AIR QUALITY EXPERTS CORPORATION a/a/o BRIAN GERARD and TRICIA GERARD v. FAMILY SECURITY INSURANCE COMPANY ( 2022 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
AIR QUALITY EXPERTS CORPORATION,
(a/a/o Brian and Tricia Gerard),
Appellant,
v.
FAMILY SECURITY INSURANCE COMPANY,
Appellee.
No. 4D21-2516
[October 12, 2022]
Appeal from the County Court for the Fifteenth Judicial Circuit, Palm
Beach County; John J. Parnofiello, Judge; L.T. Case No. 50-2020-SC-
020899-XXXX-MB.
Yasmin Gilinsky, Christopher Tuccitto and James D. Underwood of
Florida Advocates, Dania Beach, for appellant.
Ailene S. Rogers and Dan Hallenberg of Peterson Bernard, Fort
Lauderdale, for appellee.
WARNER, J.
An assignee under a homeowners’ property insurance assignment of
benefits appeals a final summary judgment in favor of the insurer. The
judgment determined that the assignment of benefits did not comply with
section 627.7152(2)(a)4., Florida Statutes (2020), rendering it “invalid and
unenforceable” under the statute. The assignee claims that the
assignment complied with that section, and under traditional contractual
assignment principles, the insurer cannot challenge its validity as it is not
a party to the contract. We affirm, concluding that this assignment did
not comply with the statutory provision, because it failed to “[c]ontain a
written, itemized, per-unit cost estimate of the services to be performed by
the assignee.” § 627.7152(2)(a)4., Fla. Stat. (2020). Further, the insurer
can challenge the assignment based upon the statute expressly declaring
an assignment not in compliance with its terms to be invalid.
Facts
Homeowners, who were insured through appellee insurer, suffered a
covered water damage loss and signed an assignment of benefits contract
(“AOB”) with assignee for mold remediation. The AOB included a
“Description of Project” paragraph that stated:
Customer desires to and does hereby engage AQE to provide
services and submit invoices for services performed. AQE
agrees to furnish and the customer agrees to pay for all of the
equipment, supplies, materials, and labor necessary for the
PROJECT, at the PROJECT address listed above. See
Standard Price List below. Prices indicated on the Standard
Price List may vary and are subject to change depending on the
property conditions and services provided. The scope of work
is based on third party protocol and industry standards.
(Emphasis added). The assignment then set forth a “price list” for mold
assessment and “price list” for post remediation assessment in the next
two paragraphs that set forth a category of service and the price per room,
unit, sample or report issued. 1
The assignee performed services and submitted two bills to the insurer.
Both bills listed a few of the services from the price list, a “quantity”
number which varied, the unit cost, and the total cost.
When the insurer did not pay the bills, the assignee filed suit, attaching
the AOB contract and the two invoices to its statement of claim. The
insurer then filed a motion to dismiss with prejudice, arguing among other
things that the assignee failed to allege compliance with section 627.7152.
The assignee filed an amended statement of claim alleging compliance and
1 9. PRICE LIST FOR MOLD ASSESSMENT
1. Visual Inspection of Arca/ Digital Photography $20.00 (per room).
2. FLIR Assessment of Area/ Moisture Readings $ 40.00 (per room).
3. Visual Inspection of HVAC Unit/ Digital Photography $ 75.00 (per unit).
4. Surface Sample/ Lab Results $ 95.00 (per sample).
5. Air Sample/ Lab Results $ 95.00 (per sample).
6. Report I Protocol $150.00 (per report issued).
10. PRICE LIST FOR POST REMEDIATION ASSESSMENT
1. Visual Inspection of Area/ Digital Photography $20.00 (per room).
2. Surface Sample/ Lab Results $ 95.00 (per sample).
3. Air Sample/ Lab Results $ 95.00 (per sample).
4. Clearance Report $150.00 (per report issued).
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included an assertion that it was entitled to an equitable assignment of
benefits.
