Columns

Anybody but Sean Shaw

By: Nancy Smith | Posted: February 20, 2014 3:55 AM
I Beg to Differ

Do the voters of District 61 really know who Sean Shaw is and what his election to the Florida Legislature might mean to important insurance reforms?

Yes, the Democratic candidate in Democrat-dominant House District 61 has a boatload of money and looks solid to win the Tampa-area House seat, but is this really a cause for rejoicing?

If Shaw wins, it's bad news for Florida, bad news for everybody except Sean Shaw and a handful of attorneys like his employer, William "Chip" Merlin, getting fat off a practice called "hammering" -- that's twisting the arms of insurance companies into agreeing to large settlements. Large settlements ultimately lead to higher premiums.

Don't worry, District 61, I'm not here to push you to elect a Republican. Just don't elect this particular Democrat. Anybody but Sean Shaw.

Lawyer Shaw, son of retired Florida Supreme Court Justice Leander J. Shaw Jr., was appointed Florida insurance consumer advocate by Chief Financial Officer Alex Sink in 2008.

But in late 2010, he opted to leave his post just as the state was deciding whether to allow property insurers to raise their rates by more than 18 percent -- which, of course, they did. The Office of Insurance Regulation approved average statewide rate hikes of 18.7 percent and 17.8 percent for two Allstate subsidiaries and a 15 percent average increase for Royal Palm Insurance -- and they did so in part to pay for exorbitant sinkhole payouts. 

Sean Shaw

Sean Shaw

Where did Shaw go after his state job? Merlin Law Group -- turning his back on his principles, or adjusting them, and becoming the ultimate corporate sellout.

Let's look first at the track record of employer-lawyer William Merlin over two decades of legal representation.

First, Merlin is perfectly happy to forego claim fulfillment offers made by insurance companies in order to pursue lucrative settlement offers from insurers -- why? -- because insurers prefer to stay out of court; and second, he also employs this strategy against insurers even when he acknowledges they've demonstrated no negligence and have tried to make his clients "whole."

That's how you "hammer." And it's into this culture that Shaw descended and thrived. 

Sinkhole billboard

Under Merlin’s guidance, Shaw created the political group, Policyholders of Florida (POF). Though POF has no filings on record with the Florida secretary of state, at least none that I could find, it operates as a de facto issue advocacy group. It works against property insurance reforms intended to stop fraudulent sinkhole claims.


Shaw's POF is funded by anti-insurance organizations that stand in solidarity with its position. POF uses liberal advocacy methods and misinformation about sinkhole fraud to blame insurance companies. He whips up populist support against government reform efforts. These efforts he has cast as anti-consumer.

Ultimately, Shaw’s sole motivation is not to protect the consumer but to appease his political benefactors and to ensure that costly, and profitable, litigation continues.

William Merlin

William "Chip" Merlin

As plaintiff’s attorneys, Shaw and Merlin reap the benefits of the average $130,000-per-case sinkhole payout, at the expense of the insurance companies.

This strategy has been plenty fruitful for the two of them. Merlin owns at least two homes with a combined value of about $2 million. He also has a nice collection of foreign and domestic cars. At least up until a year ago Shaw owned one property in Tallahassee and lived in an opulent resort-style condo in the heart of downtown Tampa.

Shaw's spiel since he joined Merlin has been to blame insurance companies for the three- and four-times rise in the number of sinkhole claims in a period of less than two years. He has insisted that only 3 percent of property insurance claims are fraudulent. He said insurers failed to appropriately build their capital reserves and outsourced too much of their costs to re-insurers -- at a cheaper price than Florida could offer.

But in his accounting, he doesn’t reference the untold millions in insurance payments made on illegitimate claims not reported as fraud, but are meritless just the same.

Shaw flip-flopped royally.

What he never mentions is that he now chastises state legislators for supporting positions he had taken as Florida’s insurance consumer advocate.

