Tag Archives: Assignment of Benefits

UPDATE: New Charges Filed Against Jacksonville Contractor & Suspected Fraudster

Eighteen new charges have been filed against Jacksonville contractor, Wyatt Green. Green was arrested in April on charges of organized fraud, forgery and grand theft. The list of Green’s victims has grown from a handful to 19. Homeowners contacted I-TEAM saying that their insurance companies had paid Storm RS to make repairs to their homes that were never completed.

Click here to read the article. (Previous post)

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Filed under Fraud, Property (Homeowners)

Florida Supreme Court Dismisses Review of Assignment of Benefits Dispute

A divided Florida Supreme Court discharged jurisdiction and dismissed the review proceeding of an assignment of benefits case due to a law that was passed this spring revamping the AOB system.

According to court documents, the policyholders, John and Liza Squitieri assigned benefits to Restoration 1 to clean up water damage in their home. However, their insurance company Ark Royal Insurance Co. refused to pay the full amount. Restoration 1 sued Ark Royal for breach of contract but lost in circuit court and appeals court.

Click here to read the article.

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Filed under Legislation, Property (Homeowners)

Update: Florida Governor Signs AOB Reform Bill

In recent years, lawmakers deliberated changes to the AOB process but could not reach an agreement, amidst heavy lobbying by groups on both sides of the issue. This year, however, the House and Senate came to an agreement and sent the bill to Florida Governor Ron DeSantis. DeSantis signed House Bill 7065 on Thursday, marking the end to a seven-year battle by the industry and reform advocates. This law takes effect on July 1, 2019.

Click here to view our earlier post on what the bill entails or contact us to discuss the implications of this significant change in Florida law.

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Filed under Property (Homeowners)

Jacksonville Roofer Facing Charges Related to Insurance Fraud & Failing to Begin Work

Jacksonville roofer and owner of Kinnecorps LLC, Roger Van Den Bosch, has been arrested and charged with insurance fraud, grand theft, uttering and failing to begin work. The roofing company has been under investigation since 2018 due to complaints from homeowners who signed Assignment of Benefits allowing their insurance companies to pay Van Den Bosch who in turn never completed the work.

Two other Kinnecorps employees, Van Den Bosch’s sister and girlfriend both face felony charges of uttering and knowingly notarizing a false document.

Click here to read the article.

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Filed under Property (Homeowners)

Exciting New Assignment of Benefits Law Passes

My Post (3)

H.B. 7065 passed last week and Governor DeSantis has promised to sign it!

This is great news for consumers and insurers alike. The law is designed to curb the onslaught of assignment of benefits cases, which have plagued the courts for the last five years. The new law has a lot of moving parts. It also creates many new opportunities for insurers to save money and prevent these “AOB” claims from reaching the litigation phase. Our firm can assist you in designing protocols to avoid some of the traps created by the new law. While the new law can save insurers money, it also presents new challenges for insurers by creating new responsibilities and deadlines. However, before discussing any protocols, one must understand the underlying new issues and responsibilities for all parties.

THE NEW AOB REQUIREMENTS

Under the new law, the assignees (AOB companies) will be required to do many things they previously did not have to contend with.

The assignees now will have to:

  1. Put their assignment in writing. This will eliminate the theory of “equitable assignments” sometimes pled and argued by the assignees and accepted by some judges.
  2. Both the assignee and assignor will have to sign the AOB. Again eliminating the “equitable assignment argument.”
  3. The AOB must allow for rescission under certain circumstances by the insured.
    • Due to the timeframes involved, this most likely will only come into play with roofs or restoration contracts.
  4. The AOB must be provided to the insurer within three business days after the date of which the assignment is executed or the date on which the work begins, whichever is earlier.
    • The statute also provides for very specific means of delivery of the assignment to the insurer.
    • Insurers still will need to inspect right away before any water mitigation is completed.
  5. The AOB must contain a written, itemized, per-unit cost of the services to be performed by the assignee.

The AOB must contain a specific 18 POINT UPPER CASE AND BOLD WARNING to the insured regarding the insured’s rights.

AOB COMPANIES PROHIBITIONS

The assignees will not be allowed to:

  1. Charge a penalty for rescission.
  2. Charge a “mortgage processing fee.”
  3. Have a penalty for cancellation of the agreement.
  4. Charge an “administrative fee.”
  5. Under “urgent or emergency circumstances,” the assignee may not receive an assignment of post-loss benefits under a residential property insurance policy in excess of the greater of $3,000 or 1% of the Coverage A limit under the policy.
  6. Assignments that don’t comply with this subsection are invalid and unenforceable.
    • Arguably any failures of the assignee to comply with the above provisions would provide the insurer a very sound affirmative defense, that the AOB is completely invalid and unenforceable.
    • This could potentially be a Motion for Summary Judgment issue as well.

