28 Fla. L. Weekly Supp. 327a

Online Reference: FLWSUPP 2804WATE

Insurance — Property — Standing — Action by assignee of property owner against insurer that issued policy to mortgagee of property — Assignee who is not named insured can only proceed in action against insurer as third-party beneficiary of policy — Assignee is not omnibus insured under policy — Count 1 of complaint is dismissed where assignee is not named insured or omnibus insured and has not plead that it is third-party beneficiary of policy — Alternative count asserting claim of implied equitable assignment of benefits is dismissed — Assignee’s action based on executed assignment of benefits precludes it from seeking equitable relief

WATER DRYOUT (LLC) Plaintiff, v. INTEGON NATL. INS. CO., Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County, Small Claims Division. Case No. 2018-020716-SP-23, Section ND 05. August 8, 2019. Luis Perez-Medina, Judge.

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS THE COMLAINT WITH LEAVE TO AMEND

THIS CAUSE came to be heard on May 2, 2019, on Defendant’s Motion to Dismiss the Complaint. Plaintiff and Defendant submitted additional filings on May 8, 2019 and on May 13, 2019. This Court having considered Defendant’s Motion to Dismiss as well as Plaintiff’s Response, the arguments presented at the hearing, the parties’ subsequent filings, and being otherwise fully advised in the premises herein, it is hereby:

ORDERED AND ADJUDGED that Defendant’s Motion to Dismiss the Complaint is hereby GRANTED. Plaintiff does not qualify as a named insured, a first-party claimant, or an omnibus insured under the lender-placed policy issued by Defendant. In addition, since Plaintiff obtained an executed Assignment of Benefits Form, it cannot proceed on an Implied Equitable Assignment of Benefits. Plaintiff will have 30 days to file an Amended Complaint, which the Court acknowledges was done on June 28, 2019.

FACTS

This is a cause of action in small claims for water damages in the amount of $2,651.75 resulting from a plumbing leak to the kitchen of a dwelling property (“Property”) owned by Maria Hernandez and Angel Rosales (“Borrowers”). The Property was encumbered by a mortgage held by Seterus, Inc. (“Seterus”). Since the Borrowers failed to obtain an insurance policy to protect the Property, Seterus purchased a policy from Integon National Insurance Co. (“Integon/Defendant”), to insure their mortgagee interests. The policy, which was referenced but not attached to the Complaint, listed Seterus as the “Named Insured” and Maria Hernandez as the “Borrower.”¹

Water Dryout LLC. (“Plaintiff”) provided remediation services for the water loss resulting from the plumbing leak. In exchange for Plaintiff’s services, Maria Hernandez signed an Assignment of Benefits and Directions to Pay Form (“Assignment of Benefits”). The Assignment of Benefits Form was included in the Complaint and listed Maria Hernandez as the “Client/Insured,” “Integon National” as the “Insurer,” and referenced the insurance policy purchased by Seterus. The Assignment of Benefits stated that Maria Hernandez assigned “any and all insurance rights, benefits, and proceeds due to [her] under the applicable insurance policy.” Ms. Hernandez “authorized [her] Insurance Company to make direct payment of any insurance benefits or proceeds” to Plaintiff for the “services rendered to [her] property.”

Under Count I of the Complaint, Plaintiff asserted that Maria Hernandez was a “named insured on the policy” and had an insurable interest in the policy pursuant to Florida Statute §627.405. Plaintiff also claimed first-party status as an “omnibus insured,” designated under the “Other Coverages” portion of the subject policy, requiring Defendant to pay reasonable costs for necessary repairs after a loss, to protect the residential property or other structures from additional losses. Under Count II of the Complaint, Plaintiff asserted a claim of Implied Equitable Assignment of Benefits as an alternative to Count I.

In its Motion to Dismiss the Complaint, Defendant argued that Plaintiff had no greater standing to bring an action for breach of contract than Ms. Hernandez. First, Defendant asserted that Ms. Hernandez possessed no rights, under the insurance policy, to assign to Plaintiff; second, that Plaintiff was not a party to the insurance contract and therefore lacked standing to bring suit for its individual benefit; third, that Plaintiff failed to plead an insurable interest under the policy; fourth, that Plaintiff was not an omnibus insured under the policy; and finally, that Count II of the Complaint improperly plead a cause of action for Breach of Contract with Implied Equitable Assignment of Benefits. Attached to the Motion to Dismiss was a copy of the insurance policy.

