The appellate court reversed the trial court’s dismissal of the insured’s complaint which adequately pled she had an insurable interest in the property even after it was transferred to an LLC. Cole v. Citizens Prop. Ins. Corp., 2021 Fla. App. LEXIS 12386 (Fla. Ct. App. Aug 25, 2021).
Two months after Aundrea Cole obtained a homeowner’s policy from Citizens, she changed the structure of the ownership of the insured dwelling by transferring ownership to a corporate entity, A.M.Z. Investment Group, LLC. Cole was a 25% owner of the LLC. Subsequently, the property suffered damages as a result of two vandalism losses.
Cole and the LLC sued, alleging Citizens breached the policy by failing to fully indemnify Cole and the LLC for their losses. The lawsuit also sought declaratory relief regarding coverage under the policy. Citizens moved to dismiss asserting that, because of Cole’s transfer of the property to the LLC without Citizen’s consent, Cole had no insurable interest in the property and the transferee LLC lacked standing to enforce the policy.
The trial court agreed with Citizens, declaring that once Cole transferred her interest in the property to the LLC, she no longer had a insurable interest in the property and therefore could not maintain the suit against Citizens. The trial court also found that the LLC lacked standing to sue Citizens.
The appellate court reversed as to Cole because under Florida law, an insurable interest was not determined by the concept of title, but rather whether the insured had a substantial economic interest in the property. The trial court’s dismissal as to the LLC was also reversed. The complaint alleged that the LLC had a insurable interest as the owner of the property and Citizens had not paid in full for the covered losses.