TAMPA (LN) — A federal judge in the Middle District of Florida denied American National Lloyds Insurance Company’s motion to dismiss on Tuesday, ruling that Mako Wash, Inc. stated a valid claim as an intended third-party beneficiary to a lender-placed insurance contract covering its property.
Mako Wash sued to enforce the policy, alleging it was an intended beneficiary despite not being a named insured. American National argued the motion should be granted because the contract did not explicitly confer a direct and primary benefit on the mortgagor.
The court applied Florida law, which requires a third party to show that conferring a benefit on them was a "direct and primary object" of the contracting parties. The judge noted that while the policy stated Mako Wash was not a named insured, it did not explicitly exclude it as a third-party beneficiary.
Key to the ruling was the policy’s provision allowing the insurer to "adjust losses with the owners of lost or damaged property if other than you" and stating that payment to those owners would satisfy the named insured’s claims. The court cited Eleventh Circuit precedent holding that such language demonstrates a clear intent to provide a direct benefit to the property owner.
American National had relied on cases involving standard insurance policies and Florida Statute Section 627.405, which requires an insurable interest. However, the court found those cases inapplicable because the policy in question was issued pursuant to the Florida Surplus Lines Law, which expressly disclaims the application of that statute.
The judge rejected American National’s argument that Mako Wash’s benefit was merely incidental, pointing to the contract’s requirement that both the named insured and the mortgagor perform specific duties to trigger the insurer’s obligation to pay.
American National must file its answer to the amended complaint no later than 14 days of the order.