Florida Statute Limits Right of Insured to Assign Benefits of Insurance
Post 4972
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Holding Insurance Companies Accountable, LLC ("HICA" ) challenged the entry of summary judgment for American Integrity Insurance Company of Florida ("American Integrity" ). HICA, as an assignee of post-loss insurance benefits, sued American Integrity for breach of contract. The trial court ruled that HICA lacked standing to sue because the assignment that it relied on did not follow the governing statute.
Holding Insurance Companies Accountable, LLC a/a/o Leonard Caruso v. American Integrity Insurance Company of Florida, No. 5D2023-2810, Florida Court of Appeals, Fifth District (January 3, 2025) resolved the dispute.
FACTS
Leonard Caruso owns a house in The Villages. In 2019, the house suffered roof damage. Caruso reported the loss to his insurer, American Integrity. He selected Noland's Roofing to repair the damage and signed a "Direction of Payment" instructing American Integrity to pay Noland's Roofing directly.
After receiving American Integrity's valuation of his claim, Caruso signed an "Assignment of Benefits Contract" with HICA in 2020.
HICA is a business that purports to help homeowners enforce their insurance rights. The document indicated that HICA would not provide "any services to protect, repair, restore, or replace [Caruso's] property or to mitigate against further damage to [Caruso's] property, as contemplated by" section 627.7152, Florida Statutes. However, it stated that "[a]ny payments shall be made in accordance with any Direction of Payment relative to" Caruso's claim.
Ultimately, HICA-as Caruso's assignee-sued American Integrity for breach of contract, alleging that American Integrity failed to pay the full value of Caruso's claim. HICA demanded "payment in accordance with the existing Direction of Payment." American Integrity raised lack of standing as an affirmative defense, maintaining that the assignment was "invalid and/or void" and the court granted American Integrity's motion.
The court's order included these findings:
1. “The parties agree that [HICA] did not comply with the provisions of Fl. Stat. Sec. 627.7152. The issue for the Court to determine is whether the "assignment of benefits" obtained by [HICA] from CARUSO is subject to Fl. Stat. Sec. 627.7152 ....
2. “The Court specifically finds that there is sufficient evidence in this case to show that any money recovered in this case would be used to make repairs to the roof by Noland Roofing and that payment would be made to Noland Roofing.
3. “The Court finds that Noland's Roofing sent the direction to pay to American Integrity ....
4. “The Court finds that the Assignment Agreement specifically says that HICA will make payments in accordance with the direction to pay ("Any payments shall be made in accordance with any Direction of Payment relative to the below referenced claim" ).
5. “The Court finds that [HICA], through [its] Verified Answers to [American Integrity's] Interrogatories, has indicated that proceeds from any recovery in this case would be used to pay Noland's Roofing (‘Noland's Roofing, Inc. is the chosen contractor upon which the insured has executed a direction in pay in favor of.’).”
Section 627.7152 was enacted by the Florida legislature in 2019 to regulate assignment agreements that seek to transfer insurance benefits from the policyholder to a third party. Under the statute, an "[a]ssignment agreement" is "any instrument by which post-loss benefits under a residential property insurance policy . . . are assigned or transferred or acquired in any manner . . . to or from a person providing services to protect, repair, restore, or replace property or to mitigate against further damage to the property." § 627.7152(1)(b), Fla. Stat. (2020).
Before assigning his benefits to HICA, Caruso signed a direction of payment in favor of Noland's Roofing, which instructed American Integrity to make Noland's Roofing a payee on any disbursement check. Here, the chosen vendor is Noland's Roofing. HICA's corporate representative also acknowledged that the goal of HICA's lawsuit was to recover the replacement cost of Caruso's roof, plus interest and related costs.
There was no genuine dispute that consistent with the assignment's terms, any funds recovered by HICA will go to Noland's Roofing. As the trial court found, this mandatory pass-through of benefits from HICA to Noland's Roofing places the assignment within the broad reach of section 627.7152. Even though HICA will not personally scale Caruso's house to repair his roof, it is seeking funds to facilitate those repairs.
The assignment HICA relies on is an "assignment agreement" under section 627.7152.
The legislature mandated that such assignments comply with all other provisions of that statute. Because the assignment here did not do so, it is "invalid and unenforceable." Without a valid assignment, HICA has no standing to sue American Integrity.
ZALMA OPINION
Because the state of Florida found that there was an abuse by roofers, contractors, and others by use of the assignment of benefits increasing unnecessary litigation impacting the availability of insurance for citizens of Florida, enacted a statute to limits the assignments. The statute was violated by Plaintiff HICA and its suit was found to be based upon an invalid and unenforceable assignment.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
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Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
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