NEW DUTIES FOR THE ASSIGNEE/AOB COMPANIES

Under the new law the assignees will now have to:

  1. Maintain records of all services.
  2. Cooperate with the insurer in the claim investigation.
  3. Provide the insurer with records and documents.
  4. Deliver the executed AOB within three business days.
    • A potential affirmative defense and Motion for Summary Judgment issue.
  5. Update the insurer with revised estimates.
  6. Perform work in accordance with “industry standards.”
  7. Submit to recorded statements and EUO’s pre-suit under certain circumstances.
    • A potential affirmative defense and Motion for Summary Judgment issue.
  8. Participate in appraisal and/or mediation under certain circumstances.

Additionally, assignees:

  1. Cannot modify managed care provisions under the policy.
  2. Cannot file suit until a written notice to initiate litigation has been served to the insurer.
    • The notice must contain certain information and has specific timing requirements.
    • A potential affirmative defense and Motion for Summary Judgment issue.

INSURERS NEW DUTIES

The insurers will also have some new obligations under the new AOB law.

The insurers now will have to:

  1. Have a provision in the policy for delivery of the AOB agreement.
  2. Respond in writing to the notice to initiate litigation within ten business days.
    • In the response, certain information must be present.
  3. Have procedures in place to respond to the notice to initiate litigation.

NEW POLICY OPTIONS FOR INSUREDS

Insurers may opt to provide policies in which the insured is not allowed to assign their rights under the policy to another. There are strict criteria which the insurer must follow in order to offer such policies. However, the price point will be lower, which will offer an incentive to most insureds to want to opt for this policy, rather than the one in which an AOB is allowed. Hopefully, this voluntary option selection by the insured will allow this provision to withstand any challenges in the courts.

I predict in the future most insureds will opt for these less expensive policies, which will allow insurers to pass the savings along to the consumers.

ATTORNEY’S FEES

The law also totally changes who will be considered the “prevailing party” for purposes of attorney’s fees, depending on an analysis of the judgment amount and the “disputed amount.” If the judgment is less than 25% of the “disputed amount” the insurer is entitled to an award of reasonable attorney’s fees. If the judgment is between 25% and 50% of the “disputed amount” no party is entitled to attorney’s fees. Only when the plaintiff (AOB company) receives a judgment of 50% or more over the “disputed amount” are they entitled to attorney’s fees.

This section dramatically changes the “risk/reward” structure previously involved in these cases. In the past, insurers have settled these cases, to avoid paying exorbitant attorney’s fees. There is a provision which states that the insurer can waive its right to fees under certain conditions if the insurer fails to inspect or provide authorization for repairs.

The statute also allows for potential attorney’s fees to the insurer if the assignee files a voluntary dismissal and then refiles a second case. Unfortunately, the statute gives the court discretion in this instance.

INSUREDS OBLIGATIONS

The new AOB law also codifies what probably was considered common sense and already law.

The insured must:

  1. Pay the deductible under the policy.
  2. Pay for any betterment ordered.
  3. Pay for any work done before any rescission by the insured of the assignment.

We believe we can help you predict the future strategies of the plaintiff’s attorneys, who are already plotting to exploit the perceived loopholes in the new law. Some may argue the law does not even apply to their clients. Some may file suit prematurely. Some will undoubtedly make constitutional challenges.

If you wish to have our firm present some protocols to help you navigate through this maze of new legislation, please contact us at info@roiglawyers.com.

This article is not intended to create an attorney-client relationship by offering this information, and anyone’s review of the information shall not be deemed to create such a relationship. The content provided is intended to provide information of general interest to the public and is not intended to offer legal advice about specific situations or problems. You should consult a lawyer with regard to specific law issues that require attention.

For additional information, please contact Jeffrey Tutan of Roig Lawyers at 954-354-1546 or by email at jtutan@roiglawyers.com. Jeffrey is a partner in the Deerfield Beach office of Roig Lawyers, head of the firm’s trial division and co-chair of the first party property division.

