HD Law Partners Blog

As family law attorneys practicing here in Florida, during the month of August, we tend to see divorce filings spike. While divorce can be difficult and overwhelming, there are some new tech -related services that can help in terms of coordinating child issues with your ex and getting connected to helpful resources for divorce proceedings, as we discuss below:

“Co-Parenting” Apps

OurFamilyWizard can be used to help parents raising children separately and includes interactive calendars that allow you to track who has the kids on what days, as well as expense logs so that you can keep track of reimbursements, receipts, invoices, and more. The app also allows parents to communicate with each other through a secure message board and even features a “tone meter” option that can help to flag potentially problematic language before it is sent.

coParenter there’s another app designed to help with co-parenting and avoiding conflict while you do it. It allows one parent to send not-trackable notifications to the other parent, for example, when they are picking up or dropping off kids, as well as parents to send requests to each other if certain aspects of the schedule need to be swapped. In addition, if one parent does not want to use the app, it does still allow for the other parent to use the app in “solo mode” while sending messages to the parent who is not participating via a separate SMS phone number.

According to Florida officials, even though it has been nine-ten months since hurricane Michael struck, insurance companies have left more than 20,000 claims unpaid, which represents approximately 15 percent of all claims associated with the storm. This is shocking, given that, Florida law dictates that insurance companies are supposed to pay claims within 90 days of being filed (unless those claims are contested).

Those who suffered losses due to Michael suffered approximately $4.5 billion, totaling more than 130,000 claims and some businesses are estimating that it could take three to five years before the region is considered fully restored; in large part due to insurance payment delays. Part of the problem also involves insurance companies sending an initial amount, and then sending the remaining portion of funds later, when, at that point, contractors and workers are often unavailable to do the restoration work necessary. In addition, there is no question that insurance companies have been exceedingly slow when it comes to sending payments after the disaster, with Florida homeowners frequently receiving payments that are far too small or delayed and even having their calls go unanswered.

New research indicates that divorced men actually become better caregivers. As a result of men becoming single parents after divorce, they are finding that it makes them better fathers in part because they are taking control and responsibility for situations that they might have otherwise delegated their partner or waiting to be told what to do. As a result, more and more men are advocating for themselves and therefore becoming better advocates for the children; all while making room to become better fathers; which is feeding back into changing custodial norms.

In general, as divorced parents are taking a more informed and research-based approach to co-parenting; while no longer distracted by marital conflict; they are parenting with a lot more focus. Part of this could also be explained by divorce simply making many people happier individuals and therefore happier parents in the long run.

A case that could have huge repercussions on insurance litigation and insurance bad faith claims is in particular against State Farm insurance could go in the direction for the insurance company, according to reports. Plaintiffs brought antitrust claims against the insurance company, State Farm, alleging that it conspired with software makers to undervalue damage to homes in the due to fires; allegedly leaving homeowners with less than they needed to recoup the costs.

Complaints Against Valuation Tools

Specifically, the plaintiffs claim that State Farm relied on a valuation tool known as “360 Value,” which is produced by Verisk Analytics and Insurance Services Offices Inc. According to the complaint, the tool estimates property values at only 30 to 40 percent of their actual value and, as a result, does not account for a number of important aspects and factors that are relevant in calculating insurance payouts. In addition, another tool, called “Xactimate,” they allege, estimates construction costs at 50 percent below their actual market rates. For example, the tool estimated the cost of rebuilding one home at $804,000 when it actually cost $2.2 million, according to the complaint.

Money related issues are one of the number one reasons couples end up seeking a divorce.  For many, it is the number one cause of arguments between two married individuals. This is no surprise as, regardless of whether a couple is wealthy or in debt, many have financial disagreements.

Below, we discuss some of the biggest money-related reasons people end up getting divorced:

One of the reasons financial issues become a problem is because couples fail to discuss these issues before getting married; only to find out afterwards that they have completely opposite views of money. Sometimes this leads to a “spender” and a “saver,” for example, who are continually at odds with one another. This can especially become an issue if a couple starts out in debt, which many do. This sometimes also adds to the anxiety which, in turn, can make discussing finances even more daunting.

Credit card debt is another issue that sometimes comes between people, especially when one individual has worked overtime to pay off their own debt; only to have their spouse rack up new debt that they will both be responsible for. In fact, the larger a couple’s debt, the more likely money becomes an issue that they fight about.

On July 15, a Florida Federal District Court made an important insurance bad faith litigation decision that involved a hurricane insurance claim. The court ultimately found that the insurance company must provide coverage to a limited number of locations when it comes to an outdoor grounds policy endorsement for a country club. The dispute involves damage caused by Hurricane Irma.

The Case & Decision

Grey Oaks Country Club filed a claim with its insurance company – Zurich Insurance Group Ltd – seeking compensation to cover damages from Hurricane Irma at 19 of its property locations. Zurich responded that it was only liable to cover one property/location (or “premises”). In response, the plaintiff country club argued that insurance company breached its coverage obligations under the commercial insurance policy and acted in bad faith by providing only partial payment and instead used the money to negotiate a lower settlement.