DISCUSSION

On a motion to dismiss for failure to state a cause of action, allegations of the complaint are assumed to be true and all reasonable inferences arising therefrom as allowed in favor of the plaintiff. Wallace v. Dean, 3 So. 3d 1035, 1042-43 (Fla. 2009) [34 Fla. L. Weekly S52b]. When determining the merits of a motion to dismiss, the trial court’s consideration is limited to the four corners of the complaint, the allegations of which must be accepted as true and considered in the light most favorable to the nonmoving party.” Susan Fixel, Inc. v. Rosenthal & Rosenthal, Inc., 842 So. 2d 204, 207 (Fla. 3d DCA 2003) [28 Fla. L. Weekly D847a].

Since Seterus did not assign their benefits to Plaintiff, Ms. Hernandez’s interest in the insurance policy, as the assignee of the Assignment of Benefits, must be ascertained. It is undisputed that Ms. Hernandez was the owner of the Property at the time of the loss. As an owner of the Property she would have an economic interest in the safety or preservation of the Property. Seterus would also have an economic interest in the safety or preservation of the Property since a diminution in the value of the Property, caused by a loss, would reduce the value of the collateral securing the loan.

While both Ms. Hernandez and Seterus have an insurable interest in the Policy, Ms. Hernandez was not the named insured on the policy and could only enforce her interest as a third-party beneficiary. Several decisions have considered the issue of a third-party beneficiary in the context of an insurance policy. The Third District Court of Appeal has held that a homeowner could enforce an insurance policy as a third-party beneficiary, even though the policy protecting his property was not in his name since the homeowner possessed an insurable interest in the property. Schlehuber v. Norfolk & Dedham Mut. Fire Ins. Co., 281 So. 2d 373, 375 (Fla. 3d DCA 1973); see also Community Bank of Homestead v. American States Insurance Company, 524 So. 2d 1154, 1154 (Fla. 3d DCA 1988) (an aircraft insurance policy naming the bank who provided the loan to purchase the aircraft as an “additional insured” on the policy “afforded the bank the right to maintain an independent action as an intended third-party beneficiary”); Mitchell v. Balboa Ins. Co., No. 8:11-CV-02580-EAK, 2012 WL 2358563, at 4 (M.D. Fla. June 20, 2012) (Plaintiff, as the property owner, could proceed against insurance company as a third-party beneficiary to enforce his insurable interest in an insurance policy listing the mortgage company as the named insured); Conyers v. Balboa Ins. Co., 935 F. Supp. 2d 1312, 1316 (M.D. Fla. 2013) (“under Florida law, an insurance company’s promise to pay the extent of a loss may be enforced by a third-party beneficiary even if he possesses no policy in his name.”).

Ms. Hernandez, as the Property owner and mortgagee of the loan issued by Seterus, had an insurable interest in the property and had standing to proceed as a third-party beneficiary to enforce the provisions of the insurance policy issued by Defendant. Payment of the claim would go directly to Seterus, reducing the mount Ms. Hernandez owed on her mortgage. If the amount Ms. Hernandez owed on her mortgage was less than the proceeds from the loss, then the residual amount remaining after the mortgage was paid would go directly Ms. Hernandez, pursuant to the “LOSS Payment” clause of the policy.

Plaintiff, as an assignee to Ms. Hernandez’s claim, can only proceed as a third-party beneficiary since Ms. Hernandez is not a named insured. As an assignee of Ms. Hernandez’s claim, Plaintiff cannot acquire any greater rights than those possessed by Ms. Hernandez. Alderman Interion Systems, Inc. v. First National-Heller Factors, Inc., 376 So. 2d 22, 24 (Fla. 2d DCA 1979).

