In an unusual move, the Florida Division of Administrative Hearings on Monday asked an appeals court to allow it to resume deciding Citizens Property Insurance Corp. claims disputes after a Hillsborough County circuit judge halted the process.
Lawyers for the Division of Administrative Hearings filed an emergency petition at the 2nd District Court of Appeal, arguing that Circuit Judge Melissa M. Polo overstepped her authority when she issued a temporary injunction. Polo ruled Aug. 1 that the process, which involves arbitrating disputes at the Division of Administrative Hearings, is likely unconstitutional.
Monday’s petition said Polo’s ruling has “indefinitely” put on hold all pending Citizens arbitration cases. It said 390 Citizens policyholders are awaiting resolution of disputes.
“The order thus completely shuts down the claims dispute resolution procedure authorized by the Florida Legislature, irreparably harming DOAH (the Division of Administrative Hearings), Citizens and the thousands of policyholders whose current and future claims will be in limbo unless the circuit court’s order is stayed,” said the petition filed by lawyers from the Lawson Huck Gonzalez, PLLC, law firm, including former Florida Supreme Court Justice Alan Lawson.
Citizens, the state’s insurer of last resort, also has appealed Polo’s ruling to the 2nd District Court of Appeal.
Florida lawmakers in 2023 approved the arbitration process for Citizens amid a series of moves to try to curb costly lawsuits against insurers. The process allows Citizens to have claims disputes heard by administrative law judges at the Division of Administrative Hearings instead of going through regular lawsuits.
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The insurance industry and many Republican leaders blamed litigation for driving up premiums and causing carriers to drop customers. But opponents of the state’s moves aimed at curbing lawsuits have long argued that they hamstring policyholders in fighting to get claims paid.
Tampa homeowner Martin Alvarez filed a lawsuit on July 11, about a month after Citizens sent his claim dispute to the Division of Administrative Hearings. He argued that the process violates part of the Florida Constitution designed to ensure access to courts.
Polo agreed with Alvarez, writing that he had “demonstrated a substantial likelihood of success” on his arguments. Citizens appealed the temporary injunction, triggering an automatic stay of Polo’s decision. Such automatic stays are common in cases involving government agencies.
But Polo vacated the automatic stay — effectively blocking the arbitration process as Citizens’ underlying appeal of the injunction moves forward.
Administrative law judges hear disputes involving numerous state and local government agencies and sometimes see their rulings challenged at appellate courts. But the Division of Administrative Hearings filing an emergency petition at an appellate court to challenge a decision by a circuit judge is unusual.
Among other things, the Division of Administrative Hearings’ lawyers argued in the petition that “a trial court in Hillsborough County has no jurisdiction to prohibit DOAH from continuing to arbitrate these disputes statewide.” It said the Division of Administrative Hearings was not a party to the Alvarez case in circuit court and “was not given notice and was not given an opportunity to be heard.”
“Given that Alvarez’s complaint challenges the constitutionality of DOAH’s arbitration proceedings, it is without question that DOAH’s interests — both statutory and contractual — will be affected by the adjudication of Alvarez’s claim,” the petition said. “Accordingly, Alvarez’s complaint should not have proceeded until DOAH was joined (as a party in the case).”
The petition asks the appeals court to stay Polo’s decision and then to prohibit actions that would affect the Division of Administrative Hearings and the arbitration process.
“The circuit court is acting in excess of its jurisdictional limits and the harm is compounding daily,” the petition said. “Without notice or an opportunity to be heard, DOAH, a non-party, is temporarily enjoined from fulfilling its contractual and statutory obligations statewide. This is irreparable harm that only the (appeals) court can cure.”
