Bill Text: FL S0122 | 2019 | Regular Session | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Insurance Assignment Agreements

Sponsorship: Slight Partisan Bill (Republican 3-1)

Status: (Introduced - Dead) 2019-04-23 - Laid on Table, companion bill(s) passed, see CS/CS/HB 7065 (Ch. 2019-57) [S0122 Detail]

Download: Florida-2019-S0122-Comm_Sub.html

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       Florida Senate - 2019                       CS for CS for SB 122
       
       
        
       By the Committees on Judiciary; and Banking and Insurance; and
       Senators Broxson, Hooper, and Simmons
       
       
       
       
       590-03195-19                                           2019122c2
    1                        A bill to be entitled                      
    2         An act relating to agreements between service
    3         providers and consumers; creating s. 501.172, F.S.;
    4         defining terms; specifying limitations and authorized
    5         provisions relating to a service provider’s right to
    6         payment under certain agreements with consumers under
    7         urgent or emergency circumstances; specifying
    8         requirements, limitations, and prohibited provisions
    9         for agreements containing a post-loss assignment of
   10         benefits; providing that a prevailing party under
   11         certain policies and coverages has the right to
   12         attorney fees and costs; providing that a court need
   13         not determine that there is a prevailing party;
   14         providing factors a court must consider in determining
   15         who is the prevailing party, under certain
   16         circumstances; providing construction relating to
   17         waiver of claims and limitations on recovery;
   18         authorizing a court to order an assignee to pay
   19         attorney fees and costs under certain circumstances;
   20         requiring the court to stay proceedings under certain
   21         circumstances; providing applicability; amending ss.
   22         626.9373 and 627.428, F.S.; providing that attorney
   23         fees under certain provisions of the Florida Insurance
   24         Code may not be awarded to an assignee of post-loss
   25         benefits who is a service provider; providing
   26         applicability; providing an effective date.
   27  
   28         WHEREAS, the Legislature finds that provisions of law
   29  allowing insureds to recover attorney fees in litigation against
   30  their insurers are intended to level the economic playing field
   31  between the economically-advantaged insurance company and the
   32  individual consumer, and
   33         WHEREAS, the award of attorney fees to the individual
   34  consumer under such laws makes the consumer financially whole
   35  and discourages insurance companies from contesting valid
   36  claims, and
   37         WHEREAS, however, the Legislature finds that the increased
   38  use of post-loss assignment of benefits by service providers has
   39  led to a dramatic increase in assignment of benefits litigation,
   40  and
   41         WHEREAS, the Legislature recognizes that additional costs
   42  incurred by insurance companies in contesting assignment of
   43  benefits-related litigation or in paying inflated claims for
   44  insurance proceeds are factored into the rates charged for
   45  property insurance and motor vehicle insurance, and
   46         WHEREAS, the Legislature finds that by explicitly providing
   47  that any right to attorney fees or costs against an insurer by a
   48  service provider must be as provided in this act, the
   49  Legislature is addressing the dramatic increase in assignment of
   50  benefits litigation by nonparties to property insurance policies
   51  and motor vehicle insurance policies for coverage of windshield
   52  damage and the associated increase in insurance premiums that
   53  are experienced by consumers, and
   54         WHEREAS, the Legislature intends to maintain its public
   55  policy of making consumers financially whole and reducing
   56  inequities between consumers and their insurance companies, as
   57  such consumers have the right to obtain attorney fees in civil
   58  actions they bring against their insurers, NOW, THEREFORE,
   59  
   60  Be It Enacted by the Legislature of the State of Florida:
   61  
   62         Section 1. Section 501.172, Florida Statutes, is created to
   63  read:
   64         501.172 Agreements between service providers and
   65  consumers.—
   66         (1) DEFINITIONS.—As used in this section:
   67         (a) “Consumer” means a person who has an interest in, or
   68  who has a right to manage real or personal property, including
   69  improvements upon such property, regardless of whether for
   70  personal or business purposes, including an owner, a tenant, a
   71  licensee, or a property manager.
   72         (b) “Service provider” means a person who enters into an
   73  agreement with a consumer for the stabilization, repair,
   74  improvement, or remediation of real or personal property.
   75         (2) LIMITATION ON AGREEMENTS BETWEEN SERVICE PROVIDERS AND
   76  CONSUMERS UNDER URGENT OR EMERGENCY CIRCUMSTANCES.—
   77         (a) If a consumer acts under urgent or emergency
   78  circumstances to protect property from damage and enters into an
   79  agreement with a service provider to stabilize, protect, repair,
   80  or improve the property, the service provider may only contract
   81  for, receive, or acquire in any manner from the consumer at the
   82  time the right to payment for the work necessary to stabilize,
   83  protect, and prevent additional damage to the property. The
   84  agreement must be in writing and detail, to the extent
