Florida Senate - 2019                              CS for SB 122
       By the Committee on Banking and Insurance; and Senators Broxson
       and Hooper
       597-02675-19                                           2019122c1
    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 there is a prevailing party; providing
   14         factors a court must consider in determining who the
   15         prevailing party is under certain circumstances;
   16         providing construction relating to waiver and
   17         limitations on recovery; authorizing a court to order
   18         an assignee to pay attorney fees and costs under
   19         certain circumstances; requiring the court to stay
   20         proceedings under certain circumstances; providing
   21         applicability; providing legislative findings and
   22         intent; amending ss. 626.9373 and 627.428, F.S.;
   23         providing that attorney fees under certain provisions
   24         of the Florida Insurance Code may not be awarded to an
   25         assignee of post-loss benefits who is a service
   26         provider; providing applicability; providing an
   27         effective date.
   29  Be It Enacted by the Legislature of the State of Florida:
   31         Section 1. Section 501.172, Florida Statutes, is created to
   32  read:
   33         501.172 Agreements between service providers and
   34  consumers.—
   35         (1)DEFINITIONS.As used in this section:
   36         (a)“Consumer” means a person who has an interest in, or
   37  who has a right to manage real or personal property, including
   38  improvements upon such property, regardless of whether for
   39  personal or business purposes, including an owner, a tenant, a
   40  licensee, or a property manager.
   41         (b)“Service provider” means a person who enters into an
   42  agreement with a consumer for the stabilization, repair,
   43  improvement, or remediation of real or personal property.
   46         (a)If a consumer acts under urgent or emergency
   47  circumstances to protect property from damage and enters into an
   48  agreement with a service provider to stabilize, protect, repair,
   49  or improve such property, the service provider may only contract
   50  for, receive, or acquire in any manner from the consumer at such
   51  time the right to payment for the work necessary to stabilize,
   52  protect, and prevent additional damage to the property. Such
   53  right to payment may include:
   54         1.A post-loss assignment of benefits under a property
   55  insurance policy or under the comprehensive or combined
   56  additional coverage under a motor vehicle insurance policy for
   57  coverage of windshield damage, executed pursuant to subsection
   58  (3), except that notwithstanding ss. 626.9373 and 627.428, any
   59  right to attorney fees or costs against an insurer by any such
   60  service provider shall be as provided in subsection (4). A
   61  service provider may not receive from a consumer acting under
   62  urgent or emergency circumstances an assignment of post-loss
   63  benefits in excess of:
   64         a.Under a property insurance policy, in excess of the
   65  greater of $3,000 or 1 percent of the Coverage A limit under
   66  such policy.
   67         b.Under a motor vehicle insurance policy for comprehensive
   68  or combined additional coverage for windshield damage, in excess
   69  of $500.
   70         2.An acknowledgement of the rights that may exist, if any,
   71  under chapter 713 to make a claim upon the property.
   72         (b)An agreement between a consumer and a service provider
   73  that provides greater rights to the service provider under such
   74  urgent or emergency circumstances, including alleged rights to
   75  do further repairs, remediation, or improvements or an
   76  assignment of rights, benefits, causes of action, or other
   77  contractual rights in violation of this subsection is void.
