FARMERS INSURANCE EXCHANGE, a foreign corporation; ABC Corporations I-X; XYZ Partnerships, Petitioners,
THE HONORABLE DAVID UDALL, Judge of the SUPERIOR COURT OF THE STATE OF ARIZONA, in and for the County of MARICOPA, Respondent Judge, ECODRY RESTORATION OF ARIZONA, L.L.C., an Arizona limited liability company; ARIZONA RESTORATION PROS, L.L.C., an Arizona limited liability company, Real Parties in Interest.
Petition for Special Action from the Superior Court in
Maricopa County No. CV2016-096885 The Honorable David K.
Skelton & Hochuli, P.L.C., Phoenix By Donald L. Myles,
Jr., Lori L. Voepel (argued), Sarah E. Epperson Counsel for
Law PLC, Mesa By Joshua T. Ehmke Counsel for Real Parties in
Childers Hanlon & Hudson, PLC, Phoenix By James A. Robles
Counsel for Amicus Curiae Arizona Association of Defense
Insurance Defense Law Group, L.L.C., Scottsdale By Joseph P.
Rocco, Jason S. Carr Counsel for Amici Curiae Pekin and
Stillwater Insurance Companies.
Paul J. McMurdie delivered the opinion of the Court, in which
Presiding Judge Diane M. Johnsen and Judge David D. Weinzweig
Four homeowners insured by Farmers Insurance Exchange
("Farmers") hired EcoDry Restoration of Arizona,
LLC ("EcoDry") to repair water damage to their
homes. In each case, the insureds assigned to EcoDry their
"rights, benefits, proceeds and causes of action"
under the policies. After Farmers refused to pay EcoDry's
repair bills in full, EcoDry sued the insurer, alleging
breach of the insurance policies. Farmers petitions this
court for special action relief from a superior court order
denying Farmers' Motion to Dismiss the complaint. We
accept jurisdiction but deny relief, holding Farmers'
insureds validly assigned to EcoDry their rights to sue to
collect post-loss benefits under the policies.
AND PROCEDURAL BACKGROUND
Farmers issued homeowners' insurance policies to four
homeowners who later required water damage mitigation and
restoration services. Each policy contained an
anti-assignment provision stating that the insured's
"interest in this policy may not be transferred to
another person without [Farmers'] written consent."
In August and September 2016, each insured signed a
"Work Order Agreement to Perform Emergency Services,
Direct Pay Authorization & Assignment of Benefits"
("Work Order") authorizing EcoDry to perform
emergency water mitigation services. Each Work Order included
an assignment of benefits clause ("the
assignments"). Each assignment read, in part:
[The insured] hereby assigns any and all insurance rights,
benefits, proceeds and causes of action under any applicable
insurance policies to [EcoDry]. This assignment is made in
consideration of [EcoDry] performing the services and in
consideration of [EcoDry] not requiring a down payment from
[the insured] prior to starting work. . . .
[The insured] further authorizes and instructs [the
insured's] insurance company to pay directly to [EcoDry]
the amount shown on the final billing for the work done by
[EcoDry] in connection with this claim. [The insured] also
understands that the insurance company is billed as a
courtesy and convenience to [the insured]. Should [the
insured's] insurance company fail to honor the assignment
and direction to pay, [the insured] agrees to pay [EcoDry]
any balances due from [the insured's] personal funds.
[The insured] understands and agrees that [EcoDry] is working
for [the insured] and not for [the insured's] insurance
company. Therefore, it is understood that [the insured] is