IN THE DISTRICT COURT OF APPEAL FOURTH DISTRICT OF FLORIDA

Transcription

1 E-Copy Received Apr 3, :03 PM IN THE DISTRICT COURT OF APPEAL FOURTH DISTRICT OF FLORIDA ONE CALL PROPERTY SERVICES INC., APPEAL NO. 4D A/A/O WILLIAM HUGHES, CASE NO.: 2013CA v. Appellant, SECURITY FIRST INSURANCE COMPANY, Appellee. / INITIAL BRIEF ON APPEAL FROM THE HON. JOSEPH MARX, CIRCUIT COURT JUDGE, FIFTEENTH JUDICIAL CIRCUIT, PALM BEACH COUNTY, FLORIDA RICARDO J. DIAZ, Esquire Florida Bar No.: COHEN BATTISTI, Attorneys at Law 1211 Orange Avenue, Suite 200 Winter Park, Florida Phone: Fax: RDiaz@cohenbattisti.com SUSAN W. FOX Florida Bar No FOX & LOQUASTO, P.A. 122 East Colonial Drive, Suite 100 Orlando, FL Ph: (407) susanfox@flappeal.com Attorneys for Appellant

2 TABLE OF CONTENTS TABLE OF AUTHORITIES...ii INTRODUCTION AND QUESTION PRESENTED STATEMENT OF THE CASE AND OF THE FACTS SUMMARY OF ARGUMENT...8 ARGUMENT...10 I. Whether the Lower Court Erred in Dismissing the Complaint Based On Arguments Outside the Four Corners of the Complaint...10 Standard of Review...10 Analysis...11 Legal Standard for Review of Motion to Dismiss Complaint The Policy Was Not Included in the Complaint The Complaint Alleged Compliance with Conditions Precedent II. Whether the Trial Court Erred as a Matter of Law in Dismissing One Call s Claim Based On The Anti-Assignment and Loss Settlement Provisions of the Insurance Policy Standard of Review...16 Analysis...16 A. General Rule as to Assignability of Insurance Claim B. Accrual of Cause of Action for Breach of Insurance Policy Right of payment accrues on date of loss Action Accrues When Carrier Refuses to Pay C. General Rule of Assignability Not Modified by Contract or Statute. 22 D. Loss Payment Clause Does Not Preclude Assignment E. Anti-Assignment Clause Does Not Preclude Post-Loss Assignment. 30 F. Recent Cases Involving Claims of Invalid Assignment of Benefits.. 38 G. Differences Between the Present Case and ASAP Restoration H. Public Policy...46 CONCLUSION...50 CERTIFICATE OF SERVICE...50 CERTIFICATE OF TYPEFACE COMPLIANCE i

3 TABLE OF AUTHORITIES CASES 1500 Coral Towers Condo. Association, Inc. v. Citizens Property Insurance Corp., 112 So. 3d 541 (Fla.3d DCA 2013)...25 Advanced Restoration, Inc. a/a/o, Moore v. Universal Insurance Co., No CC (Fla. Polk Cty. Ct. Dec. 9, 2013) Aldana v. Colonial Palms Plaza Ltd., 591 So.2d 953 (Fla. 3d DCA 1991)...30 All Dry Water Restoration a/a/o de Freitas v. Homeowners Choice Ins. Co., 20, Fla. L. Weekly 1002a, No (Fla. Broward Cty. Ct. Jan. 31, 2014) All Ways Reliable Building Maintenance, Inc. v. Moore, 261 So. 2d 131 (Fla.1972)...14 Allstate Floridian Insurance Co. v. Farmer, 104 So. 3d 1242 (Fla. 5th DCA 2012) Allstate Insurance Co. v. Regar, 942 So. 2d 969 (Fla. 2d DCA 2006)...35 AMC/Jeep of Vero Beach, Inc. v. Funston, 403 So. 2d 602 (Fla. 4th DCA 1981)...14 Anderson Restoration & Emergency Services LLC v. Florida Peninsula Ins. Co., Case No. CC (Fla. St. Johns Cty. Ct. June 3, 2013) Anderson Restoration & Emerg. Servs., LLC a/a/o Hill v. Universal Ins. Co., No. 13-CC-2940 (Fla. Duval Cty. Ct. Sept. 23, 2013) ASAP Restoration and Constr., Inc. a/a/o. Toussaint v. Citizens Prop. Ins. Co., No CA06 (Fla. 11th Cir. Ct. July 28, 2013) ii

4 Banco Ficohsa v. Aseguradora Hondurena, S.A., 937 So. 2d 161 (Fla. 3d DCA 2006) , 27 Bell v. Indian River Memorial Hospital, 778 So. 2d 1030 (Fla. 4th DCA 2001) Better Construction, Inc. v. National Union Fire Insurance Co., 651 So. 2d 141 (Fla. 3d DCA 1995) , 29, 33 Better Life Restoration, Inc., a/a/o Yord Inv., LLC v. Citizens Prop. Ins. Co., No CA-22 (Fla. 11th Cir. Ct. Sept. 21, 2012) Boulevard National Bank of Miami v. Air Metal Industrial Inc., 176 So. 2d 94 (Fla.1965)...19 Burdick v. State, 594 So. 2d 267 (Fla.1992)...48 Canal Insurance Co. v. Dougherty, 247 F.2d 508 (5th Cir. 1957)...27 Castellanos v. Citizens Property Insurance Corp., 98 So. 3d 1180 (Fla. 3d DCA 2012)...18 Citizens Property Insurance Corp. v. Ifergane, 114 So. 3d 190 (Fla. 3d DCA 2012) , 34, 35 Continental Casualty Co.v. Ryan Inc. Eastern, 974 So. 2d 368 (Fla. 2008)...33, 35 Digital Medical Diagnostics v. Allstate Insurance. Co., 15 Fla. L. Weekly Supp. 1147b, No AP (Fla. 11th Cir. Ct. Oct. 2, 2008), cert. denied, 12 So. 3d 231 (Fla. 3d DCA 2009) DriRite USA, Inc., Prepared Ins. Co., No. 13CC1217 (Fla. Seminole Cty. Ct. Aug. 26, 2013) Dunedin Restoration Servs., Inc., a/a/o Chas. Sweeney, No CI (Fla. 6th Cir.Ct. Sept., 24, 2013) iii