The insurer filed a motion to dismiss the amended statement of claim
with prejudice. The insurer argued that the amended statement of claim
on its face failed to meet the requirements of section 627.7152(2)(a)4.,
which provides: “[a]n assignment agreement must . . . [c]ontain a written,
itemized, per-unit cost estimate of the services to be performed by the
assignee. (Emphasis added). The insurer further argued that lack of
compliance prevented enforcement of the assignment, citing section
627.7152(2)(d), which states: “An assignment agreement that does not
comply with this subsection is invalid and unenforceable.”
The insurer maintained that the price lists attached to the AOB did not
satisfy the provisions of the statute. Therefore, the insurer argued that
the assignment was “invalid and unenforceable” pursuant to section
627.7152(2)(d). Accordingly, the insurer claimed that the assignee lacked
standing, and that the complaint should be dismissed with prejudice.
The assignee filed a response contending that the price list in the
assignment was sufficient to meet the requirements of the statute. In
addition, the assignee argued that the insurer did not have the authority
to challenge the validity of the assignment on two bases: (1) if the
assignment is invalid pursuant to section 627.7152(2)(a)4., then the
assignment was voidable rather than void and the insurer as an obligor of
the claim “cannot seek to invalidate the assignment”; and (2) the insurer
was not a party to the assignment or in privity of contract with the assignee
and thus lacked standing to challenge the assignment’s validity.
The trial court granted the motion to dismiss with prejudice. In the
order of dismissal, the court concluded that the assignment did not comply
with the statute, as the assignment did not include an estimate of services
to be performed; rather, it listed what services could be performed. The
court also found that the insurer could raise the invalidity of the
assignment despite a lack of privity between the parties because of the
mandatory nature of section 627.7152’s requirements, the absence of
which made the assignment invalid. After its motion for rehearing was
denied, the assignee brought this appeal of the order of dismissal.
Standard of Review
The standard of review of an order granting a motion to dismiss is de
novo. Rhiner v Koyama, 327 So. 3d 314, 316 (Fla. 4th DCA 2021).
Statutory interpretation and standing also receive de novo review.
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Therlonge v. State, 184 So. 3d 1120, 1121 (Fla. 4th DCA 2015) (statutory
interpretation); Matthews v. Fed. Nat’l Mortg. Ass’n, 160 So. 3d 131, 132
(Fla. 4th DCA 2015) (standing).
Violation of Section 627.7152(2)(a)4.
The trial court found that paragraph 9 of the assignment detailing a
price listing for services that “could be performed, absent some indicator
of what services actually are estimated to be performed,” did not comply
with section 627.7152(2)(a)4. The assignee contends that the trial court
erred, because the AOB included a written, itemized, per-unit cost
estimate of the services to be performed.
On a motion to dismiss, a complaint’s allegations “must be taken as
true and all reasonable inferences therefrom construed in favor of the
nonmoving party.” Gann v. BAC Home Loans Servicing LP, 145 So. 3d 906,
908 (Fla. 2d DCA 2014) (quoting Fla. Bar v. Greene, 926 So. 2d 1195, 1199
(Fla. 2006)). “Any exhibit attached to a pleading must be considered a part
of the pleading for all purposes[.]” Fla. R. Civ. P. 1.130(b). “[I]f an attached
document negates a pleader’s cause of action, the plain language of the
document will control.” Striton Prop., Inc. v. City of Jacksonville Beach, 533
So. 2d 1174, 1179 (Fla. 1st DCA 1988); see also K.R. Exch. Serv., Inc. v.
Fuerst, Humphrey, Ittleman, PL, 48 So. 3d 889, 894 (Fla. 3d DCA 2010) (“It
is well settled that the court must consider an exhibit attached to the
complaint together with the complaint’s allegations, and that the exhibit
controls when its language is inconsistent with the complaint’s
allegations.”); The Kidwell Grp., LLC v. United Prop. & Cas. Ins. Co., 343 So.
