A major Order defending Florida policyholders was issued by a Circuit Courtroom, which granted a sweeping short-term injunction in opposition to Residents Property Insurance coverage Company, halting the enforcement of its obligatory DOAH arbitration program. 1 This order challenges the continuing battle over the constitutionality of Residents’ arbitration scheme, a problem I’ve been warning about for a while, together with in my earlier article, Florida’s DOAH Arbitration Catastrophe: How the Legislature Gave Residents a License to Steamroll Policyholders.
The case arose from a declare filed by Martin A. Alvarez, a Tampa home-owner insured by Residents, whose property sustained a lined loss on October 9, 2024. When Alvarez disputed the quantity of cost, Residents invoked its obligatory arbitration provision, compelling the case into the Division of Administrative Hearings (DOAH) within the state capital, to bypass litigation earlier than a impartial trial choose within the county the place the property is positioned.
Beneath Florida Statute § 627.351(6)(ll), Residents can drive policyholders into an expedited arbitration course of that operates beneath compressed timelines, restricts discovery and movement follow and, most critically, supplies extraordinarily restricted avenues for judicial evaluation. For policyholders, this course of has typically been a lifeless finish. As I beforehand defined, statistics present that DOAH arbitrations overwhelmingly favor Residents. The danger of lawyer charges and price awards for withdrawing claims has chilled many insureds from ever having their day in courtroom. As all arbitration hearings happen in Tallahassee, the place state-run Residents is headquartered, with government-appointed administrative judges presiding, it might give the looks of a star chamber-like continuing, the place the deck is stacked in opposition to policyholders.
In response, Alvarez filed a lawsuit in search of declaratory aid and an emergency movement for short-term injunction. The grievance challenged each the coverage provision and the statute itself, asserting that obligatory arbitration deprives policyholders of their constitutional proper of entry to courts beneath Article I, Part 21 of the Florida Structure and violates due course of by forcing disputes right into a discussion board missing the basic attributes of neutrality and equity. The emergency movement highlighted the irreparable hurt policyholders face when they’re compelled to take part in an arbitration course of that’s structurally biased and lacks significant appellate cures.
Circuit Decide Melissa Mary Polo agreed. In her order issued this week, she discovered that Alvarez had demonstrated a considerable chance of success on his constitutional claims, together with violations of due course of and the Florida Structure’s access-to-courts provision. She additional held that policyholders like Alvarez face irreparable hurt when pressured right into a discussion board that deprives them of the standard protections of the judicial system.
The courtroom emphasised that the stability of equities and public curiosity favored defending constitutional rights over Residents’ curiosity in sustaining its arbitration program. The order not solely enjoined Residents from imposing the arbitration clause in opposition to Alvarez, however it additionally prolonged statewide, stopping Residents from imposing related arbitration provisions in opposition to any present or future policyholders and staying all pending DOAH arbitration proceedings till the constitutional questions are resolved.
This ruling is a serious step towards vindicating the rights of Florida householders who’ve been trapped in what I’ve referred to as the DOAH arbitration catastrophe. By halting Residents’ use of this statutory arbitration scheme, the courtroom has opened the door for policyholders to pursue their claims in a impartial discussion board, free from the systemic imbalances which have lengthy plagued the DOAH course of. The case now strikes towards a remaining willpower on the constitutionality of § 627.351(6)(ll), which might have lasting implications for a way property insurance coverage disputes are resolved in Florida.
As somebody who has been following these arbitration ways, this determination is a long-overdue acknowledgment that effectivity can not come on the expense of elementary rights. Policyholders buy insurance coverage for safety, to not be funneled right into a discussion board the place the percentages are stacked in opposition to them and for the government-run insurer of final resort. Even a state-created insurer like Residents can not sidestep constitutional ensures.
Thought For The Day
“The Structure doesn’t prohibit legislatures from enacting silly legal guidelines. It prohibits them from enacting legal guidelines which might be unjust.”
—Justice Thurgood Marshall
1 Alvarez v. Residents Prop. Ins. Corp., No. 25-CA-006626 (Fla. Cir. Ct. [Hillsborough] Aug. 1, 2025).
