The state’s Citizens Property Insurance Corp. quickly appealed after a Hillsborough County circuit judge Friday sided with a homeowner who challenged the constitutionality of a controversial arbitration process to resolve claims disputes.
Attorneys for Citizens on Monday filed a notice of appealing to the 2nd District Court of Appeal after Circuit Judge Melissa M. Polo issued a temporary injunction to block the insurer from sending disputes to the arbitration process at the Florida Division of Administrative Hearings.
The notice also said the appeal results in an automatic stay of Polo’s decision — effectively meaning that the ruling is on hold and the arbitration process can continue while the legal fight plays out. Such automatic stays are common when government agencies file appeals.
The notice is an initial step and does not detail arguments Citizens will make at the appeals court. But the case involves an arbitration process that Citizens leaders and insurance regulators approved in 2022 and the Legislature put into law in 2023.
It essentially has allowed Citizens to send claims disputes to arbitration at the Division of Administrative Hearings, a state agency, instead of facing civil lawsuits in court. In issuing the temporary injunction Friday, Polo wrote that Tampa homeowner Martin Alvarez “demonstrated a substantial likelihood of success” on his arguments that the arbitration process violates part of the Florida Constitution designed to ensure access to courts.
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“Plaintiff also established that he and similarly situated Citizens policyholders will suffer irreparable harm absent injunctive relief,” Polo wrote. “Specifically, enforcement of the arbitration clause at issue compels insureds (policyholders) into a forum that lacks neutrality, discovery, motion practice and meaningful judicial review.”
After Citizens filed the notice of appeal Monday, an attorney for Alvarez pushed back, including arguing Polo should vacate the automatic stay. If that occurred, the temporary injunction against the arbitration process would be in effect as the appeal moves forward.
“Due to the exigent circumstances with regard to this issue, the court (Polo) should vacate the automatic stay,” attorney Lynn Brauer wrote. “The result of the automatic stay is to negate the court’s prior ruling on the same issues, leaving the plaintiff and similarly situated individuals subject to an unconstitutional and biased scheme.”
The arbitration process started as Citizens, other insurers and state leaders blamed costly litigation for driving up property-insurance premiums and leading private carriers to drop policies. The Legislature and Gov. Ron DeSantis in 2022 and 2023 also approved a series of other steps aimed at shielding insurers from lawsuits.
After Friday’s ruling, Citizens spokesman Michael Peltier said state law “specifically authorizes the DOAH (Division of Administrative Hearings) process and we believe that the law is constitutional. Beyond that, we do not comment on pending litigation.“
But plaintiffs’ attorneys and other critics have argued that changes in recent years have been tilted too far toward the insurance industry and made it difficult for homeowners to fight to get legitimate claims paid. They also have contended that the arbitration process has overwhelmingly favored Citizens.
Alvarez filed a lawsuit and a request for a temporary injunction on July 11, about a month after Citizens sent his claim dispute to the Division of Administrative Hearings for arbitration. Documents filed in the lawsuit and at the Division of Administrative Hearings said Alvarez’s home was damaged in October 2024. Citizens’ request for an arbitration hearing indicated the dispute involves $72,811.
Citizens was created as an insurer of last resort but became the state’s largest insurer in recent years amid problems in the private industry. It had 782,728 policies as of Friday.
In a motion filed Tuesday, Citizens attorneys also sought a change of venue in the Alvarez case, arguing it should be heard in Leon County — where Citizens is headquartered — instead of Hillsborough County.
