Titan Exteriors, Inc. v. Lloyd'S
297 F. Supp. 3d 628
N.D. Miss.2018Background
- Columbus Business Center (CBC) insured a shopping center under a Lloyd’s policy; the policy valued covered property at "actual cash value" (not defined).
- In April 2014 the center suffered hail/wind damage; Underwriters estimated replacement cost and subtracted depreciation and a $100,000 deductible to arrive at an actual cash value (ACV) payment.
- Underwriters calculated ACV as $1,217,545.60 by subtracting $2,662,597.21 in depreciation from replacement cost; $1,054,023.63 of that depreciation was attributed to labor.
- In June 2017 CBC assigned its claim/ACV payment to contractor Titan Exteriors (post-loss); Underwriters refused to pay Titan, claiming the policy’s anti-assignment clause barred the transfer.
- Titan moved for partial judgment on the pleadings seeking $1,054,023.63 (the labor depreciation), arguing the assignment was valid and the policy’s ACV/depreciation language is ambiguous and cannot justify depreciating labor.
- The district court, applying Mississippi law, held the post-loss assignment valid and resolved the ACV/depreciation ambiguity against the insurer, ruling labor depreciation was not permitted under the policy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of CBC’s post-loss assignment | Post-loss assignment of proceeds is allowed; anti-assignment clauses govern pre-loss transfers only | Anti-assignment clause bars assignment of policy rights including post-loss transfers | Assignment valid; Mississippi would treat post-loss claim as assignable proceeds |
| Whether "actual cash value"/"depreciation" permits depreciating labor | Term is ambiguous; reasonably read to exclude labor depreciation; ambiguity resolves for insured | Term unambiguous; ACV (replacement cost less depreciation) necessarily includes labor | Term ambiguous; resolved against insurer — labor depreciation not allowed |
Key Cases Cited
- Lewis v. Allstate Ins. Co., 730 So.2d 65 (Miss. 1998) (interpretation of insurance policy is question of law)
- J & W Foods Corp. v. State Farm Mut. Auto. Ins. Co., 723 So.2d 550 (Miss. 1998) (policy construed as whole; ambiguity defined)
- Noxubee County Sch. Dist. v. United Nat. Ins. Co., 883 So.2d 1159 (Miss. 2004) (ambiguous policy language construed for insured)
- Merchants & Farmers Bank of Meridian v. McClendon, 220 So.2d 815 (Miss. 1969) (distinguishes assignment of contract from assignment of money due)
- Bellefonte Ins. Co. v. Griffin, 358 So.2d 387 (Miss. 1978) (Mississippi court found ACV language ambiguous as to labor depreciation)