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Good News, Could This Be the Start of a Solution to the AOB Issue?

September 6, 2018

On September 5, 2018, the Fourth District Court of Appeal issued an opinion in the case, Restoration 1 of Port St. Lucie a/a/o John and Liza Squitieri v. Ark Royal Insurance Company, No. 4D17-1113 (Fla. 4th DCA Sept. 5, 2018). This case could be good news for insurance companies who are concerned with the growing disputes and heightened litigation over assignment agreements.

In this case, the Fourth District Court of Appeal affirmed the decision of the trial court to dismiss a restoration company’s complaint for breach of contract and declaratory relief for an unpaid mitigation invoice. The insurance policy in this case, was issued to Mr. and Mrs. Squitieri and listed PNC Bank as a mortgagee. The policy contained a provision which stated, "[n]o assignment of claim benefits, regardless of whether made before a loss or after a loss, shall be valid without the written consent of all ‘insureds,’ all additional insureds, and all mortgagee(s) named in this policy." After a water damage loss, Mrs. Squitieri hired a restoration company to provide cleanup services and signed an assignment of benefits agreement without the consent of her husband or the mortgage company. The restoration company completed the clean-up and submitted a claim to the insurer who refused to pay the full amount because the assignment did not contain the required signatures. After the restoration company filed suit, the insurer moved for and was granted dismissal on the basis that the assignment failed to comply with policy’s signature requirement.

The Fourth District Court of Appeal upheld the dismissal and found that the policy provision, which requires consent of all insureds and their mortgage company, does not violate common law or public policy and is enforceable under Florida law. The Fourth District Court of Appeal also distinguished a long line of cases beginning with the West Florida Grocery Co. v. Teutomina Fire Insurance Co., 77 So. 2d 209 (Fla. 1917), which have been interpreted to mean an insurance company cannot require the insurer’s consent for a post-loss assignment. The Fourth District Court of Appeal clarified that the policy provision at issue did not prohibit assignment but merely imposed a condition requiring the approval of all insureds and the mortgagee. It reasoned that such a provision is not superfluous and that all insureds and the mortgage company have a vested interest in making sure that repairs to a home are performed by a reputable company.

The Fourth certified conflict with a recent decision issued by the Fifth District Court of Appeal in Security First Insurance Co. v. Florida Office of Insurance Regulation, 232 So 3d 1157 (Fla. 5th DCA 2017) to the extent it held that any restriction on an assignment of benefits was unenforceable. This issue will now be sent to the Florida Supreme Court for consideration. For more information on this or any other first party property issues, please do not hesitate to contact us at



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