Case Law Update: Webb Roofing & Constr., LLC, a/a/o John LeFevre and Lisa LeFevre v. FedNat Ins. Co., Fla. 2d DCA April 7, 2021, 2D20-1881
Motion to Compel Appraisal
Webb Roofing & Construction, LLC (“Webb Roofing”) appealed the trial court’s order granting FedNat Insurance Company’s (“FedNat”) motion to compel appraisal and abate the action. Webb Roofing argued that the “policy provision requiring appraisal does not apply because its claim for damages flows from an assignment and not from being a party to the insurance policy.” The court disagreed and affirmed the trial court’s order.
John and Lisa LeFevres (“the Insureds”) entered into an assignment of benefits (“AOB”) with Webb Roofing on May 20, 2019, for Hurricane Irma damages. The AOB provided that the Insureds transferred to Webb Roofing “any and all of the Insured’s rights, benefits, and proceeds due to Insured” under the policy from FedNat. When Webb Roofing filed a claim for damages against FedNat, FedNat filed a motion to compel appraise and abate the pending action. The relevant policy provision stated, “If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss.”
The court established that the insurance claim was assignable without the consent of the insurer. Then, the court addressed whether Webb Roofing, as assignee, could avoid the contractual appraisal provision in the policy. (Since the AOB was executed on May 20, 2019, Florida Statute 627.7152(4)(3) requiring an assignee to participate in appraisal did not apply.) Webb Roofing argued that the benefits assigned were the claim and right to collect payment.
The court reasoned that appraisal clauses are treated similarly to arbitration and relied on the First DCA’s analysis in Cone Constructors, Inc. v Drummond Community Bank, 754 So. 3d 779 (Fla. 1st DCA 2000). There, the court stated, “[t]he UCC makes explicit…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.’” The court indicated that this applies to arbitration provisions, which would be of no value if a party could render the clause meaningless by assigning the claim to a third party. The court also relied on UCC’s Official Comments that even assigning only “rights” without any duty of performance must include the bargained-for remedial procedures.
The court further reasoned that “appraisal. . . was not a duty of the insured under the provisions of the insurance contract” unlike an examination under oath, which is a non-assignable duty. Since appraisal is not a required duty of the insureds under the policy’s “Duties After Loss” provision, it is able to be assigned to a vendor and is “a contract condition that is not eliminated by post-loss assignment of the contract.”