WEST PALM, BEACH, Fla. (Legal Newsline) - A law firm sued in federal court by a former client whose repair business was damaged by a change in Florida insurance law seeks to dismiss the case, saying the suit is an improper “shotgun pleading” that fails to identify any specific examples of malpractice.
Arnesen Webb, which does business as Elevate Legal Services, describes itself as a “law firm that was built to handle large volume litigation.” It was hired by SFR Services to handle assignment of benefit claims under a previous law that allowed property owners to sign over insurance claims to a contractor who would then collect payment from the insurer.
The law led to widespread fraud as contractors submitted inflated claims with the knowledge insurers were likely to pay them to avoid being assessed with hefty legal fees if they fought the claim and lost. Florida legislators amended the law in 2019 to require contractors provide detailed estimates with AOB contracts and then outlawed the practice entirely for home insurance last year.
A 2022 appeals court ruling further hurt the contractors by invalidating all contracts signed without estimates after July 1, 2019. SFR sued Elevate in federal court to recoup more than $1 million it says it lost through mismanagement and ill-advised litigation.
In its motion to dismiss, Elevate described SFR as a marketing outfit owned by Ricky McGraw, a tax expatriate living in Puerto Rico. The firm describes itself as one of the biggest contractors in South Florida but “does not own a hammer, nails, roofing equipment, or work trucks, and does not even maintain a physical office or supply yard,” Elevate said. SFR instead farms out actual repair work to subcontractors, the law firm said.
After the 2019 law change, Elevate said it won rulings from judges in Lee County and elsewhere over the meaning of the new law, resulting in SFR “recovering millions of dollars in settlements.” Then in June 2022, Florida’s Fourth District Court of Appeal ruled AOBs after the law was changed needed to contain detailed estimates, rendering many of SFR’s claims worthless. The AOB had been written by SFR’s in-house lawyer, Elevate said, and the law firm didn’t dismiss any cases without McGraw’s written consent.
SFR fired Arnesen Webb in January 2023 when it still had 386 unsettled cases and liens worth $1 million. Now SFR wants the court to make a judicial determination the lawyers were fired for cause, “without pointing to any specific alleged misconduct in the handling of a specific case.”
The federal lawsuit is an attempt to impermissibly interfere with Elevate ’s cases in state court, the law firm said. But fee liens are supposed to be enforced in the court where the underlying case was filed, the lawyers said.
“There is no doubt that Plaintiff’s purpose in seeking declaratory relief is to improperly take away the ability of the state courts to determine the resolution of Elevate Legal Services’ charging liens,” the firm said.