JOHN BROWN and GEORGENE BROWN v. OMEGA INSURANCE COMPANY

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

JOHN BROWN and GEORGENE BROWN,
Appellants,

v.

OMEGA INSURANCE COMPANY,
Appellee.

No. 4D20-563

[May 26, 2021]

Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; John S. Kastrenakes, Judge; L.T. Case No. 50-2018-CA-
010137-XXXX-MB.

Earl I. Higgs, Jr. of Higgs Law, P.A., Orlando, for appellants.

Scot Samis of Traub Lieberman Straus & Shrewsberry LLP, St.
Petersburg, for appellee.

WARNER, J.

The trial court granted summary judgment in appellants’ breach of
contract claim against their insurance company, concluding that an
assignment of benefits (“AOB”) agreement appellants had signed with a
contractor divested them of standing to sue appellee insurance company.
We reverse, as the AOB contract did not divest the insureds’ standing
where it applied to work that the contractor performed or would perform,
and where the contractor had performed no work under the contract.

Appellants’ home was insured through appellee Omega Insurance
Company (“insurer”). After suffering water damage to the residence,
appellants contracted with Oasis Builders LLC, known as ERG, to perform
the repairs on the home. The assignment of benefits terms were as follows:

The undersigned property Owner [appellants’ names
handwritten] (hereafter referred to as “Owner” hereby
authorize and direct [ERG] (hereafter referred to as
“Contractor”) to proceed to make repairs at the property . . .
and to perform the work set forth in the attached estimate or
 approved insurance estimate. Contractor shall only be
obligated to perform work to the extent that the scope of work
is approved by the adjustor for the insurance carrier. The
amount to be paid is $ [blank line] (Insurance claim estimate.
Plus/minus any change orders requested by home owner)[.]
Should the insurance carrier fail to approve the estimate or
any part thereof and should work by Contractor have already
begun, than ] in such event the Owner shall be fully
responsible for all monies due to Contractor for work
performed with approved change order. . . .

The insurance carrier is [handwritten “OMEGA”] (herein after
referred to as Insurer) and Owner here by irrevocably assigns
to Contractor any and all right, title and/or interest in the
insurance proceeds for the work performed or to be performed
by Contractor. Owner further agrees to execute and deliver
to Contractor any documents necessary to effectuate this
assignment. Owner hereby irrevocably appoints Contractor
as Owner’s agent and authorizes Contractor to execute any
documents on Owners behalf as may be necessary to obtain
payment if the assigned proceeds from the Insurer. The
Owner hereby assigns to Contractor to the right to pursue
collection of insurance proceeds and to receive payment for
services directly from the Insurer.

(emphasis added) (errors in original).

Insurer never approved the work, and ERG never performed any repairs
on appellants’ property. Appellants filed suit against insurer alleging
breach of contract. Insurer filed an amended answer in which it raised an
affirmative defense that appellants lacked standing to bring the claim, as
they had assigned their rights to ERG under the AOB contract.

Insurer moved for summary judgment based upon the AOB contract.
In response, appellants filed an affidavit from the owner of ERG in which
he testified that the purpose of the AOB contract was to allow ERG to
perform repairs on the property in exchange for money. However, ERG
never performed any repairs on the property. He averred that ERG “did
not intend to receive an assignment of post-loss benefits for unapproved
or unperformed re-roofing services and interior repairs.”

After a hearing on the motion for summary judgment, the trial court
entered judgment in favor of the insured “for the specific facts of this
assignment at issue.” Appellants then filed their appeal.

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 Under Florida law, the right to benefits under an insurance contract
may be assigned by an insured. Schuster v. Blue Cross & Blue Shield of
Fla., Inc., 843 So. 2d 909, 911 (Fla. 4th DCA 2003). “An assignment has
been defined as ‘a transfer or setting over of property, or of some right or
interest therein, from one person to another.’” Sidiq v. Tower Hill Select
Ins. Co., 276 So. 3d 822, 825 (Fla. 4th DCA 2019) (quoting Cont’l Cas. Co.
v. Ryan Inc. E., 974 So. 2d 368, 376 (Fla. 2008)). Once an interest has
been assigned, “the assignor no longer has a right to enforce th[at] interest
because the assignee has obtained ‘all rights to the thing assigned.’” Id.
(quoting Cont’l Cas. Co., 974 So. 2d at 376).

“[T]he intent of the parties determines the existence of an assignment.”
Citizens Prop. Ins. Corp. v. Ifergane, 114 So. 3d 190, 195 (Fla. 3d DCA
2012) (citation omitted). “Any words or transactions which show an
intention on the one side to assign, and an intention on the other to
receive, if there is a valuable consideration, will operate as an effective
equitable assignment.” McClure v. Century Ests., Inc., 120 So. 4, 9 (Fla.
1928) (citations omitted).

