Millard Gutter Co. v. Farm Bureau Prop. & Cas. Ins. Co.
295 Neb. 419
| Neb. | 2016Background
- Farm Bureau issued a homeowner’s policy to Howard Hunter that barred assignment of “all rights and duties” without the insurer’s written consent.
- A storm damaged Hunter’s roof; Hunter hired Millard Gutter to replace the entire roof, and Millard’s estimate exceeded the amount Farm Bureau paid for part of the roof.
- After the loss, Hunter signed an assignment of his insurance claim to Millard Gutter; Farm Bureau did not give prior written consent but paid $3,022.43 directly to Millard.
- Millard Gutter sued Farm Bureau seeking the balance it claimed ($5,252.66); the county court entered judgment for Millard and awarded attorney fees; the district court affirmed.
- Farm Bureau appealed, arguing the postloss assignment was invalid under the policy’s nonassignment clause, so Millard lacked standing and the county court lacked subject matter jurisdiction.
Issues
| Issue | Plaintiff's Argument (Millard Gutter) | Defendant's Argument (Farm Bureau) | Held |
|---|---|---|---|
| Validity of postloss assignment | Assignment of the insured’s claim to contractor is valid; Millard may sue as assignee | Policy bars any assignment without written consent; assignment invalid, so assignee lacks standing | Postloss assignment of homeowner’s property-damage claim is valid despite nonassignment clause; Millard had standing |
| Subject-matter jurisdiction of county court | County court had jurisdiction because assignee may sue on the claim | County court lacked jurisdiction because Millard was not real party in interest | County court jurisdiction sustained because assignment was valid |
| Enforceability of nonassignment clause | Clause should not defeat postloss transfer of a chose in action to recover proceeds | Clause protects insurer’s contractual choice of counterparty and should be enforced | Nonassignment clauses are enforceable pre-loss but do not generally bar postloss assignments absent statute or special policy reasons |
| Public policy balance | Free alienability of ripened claims favors assignee; no evidence insurer harmed | Freedom to contract supports enforcing antiassignment provisions | Balanced for postloss homeowner claims: public policy favors assignability absent legislative direction or special insurer interests |
Key Cases Cited
- Star Union Lumber Co. v. Finney, 35 Neb. 214 (holds postloss assignment of a fire-insurance claim valid despite antiassignment language)
- OB-GYN v. Blue Cross, 219 Neb. 199 (upholds nonassignment clause in health-benefits context where clause serves important cost-control purpose)
- Folgers Architects v. Kerns, 262 Neb. 530 (allows assignment of claims after contract breach; nonassignment clause not to bar recovery for breach)
- Rumbin v. Utica Mut. Ins. Co., 254 Conn. 259 (applies rule permitting assignment of ripened insurance claims)