Court Refuses to Enforce Assignment of Benefits; Finds Contractor's Invoice Does Not Satisfy Itemized Estimate Requirements

Today, Florida’s Fourth District Court of Appeal affirmed the dismissal of a contractor’s breach of contract claim against an insurance carrier, finding that the contractor’s invoice attached to the assignment of benefits contract did not meet the requirements of Florida’s relatively new assignment of benefits statute. The ruling is a cautionary tale for contractors that rely on assignments of benefits to receive payment from insurance carriers to make sure their documentation strictly complies with the statutory requirements.

Kidwell Group LLC v. United Property & Casualty Insurance Co. arose from a homeowner’s insurance claim following damage to their home. The homeowner hired a contractor to make repairs. As part of this transaction, the homeowner signed an assignment of benefits with the contractor, assigning its benefits from its insurance carrier to the contractor. When the insurance carrier failed to pay for the repairs, the contractor filed a lawsuit against the carrier.

In bringing the lawsuit, the contractor attached a copy of its assignment of benefits, along with an invoice for the work performed or to be performed. The invoice was dated 5 days after the assignment of benefits was executed. The insurance carrier moved to dismiss the claim and for summary disposition of the claim under Florida’s Small Claims Rules on the basis that the assignment of benefits was unenforceable because it failed to comply with section 627.7152(2)(a), Florida Statutes.

The trial court agreed with the insurance carrier and dismissed the lawsuit. The contractor appealed.

On appeal, the court affirmed the dismissal, first noting that section 627.7152(2)(a), requires the following of assignments of benefits:

(2)(a) An assignment agreement must:

1. Be in writing and executed by and between the assignor and the assignee.

. . . .

4. Contain a written, itemized, per-unit cost estimate of the services to be performed by the assignee.

The court concluded that this language required an itemized, per-unit cost estimate to be provided by the contractor at the same time that the assignment of benefits was signed.

Interestingly, the court did not state that a document title as an “invoice” could not satisfy the statutory requirements, only that such a document must meet the itemization requirements of the statute and be provided at the time the assignment of benefits is executed. Further, the court provides no insight into the specific contents of the invoice, other than that it was dated 5 days after the execution of the assignment of benefits.

This case illustrates how important it is for contractors to fully and completely comply with Florida’s new assignment of benefits statute. Had the contractor provided the invoice at the time of the execution of the assignment of benefits, he would have had a much stronger argument that his case should not be dismissed.