Valley Boys, Inc. v. Allstate Insurance
66 F. Supp. 3d 1179
D. Neb.2014Background
- Valley Boys, a roofing contractor, alleges it received post-loss assignments of insurance claims from 27 Allstate-insured homeowners after an April 2013 hailstorm and seeks payment for work and line-item charges totaling at least $569,065.14.
- Assignment forms (Sept 2013–Feb 2014) transfer the insureds’ "insurance claim(s) ... including but not limited to any and all insurance claims asserted thereunder and proceeds thereof" to Valley Boys and reference Allstate claim numbers.
- Valley Boys sued Allstate for (1) breach of contract (seeking insurance benefits as assignee) and (2) breach of the duty of good faith and fair dealing (bad faith) for allegedly refusing to recognize assignments and to pay claimed items.
- Allstate moved to dismiss, arguing (inter alia) that the policy forbids assignment without its consent and that bad faith claims are not assignable or fail absent a contract breach.
- The court denied the motion to dismiss, holding post-loss assignment of insurance claims is permissible under Nebraska law and declining to resolve reserved or fact-dependent arguments (e.g., whether bad faith claims were assigned or whether insureds received payments) at the Rule 12(b)(6) stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether post-loss assignments of insurance claims are barred by the policy anti-assignment clause | Assignments of claims after loss are valid; Valley Boys, as assignee, can sue to recover benefits owed to insureds | Policy prohibits assignment without consent; assignments are invalid | Court: Anti-assignment clause barring assignment of the policy pre-loss does not defeat post-loss assignment of claims; dismissal denied |
| Whether the bad faith claim must be dismissed because contract breach is absent or bad faith is not assigned | Bad faith claim pleaded against Allstate; assignments convey claims and proceeds; factual disputes remain | Allstate: insureds already received payments; bad faith claims are nonassignable or require breach as prerequisite | Court: Declines to dismiss; reserved arguments inadequately briefed or fact-dependent; bad faith dismissal premature |
| Whether the court may consider exhibits and factual assertions on a Rule 12 motion | Valley Boys relies on assignment documents attached to complaint | Allstate urged consideration of outside facts to support dismissal | Court: Accepts complaint allegations and attached assignment documents; will not consider unpled factual assertions when ruling on Rule 12 motion |
Key Cases Cited
- Star Union Lumber Co. v. Finney, 35 Neb. 214, 52 N.W. 1113 (1892) (post-loss assignment of insurance claims allowed)
- Obstetricians-Gynecologists, P.C. v. Blue Cross & Blue Shield of Neb., 219 Neb. 199, 361 N.W.2d 550 (1985) (distinguishing health-care contract anti-assignment clause from fire/insurance cases)
- Folgers Architects Ltd. v. Kerns, 262 Neb. 530, 633 N.W.2d 114 (2001) (post-breach assignment of contract-based claims permitted)
- LeRette v. Am. Med. Sec., Inc., 270 Neb. 545, 705 N.W.2d 41 (2005) (Nebraska law on first-party bad faith and relation to contract claims)
- Ruwe v. Farmers Mut. United Ins. Co., 238 Neb. 67, 469 N.W.2d 129 (1991) (recognition of bad faith cause relating to insurer’s handling of claims)
- Williams v. Allstate Indem. Co., 266 Neb. 794, 669 N.W.2d 455 (2003) (standard for bad-faith: absence of reasonable basis and insurer’s knowledge or reckless disregard)
- Braesch v. Union Ins. Co., 237 Neb. 44, 464 N.W.2d 769 (1991) (discussing tort of bad faith in first-party context)