Wednesday, June 12, 2019

Local News: The work begins after floodwaters recede (6/11/19) - Standard-Democrat

Local News: The work begins after floodwaters recede (6/11/19) - Standard-Democrat


Local News: The work begins after floodwaters recede (6/11/19) - Standard-Democrat

Posted: 11 Jun 2019 01:30 PM PDT

Members of the Illinois National Guard build up existing sandbag barriers to hold back floodwaters Monday along Brookwood Drive in East Cape Girardeau, Illinois.

Jacob Wiegand/Southeast Missourian

CAPE GIRARDEAU, Mo. — As the Mississippi River at Cape Girardeau crests this week more than 14 feet above flood stage, clean up and restoration companies say it's important to address water damage quickly.

Meanwhile, the Better Business Bureau is advising consumers to beware of "fly-by-night" contractors offering to help clear flood debris and repair damaged structures.

According to the National Weather Service, the Mississippi River at Cape Girardeau crested Monday evening at 46.3 feet, 14.3 feet above Cape Girardeau's flood stage of 32 feet.

Several streets and highways throughout the area remain closed this week due to high water including sections of highways 74 and 25 between Interstate 55 and Dutchtown. In addition, Illinois Route 3 north of Jackson County is closed and a section of Route 3 between Illinois Route 146 and Gale, Illinois, was reduced to one lane Monday when floodwater covered part of the pavement.

According to Whitney Quick, regional director of the Better Business Bureau office in Cape Girardeau, floods and damaging rainfall are sometimes followed by "unscrupulous storm-chasing contractors seeking to cash in on the destruction."

She said it's not unusual for the BBB to take complaints about contractors who took deposits from property owners and did little or no work to repair water or storm damage.

"Storm victims need to do their due diligence and not be rushed into making a decision," Quick said. "Consumers should do their research to find qualified and reliable contractors before they sign a contract or pay any money."

More information about identifying reputable contractors and avoiding storm repair scams can be found on the Better Business Bureau's website, bbb.org.

Sources at two local water damage restoration companies -- Servpro and ServiceMaster -- say that while they've received some service calls related to flooding in recent days, most of the water damage they've seen has been more directly connected to excessive rainfall.

"We've had a lot of rain this year, so the ground is saturated," said Virgil Jones, owner of the ServiceMaster franchise in Cape Girardeau. "What's happening is it's leaching into people's basements because the ground is so saturated, but we haven't had a ton of calls that have been directly connected with river flooding at this point."

Jones said the situation would have been different years ago when more homes and businesses were located in flood-prone areas.

"After the last bad flood happened a few years ago, they tore down a lot of houses in the Red Star District of town, so there aren't as many houses there to flood anymore," he said.

"We're not getting a lot of 'emergency' calls, but instead we are hearing from people who are calling because they know their buildings are going to flood and they want to get on our list for cleanup," Jones said.

Some of those structures are near the junction of Highway 74 and Interstate 55 on the south side of Cape Girardeau. "Owners of buildings that are getting flooded now know they're going to get wet and they're prepared for it," he said, adding that it is important to address water damage as quickly as possible.

"As soon as water goes away you need to get on it," Jones explained. "It's really all about removing the wet building materials that won't dry including flooring, cabinets, drywall and insulation. Say the water goes up a foot in your house you need to take two feet of drywall out to be safe, and the sooner the better."

Kaleisha Walker, marketing support coordinator with Servpro in Cape Girardeau, agreed with Jones. "A lot of people don't realize when you have water damage there's a potential for mold damage as well," she said, adding flood water is typically more destructive than so-called "clean" water resulting from a broken water line or faulty plumbing.

"There are three different categories of water damage," Walker said. "Category 1 is clean water from your washing machine or something like that. Category 2 could be a toilet overflow and then category 3 is external water damage from the river or sewer or something similar."

Flood damage is often the most difficult to resolve and often requires removal of carpet, drywall and other building materials.

"The majority of what we're working on right now is water damage that resulted from storms, not necessarily from floods," Walker said.

Attorney Fees Take a Hit Under New Florida Law | Daily Business Review - Law.com

Posted: 10 Jun 2019 06:00 AM PDT

L-R: Liz Reynolds, Anna Cam Fentriss and David Graham. Coutresy photos. L-R: Liz Reynolds, Anna Cam Fentriss and David Graham.

A new Florida law to curb alleged fraud by contractors could create collateral damage for lawyers by slashing attorney fees in insurance litigation — and all just in time for hurricane season.

Before May 23, contractors could enjoy a one-way attorney fee privilege. It meant win or lose, they wouldn't be liable for attorney fees if they sued an insurer to collect insurance benefits that homeowners had assigned to them in exchange for doing repairs.

Insurers, meanwhile, weren't entitled to fees — until Florida Gov. Ron DeSantis signed House Bill 7065 into law.

