State Farm Loses Appeal x 2
Florida’s appellate courts continue to rule in favor of the restoration industry, homeowners, and assignment of benefits. The Circuit Court in Osceola County, in its appellate capacity, issued an order on June 5 that reversed dismissal of two restoration companies’ lawsuits where State Farm challenged assignment of benefits.
In Phoenix Dryout and Recovery Corp. v State Farm and Riley Homes, Inc. v State Farm, the restoration companies were hired to perform water remediation and construction on a home that experienced water damage in 2013.
Each of the companies received an assignment of benefits from the homeowner, a State Farm policyholder. The restoration companies filed suit against State Farm as assignee of the insured when State Farm failed to issue payment to them. At the trial level, the county court found that the assignment was not valid and did not give the restoration companies standing to file suit for insurance benefits, and dismissed the cases.
The appellate court disagreed and stated that while the policyholder is required to perform policy obligations in order for the assignee-restoration company to receive benefits, nothing prevents the assignee from filing suit against the insurance company prior to the insured meeting these policy obligations.
The appellate court also stated that an assignee has a common-law right to sue on a breach of contract to collect post-loss benefits, citing Accident Cleaners, Inc. v . Universal Ins. Co., 5D14-352 (Fla. 5th DCA 2015), and said that it is clear that anti assignment clauses and loss payment provisions will not prevent a post-loss assignment of benefits, citing ASAP Restoration and Construction, Inc. v. Tower Hill Signature Ins. Co., 4D13-4147 (Fla. 4th DCA 2015).
According to the court, the assignment of benefits in the Phoenix Dryout and Riley Homes cases give the restoration companies standing to bring their lawsuits against State Farm, and the cases are remanded back to the Osceola County Court.
Read the order on appeal for Phoenix Dryout and Recovery Corp. v. State Farm Florida Ins. Co. and Riley Homes, Inc. v. State Farm Florida Ins. Co. here.
Read the Accident Cleaners order here.
Read the ASAP Restorations order here.
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