Older cases being resolved
When the Florida Legislature passed Assignment of Benefits (AOB) reform in 2019, we knew that it would take a couple of years to flush the court system of questionable lawsuits that the reform targeted. A recent case involving Citizens Property Insurance that is now finally resolved is a good example.
In Union Restoration vs. Citizens, the Third District Court of Appeal reviewed a case from Miami-Dade Circuit Court that began back in 2019. Union Restoration had lost the case and was appealing, claiming it was owed insurance benefits signed over to it by the policyholder in the AOB contract at the start of the job. The 3rd DCA disagreed, writing “The record reflects that the written assignment upon which Union Restoration relied did not assign the insured’s right to the claim at issue. Indeed, Union Restoration altered the written assignment by changing the date of the claimed loss, changing the number of the claim several times, and adding the insured’s initials to the alterations. In these circumstances, we have no difficultly in upholding the summary judgment for Citizens.”
South Florida over the last decade has become ground zero for AOB abuse, where unsuspecting consumers have been duped into signing away all their insurance policy rights to a third-party repair or renovation contractor. When the contractor submits their often inflated claim to the insurance company and the insurer refuses to pay it – the contractor sues, aided by lawyers able to game Florida’s previous one-way attorney fees statute and bad faith laws to collect all their attorney fees.
AOB abuse has created an additional $1 billion of inflated insurance claims over recent years – costs eventually passed along to all homeowners through higher rates. While the reforms seem to have helped in reducing the number of AOB lawsuits, AOB’s are still being used and some contractors and their lawyers have been scheming with new tactics to try to get around the reforms. You can learn more about AOB abuse and the legislature’s reforms, by visiting our Assignment of Benefits and Insurance Litigation webpage.
LMA Newsletter of 10-18-21
