A Florida appeals court reversed a dismissal in a dispute over an assignment of benefits that could affect insurers and mitigation contractors in property claims.
The case began after Lazaro Ramirez Escalona’s home, insured by Citizens Property Insurance Corporation, suffered weather-related damage on September 27, 2022. About a month later, Escalona entered into an assignment of benefits agreement with Well Done Mitigation, LLC for water dryout services. The agreement required the client to pay for any portion of work, deductibles, betterment, depreciation, or additional work not covered by insurance within thirty days of completion. It also stated that the owner's deductible could not be waived pursuant to Florida Statute. A severance clause provided that the invalidity or unenforceability of any provision would not affect the rest of the agreement.
After performing the services, Well Done submitted its assignment agreement and itemized cost estimate to Citizens. Citizens acknowledged the loss, assigned an adjuster, and completed an investigation. When Citizens denied coverage and full payment of benefits, Well Done filed a breach of contract lawsuit seeking $31,389.22 in damages. Citizens moved to dismiss, arguing that Well Done lacked standing because the assignment agreement did not comply with section 627.7152(7) of Florida Statutes and was invalid. Citizens pointed to language holding the client responsible for depreciation and additional work as violating the statute. The trial court agreed and dismissed the case with prejudice.
On appeal, Florida’s Second District Court of Appeal reversed. The court found the agreement did not violate section 627.7152(7), as it addressed payment for services not covered by insurance, which the statute allows. The court also noted that even if there had been a violation of subsection (7), that would not make the entire assignment invalid because validity requirements are governed by subsection (2), not (7).
The ruling highlights the importance of contract language and a clear understanding of Florida’s assignment of benefits law for insurers and mitigation contractors.