3d 97, 98 (Fla. 4th DCA 2022) (same). Thus, we must look at the AOB
itself to determine whether it complies with the statute.
Section 627.7152 establishes mandatory requirements which an AOB
must include to be enforceable. One of those requirements at issue here
is that it must “[c]ontain a written, itemized, per-unit cost estimate of the
services to be performed by the assignee.” § 627.7152(2)(a)4., Fla. Stat.
(2020). We have held that “the statute’s plain language requires that at
the time the assignment of benefits is signed, the assignor must be
provided with a list of the itemized services to be performed by the
assignee, as well as the costs thereof.” Kidwell Grp., 343 So. 3d at 97.
Attached to the AOB in this case was not a list of itemized services to
be performed. Instead, a price list of the types of services offered by the
assignee with the services’ unit price was attached. A “price list” is plainly
not a “written, itemized, per-unit cost estimate.” See § 627.7152(2)(a)4.,
Fla. Stat. (2020). Furthermore, the AOB never described the project, nor
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did it provide an estimate. While many of the services were apparently
charged per room, nowhere are the number of rooms involved in the
inspection even mentioned. Moreover, the price list was not created
specifically to set forth the cost of services for this insured, as is evident
from the language used in the AOB identifying the price list:
See Standard Price List below. Prices indicated on the
Standard Price List may vary and are subject to change
depending on the property conditions and services provided.
The scope of work is based on third party protocol and
industry standards.
Thus, the prices did not apprise the insured of the actual estimate for
performing any work, as the prices were also dependent on the scope of
work based upon unexplained standards.
Rather than providing an estimate of the work or services “to be”
performed as required by the statute, the price list was simply a menu of
services, or, as it is identified by assignee, a “price list” of work or services
that could be performed. Accordingly, the trial court correctly found,
looking at only the four corners of the amended claim and its exhibits, that
the AOB violated section 627.7152(2)(a)4.
Standing
The assignee claims, however, that even if the AOB violated the
statutory provisions, the insurer has no standing to contest its invalidity.
“Standing is a legal concept that requires a would-be litigant to
demonstrate that he or she reasonably expects to be affected by the
outcome of the proceedings, either directly or indirectly.” Hayes v.
Guardianship of Thompson, 952 So. 2d 498, 505 (Fla. 2006). “Thus,
standing to bring or participate in a particular legal proceeding often
depends on the nature of the interest asserted.” Id. The insurer turns the
standing issue around to state that it is the assignee who lacks standing
to sue, because it cannot as a matter of law enforce an assignment violative
of the statute. We agree with the insurer.
Section 627.7152(2)(d) provides that an assignment which does not
comply with the terms of the statute is “invalid and unenforceable.”
Because the assignment failed to comply with the statute, it is invalid.
Therefore, the assignee cannot attempt to enforce any claim to insurance
proceeds based upon an invalid assignment.
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While general contracts are assignable, the general rule does not apply
when the assignment violates a statute. Gables Ins. Recovery, Inc. v.
Citizens Prop. Ins. Corp., 261 So. 3d 613, 619 (Fla. 3d DCA 2018) (citing
Hall v. O’Neil Turpentine Co., 56 Fla. 324, 47 So. 609, 612 (1908); see also
Park v. Wausau Underwriters Ins. Co., 547 So. 2d 213, 215 (Fla. 4th DCA
1989) (noting the general rule that where a contract is violative of a statute
or public policy it will not be enforced by the courts). In Gables, the court
held that an assignment of benefits contract between an insured and
public adjuster was invalid and unenforceable in a suit by the assignee
public adjuster against the insurer, because the compensation to the
assignee exceeded the amount allowed pursuant to statute. 261 So. 3d at
627. The statute in question in Gables stated that a public adjuster’s fee
could not exceed twenty percent of the amount of an insurance claim. Id.
at 617. The statute did not state that any contract would be invalid and
unenforceable. Nevertheless, because the assignment violated the statute,
the court held that the assignment was unenforceable and allowed
Citizens to assert the assignee’s lack of standing because of its invalidity.