   85  reasonable under the circumstances, the work to be performed and
   86  the charges for the services to be provided. The right to
   87  payment may include:
   88         1. A post-loss assignment of benefits under a property
   89  insurance policy or under the comprehensive or combined
   90  additional coverage under a motor vehicle insurance policy for
   91  coverage of windshield damage, executed pursuant to subsection
   92  (3), except that notwithstanding ss. 626.9373 and 627.428, any
   93  right to attorney fees or costs against an insurer by any such
   94  service provider shall be as provided in subsection (4). A
   95  service provider may not receive from a consumer acting under
   96  urgent or emergency circumstances an assignment of post-loss
   97  benefits:
   98         a. Under a property insurance policy, in excess of the
   99  greater of $3,000 or 1 percent of the Coverage A limit under
  100  such policy.
  101         b. Under a motor vehicle insurance policy for comprehensive
  102  or combined additional coverage for windshield damage, in excess
  103  of $500.
  104         2. An acknowledgment of the rights that may exist, if any,
  105  under chapter 713 to make a claim upon the property.
  106         (b) To the extent that an agreement between a consumer and
  107  a service provider purports to provide greater rights to the
  108  service provider under such urgent or emergency circumstances,
  109  including alleged rights to do further repairs, remediation, or
  110  improvements or an assignment of rights, benefits, causes of
  111  action, or other contractual rights in violation of this
  112  subsection, such purported assignment is void.
  113         (3) REQUIREMENTS FOR POST-LOSS AGREEMENTS, INCLUDING THOSE
  114  CONTAINING A POST-LOSS ASSIGNMENT OF BENEFITS.—In all
  115  circumstances, an agreement entered into by a consumer and a
  116  service provider after a loss or damage has occurred to the
  117  consumer’s property must be in writing. The agreement must
  118  detail, to the extent reasonable under the circumstances, the
  119  work to be performed, the charges for the services to be
  120  provided, and the dates by which work on the property will
  121  commence and be completed. The agreement may also provide for
  122  subsequent change orders, subject to the approval by the
  123  consumer and service provider, which must also set forth in
  124  writing the changes to the scope of work and the cost for the
  125  changes to the work. To the extent that the agreement contains a
  126  post-loss assignment of insurance benefits to the service
  127  provider or some third person under a property insurance policy
  128  or under the comprehensive or combined additional coverage under
  129  a motor vehicle insurance policy for coverage of windshield
  130  damage, the purported assignment of benefits is valid only if
  131  all of the following are satisfied:
  132         (a) The consumer or service provider provides a copy of the
  133  agreement to the consumer’s insurer, sent to the location
  134  designated for receipt of such agreements if specified in the
  135  insurance policy, within 3 business days after the agreement’s
  136  execution.
  137         (b) The agreement provides that the consumer may rescind
  138  the agreement by submitting a written notice of rescission which
  139  is signed by the consumer to the service provider within 14 days
  140  after the execution of the agreement, at least 30 days after the
  141  date work on the property is scheduled to commence if the
  142  service provider has not substantially performed, or at least 30
  143  days after the execution of the agreement if the agreement does
  144  not contain a commencement date and the service provider has not
  145  begun substantial work on the property. However, the service
  146  provider retains the right to payment for services performed
  147  pursuant to the agreement before receiving notice of the
  148  rescission.
  149         (c) The agreement does not impose any fee or penalty for
  150  rescinding the agreement, for check processing, for not using a
  151  specified service provider for permanent repairs, or for
  152  mortgage processing.
  153         (d) The agreement does not prevent or inhibit an insurer
  154  from communicating with the consumer at any time.
  155         (e) The agreement, if made under a motor vehicle insurance
  156  policy for comprehensive or combined additional coverage for
  157  windshield damage, does not assign the right to more than $500
  158  in post-loss benefits.
  159         (f) The agreement does not transfer or create any authority
  160  to adjust, negotiate, or settle any portion of a claim to a
  161  person or an entity who is not authorized to adjust, negotiate,
  162  or settle a claim on behalf of the insured or claimant under
  163  part VI of chapter 626.
  164         (g) The agreement does not transfer to the assignee any
  165  greater right to attorney fees and costs from the insurer than
  166  the right to attorney fees and costs as provided for in
  167  subsection (4).
  168         (h) The agreement relates only to work performed or to be
  169  performed by the service provider.
  170         (4) ATTORNEY FEES.—
  171         (a) In a civil action under a property insurance policy or
  172  under the comprehensive or combined additional coverage under a
  173  motor vehicle insurance policy for coverage of windshield
  174  damage, between an insurer and a service provider who obtains an
  175  assignment of post-loss benefits, the prevailing party has the
  176  right to attorney fees and costs from the:
  177         1. Insurer, if the service provider is the prevailing
  178  party.
