Daytona's Brown & Brown Insurance settles legal battle with upstart rival

DAYTONA BEACH ― A nearly five-year-long legal battle between Brown & Brown Insurance and its upstart crosstown rival Foundation Risk Partners has been settled out of court, according to an internal FRP company memo obtained by The Daytona Beach News-Journal.

"Late last week (June 29), Brown & Brown paid FRP a multiple seven-figure dollar amount for a global resolution," wrote FRP Chief Legal Counsel Tom Leek in a memo dated July 7 to employees. "That's right: Brown paid FRP. Foundation Risk Partners, and all of us, stand victorious."

The memo did not disclose the amount of the settlement.

Leek on Thursday morning verified the authenticity of the memo.

Brown & Brown officials did not respond to requests for comment.

How the dispute began

Founded in 1939, Brown & Brown is the world's seventh-largest insurance brokerage. FRP is a fast-growing upstart rival that was launched in early 2017 by several former Brown & Brown executives.

Brown sued FRP in 2018 claiming that its former employees stole "company secrets" and violated employee agreements. Its initial lawsuit included accusations that FRP founders, while still employed at Brown & Brown, held "clandestine meetings" and used "burner phones" to hatch their plot.

FRP countersued, contending that those accusations were false.

A judge last year ruled in favor of FRP, but Brown & Brown declared its intentions to file an appeal.

"To avoid further meritless appeals and the inevitable continued legal wrangling, we agreed to take Brown's offer and resolve all disputes. The matter has been fully and finally resolved, and this chapter in FRP's story comes to an end," wrote Leek.

Similar case, different outcome

In an ironic twist, Leek, when he was a partner at Daytona Beach's Cobb Cole Law Firm, was one of the attorneys that helped Brown & Brown in 2017 win a then-record $20 million settlement from another upstart rival, Lake Mary-based AssuredPartners Inc.

That rapidly growing insurance brokerage was also started by former Brown & Brown executives and was accused of violating an agreement to not hire away the more-established company's employees or solicit its clients.

The out-of-court settlement did not include an admission of guilt by AssuredPartners.

Both Brown & Brown, FRP continue to grow

The millions of dollars spent in legal fees to battle each other in court has not impeded the growth of either Brown & Brown or FRP.

In its annual ranking which came out July 12, industry trade publication Business Insurance put Brown & Brown at No. 7 in its list of the world's 10 largest insurance brokerages.

Brown & Brown in 2022 saw its revenues increase 17% year-over-year to a record $3.57 billion just 11 years after topping the $1 billion mark for the first time ever in 2011. The company appears likely to set another record high this year after reporting $1.1 billion in revenues in the first quarter of 2023, up from $904.7 million the same period last year.

The publicly traded company is set to report its second-quarter revenues and earnings on July 24. It employs more than 14,500 "teammates" in over 450 locations across the United States and Canada as well as in the United Kingdom, Europe, Bermuda, and the Cayman Islands. Locally, it employs roughly 500 people at its headquarters on North Beach Street as well as more than 325 at the newly refurbished Daytona Beach offices for subsidiary Proctor Loan Protector at 220 S. Ridgewood Ave.

FRP does business in 19 states under the various names of its subsidiaries, including Halifax Insurance Partners and Reames Employee Benefit Solutions in Daytona Beach. It now employs 2,300 people in 135 offices, including 115 at its headquarters in Daytona's Cornerstone Office Park.

"Our annual revenues will be north of $600 million by the end of this year," said Chairman and CEO Charlie Lydecker. FRP's revenues in 2022 were approximately $500 million. The privately held company is not required to publicly disclose actual revenue and earnings.

FRP last year sold a 50% ownership stake to a Switzerland-based private equity firm. Lydecker and the other local investors that started FRP have retained a combined 40% stake with another 10% owned by a New York-based private equity firm. The sale, for an undisclosed amount, provided capital to help the insurance brokerage to continue its expansion efforts, which like Brown & Brown, is fueled in large part by acquiring other insurance agencies and related businesses.

Both Brown & Brown and FRP have been big supporters of various community and charitable causes.

Settlement 'allows the healing process to begin'

Leek in a written statement emailed to The News-Journal Thursday afternoon wrote, "This subsequent settlement brings us closure and allows the healing process to begin. The action brought by Brown & Brown was always a lawsuit in search of a claim, and in the end, the Court agreed with us."

Lydecker wrote in a text message, "Personally, I'm letting go of the bitterness. Time to move on."

This article originally appeared on The Daytona Beach News-Journal: Daytona's Brown & Brown settles legal battle with crosstown rival FRP