Hurricane Ian Shoreline Loss: Four Policies, Oh Joy!
October 19, 2023
In a recent opinion, Judge Schmehl of the Eastern District of Pennsylvania denied a forced placed insurer’s Motion to Dismiss a suit brought by the assignee of a homeowner for water damage to the home. In Williams v. American Surety Insurance Company, the subject home was damaged by water while the mortgage company was in the process of foreclosing on the home. The homeowner, who had been designated as “Borrower” under a forced placed insurance policy issued to the mortgage company, made a claim under the policy. After the home was subsequently purchased at Sheriff’s Sale, the new buyer obtained an assignment of the claim. The claim was denied and the purchaser brought suit.
In denying the insurer’s Motion to Dismiss, the court ruled that the policy’s anti-assignment clause only served to bar pre-loss assignments. The claim, being a fixed and vested right at the time of the loss, is assignable under Pennsylvania law. The court also rejected arguments relating to the timing of the assignment, finding that it was irrelevant that the original claimant had already sold the home at the time the assignment was made. The court found that the only issue that mattered was whether the assignor had an insurable interest at the time of the loss, which the court concluded she did.
Notably, the court cited with approval to the Florida decision of One Call Prop. Servs., Inc. v. Security First Ins. Co., 165 So .2d 749 (Fla. 4th DCA 2015) for the proposition that the assignable right accrues as of the date of loss even though payment may not be due. Florida courts are awash in the assignment of benefits (AOB) suits brought by restoration companies. While the avalanche of AOB cases in Florida is likely the product of the state’s unique one-way, fee-shifting statute (§ 627.428), it will be interesting to see whether decisions like Williams will encourage similar litigation in Pennsylvania.
For any further questions, please contact Richard Gable, Jr.