TALLAHASSEE – Amidst political and legal struggles against the practice of insurance known as "benefit assignment", the Florida Supreme Court has agreed to take up a closely followed case resulting in damage of water caused to a house in St. Lucie County.
The decision taken by the Supreme Court Thursday to hear the case could lead to the resolution of a dispute between lower courts about a restriction that insurers have been attempting to enforce. the transfer of benefits. In somewhat unusual circumstances, lawyers on both sides of the Saint Lucia County case have asked the Supreme Court to take up the case and resolve the dispute.
The benefit assignment, or AOB as it's widely called, has been one of the most controversial insurance issues in the state of Capitol in recent years and is expected to spark a brawl at during the 2019 Legislative Session. When assigning the benefits, homeowners who need repairs forego the benefits to the contractors, who ultimately seek out the payments from the insurance companies.
Insurers say the process has become fraught with fraud and litigation, driving up rates. On the other hand, subcontractors and litigators argue that the awarding of benefits helps homeowners to hire contractors quickly to repair the damage and compels insurers to pay claims properly.
Much of the controversy has centered on claims for water damage in homes in South Florida, although it also concerns other parts of the state and problems such as claims for damage to the windshield of a car.
The St. Lucie County case involves a lawsuit for breach of contract by Port St. Lucie's Restoration 1 against Ark Royal Insurance Co.'s policyholders John and Liza Squitieri. damaged by the water, and Liza Squitieri was reduced with restoration 1 of Port St. Lucie to carry out clean-up work and attribute the benefits to the company, according to a decision made in September by the court of appeal of the 4th district.
Ark Royal, however, refused to pay the full amount claimed by the catering company, indicating an insurance contract requiring the approval of Squirteris' husband, wife and mortgage company, PNC Bank, for the benefits to be transferred to the contractor. Restoration 1 sued the insurer for breach of contract, but was dismissed in front of the circuit court and the 4th DAC.
The decision of the 4th District Court of Appeals, however, opposed a previous decision of the Fifth District Court of Appeal, which also sought to determine whether an insurer could require the approval of the mortgage credit companies and all persons insured by policies before the transfer of benefits.
Security First Insurance Co. brought the case to the Fifth District Court of Appeals after the Florida Office of Insurance Regulation rejected a company's proposal to add such restrictions other than force. A panel of the court of appeal confirmed the position of the Office of Insurance Regulation. The 5th District Court of Appeal also reached a similar conclusion in a subsequent case involving ASI Preferred Insurance Corp.
As is customary, the Supreme Court did not explain Thursday why it had agreed to take up the St. Lucia County case. But in briefs filed in October, the Ark Royal and Restoration 1 lawyers emphasized the need to resolve conflicts of decisions of lower courts.
"The same restrictive allocation language is included in each of the policies issued by Ark Royal, Security First Insurance Company and ASI Preferred Insurance Corporation," Restoration 1's lawyers wrote. "As a result, conflicting decisions have a impact on several insurance companies, policyholders and assignees across the state. Thus, this Supreme Court should resolve the conflict and ensure unity among the districts for the insured, the insurers, the mortgagee and the assignees. "