In bad faith claims, the Florida Court of Appeals scores one for the insurer, one against

Remember the George Costanza thing in ‘Seinfeld’, the ’90s TV sitcom? When he couldn’t (or didn’t want to) pay rent or other expenses, he conveniently “forgot” to sign the check, saving him a little more time.

In a South Florida benefit assignment case that turned into a bad faith claim, a catering company argued that the insurer used a similar tactic when it wrote the check to both the construction company and the policyholder.

In Expert Inspections vs. United Property and Casualty, the dissenting opinion of a Florida’s 4 judgee The District Court of Appeal pointed out that the insurer also sent the check to the wrong address.

Judge Forst

“While neither party disputes that the insurer ultimately sent a check in the amount of $ 1,995.00, the insurer sent this payment to the wrong party,” Judge Alan Forst wrote in his dissent in the January 5 decision. “Under Florida law, the assignee could not endorse the check sent by the insurer without the signature of the assignee and the insured. “

Nonetheless, the majority of the court’s three-judge panel sided with United, affirming the trial court’s ruling that the insurer followed the wording of the policy and did not owe the lawyer’s fees. plaintiff in the case.

“it was not unreasonable for the insurance company to make the check payable to both the insured and the assignee, especially since the AOB agreement did not assign all of the insured’s interests in the insurance policy to the assignee “, Judge Edward Artau wrote for the majority.

Some insurance attorneys have said that this type of case illustrates the overly contentious Florida environment, in which some catering companies and their attorneys are too quick to bring bad faith claims, for small amounts and even when a claim is made. claim has been paid. For many claims, insurers have less than two weeks to respond or inspect the property, which often isn’t enough to make a clear decision. Yet plaintiffs’ attorneys often use this as a trigger for bad faith claims – simply to get fees, insurance companies have complained.


“The law as it stands now benefits lawyers at the expense of consumers in Florida,” said Julie Nevins, who handles bad faith cases for Miami law firm Strook.

The United Property dispute stems from water damage from Hurricane Irma in 2017. The owner awarded benefits to Expert, a mold remediation company. The company, also known as, performed the repairs and submitted an invoice to United, along with a copy of the AOB agreement.

United apparently did not pay the bill immediately. But three months later, after a second email from the restaurant company, the insurer wrote the check for $ 1,995, the court said. A year later, Expert Inspection sued United for breach of contract, arguing that the AOB agreement ordered the insurer to pay the assignee, not the insured and not both parties.

United then asked the Broward County Court clerk to deposit the check and told the catering company they would reissue the check to Expert if the company dropped its lawsuit. United also argued that Expert was not entitled to attorney fees because the firm had never been forced to take legal action and never informed the insurer of any disagreements. before bringing an action for breach of contract.

The circuit court issued a summary judgment in favor of United, noting that the check had been mailed long before the complaint was filed. The majority of the appeal court panel agreed.

“The assignee alleges a breach of the insurance contract because the insurer did not follow the instructions listed in the AOB agreement,” noted the majority. “However, the insurer cannot violate an unrelated agreement.”

An AOB agreement may give the assignee the right to apply an insurance policy, but it does not give the contractor the right to enforce terms of the agreement that are extraneous to the policy, the court said. The majority also concluded that the Uniform Commercial Code, which generally provides that debtors cannot meet their obligations by paying the assignor, does not apply to insurance claims.

In addition, the AOB agreement was a limited assignment, keeping the insured up to date with the benefits. He also granted a limited power of attorney to the catering company, so that Expert Inspections could have cashed the check simply by asking the owner to approve it, the court said. The agreement also required the insured to cooperate to ensure that payment was received from the insurance company.

In another bad faith decision issued the same day, the 4e The District Court of Appeal ruled against USAA Casualty Insurance.

In Wendy Firtell and Brian Firtell v. USAA, the court overturned the Broward County Circuit Court, finding that the trial court should not have rendered judgment for the insurer.

After the Firtell’s Pembroke Pines home was damaged by Hurricane Irma, they filed a claim. USAA inspected but did not pay the full amount requested by the owners. Following an assessment process, the Firtells filed a bad faith complaint. The trial court dismissed this claim and granted summary judgment to the insurer.

The family appealed and the 4e DCA agreed with them, noting that summary judgment is only appropriate if there is no question of material fact.

“The entry of a summary judgment is … erroneous if different inferences can be reasonably drawn from these facts”, the per curiam opinion said, citing previous court rulings. The court returned the case, noting that the bad faith issue should be resolved by a jury.

In the USAA case, it was Justice Artau who expressed his dissent.

“The undisputed evidence shows that the insurer complied with the terms of the policy, reasonably investigated the claim, promptly participated in the appraisal process, and timely paid the appraisal fee which was less than the amount claimed by his insured, “he wrote. “In these circumstances – with no real questions of fact in dispute – the trial court correctly concluded that no reasonable jury could find that the insurer engaged in bad faith.”

Complaints from carriers in Florida

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