5 Erickson's Drying Systems, Inc. v. QBE Insurance Corp., No. 2:11-cv-581, 2012 WL , *2 (M.D. Fla. 2012) Gables Insurance Recovery, Inc. v. Seminole Casualty Insurance Co., 10 So. 3d 1106 (Fla. 3d DCA 2009)...34 Ginsberg v. Lennar Florida Holdings, Inc., 645 So. 2d 490 (Fla. 3d DCA 1994)(Fla.1995) Gisela Investments, N.V. v. Liberty Mutual Insurance Co., 452 So. 2d 1056 (Fla. 3d DCA 1984) , 34 Godshalk v. Countrywide Home Loans Servicing, L.P., 81 So. 3d 626 (Fla. 5th DCA 2012)...15 Goldenberg v.sawczak, 791 So. 2d 1078 (Fla. 2001)...48 Graham s Carpet Cleaning & Restoration v. Royal Palm Insurance Co., Case No: CC 05 (Fla. 11th Cir. Ct. June 18, 2013) Grant v. State Farm Fire & Casualty Co., 638 So. 2d 936 (Fla.1994)...24 Hoffman v.jones, 280 So. 2d 431 (Fla. 1973)...35 Holyoke Mutual Insurance Co. v. Concrete Equipment Inc., 394 So. 2d 193 (Fla. 3d DCA 1981)...19 In re Surfside Resorts and Suites, Inc., 344 B.R. 179 (Bankr. M.D. Fla. 2006) , 36 Independent Fire Insurance Co. v. Lugassy, 593 So. 2d 570 (Fla.3d DCA1992)...22, 27 Indoor Environmental Services, a/a/o Alvarez v. Citizens Property Insurance Co., No (Fla. Dade Cty. Ct. July 2, 2012) iv

6 Indoor Environmental Services, Inc. a/a/o Macho v. State Farm Insurance Co., No (Fla. Dade Cty. Ct. June 19, 2012) Ingersoll v. Hoffman, 589 So. 2d 223 (Fla. 1991)...15 International School Services, Inc. v. AAUG Insurance Co., Ltd., No CIV, 2012 WL , *9 (S.D. Fla. July 25, 2012) 36, 48 Kissman v.panizzi, 891 So. 2d 1147 (Fla. 4th DCA 2005) Kohl v. Blue Cross and Blue Shield of Florida, Inc., 988 So.2d 654 (Fla. 4th DCA 2008) , 22, 29 Lexington Insurance Co. v. Simkins Industrial, Inc., 704 So. 2d 1384 (Fla.1998)...17, 31, 34 Liberty Mutual Insurance Co. v. Davis, 412 F.2d 475 (5th Cir.1969)...18 Liberty Mutual Insurance Co. v. Davis; Ginsberg v. Lennar Florida Holdings, Inc., 645 So. 2d 490 (Fla. 3d DCA 1994)(Fla.1995) Malu v. Security National Insurance Co., 898 So. 2d 69 (Fla. 2005)...48 Maynard v. Taco Bell of America, Inc., 117 So. 3d 1159 (Fla. 2d DCA 2013)...15 Medical Jet, S.A. v. Signature Flight Support - Palm Beach, Inc., 941 So. 2d 576 (Fla. 4th DCA 2006)...21 Meigs & Cope Agency of Florida, Inc. v. Koffey, 435 So. 2d 867 (Fla.3d DCA1983)...28 Nationwide Mutual Fire Insurance Co. v. Pinnacle Medicine, 753 So. 2d 55 (Fla. 2000)...20, 49 v

7 NextGen Restoration Inc. v. Citizens Property Insurance Corp., 126 So. 3d 1255 (Fla. 2d DCA 2013) , 13, 35, 43 North Pointe Insurance Co. v. Tomas, 16 So. 3d 977 (Fla. 3d DCA 2009) , 13, 35, 43 Pardo v. State, 596 So. 2d 665 (Fla.1992)...27 Parkway Gen. Hosp., Inc. v. Allstate Ins. Co., 393 So. 2d 1171 (Fla. 3d DCA 1981)...36 Parkway General Hospital, Inc. v. Allstate Insurance Co., 393 So. 2d 1171 (Fla. 3d DCA 1981)...12 Pizzi v. Central Bank & Trust Co., 250 So. 2d 895 (Fla. 1971)...12 Plowden & Roberts, Inc. v. Conway, 192 So. 2d 528 (Fla. 4th DCA 1966)...11 Price v. RLI Insurance Co., 914 So. 2d 1010 (Fla. 5th DCA 2005) Professional Consulting Services, Inc. v. Hartford Life and Accident Ins. Co., 849 So. 2d 446 (Fla. 2d DCA 2003)...19 Progressive Express Insurance Co. v. McGrath Community Chiropractic, 913 So. 2d 1281 (Fla. 2d DCA 2005)...34 Rapid Settlements, Ltd. v. Dickerson, 941 So. 2d 1275 (Fla. 4th DCA2006) Regis Insurance. Co. V. Miami Management, Inc, 902 So. 2d 966 (Fla. 4th DCA 2004) , 31 Restoration Unlimited, LLC, a/a/o Dersainvil v. Citizens Property Insurance Co., (Fla. Dade Cty. Ct. Sept. 11, 2012) vi

