Court Opinion

ID: 9705709
Source: CourtListenerOpinion
Date Created: 2023-08-26 01:17:23.522577+00
Date Added: 2024-06-11T18:22:14.028253
License: Public Domain

SHORT, Judge
(dissenting).
I respectfully dissent. First, it is undisputed American Hardware did not insure Gopher Rubber Cote and Fred Bame personally. Given this fact, the trial court incorrectly required the insurer to pay $180,031.21 in post-tender defense fees and costs related to the Arrowhead litigation.
And second, a trial court cannot retroactively create an insurance relationship. Gopher is not an “insured,” and there was no valid assignment of the policy. See Yoselowitz v. Peoples Bakery, Inc., 201 Minn. 600, 604, 277 N.W. 221, 224 (1938) (stating benefits of policy do not extend to successor without valid assignment); see also Ocean Accident & Guar. Corp. v. Southwestern Bell Tel. Co., 100 F.2d 441, 444 (8th Cir.1939) (recognizing that liability insurance policies are not assignable without consent of parties); Argonaut Southwest Ins. Co. v. American Home Assurance Co., 483 F.Supp. 724, 727 (N.D.Tex.1980) (refusing to ignore insurance policy’s clear and specific exclusion by recognizing assignment), affd, 636 F.2d 311 (5th Cir.1981); Closuit v. Mitby, 238 Minn. 274, 281, 56 N.W.2d 428, 432 (1953) (noting, in absence of valid assignment, insurance policies do not attach to insured property). Whether we use the word “risk” or “loss” is immaterial because there was no claim or right of action on the policy until after Gopher’s succession. See Ocean, 100 F.2d at 444 (noting assignment of loss only permissible after right of action arises); Citicorp Indus. Credit, Inc. v. Federal Ins. Co., 672 F.Supp. 1105, 1107 (N.D.Ill.1987) (holding purchaser of insured’s rights may only assert claim for losses occurring before assignment). Moreover, the plan of liquidation transfers all corporate assets, subject to assumption of known or unknown corporate liabilities. Thus, Gopher expressly assumed, by contract, the environmental liabilities for which it now seeks insurance coverage. Under these circumstances, I would reverse the trial court’s determination of insurance coverage.