Bioscience West, Inc. v. Gulfstream Property & Casualty Insurance Co.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED

IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT

BIOSCIENCE WEST, INC., a/a/o )
Elaine Gattus, )
)
Appellant, )
)
v. ) Case No. 2D14-3946
)
GULFSTREAM PROPERTY AND )
CASUALTY INSURANCE CO., )
)
Appellee. )
)

Opinion filed February 5, 2016.

Appeal from the Circuit Court for Polk
County; Wayne M. Durden, Judge.

Susan W. Fox of Fox & Loquasto, P.A.,
Orlando; and T.J. Monaghan of Cohen
Battisti, Winter Park, for Appellant.

Andrew A. Labbe of Groelle & Salmon,
P.A, Tampa, for Appellee.

BADALAMENTI, Judge.

Appellant Bioscience West, Inc., ("Bioscience") appeals a final order

granting summary judgment to Appellee Gulfstream Property and Casualty Insurance

Company ("Gulfstream"). The circuit court held that Gulfstream's insured, Elaine
Gattus, was precluded from assigning the benefits of her homeowner's insurance to

Bioscience, an emergency water mitigation company, without first receiving

Gulfstream's consent. After de novo review and oral argument, we reverse. We hold

that: (1) the plain language of the insurance policy merely prohibited the insured's

unilateral assignment of the entire policy, not a financial benefit derived from that policy;

and (2) Florida law prohibits an insurer from restricting an insured's unilateral post-loss

assignment of a benefit derived from that policy.

Ms. Gattus purchased homeowner's insurance from Gulfstream, a

property and casualty company. The insurance policy contained a provision limiting the

assignment "of this policy" without Gulfstream's written consent.

Ms. Gattus's home subsequently suffered water damage. She hired

Bioscience to perform "emergency water removal and construction services" on her

home. In exchange for Bioscience's services, Ms. Gattus executed a document entitled,

"Assignment of Insurance Benefits," authorizing Bioscience to directly bill, and receive

payment from, Gulfstream for its mitigation services for any "benefits or proceeds to

[Ms. Gattus's] property" as follows:

I hereby assign any and all insurance rights, benefits, and
proceeds pertaining to services provided by BIOSCIENCE
WEST INC. under the above referenced policy to
BIOSCIENCE WEST, INC. I hereby authorize direct payment
of any benefits or proceeds to my property . . . , as
consideration for any repairs made by BIOSCIENCE
WEST, INC.

Ms. Gattus subsequently filed an insurance claim with Gulfstream.

Gulfstream thereafter denied Ms. Gattus's claim, concluding that the claimed damages

were not covered by the policy. Bioscience, as an assignee of the right to recover a

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benefit under Ms. Gattus's home insurance policy, filed a breach of contract suit against

Gulfstream based on Gulfstream's denial of insurance coverage. Gulfstream moved for

summary judgment, which the circuit court granted. The circuit court reasoned that

Florida law and the terms set forth in the insurance policy prohibited the assignment of

benefits "without the consent of the insurer," which Ms. Gattus had never received from

Gulfstream. Next, the circuit court reasoned that any "assignment improperly purports

to transfer the right or privilege to adjust the claim to Plaintiff."

We review de novo both an appeal of a summary judgment order and an

interpretation of an insurance policy. Jyurovat v. Universal Prop. & Cas. Ins. Co., 84

So. 3d 1238, 1241 (Fla. 2d DCA 2012). "In interpreting an insurance contract, we are

bound by the plain meaning of the contract's text." State Farm Mut. Auto. Ins. Co. v.

Menendez, 70 So. 3d 566, 569 (Fla. 2011). We "may consult references" such as

dictionaries to discern the plain meaning of an insurance policy's language. Garcia v.

Fed. Ins. Co., 969 So. 2d 288, 292 (Fla. 2007). "If the language used in an insurance

policy is plain and unambiguous, a court must interpret the policy in accordance with the

plain meaning of the language used so as to give effect to the policy as it was written."

