46 Fla. L. Weekly D760h
WEBB ROOFING & CONSTRUCTION, LLC, a/a/o JOHN LEFEVRE and LISA LEFEVRE, Appellant, v. FEDNAT INSURANCE COMPANY, Appellee. 2nd District. Case No. 2D20-1881. April 7, 2021. Appeal pursuant to Fla. R. App. P. 9.130 from the Circuit Court for Collier County; Hugh D. Hayes, Judge. Counsel: Alex Finch of Fromang & Finch, P.A., Orlando, for Appellant. Warren B. Kwavnick of Cooney Trybus Kwavnick Peets, PLC, Fort Lauderdale, for Appellee.
(CASANUEVA, Judge.) Webb Roofing & Construction, LLC, appeals the trial court’s nonfinal order granting FedNat Insurance Company’s motion to compel appraisal and abate action pending appraisal. Webb Roofing asserts that the homeowner’s insurance policy provision requiring appraisal does not apply to it because its claim for damages flows from an assignment and not from being a party to the insurance policy. We disagree and affirm.1BACKGROUND
John LeFevre and Lisa LeFevre were owners and insureds of a residence in Collier County. The residence sustained damage in 2017 as a result of Hurricane Irma. To effectuate repairs to the residence, the LeFevres contracted with Webb Roofing. To ensure payment, Webb Roofing obtained an assignment from the homeowners on May 20, 2019. The assignment provided, in pertinent part, that the owners transferred and assigned to Webb Roofing “any and all of the Insured’s rights, benefits, and proceeds due to Insured” under any applicable insurance policy, which included a policy from FedNat.
In October 2019, Webb Roofing filed an action for damages against FedNat asserting that FedNat had insured the premises, the homeowners had filed a claim, and the claim had been assigned to Webb Roofing. FedNat responded by filing a motion seeking to compel appraisal and to abate the pending action. It asserted that the policy conditions provided for appraisal. The appraisal provision stated in part: “If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss.” Webb Roofing opposed the appraisal demand. The trial court found that the appraisal provision applied, and it ordered the parties to proceed with the appraisal process. This appeal followed.DISCUSSION
In Bioscience West, Inc. v. Gulfstream Property & Casualty Co., 185 So. 3d 638, 641 (Fla. 2d DCA 2016), this court defined an assignment as a voluntary transfer of a right or interest. Bioscience had received an assignment of any and all insurance rights, benefits, and proceeds pertaining to services it provided under the homeowner’s insurance policy, authorizing direct payment of any benefits or proceeds to Bioscience. Id. at 640. Here, as in Bioscience, the assignment transfers a contractual right.
“All contractual rights are assignable unless the contract prohibits assignment, the contract involves obligations of a personal nature, or public policy dictates against assignment.” Id. (quoting One Call Prop. Servs. Inc. v. Sec. First Ins., 165 So. 3d 749, 752 (Fla. 4th DCA 2015)). It is well settled in Florida that post-loss insurance claims are assignable. See id. at 642-43 (“[P]ost-loss insurance claims are freely assignable without the consent of the insurer”); One Call Prop. Servs., 165 So. 3d at 752-53 (“A claim on an insurance policy is a chose in action and is assignable as such.” (quoting United Cos. Life Ins. v. State Farm & Fire Cas. Co., 477 So. 2d 645, 646 (Fla. 1st DCA 1985))).
We next address whether Webb Roofing as a post-loss assignee may avoid compliance with the contractual appraisal provision contained in the policy.2 “Assignment of a right to payment under a contract does not eliminate the duty of compliance with contract conditions, but a third-party assignee is not liable for performance of any duty under a contract . . . .” Shaw v. State Farm Fire & Cas. Co., 37 So. 3d 329, 332 (Fla. 5th DCA 2010), disapproved on other grounds, Nunez v. Geico Gen. Ins. Co., 117 So. 3d 388 (Fla. 2013). Webb Roofing essentially argues that the post-loss assignment transferred to it the post-loss claim and the right to collect payment, but the policy provision requiring appraisal did not transfer. We disagree.
While appraisal and arbitration differ in some important respects,3 Florida case law recognizes that appraisal clauses are often treated similarly to arbitration clauses. Fla. Ins. Guar. Ass’n v. Castilla, 18 So. 3d 703, 704 (Fla. 4th DCA 2009) (“[A]ppraisal clauses are treated similarly to arbitration clauses” (citing Allstate Ins. v. Suarez, 786 So. 2d 645, 646 (Fla. 3d DCA 2001))). In Cone Constructors, Inc. v. Drummond Community Bank, 754 So. 2d 779, 779 (Fla. 1st DCA 2000), the issue presented was whether the trial court erred in denying a motion to compel arbitration. A borrower had executed several security agreements and promissory notes with Drummond, assigning the proceeds of its contracts and accounts receivable. Id. Contained within one of the contracts assigned to Drummond was an arbitration provision.
