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Florida Allocation of reform benefits does not apply retroactively: Part 2 | Legal insurance blog for property insurance



In my first blog on the Reform Charter on the Distribution of Benefits (AOB), I described the decision of the 20th Court that § 627.7152 cannot retroactively change material rights. 1 This holding found that the law in effect when the subject policy was entered into was applied to the disputed benefit contract in subsequent disputes. While the holding in that case focused on both pre-litigation and law firm claims and costs as material rights are being considered, another Florida court has recently discussed a similar concept regarding retroactive application of the Charter.

In Extreme Emergency Fire & Water Restoration LLC v Certain Underwriters at Lloyd & # 39; s of London 2 the Third District Court of Florida was instructed to examine a similar issue with respect to the retroactive the application of §627,71

52. In this case, the insured lost to his home on September 3, 2018. At that date, the property of the insured was covered by a homeowners' insurance with certain insurers at Lloyd & # 39 ;s of London ("Lloyd & # 39; s). Try to mitigate. and repair their damages, the insured hired Extreme Emergency Fire & Water Restoration, LLC (“Extreme”) and granted Extreme their rights to pay for the claim under Lloyd's policy, after which Extreme sent an invoice to Lloyds for work on the property, which Lloyd refused to pay.

In support of its proposal for a summary assessment, Lloyd asserted as a confirmatory defense a provision of the policy requiring written consent before a distribution of benefits under policy. The anti-Assignment inscription reads as follows:

With regard to the premium paid, it is agreed and understood that rights benefits and obligations under the policy I am applying for may not be granted and / or transferred, either before or after a loss, without the written consent of the company, except in the case of a person named insured death. annulled the AOB agreement under Anti-Assignment Endorsement.

On appeal, the Third District Court began its analysis by reciting the long-standing principles associated with the distribution of post-loss benefits in Florida, stating:

[A] an insured does not need the consent of the insurer before making a post-loss allocation of his right to payment of a claim under an insurance and attempts by the insurer to limit the insured's right to do so is invalid.

With this principle in mind, the court quickly abolished Lloyd's attempt to distinguish the approval of the substance as "negotiated" through the application for insurance as opposed to it being included in the insurance itself

While the basis for the holding relied on the old principle of attempt that unilaterally restricting contract agreements were invalid, the court recognized the legislature's ability to decide / change these issues as a matter of public policy. DCA cited the legislature's decision to authorize insurance companies under certain circumstances to take out insurance for residential or commercial real estate that restricts the allocation of benefits after loss in the AOB Reform Statute. In particular, and for the purposes of this blog, there was no dispute that the AOB Reform Charter did not apply to policies entered into before July 1, 2019.

The parties acknowledge (and we agree) that §627,7153 does not apply to the agreement in the present case, as this new law "applies to a policy issued or renewed on or after 1 July 2019." 3

Although this decision does not primarily rely on the principle that laws cannot change the substantive rights with retroactive effect, it is another example of the Court's refusal to apply the AOB Reform Charter with retroactive effect. . Although there is still some uncertainty about the Charter, one theory has been consistent: It does not apply retroactively to policies issued or renewed on or after 1 July 2019.
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1 SFR Services, L.L.C. v. American Integrity Ins. Co. of Florida (Order attached).
2 Extreme Emergency Fire & Water Restoration LLC v Certain Underwriters at Lloyd & # 39 ;s of London No. 3D20-5, 2020 WL 7379133 (Fla. 3rd DCA December 16, 2020).
3 Id. at 2, footnote 1.


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