Menendez, 70 So. 3d. at 569-70 (quoting Travelers Indem. Co. v. PCR Inc., 889 So. 2d

779, 785 (Fla. 2004)). We construe an insurance contract as a whole, "endeavoring to

give every provision its full meaning and operative effect." Fla. Peninsula Ins. Co. v.

Cespedes, 161 So. 3d 581, 584 (Fla. 2d DCA 2014) (quoting Washington Nat'l Ins.

Corp. v. Ruderman, 117 So. 3d 943, 948 (Fla. 2013)).

"All contractual rights are assignable unless the contract prohibits

assignment, the contract involves obligations of a personal nature, or public policy

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dictates against assignment." One Call Prop. Servs. Inc. v. Sec. First Ins. Co., 165 So.

3d 749, 752 (Fla. 4th DCA 2015) (quoting Kohl v. Blue Cross & Blue Shield of Fla., Inc.,

988 So.2d 654, 658 (Fla. 4th DCA 2008)). "Once an assignment has been made, 'the

assignor no longer has a right to enforce the interest because the assignee has

obtained all the rights to the thing assigned.' " Id. at 752 (quoting Cont'l Cas. Co. v.

Ryan Inc. E., 974 So. 2d 368, 376 (Fla. 2008)).

Bioscience argues that the insurance policy's plain language merely

prohibits an insured's assignment of the entire policy without Gulfstream's consent, but

that it does not an insured's unilateral assignment of a benefit derived from the policy.

We agree. The Assignment provision of the insurance policy states: "Assignment.

Assignment of this policy will not be valid unless we give our written consent." (Bold in

original, underline emphasis added).

Assignment is defined as "a transfer of rights or property." Assignment,

Black's Law Dictionary (9th ed. 2009). Indeed, our supreme court has explained that an

assignment generally refers to "a voluntary act of transferring an interest." Ryan Inc. E.,

974 So. 2d at 376 (quoting DeCespedes v. Prudence Mut. Cas. Co., 193 So. 2d 224,

227 (Fla. 3d DCA 1966)). An assignment, then, is defined as a voluntary act of

transferring a right or an interest.

Having established the meaning of "assignment," we now turn to deriving

the plain meaning of the remainder of the phrase "assignment of this policy." In

ordinary parlance, one would use the phrase "assignment of this policy" to refer to the

entire policy, not something less than the entire policy, such as assignment of the

financial proceeds derived from a benefit of the policy. See Sable Cove Condo. Ass'n v.

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Owners Ins. Co., 14-CV-00912-MJW, 2014 WL 4398668, at *3 (D. Colo. Sept. 5, 2014).

Our interpretation of the insurance policy's clear and unambiguous language yields the

conclusion that Ms. Gattus was contractually prohibited from transferring her interest in

the entire policy to Bioscience without first receiving Gulfstream's permission.

Gulfstream does not and cannot argue that the entire policy was

unilaterally transferred from Ms. Gattus to Bioscience, which would have been void

under the language of the policy's anti-assignment clause. Instead, it is clear that Ms.

Gattus merely assigned to Bioscience the "insurance rights, benefits, and proceeds

pertaining to services provided by" the policy in consideration for Bioscience's

emergency mitigation services and authorization to directly bill and to be directly paid by

Gulfstream. (Emphasis added). Stated differently, it was a post-loss assignment of a

benefit under the policy to Bioscience, namely a right to seek payment for the mitigation

services it rendered under the policy, not an assignment of "this policy" issued by

Gulfstream to Bioscience. See Peck v. Pub. Serv. Mut. Ins. Co., 114 F. Supp. 2d 51, 56

(D. Conn. 2000) ("An assignment before a loss involves a transfer of a contractual

relationship, whereas an assignment after a loss is the transfer of a right to a money

claim." (citing 3 Couch on Insurance § 35.7 (3d ed. 1999))).

