Nick McGuffin Civil Rights Lawsuit – Complaint & Press Release

MLR Prevails on Anti-Assignment Provision in Oregon COA Opinion

MLR Prevails on Anti-Assignment Provision in Oregon COA Opinion

On November 30, 2016, the Oregon Court of Appeals ruled in favor of Maloney Lauersdorf Reiner’s client in Clinton Condominiums Owners Association v. Truck Insurance Exchange, Multnomah County Circuit Court, Case No. 14CV10123.  On behalf of defendant Truck Insurance Exchange (“Truck”), MLR attorneys F.J. Maloney and Janis Puracal successfully moved for summary judgment against the plaintiff’s claims for breach of the insurance contract and breach of the implied covenant of good faith and fair dealing on the basis that the plaintiff did not have standing to assert those claims due to the underlying policy’s anti-assignment clause.  The trial court agreed with the insurance company, the plaintiff appealed, and the Court of Appeals affirmed the trial court’s ruling.

The case concerned an underlying lawsuit brought by the plaintiff against We Do Windows, Inc. (“WDW”), for negligence and breach of contract for work it performed on plaintiff’s property.  WDW was insured by Truck and tendered its defense and indemnity to Truck, which was denied.  At some point, plaintiffs and WDW entered into a settlement and, as part of that settlement, WDW assigned its claims against Truck to the plaintiff.  Thereafter, the plaintiff, as assignee of WDW’s rights and claims, filed this lawsuit against Truck for breach of contract and breach of the covenant of good faith and fair dealing.  However, the policies under which Truck issued insurance to WDW contained anti-assignment clauses, which provided that WDW could not assign any rights or claims under the policies without Truck’s consent.

Truck filed a summary judgment motion asserting that the plaintiff did not have standing to bring its claims because the anti-assignment clauses “provide that WDW’s ‘rights and duties under this policy may not be transferred without [Truck’s] written consent,’ ” and Truck never provided such consent.  The plaintiff argued that, regardless of the text of the policies, ORS 31.825 made the anti-assignment clauses “invalid and unenforceable.”  The trial court agreed with Truck, determining that the anti-assignment clauses were “clear, unambiguous, valid and enforceable,” and further, that they were not “rendered unenforceable by ORS 31.825.”

On appeal, the plaintiff again argued that the anti-assignment provisions were invalid by ORS 31.825.  Truck argued that the Oregon Supreme Court’s recent ruling in Brownstone Homes Condo. Assn. v. Brownstone Forest Hts., 358 Or 223, 363 P3d 467 (2015) (discussed here), was controlling and prevented plaintiff’s claims against Truck.  In relying upon Brownstone, the Court noted that ORS 31.825 relates to the assignment of claims that arise from a judgment against the insured, “not from the underlying insurance policy.”  In other words, as the Brownstone court explained, ORS 31.825 is directed toward allowing an insured to assign excess judgment claims, not the insurance claims at issue in this case.  The Court held that the trial court correctly rejected the plaintiff’s contention that the statute rendered the anti-assignment clauses in the insurance policies unenforceable and invalid.

Maloney Lauersdorf Reiner has represented numerous clients throughout Oregon in cases concerning insurance coverage, extra-contractual claims, and anti-assignment clause issues.  Please contact us with any questions regarding this matter, or anything else you read on the Insurance Coverage Blog.

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