Ins Co St of PA v. Hutter

• Court: Court of Appeals for the Fifth Circuit
• Decided: April 5, 2002
• Docket: 01-10768
• Status: Unpublished

Opinion

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 01-10768 _____________________

INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA,

Plaintiff - Counter Defendant - Appellee

v.

LAWRENCE HUTTER

Defendant - Counter Claimant - Appellant

_________________________________________________________________

Appeal from the United States District Court for the Northern District of Texas, Fort Worth 4:98-CV-1063-E _________________________________________________________________ April 4, 2002

Before KING, Chief Judge, and GARWOOD and HIGGINBOTHAM, Circuit Judges.

PER CURIAM:*

Plaintiff-Counter Defendant-Appellee Insurance Company of

the State of Pennsylvania (“ICSOP”) filed suit seeking a

declaratory judgment that it had no liability to Defendant-

Counter Claimant-Appellant Lawrence Hutter under a commercial

property policy issued by ICSOP to M & W Holdings, Ltd., with

Federal Deposit Insurance Corporation named as mortgagee. During

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. the term of the policy, Hutter was neither an insured nor a

mortgagee under the ICSOP policy. After the district court

entered a partial summary judgment in favor of ICSOP, dismissing

Hutter’s extra-contractual claims and finding that Hutter could

not make any claims under the policy as an owner of property, M &

W Holdings purported to assign its interest in, or rights under,

the ICSOP policy to Hutter at a time when M&W Holdings had no

right to bring suit on the policy. ICSOP did not consent to the

assignment. Hutter then proceeded to assert a claim against

ICSOP based on the assignment. ICSOP defended on the basis,

among others, that the anti-assignment clause of the policy

barred Hutter’s claim. The district court agreed with ICSOP and

granted another partial summary judgment, this time finding

Hutter’s claims based on the purported assignment barred by the

anti-assignment clause of the ICSOP policy. After entry of

judgment in favor of ICSOP, Hutter appeals.

In this diversity case, Texas law governs. Anti-assignment

clauses are enforced generally under Texas law. See Island

Recreational Dev. Corp. v. Republic of Tex. Sav. Ass’n., 710

S.W.2d 551, 556-57 (Tex. 1986); Tex. Farmers Ins. Co. v. Gerdes,

880 S.W.2d 215, 218 (Tex. App.-Fort Worth 1994, writ denied).

Such clauses are also enforced so as to preclude the assignment

of a claim under an insurance policy. See Gerdes, 880 S.W.2d at

218-19; Tex. Pac. Indem. Co. v. Atlantic Ritchfield Co., 846

S.W.2d 580, 584-85 (Tex. App.-Houston[14th dist.] 1993, writ

2 denied); Conoco, Inc. v. Republic Ins. Co., 819 F.2d 120, 124

(5th Cir. 1987)(applying Texas law). Hutter argues that the

policy reasons supporting the enforcement of an anti-assignment

clause should not apply if the assignment in question occurs

after the loss. As ICSOP correctly points out, however, the

assignments at issue in Gerdes and Conoco occurred after the

loss, and we do not have a roving mandate to disregard settled

Texas law based on our view of what is wise policy.

Hutter’s final argument is that following the decision of

the Texas Supreme Court in Hernandez v. Gulf Group Lloyds, 875

S.W.2d 691 (Tex. 1994), and this court’s decision in Hanson Prod.

Co. v. Americas Ins. Co., 108 F.3d 627, 630-31 (5th Cir. 1997),

Conoco is no longer good law. Both those cases, however,

involved markedly different facts and issues than this case

involves, and they do not stand for the broad proposition that

the Texas courts (and hence this court) will no longer apply the

explicit terms of an insurance policy in the absence of a showing

of prejudice. It is only at that level of abstraction that

Hutter even has an argument. The present state of the law in

Texas and in this circuit (whatever may be the case elsewhere) is

that no showing of prejudice is required to enforce the anti-

assignment clause contained in the ICSOP policy, and that clause

applies here to bar a post-loss assignment.

The judgment of the district court is AFFIRMED.