Download PDF

News & Events

Fort Lauderdale Attorneys Granted Motion to Dismiss On Assignment of Benefits Case

Florida has an expansive body of case law dating back more than 100 years, which holds that an insured is free to assign any or all post-loss benefits to a third party pursuant to an assignment of benefits (“AOB”). In recent years, several carriers have tried to challenge this position by including anti-assignment provisions in their policies. The courts, however, repeatedly declined to enforce those exclusions, relying upon Florida’s long history of allowing post-loss AOBs. Importantly, each of those challenges were brought by carriers conducting business in Florida on an admitted basis.

Recently, Litchfield Cavo LLP was retained by a national insurance company to defend them against a coverage action brought by a remediation service contractor in the U.S. District Court for the Southern District of Florida. Specifically, the remediation contractor received an AOB from our client’s insured, and responded by submitting its invoice to our client demanding payment. Our client declined to recognize the AOB or pay the invoice, stating that its policy has an anti-AOB exclusion. Notably, the exclusion had previously been drafted by our attorneys on our client’s behalf more than two years earlier.

Litchfield Cavo’s Fort Lauderdale attorneys Jason M. Chodos and Dana B. Kuczynski filed a motion to dismiss on behalf of our client arguing, in part, that the client is a surplus lines carrier and therefore not subject to the same restrictions as admitted carriers. As such, Jason and Dana argued that our client was free to include an anti-AOB exclusion on its policy.

The Southern District entered an order and final judgment on September 28, 2020, granting our attorneys’ motion and finding the exclusion enforceable. This is the first time in Florida that a court has upheld a straight, anti-AOB exclusion contained within an insurance policy. Additionally, this ruling has the strong potential to effectively change more than 100 years of legal precedent in Florida regarding the enforceability of AOBs in the state.

Our attorneys represent insurers in first-party property insurance coverage matters including commercial, homeowner’s, apartment and condominium properties and possess extensive experience litigating, business interruption claims and bad faith claims under first-party property policies as well as COVID-19 claims. Our attorneys provides coverage advice to insurers concerning commercial general liability matters and claims arising under such policies.