AOB Question Certified to Florida Supreme Court
Florida’s Fifth District Court of Appeal (DCA) has certified the following question pertaining to Assignments of Benefits (AOB) to the Florida Supreme Court as a matter of great public importance:
Does article X, section 4(c) of the Florida Constitution allow the owner of homestead real property, joined by the spouse, if married, to assign post-loss insurance benefits to a third-party contractor contracted to make repairs to the homestead property?
The question arose in Speed Dry, Inc. v. Anchor Property and Casualty Insurance Company, Case No. 5D19-3055. This case related to an AOB issued by the homeowner in favor of Speed Dry for work performed after Hurricane Irma. The insurer refused to pay Speed Dry, arguing that insurance proceeds resulting from a loss to homestead property cannot be assigned. A circuit court judge agreed with the insurer. However, the 5th DCA reversed and sided with Speed Dry.
The 5th DCA reasoned that the concept of “alienation” advanced by the insurer is a term of art in real property referring to the transfer of title to the property. The court went on to say that because an AOB does not transfer title to real property, it does not constitute alienation. However, the court acknowledged at AOB’s are used extensively in Florida and asked the Supreme Court to take up the issue.