Help for a homesteader
Wayne Parker’s home, which was a homestead, was insured by Anchor Property and Casualty Insurance Company. In September 2017, Hurricane Irma damaged the home. Parker filed a damage claim with Anchor and soon thereafter entered into a “Work Authorization & Assignment of Benefits” agreement (AOB) with Speed Dry, Inc. Pursuant to the agreement, Speed Dry was to handle the repair work and any claim negotiations with Anchor. The AOB also allowed Speed Dry to receive payment directly from Anchor according to the terms of Parker’s policy.
After Speed Dry assessed the damage to the Parker home, it sent Anchor an estimate of the cost of repairs and sought payment under the policy. Anchor refused to pay, and Speed Dry sued Anchor for breaching the policy. Anchor answered the complaint and, relying on the alienation (transfer of title to a real property) restrictions contained in article X, section 4(c) of the Florida Constitution, asserted as an affirmative defense that Speed Dry lacked standing to sue. Specifically, Anchor alleged:
[Speed Dry]’s action is barred to the extent the alleged assignment is an unenforceable contract to divest the homeowner of the exemption afforded by article X, section 4 of the Florida Constitution. Pursuant to section 4(c), the homestead, including homeowner insurance policy proceeds, may only be alienated by mortgage, sale or gift. The alleged assignment of benefits is not a mortgage, sale or gift.
Article X, section 4(c) of the Florida Constitution allows the owner of homestead real property, joined by the spouse, if married, to alienate the property by mortgage, sale or gift.
Anchor moved for summary judgment, contending that any insurance proceeds resulting from a loss to homestead property are constitutionally protected to the same extent as the homestead property itself and cannot be assigned pursuant to an AOB. The court agreed with Anchor’s argument and entered a summary final judgment in Anchor’s favor. Parker appealed.
On appeal, the court noted that an assignment of post-loss insurance benefits does not transfer title of real property. Rather, the court said, it is an assignment of contract rights that places a third party in the shoes of the homeowner and in privity with the insurance company.
As such, that assignment gives the third party the right to collect benefits under the insurance contract. The AOB conveys no interest in the homestead property.
The court concluded that article X, section 4(c) of the Florida Constitution does not prohibit the assignment of post-loss insurance benefits due as a result of damage to a homestead property. For these reasons, the court reversed the summary final judgment and remanded the case for further proceedings. However, the court said, because assignments of post-loss insurance benefits are used so extensively, we certify the following question to the Florida Supreme Court as one of great public importance:
Does article X, section 4(c) of the Florida Constitution allow the owner of homestead real property, joined by the spouse, if married, to assign post-loss insurance benefits to a third-party contractor contracted to make repairs to the homestead property?
Speed Dry, Inc. v. Anchor Property and Casualty Insurance Company—District Court of Appeal of Florida—No. 5D19-3055—August 21, 2020.