A review of the "loss-payment" provision provides support for our

interpretation that the "Assignment" provision of the insurance policy was not intended

to apply to assignments of benefits derived from the policy but instead to assignments

of the entire policy. See Cespedes, 161 So. 3d at 584 (noting construction of an

insurance contract as a whole). Specifically, an examination of the loss-payment

provision demonstrates that Gulfstream contemplated the need to pay third parties who

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were "legally entitled" as follows: "[Gulfstream] will pay you unless some other person . .

. is legally entitled to receive payment." (Emphasis added). In sum, Gulfstream

anticipated the need to pay those "legally entitled to receive payment" under the policy,

which, pursuant to Ms. Gattus's "Assignment of Insurance Benefits" agreement with

Bioscience, entitled Bioscience to receive any payments due under the policy. Thus,

there is no contractual language restricting the post-loss assignment of benefits under

"this policy" without Gulfstream's consent.

Gulfstream argues that the assignment of benefits to Bioscience violates

section 626.854(16), Florida Statutes (2012), a public adjusting statute. Specifically,

Gulfstream contends that the assignment to Bioscience, a mitigation contractor,

impermissibly adjusted the insurance claim here, which is contrary to that statute's

mandate. First, there is no record evidence that Bioscience adjusted Ms. Gattus's

insurance claim for Gulfstream. The record before us demonstrates that Bioscience

provided emergency, post-loss water removal services to Ms. Gattus's home at her

request. It did not determine the amount due under the policy.

Even more, the text of section 626.854(16) expressly permits a contractor,

like Bioscience, to "discuss or explain a bid for construction or repair of covered

property with the residential property owner who has suffered loss or damage covered

by a property insurance policy" if that contractor "is doing so for the usual and

customary fees applicable to the work to be performed as stated in the contract

between the contractor and the insured." A review of the record reveals that Bioscience

appropriately discussed the water loss repair with Ms. Gattus and was retained to make

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those repairs. We thus reject Gulfstream's argument that assignment of benefits

contravenes section 626.854(16) under the facts and circumstances of this case.

Gulfstream further contends that the assignment of benefits to Bioscience

violates section 627.405, Florida Statutes (2012), because Bioscience, an assignee,

does not have an "insurable interest" in "the things at the time of the loss." Section

627.405(1) states as follows: "No contract of insurance of property or of any interest in

property or arising from property shall be enforceable as to the insurance except for the

benefit of persons having an insurable interest in the things insured as at the time of the

loss." It is true that Bioscience did not have an insurable interest at the time of the loss.

Ms. Gattus, however, did have an insurable interest at the time of the loss. Ms. Gattus,

the insured/assignor, then assigned her vested insurable interest by the post-loss

execution of the assignment of benefits to Bioscience, permitting Bioscience to step into

Ms. Gattus's shoes. See United Water Restoration Grp., Inc.. v. State Farm Ins. Co.,

173 So. 3d 1025, 1027 (Fla. 1st DCA 2015) ("The assignee stands in the shoes of the

assignor and is able to maintain suit in its own name as the real party in interest, 'that is

the person in whom rests by substantive law, the claim to be enforced.' " (quoting Weiss

v. Johansen, 898 So. 2d 1009, 1011 (Fla. 4th DCA 2005))); Accident Cleaners, Inc. v.

Universal Ins. Co., 40 Fla. L. Weekly D862, D863 (Fla. 5th DCA Apr. 10, 2015) ("We

therefore construe section 627.405 to require the property owner who holds the policy to

have an insurable interest at the time of loss. The property owner's insurable interest is

imputed to the post-loss assignee."). This is because the right to insurance benefits

generally matures as soon as the loss materializes. Cf. Williams v. Auto Owners Ins.