8 Reyes v. Roush, 99 So. 3d 586 (Fla. 2d DCA 2012)...40 Sammis v. Wightman, 12 So. 536 (Fla.1893)...11, 15 Schuster v. Blue Cross & Blue Shield of Florida Inc., 843 So. 2d 909 (Fla. 4th DCA 2003)...18 Scott v. Progressive Express Insurance Co., 932 So.2d 475 (Fla. 4th DCA 2006)...19 Shaw v. State Farm Fire & Casualty Co., 37 So. 3d 329 (Fla. 5th DCA 2010) (en banc) Spears v. West Coast Builders' Supply Co., 133 So. 97 (1931)...17, 30, 31 SR International Business Insurance Co.,v. World Trade Center Properties, LLC., 375 F. Supp. 2d 238 (S.D.N.Y. 2005) , 28 St. Paul Mercury Ins. Co. v. Coucher, 837 So. 2d 483, 487 (Fla. 5th DCA 2002) , 38 United Water Restoration Group, Inc. a/a/o Shatley, v. USAA, No (Fla. St. Johns Cty. Ct. Sept. 5, 2012) W.S. Badcock Corp. v. Webb, 699 So. 2d 859 (Fla. 5th DCA 1997)...40 West Florida Grocery v. Teutonia Fire Insurance Co., 77 So. 209 (Fla. 1917)...18, 19, 28 Wilson v. County of Orange, 881 So. 2d 625 (Fla. 5th DCA 2004) , 32, 33 vii

9 STATUTES Section (1)(i)(4), Florida Statutes , 26 Section (5)(a), Florida Statutes , 26 Section , Florida Statutes (2013) Section , Florida Statutes...31, 34 Section , Florida Statutes...35 RULES Florida Rule of Civil Procedure 1.120(c) Florida Rule of Civil Procedure , 29 Rule 69B , Florida Administrative Code OTHER The Assignment Clause in First-Party Property Insurance Policies: Are Post Loss Assignments of Policy Proceeds Enforceable? The Brief (ABA Tort Trial & Insurance Practice Section 2010) viii

10 INTRODUCTION AND QUESTION PRESENTED This is an appeal of an order dismissing a complaint for breach of contract filed by One Call Property Services Inc., Inc. (One Call), as assignee of William Hughes (Hughes), against Security First Insurance Co. (Security First), for underpayment of the cost to repair water damage to Hughes home which was insured by Security First under a homeowner s policy. One Call s complaint alleged - Hughes contracted with One Call to perform water removal and- necessary repairs following a covered loss and had assigned his right to insurance proceeds as payment, but that Security First had failed to fully compensate One Call for the work. Security First moved to dismiss arguing the Complaint failed to attach a copy of the policy and that the assignment of benefits was invalid and unenforceable on statutory grounds and prohibited by policy provisions. One Call maintained the assignment was valid and enforceable. The trial court, Circuit Court Judge Joseph Marx, agreed with Security First s argument that the assignment was precluded by the anti-assignment and loss payment clauses of the policy and dismissed the complaint. The issue on appeal is: Whether the trial court erred as a matter of law in dismissing One Call s complaint on the basis that the assignment of benefits was invalid under the anti-assignment and loss payment clauses of the policy? 1

11 STATEMENT OF THE CASE AND OF THE FACTS On August 24, 2012, William Hughes' residence at 2263 Ridewood Circle, Royal Palm Beach, FL was damaged by wind and water. One Call provided necessary, emergency services for Hughes and in exchange, Hughes agreed to assign benefits under his insurance policy to One Call. One Call submitted invoices for the services to Security First, but was only partially paid by Security First. On June 18, 2013, One Call filed a breach of contract action, as assignee of Hughes, related to Security First's failure to pay full value for its water extraction and construction services (R. 4). The complaint alternatively alleged One Call had an assignment in equity based upon the services it rendered at the Hughes home in reliance on payment of insurance proceeds (R. 4). One Call alleged compliance with all conditions precedent to entitle it to recover under the policy or that the conditions had been waived (R. 5). One Call stated it did not have a copy of the insurance policy, but would obtain it through discovery and file it at that time (R. 5). The assignment attached to the complaint stated, as follows: I, the Owner, hereby assign any and all insurance rights, benefits, and proceeds under any applicable insurance policies to One Call. I make this assignment in consideration of One Call's agreement to perform services and supply materials and otherwise perform its obligations under this contract, including Once Call not requiring full payment at the time of service. I intend to transfer all insurance rights to Once Call, including any causes of action which exist or may exist in the future. 2

12 See Exhibit A to Plaintiff s Complaint (R ) Security First filed a Motion to Dismiss the complaint. The motion attached the complaint, an insurance policy, some documents from Florida Department of Financial Services, and various orders from Florida trial court which defense counsel characterized as recogniz[ing] the numerous problems and issues with these Assignments of Benefits and...dismissing similar Complaints. (R. 64). The motion contended that One Call lacked standing to sue under the policy and that the complaint failed to state a cause of action (R. 64). The motion contended the policy contains a loss payment clause and an anti-assignment clause, the combined effect of which precluded One Call from bringing suit to determine the amount due under the policy even though it was entitled to receive any payment that was due under the policy. The anti-assignment clause quoted by Security First provides as follows: Assignment of this policy will not be valid unless we give our written consent. See Page 17 of 18 of Policy Form HO (R.174). The motion quoted the Loss Payment clause as follows: We will adjust all losses with you. We will pay you unless some other person is named in the policy or is legally entitled to receive payment. Loss will be paid upon the earliest of the following: a. 20 days after: (1) We receive your written proof of loss and reach a written, executed agreement or settlement with you according to the terms of the written agreement; or 3

13 b. 60 days after we receive your written proof loss and: (1) There is an entry of a final judgment or, in the case of an appeal from such judgment, within 60 days from and after the affirmance of the same by the appellate court; or (2) Written executed mediation settlement with you according to the terms of the written mediation settlement; or c. Within 90 days after we receive notice of an initial claim "reopened claim" or "supplemental claim" from you, we will pay or deny such claim or a portion fo the claim unless the failure to pay such claim or portion of claim is caused by factors beyond our control which reasonably prevent such payment. See Page 6 of 9 of Policy Form SFIV H03 09 SP (R. 181). The motion argued that while Florida law recognizes that the right to receive the payment of proceeds due under a homeowner's policy is assignable, the duties and obligations owed under the policy are non-assignable (R. 66). The motion argued that the policy places a duty on the insured to adjust the loss. Therefore, the motion stated, One Call was precluded from bringing suit to determine the amount due under the policy (R. 66). The exhibits attached to the motion to dismiss included the following: Exhibit 1: the complaint with all attachments; Exhibit 2: the allegedly applicable insurance policy; Exhibit 3: copies of documents from other trial court cases (discussed in Argument section II. infra): Exhibit 4: a Consent Order from the Florida Department of Financial Services agreeing that Emergency Services 24, Inc. would not hold itself out as a public 4

