Two Roofing Firms Join Challenge to Insurance Law

An injunction stopped part of a Fla. law intended to reduce the number of insurance roofing claims, and two more roofing companies have joined the legal fight.

TALLAHASSEE, Fla. – Two more contractors have jumped into a case challenging the constitutionality of a new Florida property-insurance law that seeks to restrict advertising that could lead to residents filing roof-damage claims.

Sonshine Roofing, Inc., which is based in Sarasota County, and Florida Forever Roofing & Restoration, LLC, which is based in Hillsborough County, intervened in the federal lawsuit last week.

The moves came after Chief U.S. District Judge Mark Walker sided with another contractor, Gale Force Roofing & Restoration LLC, and granted a preliminary injunction to at least temporarily block the advertising restrictions.

The companies contend that the restrictions violate their First Amendment rights, as the law would prevent practices such as using door hangers to urge homeowners to seek roof inspections. Such inspections can lead to filing roof-damage claims with insurers.

“The statute does not prohibit false or misleading advertising,” a court document filed Friday by Florida Forever Roofing & Restoration said. “Rather the statute prohibits the intervenor-plaintiff (Florida Forever Roofing & Restoration) and other Florida contractors from advertising accurate, truthful information concerning their services and the possibility that insurance may pay for those services. The statute also violates the First Amendment rights of Florida homeowners to receive accurate, truthful information about roofing services and the possibility that their homeowner’s insurance may pay for services that are needed.”

Lawmakers passed the restrictions in April as part of a broader bill (SB 76) aimed at curbing rising property-insurance rates and homeowners losing coverage. Backers of the bill and insurers contend that questionable, if not fraudulent, roof-damage claims are driving up costs in the insurance system.

In a court filing this month, attorneys for state Department of Business and Professional Regulation Secretary Julie Brown – the named defendant in the case – said Florida has a “compelling state interest” in making sure that homeowners are protected from soaring insurance rates and have access to coverage. The document said fraud by contractors drives up costs.

“This translates into hundreds of dollars in increased premiums for some homeowners, and denial of coverage for others,” Brown’s attorneys wrote. “In Florida, this sort of fraud is particularly rampant given the concern over hurricane-driven roofing damage and the propensity for unscrupulous contractors to take advantage of homeowners who cannot readily assess whether their roofs need service. Plainly, the state’s interest in regulating this sort of commercial speech is substantial.”

But in granting the preliminary injunction, Walker on July 11 said the law’s advertising restrictions went too far.

“To be clear, this court recognizes that the state of Florida has a valid and weighty interest in regulating contractors and protecting Floridians from fraud, exploitation and the deleterious effects that fraud and exploitation have on the insurance market in Florida,” Walker wrote. “And it is within the Legislature’s purview to address these concerns. But it must do so within the bounds set by the Constitution. Here, the Legislature failed to do so.”

While Walker issued a preliminary injunction, the roofing contractors are seeking a permanent injunction and what is known as a declaratory judgment that the law is unconstitutional. Sonshine Roofing and Florida Forever Roofing & Restoration are both represented by the Texas-based Gibbs Law Firm, P.A.

The law seeks to prevent contractors from soliciting homeowners to file roof-damage claims through a “prohibited advertisement,” which could include such things as emails, door hangers, flyers and pamphlets.

In a court document filed Friday, Sonshine Roofing said it uses door hangers and lawn signs that could be prohibited under the law.

“The provisions of (the law) are far removed from targeting the disfavored conduct and practices that the state of Florida seeks to control,” the Sonshine Roofing document said. “Rather, the statute sweeps in an unconstitutionally broad fashion to prohibit the advertising of truthful information concerning storm damage that a consumer’s home may have suffered and that the possibility that the consumer’s homeowner’s insurance may cover that damage.”

Source: News Service of Florida