Recently, a restoration contractor in Broward County, Florida had its lawsuit dismissed for failure to include an itemized statement, required to be attached to its assignment of benefits under Florida’s new assignment of benefits statute found in 627.7152, Florida Statutes.
in Restoration Doctor LLC v. Citizens Property Insurance Corporation, a contractor filed suit against an insurance company after allegedly receiving an assignment of the homeowner’s benefits under the insurance policy. The insurer sought to dismiss the lawsuit on two grounds.
First, the insurance company argued that the lawsuit was deficient because the contractor failed to attach an itemized, per-unit cost estimate of the services to be performed to the assignment of benefits attached to the complaint. Under section 627.7152, Florida Statutes, assignments of benefits must include such an itemization to be enforceable.
While the contractor’s assignment of benefits referred to an attached per-unit cost itemization, it was not actually attached to the complaint. On this basis, the trial court dismissed the lawsuit, giving the contractor 15 days to refile the lawsuit with the appropriate attachments.
Second, the insurance company argued that the assignment of benefits attached to the complaint was unenforceable as a matter of law because it did not contain a proper notice of the homeowner’s right of rescission under 627.7152, Florida Statutes. That statute requires the following:
An assignment agreement must [. . . c]ontain a provision that allows the assignor to rescind the assignment agreement without a penalty or fees by submitting a written notice of rescission signed by the assignor to the assignee within 14 days after the execution of the agreement, at least 30 days after the date work on the property is scheduled to commence if the assignee has not substantially performed, or at least 30 days after execution of the agreement if the agreement does not contain a commencement date and the assignee has not begun substantial work on the property.
The contractor’s assignment agreement stated the following:
Assignor understands and has been formally advised that this contract may be rescinded within fourteen (14) days of Assignor executing the same without penalty or fee so long as written notice of the intent to rescind the agreement is provided to the Assignee. Furthermore, Assignee understands and has been formally advised that this contract may be rescinded without penalty or fee should the work contracted for not be substantially completed within thirty (30) days of Assignor executing this agreement, or at least thirty (30) days after the execution of the agreement if the agreement does not contain a commencement date and the assignee [h]as not begun substantial work on the property.
While the court acknowledged that this assignment did not exactly match the language of the statute, it did not violate the statute. Accordingly, the court declined to dismiss the lawsuit based on this second argument.
This is one of the first published trial court orders relating to Florida’s new assignment of benefits statutes. The critical takeaway at this point is that contractor’s should make sure their documents are complete and fully compliant with the new law before attempting to enforce them. Insurance companies are clearly going to aggressively attack these documents if they show even a hint of non-compliance.