While homeowners should obtain their own insurance policies for their homes, there are occasions where mortgage companies for homeowners secure insurance policies on properties on which they hold mortgages. The policies obtained by mortgage companies are commonly referred to as force-placed insurance or lender-placed insurance.
In Thomas Barry and Rising Star Roofing, LLC as assignee of Thomas Barry v. Integon National Insurance Company, the insurance company filed a Motion to Dismiss claiming the plaintiffs lacked standing to sue the insurance company. The insurance policy issued by the defendant insured the plaintiff’s home but was a force-placed insurance policy secured by Mr. Barry’s mortgage company. While the insurance policy was in effect, the home suffered a loss due to a windstorm. The defendant argued that the insurance policy was obtained by the homeowner’s mortgage company and therefore did not provide coverage for the homeowner as a result of the windstorm claim.
The plaintiff argued that the homeowner was an insured pursuant to the language of the insurance policy. Specifically, Biller Sachs & Robert, on behalf of the plaintiffs, argued that the homeowner was insured under the policy as a “borrower.” Attorneys Jon Biller and Brianna Robert analyzed the policy and argued the insurance policy includes a Connecticut endorsement providing coverage to the home, which was owned by the plaintiff. That same Connecticut endorsement in the policy also adds a mortgage clause, which states that the homeowner was insured under the policy. Furthermore, the policy defined “borrower” and the borrower on the Notice of Insurance was the homeowner. As such, Biller Sachs & Robert argued that the policy itself stated that it was issued to the mortgage company and the borrower. There was no question that the borrower was the homeowner.
The plaintiff also argued that if the defendant’s position was that this language in the policy differed from other portions of the policy where the borrower was not listed as an insured, this was an ambiguity in the policy. The plaintiff advised the court that Connecticut law is clear on ambiguities in insurance policies. Connecticut courts have held that insurance policies are contracts of adhesion because the purchaser has limited, if any, bargaining power. As such, any ambiguities within the policy are to be construed against the insurer. See Johnson v. Connecticut Ins. Guar. Ass’n., 302 Conn. 639, 31 A.3d 1004 (2011).
In ruling on the Motion to Dismiss, the court concluded that an ambiguity exists “regarding whether the plaintiff constitutes an insured and whether the plaintiff was an intended third-party beneficiary under the policy.” Thomas Barry and Rising Star Roofing, LLC as assignee of Thomas Barry v. Integon National Insurance Company, Docket No.: TTD-CV-23-6027659-S, Judge Matthew Dallas Gordon decision dated January 22, 2024. The court went on to cite Conboy v. State, 292 Conn. 642, 653-654, 974 A.2d 669 (2009), holding that this was not a case in which the defendant’s Motion to Dismiss could be decided simply on the basis of an affidavit submitted by the defendant and the language of the contract. In further citation to the Conboy case, the court went on to state that an evidentiary hearing would be required to make “critical factual findings as to whether the plaintiff has standing as a third-party beneficiary.” Thomas Barry et al. v. Integon National Insurance Company, Docket No.: TTD-CV-23-6027659-S, Judge Matthew Dallas Gordon decision dated January 22, 2024
The court also cited Anderson v. Town of Bloomfield, 203 Conn. App. 182, 197, 247 A.3d 642, 652 (2021) holding that the resolution of the factual issue was “intertwined with the merits of the case” and therefore resolution of the jurisdictional question should be resolved by ultimate fact finder – the jury or the trial judge – as part of the trial on the merits.
The plaintiff was successful in defending this Motion to Dismiss because of the briefing and advocacy at oral argument by Attorneys Biller and Robert. Shortly after the Motion to Dismiss was denied, the parties were able to resolve the matter without additional further litigation to the mutual satisfaction of the parties.
Read the decision here: