Florida Supreme Court. (MGN)

TALLAHASSEE, Florida (Florida Press Service) – In a closely monitored case, a catering firm on Monday asked the Florida Supreme Court to rescind a ruling authorizing restrictions on the controversial insurance practice called "benefit assignment".

Port St. Lucie Catering 1 lawyers filed a 45-page Supreme Court submission arguing that the 4th District Court of Appeal had improperly supported Ark Royal Insurance Co.'s restrictions on a policy. in a dispute in St. Lucie County concerning water damage. in a house.

The allocation of benefits, or AOB as it is often called, has been one of the most controversial insurance issues in the state Capitol in recent years and will provoke a fight during the session. this spring. The file had been filed just hours before the Senate Banking and Insurance Committee was scheduled late Monday afternoon to consider a bill limiting legal fees in non-legal litigation – a question key for insurance companies.

When assigning benefits, homeowners who need repairs forego the benefits to the contractors, who are ultimately looking for payments from the insurance companies. Insurers say the practice is fraught with fraud and litigation, while plaintiffs 'and other groups' lawyers say it helps ensure claims are properly settled.

Port St. Lucie Restoration 1 initiated legal action against Ark Royal Insurance Co. after police officers John and Liza Squitieri suffered water damage at their home. Liza Squitieri entrusted Restoration 1 of Port St. Lucie with the cleaning work and attributed the benefits to the company.

Ark Royal, however, refused to pay the full amount claimed by the catering company, stating an insurance contract requiring the approval of the husband, wife and mortgage company of the Squitieris family, PNC Bank, for the benefits to be transferred to the contractor. Restoration 1 allegation of breach of contract, but loss in circuit court and in front of the 4th district court of appeal.

In the memorial to the Supreme Court on Monday, Restoration 1's lawyers argued that the insurance regulators had rejected these restrictions on the assignment of rights.

"To be clear, the requirement of Ark Royal that the mortgagee (the mortgage company) signs a contract" makes the assignment of benefits after the loss of the insured a practical impossibility, "says the statement." Letting him hold not only eliminates the right of the insured to freely assign claims for post-loss claims, but also puts an end to the normal legislative and regulatory processes in place. to protect the citizens of Florida from such a drift. "

The submission also stated that the restrictions were intended to "achieve the ultimate goal of the insurance industry to eliminate CBIs".

The case was brought to the Supreme Court after the decision of the 4th District Court of Appeals was inconsistent with a decision of the 5th District Court of Appeals.

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 similar AOB restrictions to the policies. A panel of the court of appeal confirmed the position of the Office of Insurance Regulation.

The Supreme Court has agreed to consider the case of St. Lucie County, but has not scheduled any pleadings. Ark Royal is expected to file its initial brief next month.

As a sign of strong interest in the case, the Supreme Court has received requests from various groups on both sides to file briefs from friends of the court. For example, a group from the insurance industry known as the Personal Insurance Federation of Florida, the Florida Insurance Council, the Property Casualty Insurers Association of Florida and the Florida Bankers Association asked in November to submit a brief on behalf of Royal Ark Insurance.

"This question is important for property insurers across the state, who are often faced with benefit claims that have not been executed by all parties with an interest in the insured property." specifies the request. "This issue is also important to the banks that hold the mortgages and therefore have real estate interests in these properties, with a significant interest in ensuring that the repairs are done properly, and with the consent of the mortgagee, as required in the mortgage contracts. "