Co., 779 So. 2d 563, 565 (Fla. 2d DCA 2001) (quoting Counihan v. Allstate Ins. Co., 25

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F.3d 109, 113 (2d Cir. 1994)). Furthermore, our court has recently noted that the "loss-

payment provision of the policy did not render the suit premature; indeed, that provision

expressly contemplated that there might be a final judgment — presumably stemming

from a lawsuit — before payment was due." Curtis v. Tower Hill Prime Ins. Co., 154 So.

3d 1193, 1196 (Fla. 2d DCA 2015). As such, we reject Gulfstream's interpretation of

section 627.405 as well.

Even if an insurance policy contained a specific, articulate provision

precluding an insured's post-loss assignments of benefits without the insurer's consent,

Florida case law yields deep-rooted support for the conclusion that post-loss

assignments do not require an insurer's consent. 1 See One Call Prop. Servs. Inc., 165

So. 3d at 755 ("Even when an insurance policy contains a provision barring assignment

of the policy, an insured may assign a post-loss claim."). Nearly 100 years ago, the

Florida Supreme Court recognized that provisions in an insurance policy requiring

consent to assignment of that policy do not apply to assignments after a loss. W. Fla.

Grocery Co. v. Teutonia Fire Ins. Co., 77 So. 209, 210-11 (Fla. 1917) ("The policy was

assigned after loss, and it is a well-settled rule that the provision in a policy relative to

the consent of the insurer to the transfer of an interest therein does not apply to an

assignment after loss."). This principle was reaffirmed in 1998, when our supreme court

explained that "an insured may assign insurance proceeds to a third party after a loss,

even without the consent of the insurer." Lexington Ins. Co. v. Simkins Indus., Inc., 704

So. 2d 1384, 1386 n.3. (Fla. 1998).

1Florida stands apart from a minority of jurisdictions that permit an insurer
to contractually restrict its insured's post-loss assignment without the insurer's consent.
See, e.g., In re Katrina Canal Breaches Litig., 63 So. 3d 955, 962-63 (La. 2011).

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 As the First District recently observed, "[o]n this point we find an unbroken

string of Florida cases over the past century holding that policyholders have the right to

assign such [post-loss] claims without insurer consent." Sec. First Ins. Co. v. State,

Office of Ins. Regulation, 40 Fla. L. Weekly D1449, D1449 (Fla. 1st DCA June 22,

2015). We agree and hold that post-loss insurance claims are freely assignable without

the consent of the insurer. Id. (holding that post-loss insurance claims are assignable

without the consent of the insurer); One Call Prop. Servs. Inc., 165 So. 3d at 755

(same); Accident Cleaners, Inc., 40 Fla. L. Weekly at D863 ("Dating back to 1917, the

Florida Supreme Court recognized that provisions in insurance contracts requiring

consent to assignment of the policy do not apply to assignment after loss."); Citizens

Prop. Ins. Corp. v. Ifergane, 114 So. 3d 190, 195 (Fla. 3d DCA 2012) ("Post-loss

insurance claims are freely assignable without the consent of the insurer.").

Gulfstream's policy concern that post-loss assignments may allow

subcontractors, like Bioscience, to influence the adjustment process is misplaced. First,

any such influence obviously did not prevent Gulfstream from denying Ms. Gattus

coverage, an option available to any insurer if done in good faith. Second, it is

imprudent to place insured parties in the untenable position of waiting for the insurance

company to assess damages any time a loss occurs. Repairing a home after an

unexpected loss event is often a time-sensitive procedure. An insured simply cannot

afford to wait for an insurance claim to be adjusted to address that loss, and insurance

benefits represent the most ready means of paying for post-loss emergency repairs.

We are mindful that there are competing policy considerations here.

These policy considerations are for the legislature to decide, not our court. We

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therefore reverse the order granting summary judgment in favor of Gulfstream and

remand for further proceedings.

Reversed; remanded for proceedings consistent with this opinion.

NORTHCUTT and KHOUZAM, JJ., Concur.

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