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Analyzing AOBs: Are the Courts Splitting Hairs or Seeking Statutory Compliance?

Kimberly Matot

Senior Associate | Arson & Fraud, Extra-Contractual, First-Party Coverage
813-281-1900
kmatot@butler.legal

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February 23, 2024

Jigsaw puzzle of US dollar 100 bill scattered on red background. Illustration of the concept of the crisis of US dollar dominant status

So many things in life can be randomly assembled and made to function seamlessly: puzzle pieces for your five-year-old, online gaming teammates, and music mixed by a deejay, to name a few.

With ever-evolving technology, splicing and dicing has become the norm, but when it comes to assignment of benefits (AOB) agreements, meeting the statutory requirements is essential. Splicing and dicing without conformity to the statutory requirements doesn’t cut it.

Florida Statute section 627.7152 contains all the requirements for an AOB to be valid. “An assignment agreement that does not comply with this subsection is invalid and unenforceable.” §627.7152(2)(d), Fla. Stat. 

The Second District Court of Appeal recently reinforced the importance of compliance in Gale Force Roofing and Restoration, LLC v. American Integrity Insurance Company of Florida, 2024 WL 647234, — So.3d — (Fla. 2d DCA 2024), when it found Gale Force’s purported AOB to be invalid and unenforceable because it did not contain the required provision delineated by section 627.7152(2)(a)(2).

Specifically, Gale Force’s “Assignment Agreement” didn’t include language that permitted rescission of the AOB, without penalty or fee, so long as a written, signed rescission notice is sent:

“to the assignee within 14 days after the execution of the agreement, at least 30 days after the date work on the property is scheduled to commence if the assignee has not substantially performed, or at least 30 days after the execution of the agreement if the agreement does not contain a commencement date and the assignee has not begun substantial work on the property.” Id.

This is not the first time that a repair/remediation company has had its form AOB agreement invalidated. In Air Quality Experts Corp. v. Family Sec. Ins. Co., 351 So.3d 32 (Fla. 4th DCA 2022), the Fourth District held Air Quality Expert’s AOB invalid for failing to list the specific price of the specific work to be performed on a job site. Instead, the company attached a generic price sheet to its AOB.

Some repair/remediation companies may argue the courts are splitting hairs and claim the assignor had adequate notice of the rights she or he was surrendering. In looking at a vendor’s complete assignment agreement, if all the elements required by statute are not there, then it is not a valid assignment of benefits.

For any further questions, please contact Kimberly Matot.