This case is controlled by Nicon Construction, Inc. v. Homeowners Choice
Property & Casualty Insurance Co., 249 So. 3d 681 (Fla. 2d DCA 2018) and
Sidiq. In Nicon, an insured property owner who suffered property damage
provided an assignment of benefits from the insurance policy to two firms:
B & M Clean, LLC, for water and debris removal, and Nicon, for asbestos
remediation. 249 So. 3d at 682. Both firms sued the insurer for breach
of contract alleging that it failed to pay all the benefits due under the
policy. The trial court granted summary judgment in favor of the insurer
against Nicon on the basis that Nicon’s assignment was invalid. The trial
court agreed with insurer that at the time the property owner/insured
assigned his rights to Nicon, he had already assigned all the benefits for
the loss to B & M Clean. The trial court’s decision was based on the
language in the B & M Clean assignment that stated that the insured was
assigning “any and all insurance rights, benefits, and causes of action
under my property insurance policy.” Id.

The Second District determined that the trial court erred in its
interpretation of the assignment. Id. at 682–83. The court noted that “[i]n
construing a contract, the intent of the parties should be determined from
the words of the contract as a whole . . . . The court also should consider
the conditions and circumstances surrounding the parties and the objects
to be obtained in executing the contract.” Id. (quoting City of Tampa v.
Ezell, 902 So. 2d 912, 914 (Fla. 2d DCA 2005)). The court concluded that
the trial court erred by isolating “a phrase in the assignment rather than

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viewing it in the context of the entire agreement.” Id. at 683. The court
found the assignment valid and that the trial court erred, stating:

When the phrase “any and all insurance rights, benefits, and
causes of action under my property insurance policy” is read
in the context of the entire assignment and the purpose for
which it was entered into, it is evident that [insured] was
assigning all his rights under the policy to payment for the
services performed by B & M Clean—not all his rights to
payment for the entire covered claim.

Id. at 683.

We also looked to the agreement as a whole and to its purpose in
concluding that the AOB in Sidiq did not prevent the insureds from suing
their insurer for breach of contract. 276 So. 3d at 826–27. The insureds
in Sidiq suffered water damage and entered into an AOB with a water
mitigation company for emergency services. The water company billed the
insurance company directly for its services. Then the insureds sued the
insurance company for the repairs made necessary by the water damage.
The insurer moved for summary judgment, arguing that the insured had
assigned his entire claim to the water mitigation company and could not
sue for the repairs. The trial court granted summary judgment, focusing
on the AOB’s language that it was effective “for services rendered or to be
rendered by Company.” Id. at 824.

On appeal, we relied on Nicon, noting that the Nicon court looked at the
context of the entire assignment and its purpose. Id. at 825–26. Nicon
determined that the assignment was “for specific work performed[,]” and
we applied that same reasoning to conclude that the assignment of
benefits covered only the work performed. Further, while the trial court
had considered only the first sentence of the AOB and concluded that it
unambiguously assigned all claims to the contractor, we explained that
ambiguity must be determined by analyzing the entire document.
“[C]onsidering the surrounding text and all of the language of the
assignment paragraph, we determine that whatever facial ambiguity that
may have existed by looking at the contested sentence in isolation is
resolved when all of the language of the document is considered as a
whole.” Id. at 827. Thus, we held that the AOB did not deprive the insured
of standing to bring a claim against the insurer for the remaining repair
work. Id.

Contracts “should receive a construction that is reasonable, practical,
sensible, and just.” Universal Prop. & Cas. Ins. Co. v. Johnson, 114 So. 3d

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1031, 1036 (Fla. 1st DCA 2013) (quoting State Farm Mut. Auto. Ins. Co. v.
Fischer, 16 So. 3d 1028, 1031 (Fla. 2d DCA 2009)). A contract should be
interpreted in a manner consistent with reason and probability. BKD
Twenty-One Mgmt. Co. v. Delsordo, 127 So. 3d 527, 530 (Fla. 4th DCA
2012) (citing King v. Bray, 867 So. 2d 1224, 1227 (Fla. 5th DCA 2004)).
“In construing the language of a contract, courts are to be mindful that
‘the goal is to arrive at a reasonable interpretation of the text of the entire
agreement to accomplish its stated meaning and purpose.’” Murley v.
Wiedamann, 25 So. 3d 27, 29 (Fla. 2d DCA 2009) (quoting Taylor v. Taylor,
1 So. 3d 348, 350 (Fla. 1st DCA 2009)).

In reviewing the terms of the AOB in question in this case, the clear
purpose of the assignment was to enable ERG to be paid directly by the
insurer for services performed. ERG obligated itself to perform work
approved by the insurer (“Contractor shall only be obligated to perform
work to the extent that the scope of work is approved by the adjustor for
the insurance carrier.”). When insurer failed to approve the work, ERG
had no further obligation to perform, and did not perform any work.
Following the words of assignment in the “insurance proceeds for the work
performed or to be performed by [ERG],” the contract continues with
language showing that payment by the insurer for work performed is its
purpose: “Owner here by [sic] . . . authorizes [ERG] to execute any
documents . . . as may be necessary to obtain payment . . . . The Owner
hereby assigns . . . the right to pursue collection of insurance proceeds
and to receive payment for services directly from the Insurer.” This
contract clearly contemplates work being performed in order for the
assignment to be given. Consistent with Nicon and Sidiq, when the entire
contract is reviewed together with its purpose, we conclude that this AOB
did not deprive the insureds of standing to assert their claim for breach of
contract and the right to sue for damages.

For the foregoing reasons, we reverse the final judgment and remand
for further proceedings.

DAMOORGIAN and FORST, JJ., concur.

* * *

Not final until disposition of timely filed motion for rehearing.

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