COnSTruCTiOn ASSignMenTS OF BeneFiTS Aren ’ T whAT They uSeD TO Be
Construction law Section
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execution , 30 days after the start of work if it is not substantially performed , or 30 days after execution if substantial work has not begun . An assignment agreement must contain an itemized per unit cost estimate of services . This estimate must be provided to the insurer the earlier of ( a ) three business days after the agreement is executed or ( b ) when the work begins , and include an express disclaimer acknowledging the right to cancel .
Crucially , under the new statutes , a contractor can no longer sue the property owner for the assigned work . Under § 627.7152 ( 4 )( c ), an assignee may not seek payment from the assignor for amounts above the deductible , unless the assignor has chosen additional work to be performed at their own expense . Further , the contractor must indemnify the property owner . The assignment must contain a provision whereby the contractor agrees to indemnify and hold harmless the assignee from all losses where the policy prohibits the assignment of benefits .
There are also new conditions precedent to suit . Prior to filing suit , assignees must submit to examinations under oath or provide recorded statements as “ reasonably necessary ” regarding the services provided , the costs , and the assignment . Assignees must also participate in appraisal or ADR as specified in the policy . Further , under Subsection 627.7152 ( 9 ), at least 10 business days before filing suit under the policy , the assignee must provide the insurer with detailed invoices , a notice of intent to initiate litigation specifying damages , the amount claimed , and presuit settlement demand . The insurer must respond within 10 business days to make a presuit settlement offer or require appraisal or other alternative dispute resolution .
Assignments are also prohibited under “ urgent or emergency circumstances ,” defined as “ a situation in which a loss to property , if not addressed immediately , will result in additional damage until measures are completed to prevent such damage .” 1
Finally , the prior central appeal of AOBs , fee shifting , is no longer automatic . If the damages judgment ( excluding interest ) obtained by the assignee is less than 25 percent of the “ disputed amount ” ( i . e ., the difference between the insurer ’ s pre-suit settlement offer and the assignee ’ s pre-suit settlement demand ), the insurer recovers its reasonable attorneys ’ fees . If the damages judgment is between 25 percent and 50 percent of the disputed amount , no party recovers attorneys ’ fees . If the damages judgment is 50 percent or more of the disputed amount , the assignee recovers its reasonable attorneys ’ fees .
These 2019 statutes greatly diminish the appeal of AOBs and must be considered before undertaking any AOB work . n
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§ 627.7152 ( 2 )( c ), Fla . Stat .
Author : Mark A . Smith - Carey , O ’ Malley , Whitaker , Mueller , Roberts & Smith , P . A .
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