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Filed under Property (Homeowners)

Florida Legislature Passes Assignment of Benefits Reform Bill

On April 24, 2019, by a vote of 25-14 the Florida Senate passed SB 122 that addresses AOB’s for residential or commercial property insurance claims and limits attorney’s fees related to AOB agreements. The Senate bill was a committee substitute for House Bill 7065, which passed the House on April 11, 2019. Governor Ron DeSantis is expected to sign the bill which would become law effective July 1, 2019. Click here to view the entire Bill: Florida SB 122/HB 7065

Contact us for more information or to discuss the implications of this significant change in Florida law.

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Filed under Legislation, Property (Homeowners)

Florida Insurance Leaders Hope to Rein In AOB Crisis

The Florida insurance industry is hoping to put an end to its AOB crisis with education. Barry Gilway, president, CEO and executive director of Citizens Property Insurance Corp. says the key to slowing Assignment of Benefits (AOB) abuse in Florida is for the insurance industry to link AOB to its impact on the consumer and the premiums they are paying.

Insurance carriers from across the state have seen an increase in litigation due to AOB lawsuits from homeowners who work with unlicensed contractors who file inflated and fake claims on their behalf. According to the Florida Department of Financial Services, AOB lawsuits in Florida have increased from 405 to 28,200 between 2006 and 2016 with South Florida being the worst region for this issue.

Florida insurance industry leaders are hoping for a legislative fix with the new Senate leadership coming in next year.

Click here to read the full article.

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Filed under Property (Homeowners)

Insurance Bill addresses issues with Assignment of Benefits

Florida House of Representative, John Tobia of the 53rd district, has introduced CS/HB 669 which addresses consumer issues related to “Assignment of Benefits”. The bill is still alive after a hearing on March 19, 2015 in front of the House Insurance and Banking Subcommittee. The bill addresses insurance-claims issues regarding AOB’s dealing with property insurance. An AOB occurs when a policyholder has a loss and signs a contract with a third party to reconcile the damage. Once the AOB is signed the contract allows for the third party to be assigned the proceeds from the homeowner’s insurance policy. AOB’s are currently a hot topic with property insurance carriers and for years have been the keystone of PIP/No Fault Litigation.

CS/HB 669

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Filed under Legislation

Court Grants State Farm Motion in Terlep Chiropractic Case

Defendant State Farm’s insured, Mark Kundrat, was allegedly involved in a car accident on July 9, 2009.  Kundrat sought treatment for injuries sustained in the accident from Plaintiff Terlep Chiropractic. On November 22, 2010, Terlep filed a cause of action against State Farm, alleging failure to pay PIP benefits.  As an affirmative defense, State Farm argued that Terlep Chiropractic lacked standing to bring the cause of action.  Terlep argued that a “Financial Policy & Consent Form” signed by Kundrat as a condition of receiving treatment conveyed to Terlep the right to bring any and all causes of action against State Farm.

The document signed by Kundrat, and upon which Terlep relies, contains a paragraph entitled “Assignment of Benefits.”  In that paragraph, Kundrat assigned payment directly to Terlep Chiropractic and agreed that he is financially responsible for charges not covered by the assignment or which the insurer declines to pay.  The court found that this language unambiguously serves only to direct payment by the insurance company to the medical provider and that there is no language conveying any and all rights, including the right to bring any and all causes of action.  Because the language in the instant case does not convey a full assignment of any and all benefits and rights under the policy, the Plaintiff does not have standing to bring this cause of action against Defendant.

Terlep, in turn, argues that State Farm lacks standing to challenge the assignment of benefits because it lacks privity of contract.  The court points out, however, that State Farm is not challenging the contract between Terlep and Kundrat.  Rather, State Farm is raising the issue of the interpretation of the “assignment of benefits” part of the agreement.

Terlep further argues that it has standing to bring the cause of action based on equitable assignment.   The court concludes that the cases upon which Terlep relies for this argument should be distinguished because they involved situations in which the documents contained ambiguities and inconsistencies.  In this case, the document at issue is “clear and unambiguous,” and therefore equitable principles do not apply.

Plaintiff’s final argument is that it is the real party in interest and that entry of final judgment against it would deny it a remedy at law.  The document provides, however, that the insured is financially responsible for any payments not made to Plaintiff, and any cause of action is therefore between Kundrat and State Farm.

The court granted Defendant State Farm’s motion for full and final summary judgment.

The case is Terlep Chiropractic v. State Farm, Circuit Court, 6th Judicial Circuit in and for Pinellas County. Case No. 10-006194-SC. December 5, 2013.

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