United States District Judge Kari A. Dooley sides with Biller Sachs & Robert Safeguarding the Rights of Assignees against Insurance Companies

Attorneys Jon Biller and Brianna Kastukevich Robert successfully defeated an insurer’s refusal to honor a post-lost assignment of a property insurance claim. Insurers’ “Anti-Assignment” Clauses are designed to control the rights of policyholders’ insurance proceeds arising out of a loss. A transcript of the Honorable Kari A. Dooley’s decision to grant partial summary judgment in favor of the Connecticut policyholder assignee can be read here.

In 51 Roses Mill LLC v. American Guarantee & Liability Insurance Company, Attorneys Biller and Robert secured partial summary judgment in favor of a Connecticut policyholder that was entitled to replacement cost coverage value under the policy. In 51 Roses Mill LLC, the insurer denied the policyholder’s claim, arguing that the replacement cost provision in the policy could not be assigned because it had to consent to the assignment and the insured/assignor was not the entity that started the repairs within two years.

Counsel for the insurance carrier American Guarantee & Liability (Parent organization Zurich American Insurance Company) argued that even if the assignment was valid, the insured was limited to recovering actual cash value and not replacement cost value. Attorney Biller at oral argument advocated that the cross-motions for summary judgment could be resolved without reference to any disputed facts and the Court agreed. In particular, “Connecticut follows the clear majority rule that such provisions do not bar the assignment of an insured’s claim after the loss that is the subject of the claim has occurred” which was the premise of Attorney Biller’s argument.

In addition to refusing the assignment, American Guarantee & Liability Insurance Company (Zurich American Insurance Company) also argued the assignee was not entitled to recover on a replacement cost basis because the assignee as opposed to the insured had started the construction and rebuilding of the damaged property. However, Attorneys Jon Biller and Brianna Kastukevich Robert maintained that regardless of the existence of any conditions set forth by the insurance company any and all insurance proceeds arising from the loss became assignable. The Court agreed with 51 Roses Mill LLC and the arguments made by Attorney Biller.

Following the argument of the cross-motions, District Judge Kari A. Dooley denied the insurance carrier’s motion for summary judgment, and granted the plaintiff’s motion, in part, holding that “the plaintiff’s assignment includes the right to seek replacement cost value under the terms of the Policy.” Furthermore, in District Judge Kari A. Dooley’s decision, the court reasoned that, while an “assignee may present a greater risk of loss to the insurer than the original insured…the need to protect the insurer no longer exists after the insured sustains the loss because the liability of the insurer is essentially fixed.” Thus, after the loss occurred, the court reasoned the insurer-insured relationship is analogous to that of a debtor and creditor, with the policy serving as evidence of the amount of debt owed. The assignor was entitled to insurance proceeds following the loss of the property and it’s claim was assignable despite the inclusion of an “Anti-Assignment” provision in the policy provided by American Guarantee and Liability Insurance Company (ZAIC).

This is a matter that fits perfectly within Connecticut’s majority rule concerning post-loss assignments, safeguarding the rights of Assignees against insurance companies, and assuring that insurance companies pay fair and reasonable compensation for covered losses.

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