Givaudan Fragrances Corporation v. Aetna Casualty & Surety Company(076523), 151 A.3d 576

Background

Givaudan Fragrances (Fragrances) seeks coverage for environmental contamination at a Clifton, NJ site for occurrences during policy periods ending January 1, 1986; the policies were originally issued to Givaudan Corporation.
Corporate restructurings after the policy periods produced Givaudan Roure Flavors (Flavors) as successor-in-interest to the named insured; Fragrances later became a sister affiliate and received an assignment of insurance rights from Flavors in 2010.
The insurers refused consent to the assignment based on anti-assignment clauses in the policies and denied coverage, prompting Fragrances to bring a declaratory-judgment action in 2009.
The trial court held the assignment was effectively an impermissible policy assignment and ruled for insurers; the Appellate Division reversed, treating the transfer as a post-loss assignment of claims.
The Supreme Court of New Jersey affirmed the Appellate Division: it held that anti-assignment clauses cannot bar post-loss assignments of claims under occurrence policies and that the assignment here was post-loss.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether an anti-assignment clause bars a post-loss assignment of insurance claims	Assignment of post-loss claims is valid because once the loss (occurrence) happened the insurer's risk was fixed	Anti-assignment clause prohibits transfer absent insurer consent; assignment is a prohibited transfer of the policy and may multiply insurer risk	Anti-assignment clauses cannot bar post-loss assignments of claims under occurrence policies; assignment upheld
Whether the 2010 transfer was a prohibited policy-assignment or an allowable claim-assignment	The transfer was a post-loss assignment of rights to claims (policies had expired; loss had occurred in policy period)	The assignment's broad language transferred the policy and added a new insured, increasing insurers' obligations	The transfer was a post-loss claim assignment (policies had lapsed), so anti-assignment clauses do not apply
Whether post-loss assignment here multiplies insurers’ indemnity exposure	No — indemnity exposure was fixed by the occurrence during the policy period; assignment does not increase risk	Yes — assignment could create additional insureds, duplicate defenses, or expand indemnity obligations (including via separate indemnity agreements)	Assignment does not increase the contractual risk to insurers; indemnity exposure remains defined by the original occurrence/policies
Whether the duty to defend can be assigned	Duty to defend passes with a valid post-loss claim assignment; assignee can require defense	Duty to defend is personal to the insured and cannot be assigned; assignment could create dual defense obligations	Duty to defend accompanies a valid post-loss claim assignment; here no dual-defense burden arose because assignor relinquished rights

Key Cases Cited

Flint Frozen Foods, Inc. v. Firemen’s Ins. Co. of Newark, 8 N.J. 606 (N.J. 1952) (Law Division permitted post-loss claim assignment; Supreme Court reversed on other grounds but did not reject post-loss assignment principle)
Elat, Inc. v. Aetna Cas. & Sur. Co., 280 N.J. Super. 62 (App. Div. 1995) (appellate decision rejecting enforcement of anti-assignment clause against post-loss claim assignment)
Ocean Accident & Guar. Corp. v. Sw. Bell Tel. Co., 100 F.2d 441 (8th Cir. 1938) (classic formulation: liability and cause of action arise at occurrence; post-loss assignments enforceable)
Ross v. American Employers’ Liability Ins. Co., 56 N.J. Eq. 41 (Ch. 1897) (explains insurer’s liability relates back to the injurious occurrence, not the later judgment)
Fluor Corp. v. Superior Court, 354 P.3d 302 (Cal. 2015) (California Supreme Court adopting the majority rule overruling prior contrary California authority)
Henkel Corp. v. Hartford Accident & Indem. Co., 62 P.3d 69 (Cal. 2003) (earlier California decision taking the contrary view that anti-assignment clauses can bar pre-judgment assignments)