Court Reverses Dismissal of Water Mitigation Contractor’s Lawsuit for Failure to Comply with 627.7152(7), Florida Statutes
Spartan Services Corp v. Citizens Property Insurance Corp, arises from a dispute over an assignment of benefits regarding repairs as a result of Hurricane Ian. In December 2022, the homeowner and contractor executed an assignment of benefits contract (“AOB”) for water mitigation services. The AOB included the following language:
Client agrees that any portion of work, deductibles, betterment, depreciation or additional work requested by the undersigned, not relating to the subject claim, must be paid by the undersigned on or before its completion.
While the homeowners’ insurance carrier acknowledged the loss, when the contractor submitted a $17,272.37 bill, the carrier refused to pay, arguing that the AOB was unenforceable for failing to comply with 627.7152(7), Florida Statutes. In June 2023, the contractor filed suit against the insurance carrier for breach of contract. The trial court dismissed that lawsuit, agreeing with the insurance carrier that the contractor had failed to comply with 627.7152(7), Florida Statutes, and therefore the AOB was unenforceable. The contractor appealed the dismissal.
On appeal, the insurance carrier argued that 627.7152(7), Florida Statutes, contained an exclusive list of items for which an insured could be responsible, and because depreciation was not on that list, but was in the AOB, the AOB was invalid. While the Third District Court of Appeal noted that 627.7152(2), Florida Statutes, contained a provision invalidating contracts for failing to comply with its requirements, no such language exists in 627.7152(7), Florida Statutes. Accordingly, the Third DCA reversed the dismissal of the lawsuit and allowed litigation to continue.
About the Author:
Jason Lambert is a Florida Board Certified Construction Attorney and Partner in the Construction Industry Practice Group at Hill Ward Henderson, in Tampa, Florida. He is also the founder and chief contributor to the Hammer & Gavel construction law blog. Jason focuses his practice on representing contractors, subcontractors, and materials suppliers throughout the state of Florida. Before law school, Jason spent a decade working in the construction industry, primarily as a project manager and operations director for both new construction and remodeling. He can be reached at jason.lambert@hwhlaw.com or 813-227-8495.