The former David-and-Goliath-esque statute was designed to look out for the policyholder, considered to be at a disadvantage compared with high-powered insurance professionals with corporate counsel and significant funds in their arsenal.

But critics—led by pro-insurance groups—cried foul. They claimed the statute had exacerbated abuse through inflated repair costs and excessive lawsuits over assignment of benefits, or AOB, which were created to speed up repairs, shield consumers from exploitation and save them from having to chase claims.

Now, under the new law, homeowners can still use the one-way statute to file lawsuits against insurers, but they can't transfer that right to contractors through AOB agreements—a provision that critics says disincentivizes contractor attorneys.

And there's another change: The law includes a new formula for third-party cases to decide which side, if any, is entitled to attorney fees after a judgment.

'No guard rails'

Tallahassee attorney Anna Cam Fentriss represents licensed contractors through the Florida Roofing and Sheet Metal Contractors Association and Florida's Association of Roofing Professionals and was glad of the change. Fentriss feels that while a homeowner, or "the little guy," typically needs less risk in litigation against giant companies, there's no reason contractors couldn't duke it out.

What's the new formula?

The insurer is entitled to fees if:

The difference between the judgment and pre-suit settlement offer is less than 25% of the disputed amount.

Neither party is entitled to fees if:

The difference is more than 25% but less than 50% of the disputed amount,

The assignee is entitled to fees if:

The difference is at least 50% of the disputed amount.

(A provision in House Bill 337 signed May 24 sent this formula into immediate effect)

"You're transferring that benefit from an unsophisticated party to a sophisticated party, and that creates a type of imbalance that you absolutely should not have and shouldn't encourage," Fentriss said.

AOB is one avenue for third parties to collect payment from insurers, allowing them to legally stand in a policyholder's shoes. But Fentriss claims many of her members have never heard of AOB as it wasn't widely used until a cottage industry emerged among water-damage restoration and roofing contractors.

"Some of these contractors out there, and sometimes with the help of attorneys, they really push it," Fentriss said. "And there's nothing, no guard rails to stop them, as long as they have that one-way attorney fee, because they can put forth anything."

Now, contractors might have to charge lower rates to homeowners or accept less money from insurers to avoid going to court and risking attorney fees.

Critics say by curbing attorney fee awards, the new law forces contractors to choose between doing quality work and chasing payments to stay afloat.

Tampa restoration contractor David Sweet, who regularly testifies as an expert witness in insurance suits, said many of the lawsuits end in judgments and settlements—a sign of their merit, Sweet suggests.

"When an insurance company tells you that they're losing lots and lots of money in litigation expenses, what did they really just say?" he said. "They're actually losing almost all of their cases."

But Liz Reynolds, regional vice president of state affairs for the National Association of Mutual Insurance Companies in the Southeast, says AOB litigation is so prevalent that some insurers first learn of claims only after they're hit with contractor lawsuits. That's why Reynolds hopes the new legislation will reduce lawsuits in Florida, a nationwide outlier in attorney fee privileges, thanks to the former win-or-lose award provision for contractors.

"No other state has a one-way attorney fee statute, and assignment of benefits are being used in other states," Reynolds said. "Now you would have to have a more egregious situation to have the insurer pay the attorney fees for the assignee."

California laywer Edward Cross, who represents disaster recovery and restoration contractors. Courtesy photo. California laywer Edward Cross. Courtesy photo.

But California attorney Edward Cross disagrees.

Cross has represented disaster-recovery and restoration contractors since 1997, and says he's noticed an "unfriendly" environment for contractors "as the insurance industry and its partners grow increasingly aggressive in driving down prices."

But even so, Cross, who doesn't handle AOB cases in Florida, believes California has done well without a one-way attorney fee statute.

"I have always subscribed to the school of thought promoted by President George H.W. Bush— that the loser in litigation should pay the other side's attorney fees," he said.

Even more litigation?

But some observers aren't sure the new law will have the desired effect. In fact, some expect the opposite.

Policyholders attorney David Graham of David Graham Insurance Lawyers in Jacksonville, for instance, suspects the new attorney-fee provision could lead to even more litigation.

"I think, ultimately, any smart attorney is going to work around that by representing the policyholder directly," Graham said.

But William Stander, who heads multiple insurance trade groups, including the Florida Property and Casualty Association, applauded the change.

Stander advocated for the rollback of one-way fees for vendors, particularly those doing water-damage mitigation, which created a cottage industry and what he said spawned "no-risk litigation" for contractors.

"They should have some skin in the game, and not be able to sue in the sense of throwing darts at a wall and hope something hits," Stander said.

Whatever happens, contractor Ken Larsen said he's tired of what he considers an unnecessarily adversarial industry when compared to the rest of the U.S. and the world.

"It is astounding to most others contractors in our industry in Australia, Europe and elsewhere," Larsen said. "Why on earth do we do battle like this on every insurance claim, to the point where it's hard feelings and companies going broke?"

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