Florida: Policyholder Can Assign Benefits Without Insurer Consent

FLORIDA, Feb. 5 – An intermediate state appeals court in Florida has ruled that the policyholder can assign the right to post loss benefits to third parties without insurer consent.  In Bioscience W., Inc. v. Gulfstream Prop. & Cas. Ins. Co., 2016 Fla. App. LEXIS 1548 (2nd Dist. 2016), a unanimous three-judge panel held that the homeowner/insured could assign post loss benefits to Bioscience W., reversing a summary judgment entered for Gulfstream by the trial court.

In Bioscience the homeowner-insured, Gattus, engaged Bioscience, an emergency water mitigation company, to provide cleanup services after a water loss her home.  As part of Gattus’ arrangement with Bioscience she assigned all loss-related policy benefits to them as compensation.  Following the loss, and the assignment, Gattus made a claim under her property insurance policy with Gulfstream.

Gulfstream denied the claim as an uncovered loss, and Bioscience subsequently filed suit against Gulfstream for breach of the policy.  Gulfstream sought dismissal, and the  trial court granted summary judgment to Gulfstream on grounds that the policy had an anti-assignment provision, requiring Gulfstream’s consent to any policy assignment.

In reversing the trial court, the appeals court held:

“Gulfstream does not and cannot argue that the entire policy was unilaterally transferred from Ms. Gattus to Bioscience, which would have been void under the language of the policy’s anti-assignment clause. Instead, it is clear that Ms. Gattus merely assigned to Bioscience the “insurance rights, benefits, and proceeds pertaining to services provided by” the policy in consideration for Bioscience’s emergency mitigation services and authorization to directly bill and to be directly paid by Gulfstream. (Emphasis added).  Stated differently, it was a post-loss assignment of a benefit under the policy to Bioscience, namely a right to seek payment for the mitigation services it rendered under the policy, not an assignment of “this policy” issued by Gulfstream to Bioscience.”

The Court also found support for its ruling in the policy’s loss payable provisions, which contemplated that payment of policy benefits might be made to persons or entities other than the insured.  It also pointed out a long history of Florida case law which permitted post-loss assignment of policy benefits without the insured’s consent.

The case remanded to the trial court for further proceedings.

Bioscience W., Inc. v. Gulfstream Prop. & Cas. Ins. Co., 2016 Fla. App. LEXIS 1548 (2nd Dist. 2016)

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Author: CJ Haddick

C.J. Haddick is a Director with the law firm of Dickie, McCamey, & Chilcote, PC, based in Pittsburgh, Pa. He has advised and represented insurers in insurance coverage and bad faith litigation for more than a quarter of a century, and written and spoken throughout the United States on insurance coverage and bad faith prevention and litigation. He is Managing Director of the firm's Harrisburg, Pa. office. Reach him at chaddick@dmclaw.com or 717-731-4800.

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