In 2010 as consumer advocate he supported Senate Bill 2044, which accepted the rationale that property insurance companies were making illegitimate payments that should have been more properly defined as nonsinkhole-related cracks. Nonsinkhole-related cracks are not entitled to the same level of insurance payment.

What government insurance sources tell us now is that catastrophic sinkhole damage is actually only responsible for 1 percent of property insurance payments made. One percent. The rest are minor damage claims or illegitimate claims settled in or out of court.

So you have the latest insurance crisis in Florida, where homeowners, public adjusters and attorneys are clamoring for settlement checks for what often are little more than settlement cracks. As the Orlando Sentinel put it, "You would think from the escalating claims — they tripled just from 2006 to 2010 — that homes are being swallowed like rats in a python cage. In fact, that rarely happens. Catastrophic collapse is only involved in about 1 percent of sinkhole claims."

In 2011, state-owned Citizens Property Insurance was taking in more than 200 sinkhole claims a month, but paying out about four times as much as it took in from premiums.

Funny how Shaw never mentioned that. It's a plaintiff lawyer's dirty little secret, because these people created the problem and they perpetuated it, all in the name of large fee checks. They greatly exaggerated nonconsequential cracks in a home, which led to protracted fights between homeowners' lawyers and engineering experts -- and voila -- an eternity of litigation.

That's not all. Adding insult to injury, a secondary epidemic of fraud has sprouted from these settlements.

Generally, payments made by the insurance companies to homeowners come with the intention that the homeowner will use the money to fix the problems. But one report indicated that up to 79 percent of these folks pocket the money rather than spending it to repair their homes. Because this isn't reported to the government as a fraudulent claim, Shaw gets to leave it out of his argument -- and somehow gets away with "3 percent."

Sean Shaw is a wolf in sheep's clothing. When he says he's for the "consumers," what he means is his "clients." His clients, Merlin's clients, John Morgan's clients, but what about the hundreds of thousands of honest homeowners looking for a fair and reasonable price for a sound insurance policy?

If he's elected, District 61, watch how and who he represents, watch his bills, watch his committee activity. Better yet, elect anyone else.



Reach Nancy Smith at nsmith@sunshinestatenews.com or at 228-282-2423. 


Comments (15)

Cameron Wilson, Esq.
3:07PM MAR 25TH 2014
First, as someone intimately familiar with both sides of the industry, and having litigated against the Merlin Law Group on behalf of insurers, I can confidently say I have never heard of some concocted practice called "hammering" prior to this article. Secondly, the author clearly has no knowledge of the sweeping sinkhole claim reforms enacted in 2011, which overhauled the entire process (with the practical effect of stifling many valid claims.) In short, many of the assertions in this article are demonstrably false. The main question to be asking is "who paid for this hit piece?" Nancy Smith and some of the commenters here will change their tune when they have a homeowners claim and they see what type of practices they encounter from their insurer. I have met Mr. Shaw, and my opinion of him has not changed since my days when I was employed by insurers to advocate a position adversarial to his. It is amazing how some consumers are persuaded by articles like this to vote against their own interests. Sean Shaw is a lone voice advocating for consumers against enormously powerful forces. I would encourage voters to research both Mr. Shaw, and the profitability and disciplinary records of Florida insurers, prior to voting.
Tad
1:08PM FEB 26TH 2014
This is perhaps the most BS article I have ever read. Can anyone say "propaganda". I know and have met these guys and they represent the best voice for homeowners protection. I will be willing to be that the author of this article would call them if they had a claim and their insurance company tried to "make them whole".

At the end of the day, this author is clearly a paid hack that doesn't know of what he speaks.
dick
11:18AM FEB 21ST 2014
Sean and Merlin, kind of like Dean and Jerry except theyre no comedy team. Don't kid yourself, the only pockets being lined are theirs. At the end of the day If the lawyers are making millions it's all coming out of us homeowners. do you really believe that if you have a legitimate claim worth $50,000 and your company agrees to that but the lawyer gets $50,000 more that anyone benefits but them? Where do you think the money comes from?
Jim
8:21AM FEB 21ST 2014
Ask the clients who have been shortchanged by the insurance companies if they appreciate having an advocate like Sean and Merlin. Your propaganda is obvious.
Lester
11:04AM FEB 21ST 2014
sure they do. i got a couple cracks in my driveway, maybe they could get me a hundred grand too.
Jay
5:29PM FEB 20TH 2014
I know its a shocker, but the AMBULANCE CHASING SCUM SUCKING TRIAL LAWYER VERMIN CONTROL THE DEMOCRATS AND HALF THE REPUBLICANS IN TALLAHASSEE!