In the Complaint, Plaintiff also claimed the status of “omnibus insured,” designated under the “Other Coverages” portion of the policy. Florida appellate cases dealing with the award of attorney’s fees have defined an omnibus insured as an individual “who is covered by a provision in the policy but not specifically named or designated.” Cont’l Cas. Co. v. Ryan Inc. E., 974 So. 2d 368, 374 (Fla. 2008) [33 Fla. L. Weekly S59a]. An omnibus insured’s “rights are derived directly from his or her status under a clause of the insurance policy without regard to the issue of liability.” State Farm Fire & Cas. Co. v. Kambara, 667 So. 2d 831, 833 (Fla. 4th DCA 1996) [21 Fla. L. Weekly D156c]. If an individual can be classified as an omnibus insured, he or she is entitled to first-party benefits. Id.

In Kambara, a resident of an apartment complex was injured and sued State Farm for reimbursement of his medical expenses pursuant to the medical payment coverage portion of a premises liability policy State Farm had issued for the apartment complex. Id. The insurance policy issued by State Farm contained a clause which would “pay medical expenses for bodily injury caused by an accident on your premises you own or rent.” Id. The appellate court determined that Kambara was an omnibus insured under the policy and awarded Kambara his attorney’s fees. Id. at 834; see also Prygrocki v. Indus. Fire & Cas. Ins. Co., 407 So. 2d 345, 345-46 (Fla. 4th DCA 1981), approved, 422 So. 2d 314 (Fla. 1982) (pedestrian who was struck by insured motor vehicle was an omnibus insured under the personal injury protection coverage portion of an auto policy since the policy required the insurer to pay “any person while a pedestrian, through being struck by the insured motor vehicle”). In a case similar to this one, the Third District Court of Appeals held that a collateral protection insurance policy purchased under the name of the lender did not entitle the borrower to a designation as an omnibus insured since the policy did not contain any “term which would reasonably encompass any other person or entity as an ‘insured.’ ” Romero v. Progressive Southeastern, Ins. Co., 629 So. 2d 286, 287 (Fla. 3d DCA 1993).

The Plaintiff in this case is not an omnibus insured since it is not “an individual” covered by a provision in the existing policy. Cont’l Cas. Co. v. Ryan Inc. E., 974 So. 2d at 374. Plaintiff contends that the “Emergency Repairs” clause in the policy, which states that Defendant “will pay the reasonable cost incurred for necessary repairs that are made solely to protect the RESIDENTIAL PROPERTY or OTHER STRUCTURE from further LOSS,” conveys a benefit to Plaintiff. While the clause indicates that payments will be made for reasonable costs for emergency repairs, that does not mean that the entity conducting the repair is somehow a beneficiary under the policy. A pedestrian injured in an auto accident is an omnibus insured of an auto policy because the auto policy insures pedestrians. Prygrocki 407 So. 2d at 345. A resident of an apartment complex, insured by a premises liability policy covering bodily injury losses occurring within the complex, is an omnibus insured under that policy because his or her injuries were sustained while residing in the apartment complex. Kambara, 667 So. 2d at 833. Under Plaintiff’s reasoning, the hospital or medical providers who treated the pedestrian or the injured resident of the apartment complex, would be considered omnibus insureds because they provided the treatment. This Court finds that Plaintiff is incorrect in its interpretation of the clause.

Wherefore, Defendant’s Motion to Dismiss Count I of the Complaint is granted since Plaintiff is neither a named insured nor an omnibus insured and Plaintiff did not plead that it was a third-party beneficiary under the policy. Plaintiff will have 30 days from the date of this order to amend its Complaint.

Defendant’s Motion to Dismiss Count II is GRANTED. “Florida courts recognize the general rule that where a complaint shows on its face that there exists an adequate remedy at law, there is no jurisdiction in equity.” McNorton v. Pan Am. Bank, N.A., 387 So. 2d 393, 399 (Fla. 5th DCA 1980). Here, Plaintiff filed suit pursuant to an executed Assignment of Benefits Form between Plaintiff and Ms. Hernandez. In so doing, Plaintiff sought a remedy at law and is therefore precluded from seeking equitable relief based on a breach of an implied equitable assignment of benefits.

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¹Defendant’s request for dismissal premised on Plaintiff’s failure to attach a copy of the contract sued upon is denied. In their Complaint, Plaintiff indicated that the copy of the policy was not in its possession but would be requested through discovery. Parkway Gen. Hosp., Inc. v. Allstate Ins. Co., 393 So. 2d 1171, 1172 (Fla. 3d DCA 1981).