Florida DCA Reverses Trial Court: Depreciation Clause Does Not Invalidate Assignment of Benefits

Spartan Services Corporation vs. Citizens Property Insurance Corporation

Spartan Services Corporation and the insured executed an assignment of benefits (AOB) for their post-loss water mitigation services to the homeowners. Citizens determined that the AOB was invalid because it contained a sentence that stated that the “client agrees that any portion of work, deductible, betterment, depreciation or additional work requested by the undersigned, not relating to the subject claim, must be paid by the undersigned on or before its completion.” (Emphasis added.)

The trial court concluded that the AOB violated section 627.7152(7), and was therefore invalid, dismissing the lawsuit with prejudice. Spartan appealed the decision and the DCA concluded that the AOB’s inclusion of “depreciation” as an item for which the insured is responsible does not violate section 627.7152(7) and therefore does not invalidate Spartan’s AOB contract.