The Florida Court of Appeal upheld an assignment of benefits provision that required signatures of all insureds and mortgagees. Restoration 1 of Port St. Lucie v. Ark Royal Ins. Co., 2018 Fla. App. LEXIS 12633 (Fla. Ct. App. Sept. 5, 2018).
Ark Royal issued a homeowner's policy to the insureds. The policy stated that "[n]o assignment of claim benefits, regardless of whether made before a loss or after a loss, shall be valid without the written consent of the insureds, and all mortgagee(s) named in this policy."
The insureds' home suffered water damage. The insureds contacted Restoration 1 to provide cleanup services and signed an agreement assigning to Restoration 1 "any and all insurance rights, benefits, proceeds and any cause of action under any applicable insurance policies." The cleanup was completed by Restoration 1 and it submitted a claim to Ark Royal for $20,305.74. Ark Royal refused to pay the full amount of the claim, stating it was unable to recognize the assignment because it did not have all of the required signatures.
Restoration 1 sued Royal Ark for breach of contract and sought a declaratory judgment determining that a clause requiring the signatures of all insureds and mortgagees for an assignment contravened Florida public policy. Ark Royal moved to dismiss. The trial court granted the motion because the assignment failed to comply with the policy's requirements.
On appeal, the appellate court recognized that the consent to assignment provision in policies did not apply to an assignment after loss. But a significant difference existed between requiring the insurer's consent and requiring the consent of the insureds and mortgagees. The contract here did not prohibit assignment. It imposed a condition, requiring the approval of all insureds and the mortgagee. This restriction did not conflict with the public interest. Therefore, the trial court's granting of the motion to dismiss was affirmed.