A new assignment of benefits (AOB) law that came into effect here in Florida in July alters the practice of policyholders assigning third-party claim benefits of an insurance policy and could very well change the insurance litigation landscape in Florida.

The Bill’s Provisions

Prior to now, the combination of this practice with Florida’s one-way attorney fee statute allowed policyholders to recover attorney’s fees from an insurer.  However, the new law that went into effect establishes a number of requirements when it comes to assignment agreement, including:

Purpose & Effect

According to the legislators behind it, the law was passed in response to a decade of “abusive litigation tactics in Florida’s market.” However, the bill has been labeled a “consumer protection measure,” passed in response to a policyholder benefit that has caused higher rates for Florida property owners.

According to some sources, AOB lawsuits have exploded in recent years – especially in South Florida – leading to some insurers to increase rates for most-all of its homeowner’s policyholders to offset litigation expenses. That being said, insurers have also cited the fact that three hurricane seasons in a row have created certain unavoidable obstacles when it comes to elevated insurance rates. In addition, it is important to note that the insurance industry is celebrating this as a legislative victory, and while they expect a reduction in AOB litigation, they do not expect an overall reduction in insurance litigation.

An important insurance litigation decided by the 11^th Circuit (Florida) during the second week of March laid the foundation for when insurance companies can determine whether they can indemnify their policyholders.

At Issue in the Case

The case involved an appeal of a district court decision finding that Mid-Continent Casualty Company (MCC)’s complaint for declaratory relief regarding whether it had a duty to indemnify one of its insureds in a pending lawsuit was not yet ripe for adjudication until the underlying lawsuit was resolved because the company’s duty to indemnify depends upon the resolution of that underlying lawsuit.

Rule, Analysis, & Conclusion

MCC had issued a number of insurance policies to a Florida construction company (Delacruz) that built single-family homes. As part of those policies, MCC was obligated to defend and indemnify Delacruz under certain conditions if they are sued for defective construction. Once the project was completed, a number of homeowners sued the general contractor that hired Delacruz for defective construction. The general contractor then turned around the sued Delacruz and its subcontractors for breach of contract, common law indemnity, contractual indemnity, Florida building code violations, and negligence. MCC sought a declaration in court that it is not obligated to indemnify Delacruz, claiming that the alleged defective construction claims fell outside of the policy limits they set on Delacruz, and the District Court ruled that the duty to indemnify was not yet ripe for adjudication because the underlying lawsuit (i.e. the general contractor’s lawsuit against Delacruz) was not yet resolved. In other words, before MCC’s motions can be resolved, Delacruz’ liability has to be established.

Given the devastation caused by hurricane Michael to Florida last October, there is still plenty to be done, especially as a number of property owners are still waiting for their insurance companies to ‘make them whole’ in terms of their losses. In an effort to provide some relief to affected Florida property owners, on April 16, Florida state lawmakers moved legislation that aims to provide assistance to Floridians that are still recovering from the hurricane. Specifically, Senate Appropriations approved two bills to provide assistance in debris removal, housing, infrastructure, and other necessary repairs.

Funds Set Aside for Hurricane Recovery

One provision would also create a $300 million program of “rainy day” funds for local governments and school boards, allowing them to prioritize funds for housing needs, task forces to oversee recovery efforts, and improving building codes.

If the bills are implemented, total Florida state commitment on Hurricane Michael recovery would come to almost $2 billion. In addition, another bill that was approved on April 16 would take some funds set aside for the 2010 Deepwater Horizon oil spill and allow them to, instead, be used for hurricane recovery needs. The measure would direct the state Department of Economic Opportunity to designate a number of recovery infrastructure project priorities, especially in counties such as Calhoun, Jackson, Liberty, Jefferson, Holmes, Jackson, Gadsden, and Washington.

The divorce process became significantly more complicated this year with the code changes. Not only did a number of Americans end up owing more than expected, but along with these changes also came a slew of unforeseen consequences. For example, the spouse paying alimony can no longer deduct the payment, and the spouse receiving alimony no longer has to pay taxes on it as income, making alimony payments in general costlier, and divorce negotiations more strained. This loss is not insignificant: for some, it amounts to thousands of dollars; and its loss becomes more and more significant as the income difference increases.

In an effort to offset some of the losses associated with the loss of the alimony deduction, as one example, a number of divorce attorneys and accountants are resorting to other money saving (creative) techniques, as we discuss below.

One way to try and get around this loss is to set up a trust for the spouse who would otherwise receive alimony. Known as “grantor trusts,” they are effectively designed to pay out income without the tax burden, and are funded with assets designed to generate income. It is essentially a property settlement that must be established after the divorce decree has been finalized. Trusts set up like these ensure that payments continue even if the paying spouse passes away and when the receiving spouse passes away, the rest goes to heirs. However, some accountants have warned that the IRS could see this is simply disguised alimony.