Florida insurance ruling sets precedent on new assignment-of-benefits law
Tactics used by unscrupulous contractors allegedly trick homeowners into giving up certain rights under their insurance policy.
Florida appellate court ruling might become the blueprint for attorneys to successfully argue in favor of homeowners and their insurers against contractors in the application of a new law in the Sunshine State.
Jake D. Huxtable, a partner at Kelley Kronenberg’s West Palm Beach office, represented the appellee, United Property & Casualty Insurance Co., against the appellant, the Kidwell Group LLC, in a case of first impression centered on Florida Statutes Sec. 627.7152, relating to assignment-of-benefit agreements.
“There have been thousands of assignments of benefits lawsuits that have been filed since the enactment of the statute,” Huxtable said. “And these AOB contracts do not contain this per-unit cost estimate that is signed and executed by the homeowner. I’m hoping insurance carriers look at this binding-law Fourth DCA opinion, and fight back, instead of throwing in the towel.”
Chad A. Barr, a partner at Chad Barr Law in Altamonte Springs, who represented Kidwell Group, did not respond to a request seeking comment.
For Huxtable, his strategy was to explain the process of the new statute and how it was applicable in the dispute before Palm Beach County Court Judge Sandra Bosso-Pardo, and subsequently on appeal before Fourth District Court of Appeal Judges Dorian K. Damoorgian and Cory J. Ciklin.
Huxtable pointed to companies, whose employees allegedly knock on the doors of houses and ask the homeowner whether they wanted to have their roofs checked for free. The employees would climb onto the roofs, and following their “inspection,” an employee will inform the homeowner to take action.
If the homeowner agrees to their services, he or she signs a document to have the work done without realizing he or she approved a subsequent estimate, Huxtable said. As a result, the roofing companies substantially increases the price, and tells the insurance company to pay up, while pointing to the homeowner’s signature on the document.
However, to combat allegedly unscrupulous tactics, the governor signed into law HB 2019-7065 and SB 2019-122, which was codified as sections 627.7152(2)(a)1. and 627.7152(2)(a)4 of the Florida Statutes. These statutes require an assignment agreement to “be in writing and executed by and between the assignor and the assignee.” In addition, there must be a “written, itemized, per-unit cost estimate of the services to be performed by the assignee.”
And while the appellant’s attorney argued that his client provided the homeowner with an invoice, which was attached to the complaint, along with the assignment of benefits form, the Fourth DCA ruled that it disagreed with that assertion because of the timing of the estimate.
“While appellant included the invoice as an attachment to the complaint along with the assignment of benefits, such invoice was unexecuted and dated five days after the assignment was executed,” the state appellate judges ruled, adding: “As such, the trial court properly concluded the assignment did not contain a written, itemized, per-unit cost estimate of the services to be performed by appellant as required” by the law.
Now, the Fourth DCA affirmed the county court’s dismissal with prejudice of the appellant’s complaint for breach of contract.
Huxtable said that since these tactics by contractors in which they allegedly trick homeowners into giving up certain rights under their insurance policy have become so commonplace in Florida, the state legislature provided an additional incentive to fight back against taking the financial risk of litigating.
“Once a dismissal is obtained after a trial court finds an AOB is invalid and unenforceable because it doesn’t contain a per-unit cost estimate signed and acknowledged by the homeowner,” Huxtable said. “The insurance carrier — just like in my case here — will be able to recover all of its attorney fees and costs that were incurred from the AOB contractor in the lawsuit.”
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