   79  ASSIGNMENT OF BENEFITS.—In all circumstances, an agreement
   80  entered into by a consumer and a service provider after a loss
   81  or damage has occurred to the consumer’s property which contains
   82  a post-loss assignment of benefits to the service provider or
   83  some third person is only valid if:
   84         (a)The consumer or service provider provides a copy of the
   85  agreement to the consumer’s insurer, sent to the location
   86  designated for receipt of such agreements if specified in the
   87  insurance policy, within 3 business days after the agreement’s
   88  execution;
   89         (b)The agreement contains a provision allowing the
   90  consumer to rescind the agreement in a writing signed by the
   91  assignor, if the consumer provides written notice of the
   92  rescission to the service provider within 14 days of the
   93  execution of the agreement or at least 30 days after the
   94  execution of the agreement if the service provider has not begun
   95  substantial work on the property;
   96         (c)The agreement does not impose any fee or penalty for
   97  rescinding the agreement, for check processing, for not using a
   98  specified service provider for permanent repairs, or for
   99  mortgage processing;
  100         (d)The agreement does not prevent or inhibit an insurer
  101  from communicating with the consumer at any time;
  102         (e)The agreement, if made under a motor vehicle insurance
  103  policy for comprehensive or combined additional coverage for
  104  windshield damage, does not assign the right to more than $500
  105  in post-loss benefits;
  106         (f)The agreement does not transfer or create any authority
  107  to adjust, negotiate, or settle any portion of a claim to a
  108  person or an entity who is not authorized to adjust, negotiate,
  109  or settle a claim on behalf of the insured or claimant under
  110  part VI of chapter 626;
  111         (g)The agreement does not transfer to the assignee any
  112  greater right to attorney fees and costs from the insurer than
  113  the right to attorney fees and costs as provided for in
  114  subsection (4); and
  115         (h)The agreement relates only to work performed or to be
  116  performed by the service provider.
  117         (4)ATTORNEY FEES.
  118         (a)In a civil action under a property insurance policy or
  119  under the comprehensive or combined additional coverage under a
  120  motor vehicle insurance policy for coverage of windshield
  121  damage, between an insurer and a service provider who obtains an
  122  assignment of post-loss benefits, the prevailing party has the
  123  right to attorney fees and costs from the:
  124         1.Insurer, if the service provider is the prevailing
  125  party.
  126         2.Service provider, if the insurer is the prevailing
  127  party.
  128         (b)The prevailing party is the party which prevails on the
  129  significant issues of the case. The court may determine that
  130  there is no prevailing party in a case. In determining if there
  131  is a prevailing party, the court must consider:
  132         1.The issues litigated;
  133         2.The amount of the claims by the service provider versus
  134  the amount recovered;
  135         3.The existence of setoffs and counterclaims, if any; and
  136         4.The amounts offered by either party to resolve the
  137  issues prior to or during litigation.
  138         (5)LIMITATION ON RECOVERY FROM ASSIGNOR.—An assignee
  139  service provider and any subcontractor of the service provider
  140  that accepts an assignment of post-loss benefits waives any and
  141  all claims against a consumer, except as provided herein. The
  142  consumer remains responsible for the payment of any deductible
  143  amount provided for by the terms of the insurance policy, and
  144  for the cost of any betterment ordered by the consumer. This
  145  subsection does not prohibit the assignee from collecting or
  146  attempting to collect money from, maintaining an action at law
  147  against, or claiming a lien on the property of a consumer or
  148  reporting a consumer to a credit agency for payment of the
  149  amount of the insurance deductible, or any amount attributable
  150  to betterment ordered by the consumer. This waiver is effective
  151  notwithstanding any subsequent determination that the assignment
  152  agreement is invalid or the rescission of the assignment
  153  agreement by the consumer.
  155  VOLUNTARILY DISMISSED.—If a service provider assignee commences
  156  an action in any court of this state based upon or including the
  157  same claim against the same adverse party that such assignee has
  158  previously voluntarily dismissed in a court of this state the
  159  court may, as it deems proper, order the assignee to pay the
  160  attorney fees and costs of the adverse party of the action
  161  previously voluntarily dismissed. Upon the issuance of such
  162  order, the court shall stay the proceedings in the subsequent
  163  action until the assignee has complied with the order.
  164         (7)APPLICATION.—This section does not apply to a power of
  165  attorney granted to a management company, family member,
  166  guardian, or similarly situated person which complies with
  167  chapter 709 and which may include, as part of the authority
  168  granted, the authority to act in place of a principal as it
  169  relates to a property insurance or motor vehicle insurance
  170  claim, if such power of attorney is not provided to a service
  171  provider or any person with a personal or financial interest in
  172  the service provider.
