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.
28
29 Be It Enacted by the Legislature of the State of Florida:
30
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.
44 (2) LIMITATION ON AGREEMENTS BETWEEN SERVICE PROVIDERS AND
45 CONSUMERS UNDER URGENT OR EMERGENCY CIRCUMSTANCES.—
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.
78 (3) REQUIREMENTS FOR AGREEMENTS CONTAINING A POST-LOSS
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.
154 (6) ACTIONS BASED UPON THE SAME CLAIM AND PARTY PREVIOUSLY
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.
173 (8) LEGISLATIVE FINDINGS AND INTENT.—
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.