After suffering hurricane damage and having repairs made, the insured sought to assign rights under its policy to the contractor performing the remediation work. The anti-assignment provision, however, prevented the contractor's recovery under the policy. Paramount Disaster Recovery, Inc. v. Axis Surplus Ins. Co., 2011 U.S. Dist. LEXIS 98272 (S.D. Texas. Aug. 31, 2011).
Hurricane Ike damaged the insured's shopping center. Paramount was hired to perform remediation work to protect the properties from additional damage. The insured then filed a claim with Axis for hurricane-related damages. The insured subsequently attempted to assign all insurance proceeds payable to it under the policy to Paramount.
Paramount filed suit against Axis. Axis moved for summary judgment and no opposition was filed by Paramount. Axis argued the anti-assignment provision barred Paramount's right to proceeds under the policy. The provision read,
Your rights and duties may not be transferred without our written consent except in the case of death of an individual insured . . . .
The court determined the provision would be enforced precluding the assignment of any rights and duties under the policy without Axis's consent.
Next, the court considered whether anti-assignment provisions were enforceable under Texas law. A review of Texas decisions indicated that Texas courts had consistently enforced anti-assignment clauses in insurance policies. Therefore, the anti-assignment clause in Axis's policy precluded the assignment to Paramount absent Axis's written consent. Axis was entitled to judgment as a matter of law.
