Florida’s Fifth District Court of Appeal Examines Extent and Applicability of Fla. Stat. 627.7152 Governing Assignment of Benefits

By Douglas M. Cohen

In Holding Ins. Cos. Acc., LLC v. Am. Integrity Ins. Co. of Fla., 50 Fla. L. Weekly D111 (Fla. 5th DCA January 3, 2025), the 5^th DCA held that (1) an assignment of post-loss insurance benefits is governed by Section 627.7152, Florida Statutes, if it involves transferring benefits from a person providing services to repair, restore, or replace property, even if the assignee does not personally perform those services;  and (2) that an assignment that falls under Section 627.7152 but does not comply with its provisions is invalid and unenforceable, and the assignee lacks standing to sue the insurer for breach of contract.

In this case, the insured’s house suffered roof damage which was reported to American Integrity. The insured signed a “Direction of Payment” instructing American Integrity to pay Noland’s Roofing, the contractor the insured selected to repair the damage. The insured also signed an “Assignment of Benefits Contract” with Holding Insurance Companies Accountable, LLC (“HICA”), which purported to help homeowners enforce their insurance rights. The assignment stated that any payments from American Integrity would be made in accordance with the insured’s “Direction of Payment” to Noland’s Roofing. HICA, as the insured’s assignee, sued American Integrity for breach of contract, alleging failure to pay the full value of the insured’s claim.

HICA alleged that the assignment from the insured was not an “Assignment Agreement” under section 627.7152, rendering that statute inapplicable. American Integrity disagreed, raising lack of standing as an affirmative defense, and maintaining that the assignment was “invalid and/or void.” American Integrity moved for summary judgment on this basis. HICA opposed summary judgment by arguing that the assignment was beyond the scope of section 627.7152, and therefore did not have to follow that statute to be valid. The trial court granted American Integrity’s motion for summary judgment.

On appeal, both parties agreed that the assignment did not comply with section 627.7152, but disagreed as to the threshold question of whether the assignment falls under the statute in the first place. The 5^th DCA noted that 627.7152 was enacted by the legislature in 2019 to regulate assignment agreements that seek to transfer insurance benefits from the policyholder to a third party. It defines such agreements broadly. Under the statute, an “[a]ssignment agreement” is “any instrument by which post-loss benefits under a residential property insurance policy…are assigned or transferred or acquired in any manner…to or from a person providing services to protect, repair, restore, or replace property or to mitigate against further property damage. The 5^th DCA noted the expansive definition has three parts: (1) any instrument (2) by which post-loss insurance benefits are acquired in any manner (3) to or from a person providing services to protect, repair, restore or replace property or to mitigate against further property damage. HICA argued that because it is not a contractor, part (3) is not present here.

On review, the 5^th DCA noted that before assigning his benefits to HICA, the insured signed a direction of payment in favor of Noland’s Roofing, which instructed American Integrity to make Noland’s Roofing a payee of any disbursement check. In turn, the insured’s assignment to HICA states that “[a]ny payments [from American Integrity] shall be made in accordance with” the direction of payment. Records discovery showed that if HICA succeeds in obtaining funds from American Integrity, they will go to the insured’s “chosen vendor” [Noland Roofing], for the costs to repair the roof. As the trial court found, and the 5^th DCA agreed, the mandatory passthrough of benefits from HICA to Noland’s Roofing places the assignment within the broad reach of section 627.7152. Although HICA will not personally scale the insured’s house to repair his roof, it is seeking funds to facilitate those repairs. The 5^th DCA held that since the assignment HICA relied on is an “assignment agreement” under Fla. Stat. 627.7152 and did not comply with the provisions of the statute, it is “invalid and enforceable”. Without a valid assignment, HICA had no standing to sue American Integrity for its alleged breach of the insured’s insurance policy, and summary judgment in favor of American Integrity was affirmed.