The First District discussed the transfer of the right to arbitration in Cone Constructors as follows:
The Uniform Commercial Code differentiates between a “normal commercial assignment, which substitutes the assignee for the assignor both as to rights and duties, and a financing assignment in which only the assignor’s rights are transferred.” U.C.C. § 2-210(4) & Official Comment 5. The UCC makes explicit, however, that “the rights of an assignee are subject to . . . all terms of the contract between the account debtor and assignor and any defense or claim arising therefrom.” U.C.C. § 9-318(1)(a). This principle applies to arbitration provisions, which would be of no value if a party “could escape the effect of such a clause by assigning a claim subject to arbitration between the original parties to a third party.” Hosiery Manufacturers’ Corp. v. Goldston, 238 N.Y. 22, 28, 143 N.E. 779, 780 (1924). Even an assignment only of contract “rights” not entailing any duty of performance, see U.C.C. § 2-210, Official Comment 5, must be deemed to include the bargained-for remedial procedure. See U.C.C. § 1-201(36) (defining “rights” to include “remedies”). Under the Code, moreover, and in New York where the UCC has been adopted, an assignee is entitled to enforce an arbitration clause as one of the rights acquired by assignment. At least one lower court has squarely held that a lender who takes an assignment of accounts receivable as security for a loan is required to follow the remedial procedure specified in the assigned contract.
754 So. 2d at 780 (quoting Banque De Paris et des Pays-Bas v. Amoco Oil Co., 573 F. Supp. 1464, 1471-72 (S.D.N.Y. 1983)).
The First District concluded that where “the assignee of the accounts receivable has brought suit against an account debtor to recover payments made to others that the assignee alleges were due to the assignee, the assignee is subject to the arbitration provision in the underlying contract.” Id. at 780-81; see also Kong v. Allied Prof’l Ins., 750 F.3d 1295, 1303 (11th Cir. 2014) (“[A]s the court in Cone Constructors indicated, Florida law treats arbitration as a ‘remedial mechanism’ that is included in any assignment. We therefore conclude Kong is bound by the insurance policy’s arbitration clause as a matter of Florida law.”). We find this reasoning persuasive and by analogy applicable to this case, and we conclude that Webb Roofing is subject to the appraisal provision in the policy.
We find further support for our conclusion in Certified Priority Restoration v. State Farm Florida Insurance, 191 So. 3d 961, 962 (Fla. 4th DCA 2016). There, the appellant was the recipient of an assignment of benefits from an insured for repairs to his home. Id. The parties disagreed as to the amount of the loss, and the court found appraisal to be appropriate under the policy. Id. Appraisal, the court found, was not a duty of the insured under the provisions of the insurance contract: “The policy does not classify this as a duty of the insured, unlike the examination under oath, which is considered a non-assignable duty.” Id.
The Fourth District rejected a similar argument in One Call Property Services, which “held that policy provisions did not impose a ‘duty to adjust’ solely on the insured. A ‘duty to adjust’ was not a required duty of the insured under the policy provision for ‘Duties after Loss[,]’ and thus did not preclude assignment of benefits to a vendor providing services.” Certified Priority, 191 So. 3d at 962 (alteration in original) (quoting One Call Prop. Servs., 165 So. 3d at 755 (discussing why policy language requiring adjustment “does not impose a duty on the insured to adjust the loss”)). Finding the reasoning in One Call Property Services applicable, the Fourth District concluded that the trial court did not err in compelling appraisal. Id.
Similarly, the appraisal provision in this case is not included in the “Duties After Loss” policy provision. Rather, it is a contract condition that is not eliminated by a post-loss assignment of the contract. See id.; Shaw, 37 So. 3d at 332.CONCLUSION
Webb Roofing received an assignment that entitled it to receipt of payment from the insurance carrier, and concomitant with that right was its duty to comply with the conditions of the contract that afforded it payment. Therefore, we conclude that the assignment in this case did not eliminate the duty of compliance with the conditions imposed by the insurance contract, including appraisal, and the trial court did not err in granting the motion to compel appraisal.
Affirmed. (LUCAS and STARGEL, JJ., Concur.)
1We reject Webb Roofing’s waiver argument without discussion.
2Applicable to assignment agreements executed on or after July 1, 2019, an assignee of post-loss benefits “[m]ust, as a condition precedent to filing suit under the policy, and, if required by the insurer, participate in appraisal or other alternative dispute resolution methods in accordance with the terms of the policy.” § 627.7152(4)(e), Fla. Stat. (2019). The assignment agreement in this case was executed on May 20, 2019.
3Normally, arbitration encompasses the entire case or matter while “an agreement for appraisal extends merely to the resolution of the specific issues of actual cash value” and the corresponding claimed amount of loss. Preferred Ins. v. Richard Parks Trucking Co., 158 So. 2d 817, 820 (Fla. 2d DCA 1963) (quoting 5 Am. Jur. 2d, Arbitration and Award, § 3). The appraisal process is an informal one that does not require the appraisers to be sworn. The remaining issues are “reserved for determination in a plenary action.” Id. In comparison, arbitration is a quasi-judicial proceeding with a degree of formal safeguards. Citizens Prop. Ins. v. Mango Hill # 6 Condo. Ass’n, 117 So. 3d 1226, 1229-30 (Fla. 3d DCA 2013).* * *