14 adjuster; and an amended Consent Order dated May 21, 2013 clarifying that the order is not intended to prohibit any assignment and did not invalidate any contract entered into with clients for services; the department stated it took no position whatsoever as to lawful use of assignment under Florida law. (R. 281). One Call filed a written response to the motion to dismiss (R. 284). First, One Call argued, the motion impermissibly imported matters outside the complaint's four corners into the motion to dismiss (R. 283). Next, One Call contended that, as a matter of Florida law, a non-party to an assignment contract does not have standing to challenge the assignment contract, even when the contract's validity would directly affect that party. (R. 284). Next, One Call argued, Security First s interpretation of the insured s duties under the insurance policy is contrary to Florida law and is not even supported by the policy language quoted. Under Florida law, insurance contracts are strictly construed against insurers and liberally construed in favor of insureds and coverage (R. 286). The response stated Florida case law clearly allows post-loss assignments of benefits even if a policy contains a non-assignment clause, citing Lexington Ins. Co. v. Simkins Industries, Inc., 704 So. 2d 1384 (Fla. 1998), Better Constr., Inc v. National Union Fire Ins. Co., 651 So.2d 141, 142 (Fla. 3d DCA 1995), and In re Surfside Resort and Suites, Inc., 344 B.R. 179 (Bankr. M.D. Fla. 2006), holding that under Florida law, a policy holder may freely assign post-loss insurance claims, even if the policy contains anti-assignment clause. 5

15 The response disagreed that the duty to adjust losses is a duty of the homeowner insured (R. 267). The response pointed out that the Loss Payment Clause, stating, "we will adjust all losses with you" represents a duty of the insurer that has already been satisfied by Security First s adjuster who evaluated this claim and decided to pay only a limited amount (R. 267). There is no enumerated duty of the insured to adjust losses in the section "Your Duties After Loss"which lists the insured s duties (R. 267). Moreover, any implied duty to adjust a loss under this policy would not be a reciprocal one. A duty is defined as an obligation to act or not act in a particular manner. (R. 267 citing Shaw v. State Farm Fire and Cas. Co., 37 So.3d 329 (Fla. 5th DCA 2010). The response argued that in the sentence, "we will adjust all losses with you," the subject of the sentence is "we", defined in the policy as the insurer. The (transitive) verb is "will adjust," "all losses" is the direct object, and the noun "you," the insured, is the sentence's indirect object (R. 267). Since the verb speaks to the action taken by the subject noun, the direct object is the recipient of the action verb, and the indirect object is for whom that action is done, grammatically, the sentence means that the insurer shall perform the action of adjusting all losses for "you"(the insured) as the indirect object. (R ). The phrase does not state that the insured will adjust the loss; instead the insured is the recipient of the action of adjusting the loss by subject noun, the insurer (R ). 6

16 A hearing on the motion to dismiss was held January 6, After a very brief presentation of argument, the trial judge interjected that he thought he had previously heard a similar argument and granted the motion to dismiss, and that he was aware of another order entered in Palm Beach County by Judge Cox granting 1 a motion to dismiss in a similar case (T. 5-6). The parties concurred that the issues were currently on appeal before this court and that we need a DCA opinion. (T. 9). The judge then stated to defense counsel: All right. Well, that makes it easy for me. I'm going to stay consistent. Your motion's granted, same ruling. Give me an order that reflects that and let's get the 4th DCA to tell me if I was right or if I was wrong. It doesn't hurt my feelings (T. 9). A final judgment dismissing the complaint was entered (R ). One Call appeals. 1 While One Call s trial attorney stated he believed he had been before the judge on a similar case that was now pending before this court on appeal, this was incorrect. However, the same issues are on appeal before this court as to the ruling by Judge Cox in ASAP Restoration and Construction, Inc. a/a/o Suzanne Casey, vs. Tower Hill Signature Insurance Co., Appeal No.: 4D A comparison of the two cases is discussed in point II F of this brief. Appellate counsel in the ASAP Restoration case and the present case are the same. 7

17 SUMMARY OF ARGUMENT The trial court s dismissal of One Call s breach of contract claim must be reversed. The trial judge improperly relied on arguments outside the four corners of the complaint including on the provisions of the policy attached to the motion to dismiss. This fact alone mandates reversal. However, even if Security First s arguments were properly before the court, Security First s arguments based on the policy should have been rejected. Security First argued the loss payment clause precluded any payment under the policy from becoming due until the insured has fulfilled a duty to adjust the loss, and the insurer reached agreement with the insured, or there had been entry of final judgment or mediation agreement in favor of the insured. This is incorrect. Loss payment provisions have been standard in insurance policies for many years and have never been held to create a duty of the insured to adjust the loss or to preclude action for breach of contract. The loss payment provision merely allows the insurance carrier additional time for payment or issuance of a check after certain specified events. The loss payment clause is completely silent on the issue of assignments of benefits and has never been construed to have any bearing on the issue of assignments. Instead, Florida case law has long recognized that post loss assignments of insurance proceeds are valid. Post-loss assignments are often given in payment for services performed after a loss occurs so that the insured does not 8

18 have to pay in advance for covered services which are often performed on an emergency basis. The courts have never imposed a condition on the insured of adjusting the loss or of reaching agreement, final judgment or appraisal award before an assignment of benefits can be enforced. Such a construction would allow an insurer to defeat a claim simply by refusing to cooperate and would delay an insured s ability to make emergency repairs. Instead, the plain language of loss payment provision states that an insurer has a limited time window within which to pay or deny a claim. After this time or after a denial of a claim, the action for breach of contract, if any, accrues. Applicable Florida statutes confirm this reading of the provision. Florida case law allows an assignee to pursue such claims in its own right without regard to a loss payment clause. The arguments presented by Security First are an attempt to overturn wellestablished case law recognizing the validity of post-loss assignments of insurance proceeds. Similar cases are being litigated by insurance carriers many by the same defense counsel across the state in their attempt to effect a change in the law. This case and ASAP Restoration and Construction, Inc. a/a/o Suzanne Casey, v. Tower Hill Signature Insurance Co., Appeal No.: 4D , pending in this court, are an opportunity for this court to resolve these issues and end unnecessary re-litigation of a settled issue of law. 9

