22 Fla. L. Weekly Supp. 109a
Online Reference: FLWSUPP 2201KNIGInsurance — Property — Standing — Contractor that was assigned prospective insurance recovery of undetermined amount lacks standing to bring action against insurer
UNITED WATER RESTORATION GROUP, INC. A/A/O DONALD KNIGHT, Plaintiff, vs. HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE COMPANY, INC., Defendant. County Court, 6th Judicial Circuit in and for Pinellas County. Case No. 131300CO42. May 12, 2014. Honorable John Carassas, Judge. Counsel: Michael Grossman, Cohen Battisti P.A., Winter Park, for Plaintiff. Michael S. Sperounes, Gruelle & Salmon, P.A., Tampa, for Defendant.
FINAL ORDER ON DEFENDANT’S MOTION FORFINAL SUMMARY JUDGMENT AND PLAINTIFF’SCROSS-MOTION FOR SUMMARY JUDGMENT ANDMOTION FOR RECONSIDERATION OR REHEARING
THIS CAUSE came before the Court on February 11, 2014, on Defendant’s, Motion for Final Summary Judgment, and April 24, 2014, on Plaintiff’s Motion for Reconsideration or Rehearing. The Court has reviewed the pleadings, Defendant’s affidavit, and the memoranda submitted by the parties, heard argument of counsel, and is otherwise fully advised in its premises.
The Court finds as follows:
Plaintiff, United Water Restoration Group, Inc. (“UWRG”), brought this breach of contract lawsuit against Homeowners Choice Property & Casualty Insurance Company, Inc. (“HCI”) to recover insurance benefits allegedly due under an insurance contract to which it is not a party.
UWRG brought this suit as a purported assignee of one of HCI’s named insureds, Donald Knight (“the Insured”). Plaintiff attached a document to its complaint entitled “CONTRACT FOR SERVICES, ASSIGNMENT OF BENEFITS, DIRECT PAYMENT AUTHORIZATION, AND HOLD HARMLESS AGREEMENT” (“the Assignment”), which Plaintiff asserts grants an assignment from the Insured, which allows Plaintiff to receive the insurance benefits for the services it performed at the insured property and to bring forth a lawsuit for breach of the insuring agreement between the Insured and HCI.
HCI issued Policy Number HCPC-H03-129569-5 to Sharon Knight and Donald Knight, husband and wife, for the policy period of October 10, 2011 through October 10, 2012 (“the Policy”), which insured property located at 1255 Harbor Lake Drive, Largo, Florida 33770 (“the Property”). A water loss from a leaking water line occurred at the Property on September 11, 2012 and the claim was reported to HCI by Donald Knight on September 13, 2012.
On September 11, 2012, the Knights contacted Plaintiff, UWRG, to assist in the remediation of the water. On September 11, 2012, Donald Knight executed all of Plaintiff’s contract documents, which included the Assignment which is the basis of this action. HCI inspected the Property on September 29, 2012, for the first time. When the Assignment was signed by Donald Knight on September 11, 2012, no amounts or benefits were due under the Policy to the Insureds as HCI had not had notice of the claim or loss nor had it an opportunity to inspect the water loss. On or about November 12, 2012, HCI denied the Knight’s claim.
The Assignment, which forms the basis of Plaintiffs action, states, in part, as follows:Contract for Services, Assignment of Insurance Benefit,Direct Payment Authorization and Hold Harmless Agreement:
. . . In consideration of the labor, services, and/or materials provided to me by United Water Restoration Group, Inc. and its subcontractors (the ‘Services’), I agree to the following: I hereby assign all rights and benefits in relation to such Services to United Water Restoration Group, Inc. completely and without reservation. I authorize and instruct all insurance company(ies) that may be contractually obligated to provide benefits and/or payments to me for such Services to pay United Water Restoration Group, Inc. directly as sole payee.
The Policy contains the following non-assignment clause:
SECTIONS I and II – CONDITIONS
7. Assignment. Assignment of this policy will not be valid unless we give our written consent.
After being served with the lawsuit, HCI raised affirmative defenses contesting the validity and enforceability of the Assignment.
