Homeowners' Coverage Standing Third-Party Beneficiary Assignment of Rights
Dutton v. American Bankers Inc. Co., PICS Case No. 17-1073 (C.P. Philadelphia July 3, 2017) Anders, J. (5 pages).
Plaintiff lacked standing to pursue this action against his neighbor's insurer for losses allegedly suffered in a fire since plaintiff was not a party to his neighbor's insurance contract or an assignee of any of the neighbor's rights under the contract. The trial court recommended affirmance of its decision granting insurer summary judgment.
Tenille Timbers rented property on 51st Street in Philadelphia and secured a renter's insurance policy on the property through defendant American Bankers Insurance Co. Timbers suffered a loss to her property in a fire Jan. 8, 2013. Plaintiff owns the property next door to Timbers. According to plaintiff, he also sustained damages due to the fire. He filed suit against ABIC and Timbers, but that suit was withdrawn without prejudice and then marked settled and discontinued. In another action, plaintiff sued only Timbers, but that lawsuit was dismissed as time-barred. Thereafter, plaintiff filed this suit against ABIC for damages not covered by his own insurance policy and allegedly recoverable from ABIC. ABIC moved for judgment on the pleadings, asserting that plaintiff lacked standing to bring a second action against ABIC. The trial court granted ABIC's motion for judgment on the pleadings. Plaintiff filed an appeal, prompting the court's opinion. He argued that he had standing to bring claims against ABIC because the company's insured, Timbers, assigned her rights under her insurance policy to him. Moreover, according to plaintiff, the settlement negotiations he had with ABIC tolled the statute of limitations on his claims. The court found that plaintiff lacked standing to pursue his claims against ABIC. He was neither a party to the insurance contract between ABIC and Timbers nor included in the policy as a named insured. Thus, plaintiff could not derive any benefits from the contract or pursue a direct action under the policy against ABIC. The court also found that the contract between ABIC and Timbers did not express any clear, mutual intent to make plaintiff a third-party beneficiary of the policy. "Where the contract does not include language that the contracting parties intend the contract to benefit a third party, the alleged third party does not have standing to pursue a claim against the insurer," the opinion stated. Finally, the court explained that while an insured's claims against an insurer are assignable, a third party does not have standing to bring a direct action against the insurer unless there is an actual assignment of the claim from the insured to the third party. There was no evidence that Timber assigned her rights under the subject insurance policy to plaintiff. Accordingly, the court found that plaintiff lacked standing to bring his claims against ABIC. Moreover, none of plaintiff's purported negotiations with the insurer related to this matter tolled the applicable statute of limitations.