WEST PALM BEACH, Fla. (Legal Newsline) - A Southern Florida law firm caught up in litigation from a former client has failed to show some of the dispute has already been settled, a federal magistrate judge has written.
Magistrate Judge Bruce Reinhart on Jan. 16 issued his report and recommendations in West Palm Beach, finding an email exchange was not an official settlement because the firm Arnesen Webb imposed new requirements.
This particular part of the lawsuit focuses on insurance claims filed by Arnesen Webb on behalf of contractor SFR before SFR fired the firm, which does business as Elevate Legal Services.
Arnesen Webb still wants a cut from these cases. SFR offered $5,000 per file plus costs for each file that had a recovery.
"SFR proposed no other terms. Arnesen Webb accepted SFR's proposal, but made the acceptance 'contingent upon all parties signing the attached settlement and release.' As such, Arnesen Webb proposed new material terms, including the release," Reinhart's report says.
"The parties never agreed on the scope of the release. The Offer Email made no mention of a release. Nevertheless, the Acceptance Email included a one-way release - SFR released Defendants, but Defendants did not release SFR.
"The Acceptance Email did not mirror the material terms of the Offer Email. It proposed a new material term, which SFR never accepted."
Arnesen Webb's acceptance of SFR's terms was "contingent upon all parties signing the attached settlement agreement and release." SFR's lawyer sent comments to its owner proposing edits that included a fee-shifting provision if there was ensuing litigation, deadlines for certain actions and closing statements before disbursement of settlement funds.
SFR, a week after it was sent the settlement agreement, withdrew its "fees/costs compromises on the cases." Arnesen Webb then failed to show the magistrate judge that a valid settlement agreement should be enforced.
Arnesen Webb 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.