Kelley Kronenberg Partner Kurt Ciell secured final judgment on the pleadings for the firm’s client in two first-party property cases heard on the same day before the same judge. Both cases involved the same plaintiff and the same defective assignment of benefits language. 

In the first case, a homeowner reported a Hurricane Ian claim to the predecessor insurance carrier. The homeowner signed two separate assignment agreements with the plaintiff on the same day, one for an engineering report and one for water damage and mold assessment. The plaintiff invoiced $5,000 for the engineering report and $3,000 for the water damage and mold assessment. The insurer never denied the water damage and mold invoice, but the plaintiff filed suit before any payment was made. The insurer subsequently paid the $3,000 invoice, leaving only the $5,000 engineering report invoice in dispute, along with the plaintiff’s claim for attorney’s fees and costs. 

In the second case, a homeowner filed a claim related to a pipe break and signed an assignment of benefits agreement with the plaintiff in exchange for water damage and mold assessment services. The plaintiff invoiced $3,600 on the same day the assignment was signed. The insurer eventually paid the invoice in full, but payment came after the plaintiff had already filed suit. The plaintiff maintained the lawsuit seeking attorney’s fees and costs. 

Both assignments contained the statutory rescission language required under Section 627.7152(2)(a)2 of the Florida Statutes, which allows a homeowner to rescind the agreement without penalty within the statutory period. However, both assignments also included additional language stating that if the homeowner rescinded during that period, the full invoiced amount would be immediately due and owed. 

Kurt filed motions for final judgment on the pleadings in both cases, arguing that this language rendered the statutory rescission provision illusory. Because the plaintiff invoiced the entire scope of work on the same day the homeowner signed the assignment, the homeowner would be obligated to pay for work not yet completed if they exercised their right to rescind, constituting a prohibited penalty under Section 627.7152(2)(b)1. 

The Court agreed. Judge Richardson found in both cases that the provision requiring the full invoiced amount upon rescission violated the statute because it could require payment for invoiced but not yet completed work. The Court also rejected the plaintiff’s argument that the insurer’s post-suit payments constituted a confession of judgment or waiver of the right to challenge the validity of the assignments. As the Court noted, if the assignment is not legally binding, the plaintiff never stepped into the shoes of the insured and has no right to enforce the policy. A plaintiff must have standing at the inception of the case and cannot remedy that defect by subsequently acquiring standing. 

The Court entered final judgment in the insurer’s favor in both cases¹.  The plaintiff shall take nothing. The Court reserved jurisdiction on the insurer’s entitlement to attorney’s fees and costs. 

A motion for rehearing has been filed in one of the two cases and remains pending before the Court. 

Learn more about the firm’s First-Party Property and Coverage Division; click here: https://www.kelleykronenberg.com/our-practices/first-party-insurance-defense-coverage-bad-faith/  

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