Opinion ID: 1826994
Heading Depth: 1
Heading Rank: 7

Heading: reformation of national american's policy

Text: Economy contends that the district court erred in failing to reform National American's policy to provide coverage to Christopher Welsh. National American counters that Economy lacks standing to request reformation of National American's policy. Whether one insurance company may seek reformation of another insurance company's policy is a question of first impression for this court. As a general rule, [r]eformation of written instruments may be had by the immediate parties thereto and by those standing in privity with them... a person not a party or privy to the transaction in question with a substantial interest therein may not maintain the action. 76 C.J.S. Reformation of Instruments § 47 at 400-01 (1952). Other jurisdictions which have considered the issue of reformation of insurance contracts have held that the right to reformation belongs solely to the contracting parties, their assignees, or their intended beneficiaries. See, Starr v. Nationwide Mut. Ins. Co., 548 A.2d 22 (Del.Ch.1988), aff'd 575 A.2d 1083 (Del.1990) (holding that injured passenger lacked standing to seek reformation of insured's uninsured motorist coverage); International Service Ins. Co. v. Gonzales, 194 Cal.App.3d 110, 239 Cal.Rptr. 341 (1987) (holding that neither accident victim nor former wife of insured had standing to seek reformation of insured's automobile disability policy); Biondo v. Ridgemont Ins Agency, 104 Mich. App. 209, 304 N.W.2d 534 (1981) (holding that insurance agency that failed to notify company of a change in coverage requested by insured lacked standing to seek reformation of insured's theft insurance coverage). Economy is not a party to the automobile insurance contract between National American and the Welsh & Sibbernsen law firm, nor is Economy in privity with either of the parties as to that insurance contract. Economy is not an assignee of either party, nor can it be said that Economy is an intended beneficiary of the contract. Therefore, consistent with the general rule as well as the decisions of other jurisdictions, we hold that Economy lacks standing to seek reformation of National American's policy and that its assignment of error is without merit.