears that, for now, my only argument is the plain language of section 626.855. It plainly states that an independent adjuster must be self-appointed or appointed and employed by an independent adjusting firm or other independent adjuster. I guess Universal’s other argument is that Alder Adjusting–its subsidiary–is an independent adjusting firm, even though it is a wholly-owned subsidiary of Universal and the adjusters have an @universalproperty.com email address. And some adjusters have testified that their paycheck comes from Universal, not Alder.

We learn in law school that corporate entities matter; they are respected. Subsidiaries are a thing and it is okay for one person or entity to own many subsidiaries; all of the separate corporate entities will be respected as independent if there is not an argument for “piercing the corporate veil” to “disregard the corporate entity.” It would be an entirely different set of facts that I would have to discover and prove to argue that Alder Adjusting is really just the “alter ego” of Universal.