Id. at 627.
In this case, the Legislature specifically provided that the penalty for
failure to comply with the statutory provisions was the invalidity and
unenforceability of the AOB. See § 627.7152(2)(d), Fla. Stat. (2020).
Consistent with Gables, this AOB is unenforceable in this action.
The assignee cites to a federal district court case that denied a motion
to dismiss a complaint filed by an assignee under an AOB that did not
comply with the provisions of section 627.7152(2). In SFR Servs., L.L.C. v.
Indian Harbor Ins. Co., 529 F. Supp. 3d 1285, 1295-96 (M.D. Fla. 2021),
the court concluded that the meaning of the statute’s terms “invalid and
unenforceable” to describe an assignment which did not comply with the
statutory terms was not clear and thus the court would not determine the
issue on a motion to dismiss. We are not bound by a federal district court
ruling. Pignato v. Great W. Bank, 664 So. 2d 1011, 1015 (Fla. 4th DCA
1995).
SFR did not cite to any Florida law when it stated that a statute may
declare a contract “void,” but instead mean that it is “voidable.” 529 F.
Supp. 3d at 1293-94. Indeed, we can find no such law. The SFR court
also noted that the Legislature did not use the word “void” but “invalid.”
Id. While the definitions of “void” and “invalid” are distinct, they are not
substantially different. “Void” means “of no legal effect,” while “invalid”
means “not legally binding.” Black’s Law Dictionary (11th ed. 2019).
Whether the contract is of no legal effect or is not legally binding, it is
unenforceable. As we must apply the plain meaning of a statute, the
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Legislature has precluded the enforcement of an AOB which does not
include the mandatory statutory requirements.
The assignee contends that the insurer cannot raise the invalidity of
the assignment, because it is not a party to the assignment, relying on
Lugassy v. Independent Fire Insurance Co., 636 So. 2d 1332 (Fla. 1994),
and similar cases for support. In Lugassy, the supreme court found that
an insurer could not argue lack of consideration regarding an insured’s
contract with the insured’s attorney, since the insurer was neither a party
to the contract nor a third-party beneficiary. Id. at 1335.
Lugassy did not involve a contract that the statute declares invalid. See
Park, 547 So. 2d at 215. Here the statute expressly declares an
assignment violative of its requirements is “invalid and unenforceable”,
precluding its enforcement by courts. § 627.7152(2)(d), Fla. Stat. (2020).
As the assignee’s right to sue the insurance company derives from an
invalid document, the courts cannot enforce it.
Because the contract violated the statutory provisions and was thus
unenforceable, we also reject the assignee’s claim that the contract could
be considered an equitable assignment, as this would improperly
circumvent the clear statutory requirements. See Hull & Co., Inc. v.
Thomas, 834 So. 2d 904, 907 (Fla. 4th DCA 2003).
We also decline the assignee’s request to further amend its complaint.
Not only did the assignee not request that relief in the trial court, but we
also conclude that any amendment would be futile. See Progressive
Express Ins. Co. v. McGrath Cmty. Chiropractic, 913 So. 2d 1281, 1286 (Fla.
2d DCA 2005) (stating that the relation back of amendments “does not
permit a party to establish the right to maintain an action retroactively by
acquiring standing to file a lawsuit after the fact”).
Conclusion
An AOB contract must comply with section 627.7152 to be enforceable.
Where an AOB contains only a general price list and not an estimate of the
services to be performed, the AOB does not comply with the statute. An
assignee under a noncomplying AOB cannot enforce the contract because
the Legislature has specifically stated that such contracts are invalid and
unenforceable.
We thus affirm the order of dismissal.
CIKLIN and ARTAU, JJ., concur.
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* * *
Not final until disposition of timely filed motion for rehearing.
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