  179         2. Service provider, if the insurer is the prevailing
  180  party.
  181         (b) The prevailing party is the party which prevails on the
  182  significant issues of the case. The court may determine that
  183  there is no prevailing party in a case. In determining if there
  184  is a prevailing party, the court must consider:
  185         1. The issues litigated;
  186         2. The amount of the claims by the service provider versus
  187  the amount recovered;
  188         3. The existence of setoffs and counterclaims, if any; and
  189         4. The amounts offered by either party to resolve the
  190  issues prior to or during litigation.
  191         (5) LIMITATION ON RECOVERY FROM ASSIGNOR.—An assignee
  192  service provider that accepts an assignment of post-loss
  193  benefits waives any and all claims against a consumer, except as
  194  provided herein. The consumer remains responsible for the
  195  payment of any deductible amount provided for by the terms of
  196  the insurance policy, and for the cost of any betterment ordered
  197  by the consumer. This subsection does not prohibit the assignee
  198  from collecting or attempting to collect money from, maintaining
  199  an action at law against, or claiming a lien on the property of
  200  a consumer or reporting a consumer to a credit agency for
  201  payment of the amount of the insurance deductible, or any amount
  202  attributable to betterment ordered by the consumer. This waiver
  203  is effective notwithstanding any subsequent determination that
  204  the assignment agreement is invalid or the rescission of the
  205  assignment agreement by the consumer.
  206         (6) ACTIONS BASED UPON THE SAME CLAIM AND PARTY PREVIOUSLY
  207  VOLUNTARILY DISMISSED.—If a service provider assignee commences
  208  an action in any court of this state based upon or including the
  209  same claim against the same adverse party that such assignee has
  210  previously voluntarily dismissed in a court of this state, the
  211  court may, as it deems proper, order the assignee to pay the
  212  attorney fees and costs of the adverse party of the action
  213  previously voluntarily dismissed. Upon the issuance of such
  214  order, the court shall stay the proceedings in the subsequent
  215  action until the assignee has complied with the order.
  216         (7) APPLICATION.—This section does not apply to a power of
  217  attorney granted to a management company, family member,
  218  guardian, or similarly situated person which complies with
  219  chapter 709 and which may include, as part of the authority
  220  granted, the authority to act in place of a principal as it
  221  relates to a property insurance or motor vehicle insurance
  222  claim, if such power of attorney is not provided to a service
  223  provider or any person with a personal or financial interest in
  224  the service provider.
  225         Section 2. Section 626.9373, Florida Statutes, is amended
  226  to read:
  227         626.9373 Attorney Attorney’s fees.—
  228         (1) Upon the rendition of a judgment or decree by any court
  229  of this state against a surplus lines insurer in favor of any
  230  named or omnibus insured or the named beneficiary under a policy
  231  or contract executed by the insurer on or after the effective
  232  date of this act, the trial court or, if the insured or
  233  beneficiary prevails on appeal, the appellate court, shall
  234  adjudge or decree against the insurer in favor of the insured or
  235  beneficiary a reasonable sum as fees or compensation for the
  236  insured’s or beneficiary’s attorney prosecuting the lawsuit for
  237  which recovery is awarded.
  238         (2) If awarded, attorney attorney’s fees or compensation
  239  shall be included in the judgment or decree rendered in the
  240  case.
  241         (3) Attorney fees may not be awarded under this section to
  242  an assignee of post-loss benefits who is a service provider
  243  under s. 501.172.
  244         Section 3. Section 627.428, Florida Statutes, is amended to
  245  read:
  246         627.428 Attorney fees Attorney’s fee.—
  247         (1) Upon the rendition of a judgment or decree by any of
  248  the courts of this state against an insurer and in favor of any
  249  named or omnibus insured or the named beneficiary under a policy
  250  or contract executed by the insurer, the trial court or, in the
  251  event of an appeal in which the insured or beneficiary prevails,
  252  the appellate court shall adjudge or decree against the insurer
  253  and in favor of the insured or beneficiary a reasonable sum as
  254  fees or compensation for the insured’s or beneficiary’s attorney
  255  prosecuting the suit in which the recovery is had.
  256         (2) As to suits based on claims arising under life
  257  insurance policies or annuity contracts, no such attorney fees
  258  attorney’s fee shall be allowed if such suit was commenced prior
  259  to expiration of 60 days after proof of the claim was duly filed
  260  with the insurer.
  261         (3) When so awarded, compensation or fees of the attorney
  262  shall be included in the judgment or decree rendered in the
  263  case.
  264         (4) Attorney fees may not be awarded under this section to
  265  an assignee of post-loss benefits who is a service provider
  266  under s. 501.172.
  267         Section 4. Section 501.172, Florida Statutes, as created by
  268  this act, and the amendments made by this act to ss. 626.9373
  269  and 627.428, Florida Statutes, apply to actions pending on or
  270  after July 1, 2019, to the extent that the act does not require
  271  the invalidation of any provision of a contract executed before
  272  July 1, 2019.
  273         Section 5. This act shall take effect July 1, 2019.