  174         (a)The Legislature recognizes that the provisions of ss.
  175  626.9373 and 627.428 are intended to level the economic playing
  176  field between the economically-advantaged insurance company and
  177  the individual consumer. The award of attorney fees to the
  178  individual consumer under these statutes makes the consumer
  179  financially whole and discourages insurance companies from
  180  contesting valid claims.
  181         (b)The increased use of post-loss assignment of benefits
  182  by service providers, however, has led to a dramatic increase in
  183  assignment of benefits litigation. The Legislature recognizes
  184  that additional costs incurred by insurance companies, in
  185  contesting assignment of benefits-related litigation or paying
  186  inflated claims for insurance proceeds, are factored into the
  187  rates charged for property insurance and motor vehicle
  188  insurance.
  189         (c)By explicitly providing that notwithstanding ss.
  190  626.9373 and 627.428, any right to attorney fees or costs
  191  against an insurer by a service provider shall be as provided in
  192  this section, the Legislature is addressing the dramatic
  193  increase in assignment of benefits litigation by nonparties to
  194  property insurance policies and motor vehicle insurance policies
  195  for coverage of windshield damage and the associated increase in
  196  insurance premiums that are experienced by consumers. The
  197  Legislature is maintaining its public policy of making consumers
  198  financially whole and reducing inequities between consumers and
  199  their insurance companies, as such consumers have the right to
  200  obtain attorney fees under ss. 626.9373 and 627.428 in civil
  201  actions they bring against their insurers.
  202         Section 2. Section 626.9373, Florida Statutes, is amended
  203  to read:
  204         626.9373 Attorney Attorney’s fees.—
  205         (1) Upon the rendition of a judgment or decree by any court
  206  of this state against a surplus lines insurer in favor of any
  207  named or omnibus insured or the named beneficiary under a policy
  208  or contract executed by the insurer on or after the effective
  209  date of this act, the trial court or, if the insured or
  210  beneficiary prevails on appeal, the appellate court, shall
  211  adjudge or decree against the insurer in favor of the insured or
  212  beneficiary a reasonable sum as fees or compensation for the
  213  insured’s or beneficiary’s attorney prosecuting the lawsuit for
  214  which recovery is awarded.
  215         (2) If awarded, attorney attorney’s fees or compensation
  216  shall be included in the judgment or decree rendered in the
  217  case.
  218         (3)Attorney fees may not be awarded under this section to
  219  an assignee of post-loss benefits who is a service provider
  220  under s. 501.172.
  221         Section 3. Section 627.428, Florida Statutes, is amended to
  222  read:
  223         627.428 Attorney fees Attorney’s fee.—
  224         (1) Upon the rendition of a judgment or decree by any of
  225  the courts of this state against an insurer and in favor of any
  226  named or omnibus insured or the named beneficiary under a policy
  227  or contract executed by the insurer, the trial court or, in the
  228  event of an appeal in which the insured or beneficiary prevails,
  229  the appellate court shall adjudge or decree against the insurer
  230  and in favor of the insured or beneficiary a reasonable sum as
  231  fees or compensation for the insured’s or beneficiary’s attorney
  232  prosecuting the suit in which the recovery is had.
  233         (2) As to suits based on claims arising under life
  234  insurance policies or annuity contracts, no such attorney fees
  235  attorney’s fee shall be allowed if such suit was commenced prior
  236  to expiration of 60 days after proof of the claim was duly filed
  237  with the insurer.
  238         (3) When so awarded, compensation or fees of the attorney
  239  shall be included in the judgment or decree rendered in the
  240  case.
  241         (4)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 4. The creation of s. 501.172, Florida Statutes,
  245  and the amendments made to ss. 626.9373 and 627.428, Florida
  246  Statutes, by this act apply to actions pending on or after July
  247  1, 2019, to the extent that the act does not require the
  248  invalidation of any provision of a contract executed before July
  249  1, 2019.
  250         Section 5. This act shall take effect July 1, 2019.