19 If there is to be any change in long-standing Florida law that allows assignment of post-loss insurance claims and enforcement of such assignments by assignees, it should not come from the courts. The Florida legislature is presumed to be aware of court rulings construing statutes. By re-adoption of the previously construed statutes year after year without change, court rulings concerning the validity of post-loss assignments have been ratified by the legislature. Post-loss assignments serve an important public purpose and should continue to be honored as good public policy because assignments allow homeowners to have repairs made after a loss to protect their property. Any change in the status quo would require other reforms for protection of consumers and to ensure access to courts by assignees undertaking covered repairs. For these reasons, the order on appeal must be reversed and the complaint reinstated. The court should provide guidance as to the legal issues so that the same errors are not made on remand. ARGUMENT I. Whether the Lower Court Erred in Dismissing the Complaint Based On Arguments Outside the Four Corners of the Complaint Standard of Review: This appeal presents an issue of law that is reviewed de novo. Regis Ins. Co. V. Miami Mgmt., Inc, 902 So. 2d 966 (Fla. 4th DCA 2004) (stating that because a ruling on a motion to dismiss raised issues of law, it is 10

20 reviewed de novo). No deference is granted to the trial court's ruling on de novo review. Reyes v. Roush, 99 So. 3d 586, 589 (Fla. 2d DCA 2012). Analysis: The trial court s dismissal of One Call s breach of contract claim must be reversed because it was procedurally flawed and relied on arguments outside the four corners of the complaint. The issues were prematurely decided without opportunity for sufficient factual development. One Call s complaint sufficiently stated a claim for breach of contract and should be reinstated. A. Legal Standard for Review of Motion to Dismiss Complaint When reviewing a motion to dismiss, a trial court is limited to the four corners of the complaint, and must accept all allegations in the complaint as true. Bell v. Indian River Memorial Hospital, 778 So. 2d 1030, 1032 (Fla. 4th DCA 2001)( A motion to dismiss tests whether the plaintiff has stated a cause of action [and] is limited to the four corners of the complaint, the allegations of which must be accepted as true and considered in the light most favorable to the nonmoving party ). While a defendant may have defenses which might absolve it of liability, such defenses may not be considered by a trial court when ruling on a motion to dismiss. Pizzi v. Central Bank & Trust Co., 250 So. 2d 895 (Fla. 1971); Wilson v. Cty. of Orange, 881 So. 2d 625, 629 (Fla. 5th DCA 2004) ( Dismissal should not be granted on the basis of an affirmative defense, except when the face of the complaint is sufficient to demonstrate the existence of that defense ). 11

21 B. The Policy Was Not Included in the Complaint The four corners of the plaintiff s complaint did not contain the insurance policy. An assignee/plaintiff is not required to attach the insurance policy if it alleges, as One Call did here, that the policy would be obtained through discovery. Parkway Gen. Hosp., Inc. v. Allstate Ins. Co., 393 So. 2d 1171 (Fla. 3d DCA 1981). In response to the motion to dismiss, One Call correctly pointed out to the court that it must limit its review to the four corners of the complaint. Defenses based on the policy should not be considered at the motion to dismiss stage but on summary judgment, as the Second District recently ruled in a similar case, NextGen Restoration Inc. v. Citizens Prop. Ins. Corp., 126 So. 3d 1255 (Fla. 2d DCA 2013). In the NextGen case, a homeowner whose property was damaged by a water event entered into a repair contract with NextGen, which stated: In consideration for this contract, the homeowner executed a written assignment of benefits that assigned any and all insurance rights, benefits, and proceeds under [the] policy of insurance. Id. When the insurer paid only a part of NextGen's bill, NextGen filed a lawsuit alleging breach of contract, and stated in the complaint that it would obtain 2 the policy through discovery. The trial court granted the insurer s motion to dismiss 2 An assignee/plaintiff is not required to attach the insurance policy if it alleges, as One Call did here, that the policy would be obtained through discovery. Parkway Gen. Hosp., Inc. v. Allstate Ins. Co., 393 So. 2d 1171 (Fla. 3d DCA 1981). 12

22 based on anti-assignment provisions in the policy. Id. The Second District reversed, stating the issue could not be resolved on motion to dismiss; [i]n actuality, Citizens was asking the trial court to grant summary judgment in its favor. Id. at The NextGen court reversed on procedural grounds, but, as addressed in Point II of this brief, the court also criticized the merits of Citizens argument for dismissal, stating: We have serious doubts that the anti-assignment clause of the insurance contract bars the assignment attached to the complaint. Id. If the trial court below had complied with the applicable scope of review of a motion to dismiss, it should have denied the motion, requiring the insurer to file an answer and state its affirmative defenses based on the policy. See St. Paul Mercury Ins. Co. v. Coucher, 837 So. 2d 483, 487 (Fla. 5th DCA 2002) ( [o]rdinarily, an insurer's defense based on an exclusion in the policy should be raised as an affirmative defense, citing Fla. Farm Bureau Gen. Ins. Co. v. Ins. Co. of N. Am., 763 So.2d 429, 432 (Fla. 5th DCA 2000) ( Policy exclusions are generally pled as affirmative defenses. ). Lack of standing as argued by Security First is an affirmative defense. Kissman v.panizzi,891 So. 2d 1147, 1150 (Fla. 4th DCA 2005) (holding lack of standing is an affirmative defense). One Call could have then filed a reply to the affirmative defenses setting forth, any applicable circumstances for avoidance of these policy defenses, for example, the prior acceptance and payment of One Call s bill as waiver or estoppel 13

