South Florida Suit Challenges Controversial AOB
Insurance Law That Could Affect Attorney Fees
A controversial new insurance law
has found what attorneys say is likely to be the first of
several challengers as a contractor's claims against its insurer
survived a motion to dismiss Thursday. The case also presents a
question that attorneys say is likely to reach the Florida
Article Courtesy of The Daily Business Review
By Raychel Lean
May 19, 2020
A controversial new Florida insurance law has found
its first challenger as a contractor’s claims against its insurer
survived a motion to dismiss Thursday in a case that presents issues
likely to reach the state Supreme Court.
The lawsuit involves assignment-of-benefit agreements, or AOBs, which
allow homeowners to sign over their insurance policy rights to
But the new law, Florida Statute 627.7152, passed in May 2019, blocks
third parties from collecting attorney fees. It also allows insurers to
offer policies that restrict or block AOBs.
Supporters say the law will curb abusive litigation, speed up repairs
and save consumers the hassle of chasing claims. But critics argue it
will tip the scale against policyholders.
The condominium signed over benefits to the contractor in August 2018.
But defense attorney Otto Espino of Kelley Kronenberg in Miami argued
the suit should be dismissed because the plaintiff allegedly failed to
fulfill its pre-suit obligations. He also claimed it couldn’t seek
attorney fees now the new law has been enacted.
“They are not coming to United and asking for benefits for services
already rendered, for tasks that have been completed, for consumables
that have been consumed. They’re basically saying they want $916,000
dollars prospectively for all the repairs they think they believe the
property’s going to need for damages that they contend are related to
Hurricane Irma,” Espino said. “They do stand in the shoes of the
insured, and they do have those obligations to come and sit down and
provide an examination under oath.”
But Broward Circuit Judge Keathan Frink disagreed via Zoom, denying the
defendant’s motion to dismiss the case and to strike claims for attorney
fees. However, the judge did note the defendant’s allegations about
compliance with contractual obligations could be fodder for a future
Kelley Kronenberg attorney Esperanza Briscoe-Diaz is handling the
defendant’s case and did not immediately respond to a request for
The judge declined to weigh in on constitutionality, finding the statute
doesn’t apply because it was enacted after the benefits were assigned.
Meanwhile, plaintiff counsel Citron and Hernandez seek to certify that
issue as a question of great public importance, alleging the new law
violates the Florida Constitution’s equal-protection clauses. They
content the law provides different rights to the insured and to the
assignee, even though they’re part of the same contract.
“Now, as an assignee, you’re basically a second-class citizen,”
Hernandez said before the hearing.
The plaintiff’s team is confident the question will reach the Florida
Supreme Court, whether this case follows it there or not.
They point to a high court ruling from 2000, which found a similar
fee-shifting statute for Personal Injury Protection, or PIP, cases
violated the Florida Constitution by curbing medical providers’ ability
to seek attorney fees.
The defendant has 20 days to respond to the ruling.