The New Jersey Supreme Court found that an anti-assignment provision could not be applied to bar a post-loss claim assignment. Givaudan Fragrances Corp. v. Aetna Cas. & Sur. Co., 2017 N.J. LEXIS 121 (N.J. Feb. 1, 2017). In reaching its decision, the court distinguished a decision from the Hawaii Supreme Court enforcing consent-to-assignment clauses and failing to recognize any post-loss exception to such clauses. See Del Monte Fresh Produce (Hawaii), Inc. v. Fireman's Fund Ins. Co., 183 P.3d 734 (Haw. 2007).
Plaintiff Givaudan Fragrances Corporation (Fragrances) was sued for environmental contamination at a manufacturing site. A related corporate entity had operated the facility from the 1960s to 1990. Fragrances sought coverage under policies issued to its predecessor. The predecessor attempted to assign to Fragrances post-loss rights under the policies. The insurers resisted, claiming the predecessor was the named insured, not Fragrances, and that the insurers did not consent to an assignment of the predecessor's policies.
The trial court upheld the anti-assignment provisions and granted summary judgment to the insurers. The Appellate Division reversed and remanded. The court reasoned that once a loss occurred, an insured's claim under a policy could be assigned without the insurer's consent. Once a loss had occurred, there was no longer any danger that the risk would increase.
The Supreme Court noted that a minority view that enforced consent-to-assignment clauses, citing, among other cases, Del Monte. To the extent the minority cases found that insurers could enforce anti-assignment clauses and valued such enforcement above the rights of the insured to freely assign its claim, the cases were inconsistent with the established policy in New Jersey. The court, therefore, voided application of the anti-assignment clauses for post-loss claim assignments.
Here, the right to coverage for the "occurrence" of environmental contamination was assigned to Fragrances after the policies had expired. The loss event occurred during the policy periods. The assignment of claims did not increase the risk undertaken by the insurers for the policy periods for which they wrote coverage, in specified amounts, for the occurrence-based claims pertaining to the site of the contamination.