Opinion
6D23-36
06-30-2023
SFR Services, LLC, a/a/o Donald and Jane Marston, Appellants, v. Tower Hill Signature Insurance Company, Appellee.
Melissa A. Giasi and Erin M. Berger, of Giasi Law, P.A., Tampa, for Appellants. C. Ryan Jones and Scot E. Samis, of Traub Lieberman Straus &Shrewsberry, LLP, St. Petersburg, for Appellee.
Appeal from the Circuit Court for Lee County, Lower Tribunal No. 19-CA-002853, Leigh Frizzell Hayes, Judge.
Melissa A. Giasi and Erin M. Berger, of Giasi Law, P.A., Tampa, for Appellants.
C. Ryan Jones and Scot E. Samis, of Traub Lieberman Straus &Shrewsberry, LLP, St. Petersburg, for Appellee.
STARGEL, J.
SFR Services, LLC, appeals from the final judgment entered after a jury verdict in favor of Tower Hill Signature Insurance Company. We affirm the final judgment in all respects. However, we write to address SFR's argument that the
This case was transferred from the Second District Court of Appeal to this Court on January 1, 2023.
Concealment or Fraud provision in the subject insurance policy does not apply to SFR as an assignee of the insureds.
We reject the remainder of SFR's arguments on appeal without further discussion.
Background
In September 2017, the insureds suffered damage to their home during Hurricane Irma. The insureds contracted with SFR to replace their roof and executed an assignment of benefits in favor of SFR. After Tower Hill denied SFR's claim for benefits, SFR filed the underlying lawsuit for breach of contract. Tower Hill raised numerous affirmative defenses, including its Tenth Affirmative Defense, which asserted that coverage was voided under the policy because SFR made "material misrepresentations as to the purported value of the repairs reflected in SFR's estimate" in violation of the policy's Concealment or Fraud provision ("the misrepresentation defense"). The jury ultimately returned a verdict for Tower Hill, finding that although the property was damaged by Hurricane Irma and the losses were not excluded under the policy, Tower Hill had proved its misrepresentation defense. The trial court subsequently denied SFR's renewed motion for directed verdict or motion for new trial.
Analysis
SFR argues on appeal that it was entitled to a directed verdict on Tower Hill's misrepresentation defense. The relevant policy language provides:
2. Concealment or Fraud a. Under Section I - Property Coverages, with respect to all "insureds" covered under this policy, we may not provide coverage for loss under Section I - Property Coverages if, whether before or after a loss, one or more "insureds" have:
(1) Intentionally concealed or misrepresented any material fact or circumstance; (2) Engaged in fraudulent conduct; or (3) Made material false statements; relating to this insurance.
However, if this policy has been in effect for more than 90 days, we may not deny a claim filed by you or an "insured" on the basis of credit information available in public records.
Based on the language of this provision, along with the definitions contained within the policy, SFR argues that, as an assignee of the insureds, it was not subject to the conditions set forth in the Concealment or Fraud provision. In support, SFR cites the Fifth District's decision in Shaw v. State Farm Fire &Casualty Co., 37 So.3d 329 (Fla. 5th DCA 2010), disapproved of on other grounds by Nunez v. Geico Gen. Ins. Co., 117 So.3d 388 (Fla. 2013), which recognized that the assignment of a right to payment does not entail the transfer of contractual duties to the assignee:
As set forth in the policy's definitions section:
In this policy, "you" and "your" refer to the "named insured" shown in the Declarations and the spouse if a resident of the same household. "We," "us" and "our" refer to the Company providing this insurance. In addition, certain words and phrases are defined as follows:
....
3. "Insured" means you and residents of your household who are:
a. Your relatives;
b. Other persons under the age of 21 and in the care of any person named above.
Under Florida law, the assignment of a contract right does not entail the transfer of any duty to the assignee, unless the assignee assents to assume the duty. 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, unless he was a party to the agreement or has become a party by subsequent agreement. Absent such an event, which is in the nature of a novation, the duty of performance of the conditions to the right of payment remains with the assignor.Shaw, 37 So. 3d.
Contrary to SFR's argument, Shaw does not support the conclusion that the Concealment or Fraud provision should not apply to an assignee of the insured. The insured's duties under a contract are distinguishable from conditions of the contract, the latter of which are not eliminated by the assignment of a right to payment. See id. at 332 ("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 ...."); see also Certified Priority Restoration v. State Farm Fla. Ins. Co., 191 So.3d 961, 962 (Fla. 4th DCA 2016).
In Webb Roofing &Construction, LLC v. FedNat Insurance Co., 320 So.3d 803 (Fla. 2d DCA 2021), the Second District considered whether a contractor proceeding under an assignment of benefits from the insured was subject to the policy's appraisal provision. The Second District held that the assignment "did not eliminate the duty of compliance with the conditions imposed by the insurance contract, including appraisal." Id. at 807. The court also distinguished the insured's duties under the policy from contract conditions like appraisal: "[T]he 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." Id.
Although we recognize that Webb Roofing has not been applied outside the appraisal context, we find the analysis instructive in the case at hand. The Concealment or Fraud provision in the subject policy does not outline duties to be performed by the insured but rather provides a remedy for the insurer in the event of fraudulent conduct. Much like the appraisal provision in Webb Roofing, this provision "would be of no value if a party 'could escape the effect of such a clause by assigning a claim . . . to a third party.'" 320 So.3d at 806 (quoting Cone Constructors, Inc. v. Drummond Cmty. Bank, 754 So.2d 779, 780 (Fla. 1st DCA 2000)). Accordingly, we conclude that SFR was subject to the Concealment or Fraud provision contained in the policy.
AFFIRMED.
NARDELLA and SMITH, JJ, concur