First DCA Issues Another Assignment of Benefits Opinion
The First District Court of Appeal has issued its second opinion on assignment of benefit issues in recent weeks. In its most recent opinion, the court in United Water Restoration Group, Inc. v. State Farm Florida Insurance Company found that a county court had improperly dismissed United Water’s complaint based on coverage issues raised by State Farm.
The case arose when a policyholder’s home was damaged by water and United Water provided remediation services under an assignment of insurance benefits from the policyholder. State Farm refused to pay the bill because it found that the damage arose from conditions that were excluded under the policy. United Water then filed a county court action pursuant to the assignment.
State Farm moved to dismiss the complaint due to the coverage issue. State Farm asserted that only the policyholder, not the remediation company, could satisfy the conditions for coverage. The county court dismissed the complaint, and the circuit court upheld the dismissal.
The First DCA found that the dismissal was improper for two reasons. First, the county court based the dismissal on the coverage defense raised by State Farm, whereas the standard for dismissal is whether the plaintiff’s complaint stated a claim. Second, the First DCA determined that the dismissal violated established principles of Florida law that an assignee of an insurance policy may sue for breach. The court therefore granted United Water’s petition to have its complaint reinstated. The ruling paves the way for United Water to pursue its claim, and for State Farm to raise its coverage defense in the action.