23 as to the defense. See AMC/Jeep of Vero Beach, Inc. v. Funston, 403 So. 2d 602 (Fla. 4th DCA 1981) (holding consent to assignment waived by conduct). Moreover, One Call s complaint stated a claim for recovery by equitable assignment, under All Ways Reliable Bldg. Maint., Inc. v. Moore, 261 So. 2d 131, 132 (Fla.1972). Florida courts recognize equitable assignment when a document or act vests in one party the right to receive funds due another for a covered loss as a result of services rendered in reliance on the right to receive insurance payments for the loss. See Progressive Exp. Ins. Co. v. McGrath Comm. Chiropractic, 913 So. 2d 1281, 1288 (Fla. 2d DCA 2005). No particular words or form... is necessary to effect an equitable assignment[,] and any language, however informal, which shows an intention on one side to assign a right or chose in action... will operate as an effective equitable assignment. Id. (quoting Giles v. Sun Bank, N.A., 450 So. 2d 258, 260 (Fla. 5th DCA 1984)) (emphasis added). Security First failed to present any argument for dismissal of the claim for equitable assignment. Thus, the trial court prematurely reached outside the four corners of the complaint and overlooked the claim based on equitable assignment and facts showing potential waiver of the insurer s objection to the assignment. C. The Complaint Alleged Compliance with Conditions Precedent The complaint alleged in general terms the performance or waiver of all conditions precedent. This was sufficient averment of satisfaction of conditions 14

24 precedent to avoid dismissal. Ingersoll v. Hoffman, 589 So. 2d 223, 224 (Fla. 1991); Plowden & Roberts, Inc. v. Conway, 192 So. 2d 528, 531 (Fla. 4th DCA 1966). Florida Rule of Civil Procedure 1.120(c) provides: In pleading the performance or occurrence of conditions precedent, it is sufficient to aver generally that all conditions precedent have been performed.... (emphasis added). Security First cited the loss payment provision as establishing conditions precedent to suit, and argued that compliance with those provisions had not been alleged in the complaint. However, under rule 1.120(c), a general allegation that conditions precedent have been met or waived is sufficient. Accordingly, dismissals for failure to comply with any specific condition precedent are reversible error when performance of conditions precedent has been generally alleged in the complaint. Maynard v. Taco Bell of America, Inc., 117 So. 3d 1159, 1161 (Fla. 2d DCA 2013). Rule 1.120(c) s purpose is to put the burden on the defendant to identify in its defenses specific conditions that the plaintiff failed to perform, so that the plaintiff may be prepared to produce proof or cure the omission, either at trial or in summary judgment proceedings. Godshalk v. Countrywide Home Loans Servicing, L.P., 81 So. 3d 626 (Fla. 5th DCA 2012). However, on a motion to dismiss, the general allegation of performance of conditions must be accepted as true. The court is limited to the allegations in the four corners of the complaint. Reyes v. Roush, 99 So. 3d at 589 ( trial court on a motion 15

25 to dismiss [is] not allowed to determine the veracity of [allegation], it [is] restricted to consider[ing] whether [the allegation is] properly pleaded. ). In summary, this court should reverse and remand with directions that the complaint be reinstated. However, the issues on the merits, discussed in Point II, should be addressed so that the same errors on the merits are avoided on remand. II. Whether the Trial Court Erred as a Matter of Law in Dismissing One Call s Claim Based On The Anti- Assignment and Loss Settlement Provisions of the Insurance Policy Standard of Review: This issue of law is reviewed de novo. Scott v. Progressive Express Ins. Co., 932 So.2d 475, 477 (Fla. 4th DCA 2006). Analysis: The trial court granted the motion to dismiss without explaining his rationale, however, he stated he was granting the motion to be consistent with a 3 prior ruling he recalled having made in a similar case, and with Judge Cox s ruling in ASAP Restoration and Construction, Inc. a/a/o Suzanne Casey, v. Tower Hill Signature Insurance Co., Appeal No.: 4D , which is pending in this court. The judge and both parties agreed that an order from this court is needed. Based on the discussion at the hearing and the order of Judge Cox under review in Appeal No.: 4D (see Appendix 1), it appears Judge Marx s ruling 3 Appellant has not been able to identify a prior ruling on this issue by Judge Marx. 16

26 was that the anti-assignment and loss payment clauses of the policy, read together, prohibit the assignee from enforcing its right to payment of the proceeds of the insurance policy. Thus, One Call will focus its argument on this issue. Florida courts have ruled for nearly 100 years that a post-loss assignee of insurance benefits -- generally, a contractor who provides services after a covered loss and accepts the assignment of insurance proceeds as payment -- has the right to sue for insurance proceeds regardless of any anti-assignment clause in the policy. Lexington Ins. Co. v. Simkins Indus., Inc., 704 So. 2d 1384 (Fla. 1998), Better Constr., Inc v. Nat l Union Fire Ins. Co., 651 So.2d 141, 142 (Fla. 3d DCA 1995); West Fla. Grocery v. Teutonia Fire Ins. Co., 77 So. 209, 211 (Fla. 1917). An assignee stands in the shoes of the insured to sue for insurance proceeds. The loss payment clause is a standard provision that does not address, let alone prohibit assignment, and has never been applied to assignment issues. As will be shown, the motion to dismiss ignored well-settled Florida law that allows repair contractors to sue under an assignment of benefits. A. General Rule as to Assignability of Insurance Claim The ability to assign contractual rights, particularly of insurance proceeds, is an important commercial mechanism to facilitate transactions and ensure the payment of obligations. See Shaw v. State Farm Fire & Cas. Co., 37 So. 3d 329, 332 (Fla. 5th DCA 2010) (en banc). 17

