Florida’s Second District Court of Appeal recently issued a notable opinion concerning the validity and enforceability of assignments of benefits in the real property insurance context. Kidwell Grp., LLC v. Am. Integrity Ins. Co., 2022 Fla. App. LEXIS 6316 (Fla. 2d DCA, Sept. 16, 2022). The Kidwell Group, LLC., d/b/a Air Quality Assessors of Florida, (“Air Quality”) appealed a final order dismissing with prejudice its complaint premised on the insurer, American Integrity Insurance Company of Florida’s (“AIIC”), breach of the homeowner insurance policy AIIC issued to Robert and Maureen Mucciaccio.
In 2017, the Mucciaccios’ property sustained hurricane damage following Hurricane Irma. In 2019, the Mucciaccios assigned their benefits under their insurance policy to Air Quality. Air Quality submitted its invoices to AIIC. AIIC refused to pay, and Air Quality sued to recover. Air Quality alleged in its complaint that the homeowners "suffered a loss due to water and/or mold, covered perils under the [AIIC] Policy," and Air Quality agreed to provide "reasonable and necessary assessment services to the [homeowners] relating to the loss" in exchange for the assignment of post loss insurance benefits. Air Quality attached the assignment of benefits (“AOB”) to the complaint.
AIIC moved to dismiss Air Quality's complaint, arguing that Air Quality lacked standing to sue because the language in the complaint and the AOB led to the "undisputed conclusion" that the AOB was an "assignment agreement" subject to section 627.7152, Florida Statutes. AIIC argued that: (i) the AOB did not include the required provisions under section 627.7152(2)(a); and (ii) Air Quality failed to comply with the presuit notice requirement of section 627.7152(9)(a). The trial court concluded that the AOB that Air Quality obtained from the Mucciaccios was invalid and unenforceable under the statute.
On appeal, the Second District considered two issues: (1) whether a dispute of fact precluded the trial court from determining that section 627.7152 governed the type of services Air Quality provided under the AOB, which would have made dismissal of Air Quality’s complaint improper; and (2) whether section 627.7152 retroactively applied to this case.
The Second District noted that the legislature enacted section 627.7152 in May 2019 “to regulate assignment agreements that seek to transfer insurance benefits from the policyholder to a third party.” (citing Total Care Restoration, LLC v. Citizens Prop. Ins. Corp., 337 So. 3d 74, 75-76 (Fla. 4th DCA 2022); and Ch. 2019-57, §§ 1-6, Laws of Fla. (“An assignment agreement that does not comply with subsection (2) is invalid and unenforceable.” § 627.7152(2)(d))).
The Court examined the language of the statute, particularly, the definition of an “assignment agreement,” as set forth in section § 627.7152(1)(b), which states that it is
[A]ny instrument by which post-loss benefits under a residential property insurance policy or commercial property insurance policy, as that term is defined in § 627.0625(1) are assigned or transferred, or acquired in any manner, in whole or in part, to or from a person providing services to protect, repair, restore, or replace property or to mitigate against further damage to the property.
With respect to the first issue on appeal, the Second District affirmed the order of dismissal entered by the trial court and held that the legislature did not exclude assessment services from its definition of “assignment agreement” or add such services to subsection (11)’s exclusion list. See § 627.7152(1)(b) (11), Fla. Stat.
As to the second issue, whether section 627.7152 applied retroactively, the Court also affirmed. The Second District explained that a statute is applied prospectively, and not retroactively, to a contract where the statute pre-existed the contract. (citing Total Care Restoration, LLC. v. Citizens Prop. Ins. Corp., 337 So. 3d at 76). The Court noted that, although section 627.7152 was enacted after the insurance policy was issued to the Mucciaccios, it was in effect for several months prior to Air Quality acquiring the AOB.
This opinion further limits the validity and enforceability of AOBs in Florida, a trend we will continue to monitor.