Fourth District Court of Appeal, State of Florida
Case No. 4D2024-0085
Opinion Filed: March 12, 2025
Judges: Damoorgian, Levine, and Artau, JJ.
Insurance Contracts – Assignment of Benefits – Property Remediation Services – Statutory Compliance
The Fourth District Court of Appeal reversed a trial court’s summary judgment in favor of Titan Restoration Construction, Inc., ruling that the contract at issue was an invalid “assignment agreement” under section 627.7152, Florida Statutes. Because the contract failed to comply with statutory requirements, it was unenforceable under Florida law.
Background of the Case
1. The Water Damage and Restoration Contract
- In July 2021, homeowner Ronda Ellis sustained water damage at her residential property.
- She filed a claim with her property insurer and contracted with Titan Restoration Construction, Inc. (“Titan”) to perform remedial services covered by her insurance policy.
- Shortly thereafter, Ellis sought to rescind the contract.
- Titan sued Ellis for breach of contract, seeking declaratory relief and liquidated damages.
- Ellis argued that the contract was an invalid “assignment agreement” under section 627.7152, Florida Statutes.
2. Trial Court Grants Summary Judgment for Titan
- Titan moved for summary judgment, claiming the contract was not an assignment agreement and was therefore enforceable.
- The trial court agreed with Titan, concluding that the contract did not constitute an assignment agreement under Florida law.
- Ellis appealed the ruling.
Appellate Court Analysis and Ruling
1. Definition of an “Assignment Agreement” Under Florida Law
Florida law defines an “assignment agreement” as:
“Any instrument by which post-loss benefits under a residential property insurance policy . . . are assigned or transferred, or acquired in any manner, in whole or in part, to or from a person providing services.”
— § 627.7152(1)(b), Fla. Stat. (2021)
To be valid and enforceable, an assignment agreement must meet specific statutory requirements.
- If a contract fails to comply with these requirements, it is invalid and unenforceable.
- The appellate court reviewed whether the contract between Ellis and Titan met these statutory requirements.
2. The Contract Was an Assignment Agreement
The appellate court found that the contract clearly met the statutory definition of an assignment agreement because it:
- Assigned post-loss benefits from Ellis to Titan.
- Transferred insurance proceeds to Titan in exchange for remedial services.
- Required Ellis to execute additional documents to transfer insurance payments directly to Titan.
Since the contract functioned as an assignment of benefits, it was subject to the statutory requirements of section 627.7152.
3. The Contract Failed to Comply with Section 627.7152
The appellate court determined that the contract violated three key statutory provisions:
- Failure to Include a Rescission Clause Without Penalty
- Florida law requires that an assignment agreement:
“Contain a provision that allows the assignor to rescind the assignment agreement without a penalty or fee . . .”
— § 627.7152(2)(a)2., Fla. Stat. (2021)
- The contract did not allow Ellis to rescind without penalty.
- Failure to Include Required Notice in Bold, 18-Point Font
- Florida law mandates that an assignment agreement must include a bold, uppercase, 18-point font notice informing the policyholder of the rights they are giving up.
- The contract failed to include this notice, violating § 627.7152(2)(a)6.
- Unlawful Liquidated Damages Provision
- Florida law prohibits assignment agreements from including penalties or fees for cancellation.
- The contract contained a liquidated damages clause, which violated § 627.7152(2)(b)3.
4. Florida Law Declares Non-Compliant Agreements “Invalid and Unenforceable”
Under § 627.7152(2)(d), Fla. Stat. (2021):
“An assignment agreement that does not comply with this subsection is invalid and unenforceable.”
Because the contract failed to comply with multiple statutory requirements, it was unenforceable as a matter of law.
Final Judgment
The Fourth District Court of Appeal reversed the trial court’s grant of summary judgment in favor of Titan, ruling that:
- The contract was an “assignment agreement” under Florida law.
- Because the contract violated statutory requirements, it was invalid and unenforceable.
- Ellis was not liable for breach of contract.
The case was remanded for further proceedings consistent with the ruling.
Key Takeaways: Assignment of Benefits and Florida Property Insurance Law
- An assignment agreement transfers post-loss benefits from a homeowner to a service provider.
- To be valid, an assignment agreement must strictly comply with Florida’s statutory requirements.
- Failure to include a rescission clause, required notices, or compliance with fee prohibitions renders the contract invalid.
- Homeowners cannot be sued for breach of an unenforceable assignment agreement.
This ruling reinforces the importance of strict statutory compliance in assignment of benefits (AOB) agreements and protects homeowners from unlawful contract provisions.