Its par for the course.
Frank
12:41PM FEB 21ST 2014
I'm shocked, I'm shocked . . . that you'd attack an ex-SSN writer, now trial lawyer, so vehemently . . .

Pathetic . . . .
Gabe Leighton
1:37PM FEB 20TH 2014
Hey Nance lookie here, you got all the trial lawyers coming out of the woodwook to try to discredit you. You must have done something right.
Frank
9:38AM FEB 21ST 2014
Yes, yes, you must be right . . . your legal bigotry confirms it . . .

Pathetic . . .
David
12:58PM FEB 20TH 2014
Nancy should be commended on her story. She has obviously thoroughly reviewed the talking points put forth by the insurance industry and has done a masterful job regurgitating them in her article.

In Nancy's world it appears that we should all get lower premiums even if that means that we receive sub par service in the event of a claim.

The truth, something which Nancy seems to be unfamiliar with, is that the "sinkhole crisis", i.e. an onslaught of fraudulent sinkhole claims, is not what is really going on here. Contrary to her insinuations, insurers owe to fix properties when 1) a sinkhole exists and 2) a sinkhole has caused damage to the home. Until recently there was no requirement that the home have "catastrophic" damage. This, by the way, was due to the legislature's longstanding statutory requirements not as a result of greedy plaintiff's attorneys "hammering" insurance companies.

Even more laughable is the statement that not using insurance proceeds to pay for repairs is "an epidemic of fraud." Anyone who has even the most basic understanding of insurance knows that there has historically been no requirement to use insurance proceeds for any repairs. If my house burns down and the insurance company pays for the damages, am I required to rebuild? No. I can use the money to buy another house or even put my kids through college. The reason nobody reports this to the state as "fraud" is because there is nothing illegal about it.
L
10:05AM FEB 20TH 2014
I guess "honest" is a relative term. If fighting the good fight means allowing insurers to routinely and egregiously underpay and ourtight deny valid insurance claims, then I can see Nancy Smith's point. Otherwise, i am befuddled by her critcism of lawyers who became successful by advocating against these practices. I guess Nancy's view is that lawyers should work for free, just insurance companies are non profit.
Michael
9:28AM FEB 20TH 2014
What an amazing screed! I do not recall Ms. Smith writng a single word on the many, many times that the Insurance Industry or Nursing Home Industry or Developers have had their way with the Florida Legislature, at least the Republican side, to the detriment of the majority of the citizens of Florida. Since the Insurance Companies have throgh their legislative influence considerably stacked the deck to their favor Sean Shaw probably deeseves kudos and the votes of the citizens of his district.
Frank
9:26AM FEB 20TH 2014
Anybody actually believe Nancy's -->"I'm not here to push you to elect a Republican. Just don't elect this particular Democrat." . . . . thought not . . . .

Pathetic . . . .
Joel
10:54AM FEB 20TH 2014
Frank, you are so partisan you don't recognize a great story when you see one. The demographics in Dist 61 prove it's all blue. No Repub would have a chance. This is just something that needed to be said which many in the know have been thinking and Nancy said it. I think if Shaw was a Republican she would have stepped on his neck just the same.
Frank
9:43AM FEB 21ST 2014
Yes, yes, we all know Nancy would support Democrats . . . anywhere, anytime, right . . . . . be serious . . . . and you know, if she actually wanted to say she would step on Shaw's neck if he were a Republican, she could say so herself . . . . rather than leaving it to a lowly self-declared minion . . . .

Pathetic . . . .

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