TALLAHASSEE — Citizens Property Insurance has a lawsuit problem.

More than 12,000 policy holders have sued the company in an effort to get their outstanding claims paid and, new data shows, the defense costs are rising — with the company billed more than $21 million for the last three months of 2013 alone.

Some of the longest-fought battles are in sinkhole alley — the section of the state that includes Hillsborough, Hernando and Pasco counties, which rest on a porous, cavity-prone limestone bed. The amount the agency spends on sinkhole litigation alone has doubled — from an average per-month expenditure of $944,345 for 2012 to $2,050,106 for 2013, according to data provided to state Rep. Frank Artiles, R-Miami, last week.

As more than 2,100 homeowners have filed lawsuits for sinkhole damage reported more than two years ago, the legal costs of those claims are now costing Citizens more than $4.4 million a month, or about $2,100 per sinkhole claim.

To deal with the mounting lawsuits, Citizens is fighting in the courtroom and at the Capitol:

• It is hiring the Palm Beach law firm of Ackerman, Link and Sartory for $6.5 million over five years to "coordinate" a get-tough legal strategy that includes denying claims and delaying payment to force settlements.

• It is backing legislation (SB 416) that would bypass homeowners and leave the decision for how to repair a home to an approved set of contractors, many of whom favor the controversial "grout in the ground" repair method.

• It is lobbying for legislation (SB 708) that would stop the ability of homeowners to sign over the benefits of an insurance policy to contractors in order to get emergency work completed.

• And it is urging homeowners to settle their lawsuits so both can avoid the expense of battling in court.

Last week, Citizens announced it had reached a "global settlement" with the Central Florida law firm of Boyette, Cummins and Nailos, which is representing more than 300 policyholders who have disputed sinkhole claims.

The agreement "will allow homeowners to make critical repairs to protect their families and their neighbors without spending more time in court,'' the company said in a statement.

There is one problem: The policyholders haven't actually agreed. The law firm has 60 days to persuade policyholders it's a good deal, and the law firm will then get paid about $2 million.

"What we have announced is we have entered into a settlement through counsel with 300 insureds,'' said Dan Sumner, Citizens general counsel. "What has not occurred is, we have not received agreements (from each of those policyholders)."

But, he added, "no one has opted out of this deal.'' On the other hand, he acknowledged, no one has signed on either.

Artiles, a licensed general contractor and appraiser, and others said the settlement announcement was premature and misleading.

"If Citizens is trying to take credit for settlements before the homeowner agrees, you have to wonder what other misrepresentations are they making?" said Dan Fritz, general counsel for Sinkhole Public Adjusters in New Port Richey. "Citizens is making a habit out of violating the public trust. They need to get back to paying claims and stop wasting our money."

Artiles suggests the company could save the money it is spending on legal fees —including the $2,100 it is now spending per sinkhole claim — by simply paying policyholders what they are owed.

"You have been misled, and that is part of their game,'' he said. "They have to justify spending this money on the coordinating counsel and look like they're doing something for the people."

Under terms of the settlement, Citizens agrees to pay for underground repairs as recommended by a professional engineer as long as the work is done by contractors chosen from the company's preapproved list. If repairs have been recommended by a neutral evaluator, and Citizens has refused to pay for them in the past, it will pay for them in the future.

The company says the savings will amount to about $30 million in legal costs and repair fees.

Artiles, a harsh critic of the state-run insurance company, pounded Citizens with public records requests, obtaining a batch last fall that showed the company was spending $2 million a month on legal fees for plaintiffs attorneys. The documents he received last week show the company is spending an equal amount each month on 104 separate law firms who work for the company to defend against the claims.

Artiles also attended the December meeting of the Citizens Board of Governors and urged them to pull back on the legal battles.

"The board has a fiduciary responsibility to the policyholders in Florida to not waste money,'' he told them. "You're spending millions of dollars for no reason, other than you're giving a giveaway to these law firms that are not doing anything.

"You, as a Board, have an opportunity to right this ship, '' he said. "Control your costs."

Citizens executives, however, are skeptical. They defend their position of challenging homeowners' claims, saying that too often policyholders don't make sinkhole repairs when they receive a claims check, resulting in communities left with damaged homes and declining property values.

"It is true plaintiff counsel would love it if we'd pay what we submitted on every single claim,'' Citizens CEO Barry Gilway told Artiles at the December meeting. "All that would do is dramatically accelerate the loss costs at Citizens."

He noted that 87 percent of the growth in claims for water damage has been in Miami-Dade and Broward, suggesting it is a "runaway" environment and an organized effort to gouge Citizens.

According to the sinkhole data provided to Artiles, Citizens settled and closed only 253 cases last year, 371 cases in 2012 and 488 cases in 2011.

Meanwhile, the cost of litigation continues to climb, even after Link's firm was hired to coordinate the legal strategy. Since August 2012, Citizens has also spent $27 million on expert witnesses, geotechnical and investigation costs defending their cases.

Contact Mary Ellen Klas at meklas@MiamiHerald.com and on Twitter @MaryEllenKlas.