27 All contractual rights are assignable unless the contract prohibits assignment, the contract involves obligations of a personal nature, or public policy dictates against assignment. Kohl v. Blue Cross and Blue Shield of Fla., Inc., 988 So.2d 654, 658 (Fla. 4th DCA 2008) (explaining pre-loss versus post loss assignments and recognizing assignability of insurance claims). Insurance claims are choses in action that are freely assignable. Castellanos v. Citizens Prop. Ins. Corp., 98 So. 3d 1180, 1183 (Fla. 3d DCA 2012)(stating an insurance claim is a chose in action); W.S. Badcock Corp. v. Webb, 699 So. 2d 859, 861 (Fla. 5th DCA 1997) (recognizing free assignability of choses in action); Liberty Mut. Ins. Co. v. Davis, 412 F.2d 475 (5th Cir.1969) (chose in action arising out of contract is assignable); Kohl v. Blue Cross and Blue Shield, 988 So.2d at 658. Assignees of choses in action have the right to maintain suit in their own names as the real parties in interest. Spears v. West Coast Builders' Supply Co., 133 So. 97 (1931) (choses in action arising out of contract are assignable and may be sued upon and recovered by the assignee in own name); Sammis v. Wightman, 12 So. 536 (Fla.1893) (the assignee is an indispensable party; assignor is a mere nominal and unnecessary party). A chose in action is a right to personal things of which the owner has not the possession, but merely a right of action for their possession. Spears v. West Coast Builders' Supply Co., 133 So. at 98. The owner of a chose in action arising out of 18

28 contract may assign it to another so that the assignee may sue on it in his own name and make recovery. Blvd. Nat l Bank of Miami v. Air Metal Indus., Inc. 176 So. 2d 94, (Fla.1965); see also Schuster v. Blue Cross & Blue Shield of Fla., Inc., 843 So. 2d 909, (Fla. 4th DCA 2003) ( Under Florida law, an insured may assign his right to benefits under a contract of insurance. The effect of such an assignment is to place the insured's cause of action for such benefits in the [assignee]. ) (citations omitted, emphasis added). This is consistent with Florida law generally which recognizes assignability of almost any type cause of action; in fact, assignability of a cause of action is the rule rather than the exception. W.S. Badcock Corp. v. Webb at 861; Liberty Mut. Ins. Co. v. Davis; Ginsberg v. Lennar Florida Holdings, Inc., 645 So. 2d 490 (Fla. 3d DCA 1994)(Fla.1995) (party may assign almost any cause of action). Once an assignment has been made, the assignor no longer has a right to enforce the interest because the assignee has obtained all rights to the thing assigned. Price v. RLI Ins. Co., 914 So. 2d 1010, (Fla. 5th DCA 2005) (quoting Lauren Kyle Holdings, Inc. v. Heath-Peterson Constr. Corp., 864 So. 2d 55, 58 (Fla. 5th DCA 2003)). Florida Rule of Civil Procedure allows an assignee of a cause of action to prosecute the action in its own name as the real party in interest. See Holyoke Mut. Ins. Co. v. Concrete Equip. Inc., 394 So. 2d 193 (Fla. 3d DCA 1981)(discussing 19

29 history of assignee s right to maintain action in own name as real party in interest). The rights of assignees to bring actions to enforce their rights have been deemed so fundamental that efforts to restrict that right were declared unconstitutional in Nationwide Mutual Fire Ins. Co. v. Pinnacle Medical, 753 So. 2d 55, 57 (Fla. 2000) (ruling that statute which prohibits provider-assignees from pursuing a breach of contract claim in court would be an unconstitutional violation of assignee's access to courts because the right of an assignee to sue preexisted the adoption of the Florida Constitution). For these reasons, the motion to dismiss was incorrect in arguing One Call is precluded from bringing suit to determine the amount due under the policy (R. 66). B. Accrual of Cause of Action for Breach of Insurance Policy 1. Right of payment accrues on date of loss The motion to dismiss also argued that the loss payment clause creates conditions precedent to suit for breach of contract, such as, agreement with the insurer, final judgment, or appraisal award. This is the argument accepted by Judge Cox s order that is on appeal before this court in Appeal No.: 4D This argument is incorrect. The rights of the insured to insurance proceeds become fixed as of the date of loss. In re Surfside Resorts and Suites, Inc., 344 B.R. 179, 189 (Bankr. M.D. Fla. 2006)( [O]nce the Hotel had sustained property damage, Plaintiff was already responsible for payment of whatever claim Debtor asserted. 20

30 Hence, once the damage affected the property, Plaintiff's obligation to pay originated ). Before loss, the insured has only an inchoate or a contingent right to compensation, but after loss that right became absolute and transferable without consent, since the relationship of the insured and insurer is now one of creditor and debtor and the policy no longer significant except as evidence of the existence and amount of the debt. Catherine M. Colinvaux and Kristen S. Heres, The Assignment Clause in First-Party Property Insurance Policies: Are Post Loss Assignments of Policy Proceeds Enforceable? The Brief (ABA Tort Trial & Insurance Practice Section 2010), available at (citing Antal's Rest., Inc. v. Lumbermen's Mut. Cas. Co., 680 A.2d 1386 (D.C. 1996)). 2. Action Accrues When Carrier Refuses to Pay, Not When Amount Ascertained While the debt accrues on the date of loss, the cause of action accrues when the insurer refuses to pay an amount later determined to be due. This court has agreed with the proposition that the insured's right to compensation for the loss accrues on the date of loss, but the cause of action for breach accrues if payment is not made when due. See Levy v. Travelers Ins. Co., 580 So. 2d 190 (Fla. 4th DCA 1991) (cited with approval in State Farm Mut. Auto. Ins. Co. v. Lee, 678 So. 2d 818, 820 (Fla. 1996)). The date of the breach is the date when the insurer refuses to make payments later determined to be due under the policy, not the date when consequential damages result or become ascertained. Med. Jet, S.A. v. Signature 21