The Court finds, and counsel for both parties concede, that controlling case law in Florida permits, under certain circumstances, the assignment of insurance proceeds or benefits due under an insurance policy. Lexington Ins. Co. v. Simkins Industries, Inc., 704 So. 2d 1384 (Fla. 1998) [23 Fla. L. Weekly S41a]. These cases, however, do not support the assignment of a cause of action to determine the amount due under the policy when the policy contains an anti-assignment clause such as the one in this case.
An insurance policy may be assignable, or not assignable, as provided by its terms. Lexington Ins. Co., 704 So. 2d at 1386. This legal maxim has been codified within Florida Statute 627.422, which provides:
A policy may be assignable, or not assignable, as provided by its terms. Subject to its terms relating to assignability, any life or health insurance policy under the terms of which the beneficiary may be changed upon the sole request of the policy owner may be assigned either by pledge or transfer of title, by an assignment executed by the policy owner alone and delivered to the insurer, whether or not the pledge or assignee is the insurer. Any such assignment shall entitle the insurer to deal with the assignee as the owner or pledge of the policy in accordance with the terms of the assignment, until the insurer has received at its home office written notice of termination of the assignment or pledge or written notice by or on behalf of some other person claiming some interest in the policy in conflict with the assignment. (Emphasis added).
Consequently, the terms of the applicable policy of insurance must be given effect. Despite the foregoing, a provision in an insurance contract forbidding either party from assigning a party’s rights under the contract without written consent of the other party will be construed as barring only an assignment of duties and obligations under the contract, rather than precluding the assignment of an accrued claim for damages arising from its breach. See Rapid Settlements, Ltd. v. Dickerson, 941 So. 2d 1275 (Fla. 4th DCA 2006) [31 Fla. L. Weekly D2924c]. See also Aldana v. Colonial Palms Plaza, LTD, 591 So. 2d 953, 955 (Fla. 3d DCA 1991) (prohibition against assignment in contract will preclude assignment of contractual duties but not assignment right to receive payments due under contract). Because of the non-assignment provision in the Policy, Plaintiff could not have brought this suit until a payment is due and owing to the Insured under the Policy.
Florida courts have generally held that a contractual non-assignment clause prevents the transfer of duties and obligations owed under a contract to a third party. Aldana v. Colonial Palms Plaza Ltd, 591 So. 2d 953 (Fla. 3d DCA 1991).
As explained in Shaw v. State Farm Fire and Casualty, 37 So. 3d 329, 333 (Fla. 5th DCA 2010) [35 Fla. L. Weekly D1020a], “the defenses available to the obligor are fixed at the time of the assignment. . . .” “If the assignor is not entitled to be paid” at the time of the assignment, “then the assignee is not entitled to be paid either.” Id.
The Court finds the non-assignment provision of the Policy to be dispositive of the issues raised in this case. On the date Plaintiff’s Assignment was executed, there was not a right to payment or a benefit accrued — no insurance proceeds were due and owing to the Insureds under the Policy to be assigned to Plaintiff. Donald Knight had nothing to assign since he had not yet reported the loss to HCI on the date of the Assignment and the claim was not reported to HCI until two days later, September 13, 2012. As a result of the non-assignment provision in the Policy, the only “assignment” enforceable under this Policy is a fully accrued right to payment or in other words, a post-loss assignment of an accrued benefit or right.
Under the rules of law, the undisputed material facts of this case, and the Non-Assignment provision of the insurance contract, Plaintiff has no standing to sue to enforce the insurance contract.
Accordingly it is:
ORDERED AND ADJUDGED that Defendant, Homeowners Property & Casualty Insurance Company, Inc.’s, Motion for Final Summary Judgment is GRANTED, and Plaintiff’s Cross-Motion for Summary Judgment is DENIED. Plaintiff’s Motion for Reconsideration or Rehearing is DENIED. The Court retains jurisdiction to determine Defendant’s entitlement to attorneys’ fees and costs, and amount of same.