31 Flight Support - Palm Beach, Inc., 941 So. 2d 576 (Fla. 4th DCA 2006) (quoting Fradley v. Cty. of Dade, 187 So. 2d 48, 49 (Fla. 3d DCA 1966)). Many courts hold that if the insurer denies liability, interest begins to run from the date of the loss, even where the policy provides for payment at a later date. Indep. Fire Ins. Co. v. Lugassy, 593 So. 2d 570, 572 (Fla.3d DCA1992). The cause of action for breach accrues on the date the insurer denies payment; if the claim is wrongly denied in whole or part, and the insured or assignee later recovers a judgment, interest is due from the date of loss. Id. According to that established line of authority, the policy provision relating to the time of payment of benefits [i.e., the loss payment clause], and thus the insurer's liability for interest, is rendered immaterial by the insurer's denial of liability. The underlying legal theory is that by denying liability, the insurer waives its right to withhold payment pursuant to a contractual provision deferring payment. Id. While the Lugassy decision does have some negative history, such history relates to an insurer s liability for pre-judgment interest, see Lumbermens Mutual Casualty Company, v. Percefull, 653 So.2d 389 (Fla.1995), not the basic propositions discussed above. C. General Rule of Assignability Not Modified by Contract or Statute As discussed in section A. above, rights to insurance proceeds have been held to be assignable unless prohibited by contract or statute. Kohl v. Blue Cross and Blue Shield, 988 So.2d at 658. There is no prohibition of assignment of post-loss 22

32 claims applicable to the present scenario. As will be discussed in greater detail infra, the policy in the present case contains an anti-assignment clause that precludes assignment of the policy, but this clause has been held not to preclude assignment of a right to proceeds after loss. Recognizing the anti-assignment clause did not invalidate the assignment, Security First relied on the loss payment clause. D. Loss Payment Clause Does Not Preclude Assignment Security First relied on the loss payment clause for the proposition that no loss is payable until after one of the events listed in the clause occurs: agreement with the insurer; final judgment or mediation agreement (R.68, T. 3-4). Security First argued this clause creates a precondition to any rights vesting in an assignee. This argument is incorrect because the plain language of the loss payment clause does not address or prohibit assignment and has never been construed as relevant to assignment, and the purpose of the loss payment clause is to establish due date of a check after the amount has been determined. The loss payment clause states that a loss under the policy is payable on the earliest of four conditions; the first three events are those listed by defense counsel at the hearing -- agreement with the insurer; final judgment or mediation agreement (T. 3-4). The fourth condition is 90 days after notice of claim. Thus, under this plain language, the insurer has a duty to pay upon the earliest of these four events, therefore, within 90 days of notice of claim if that occurs earlier than the other 23

33 events, as it would in most cases. Since the complaint in the present case was filed more than 90 days after notice of the loss, the time for payment of benefits under the loss payment clause had already passed and the cause of action for any unpaid amounts due under the policy had accrued. This construction is consistent with the insurer's statutory duties. Under section (1)(i)(4), Florida Statutes, Unfair methods of competition and unfair or deceptive acts or practices defined, an insurer must determine and make payments of all undisputed amounts owed under policy within 90 days of receipt of an invoice. Similarly, section (5)(a) states that within 90 days after an insurer receives notice of an initial property insurance claim from a policyholder, the insurer shall pay or deny the claim or any portion of the claim unless the failure to pay is caused by factors beyond the control of the insurer. The policy must be construed in light of these statutes. In Grant v. State Farm Fire & Casualty Co., 638 So. 2d 936, 938 (Fla.1994), the Florida Supreme Court held that where a contract of insurance is entered into on a matter surrounded by statutory limitations and requirements, the parties are presumed to have entered into such agreement with reference to the statute, and the statutory provisions become part of the contract. (Citations omitted). The motion to dismiss relied on the language of the loss payment clause stating, We will adjust all losses with you. This language, however, does not 24

34 address either assignment or accrual of a cause of action. Moreover, to construe it as placing a duty on the insured to adjust the loss (as stated in Judge Cox s order in Appeal No.: 4D ) is contrary to normal contract interpretation and common sense, as well as other provisions of the policy. We is defined in Definitions section as the Company providing this insurance. The action verbs are will adjust, and the direct object is losses. Basic grammatical construction shows that this creates a duty for the insurer and not the insured. We (the insurer) is the subject noun and will adjust is the transitive verb. Therefore, the insurer is the party who will take the action ( adjust ). Nowhere in the policy is it stated that the insured will adjust the loss. The court must also reject the argument that the insured has a duty to adjust because the insured's duties of cooperation under the policy are expressly set out in the sections entitled Duties After Loss in the main policy and Your Duties After Loss in the Florida endorsement (R. 173, 180). The duties set forth do not include a duty to adjust the loss on the insured or even require the insured to participate in adjusting the loss. These duties are standard in insurance policies and include giving prompt notice to the insurer; protecting the property; making reasonable repairs; showing the insurer the property; providing documentation; and, sending the insurer a signed, sworn proof of loss. E.g Coral Towers Condo. Ass'n, Inc. v. Citizens Prop. Ins. Corp., 112 So. 3d 541, 543 (Fla.3d DCA 2013); Citizens Prop. Ins. Corp. 25

35 v. Ifergane, 114 So. 3d 190, 192 (Fla. 3d DCA 2012). The term adjuster is statutorily defined as an employee of an insurer or a public adjuster , Florida Statutes (2013); Rule 69B , Fla. Admin. Code (defining adjuster as person who works for insurer or is self employed as public adjuster to ascertain and determine the amount of any claim, loss, or damage payable under an insurance contract ). The insured is not an adjuster. Under the correct construction of language of the loss payment clause, the insurer has up to 90 days after notice of a claim to pay or deny the claim. This is the time period during which the insurance carrier "adjusts" the claim and determines how much is payable. The person who performs this task is the adjuster. Therefore, it makes sense that the language "We will adjust losses with you" means the insurer will perform its adjustment duties within the 90 day investigation period permitted under the policy. This construction is consistent with the insurer's statutory duties under sections (1)(i)(4) and (5)(a). The insurer also has a set number of days for payment processing after settlement, mediation or final judgment. Furthermore, the loss payment clause states We will pay you unless some other person is named in the policy or is legally entitled to receive payment. This language recognizes that another party, such as, an assignee, may be entitled to payment. Similar language was construed in Banco Ficohsa v. Aseguradora Hondurena, S.A., 937 So. 2d 161 (Fla. 3d DCA 2006) to allow a reinsurer to pay 26