Due to the insurance carriers delay, deny defend tactics, my homeowner clients are often put into the precarious position of selling their property during the pendency of the claim. The question I’m always asked at that point it, “how will the sale of my property affect my claim?” I usually go into an explanation about actual cash value versus replacement cost value and that generally your only entitled to actual cash value because you’re selling the home and won’t have an opportunity to repair and recover the depreciated amount. Then I explain that even your actual cash value is not guaranteed unless its expressly stated in the bill of sale that you are entitled to any and all insurance proceeds. If necessary, it’s also beneficial to note the price of the property has been reduced to account for the loss and the anticipated proceeds. Without these safeguards in place, you risk selling your property at a deflated value and losing your ability to sue for the proceeds.
In Liberty Transportation, Inc. v. Massachusetts Bay Insurance Company,1 Liberty sold their property to another entity and had the following language in its agreement:
If any damage to the premises shall not be restored prior to closing [Capital] shall be required to close title to the premises and shall receive in an amount not to exceed the purchase price all insurance monies recovered or recoverable on account of such damage.2
Liberty claimed that the loss which is the subject of the action predated the purchase agreement and that in the agreement, the plaintiff retained the right to continue to use or rent the two units in the building which are the subject of the claim.
In ruling that plaintiff did not have standing to sue, the court stated the previous language denoting the transfer of rights of “all insurance monies” was not ambiguous. The cited section does not expressly draw a distinction between unrestored damage to the premises that occurred before the execution of the Agreement. Therefore, Liberty lacked any legal interest in the insurance proceeds and standing to sue.
I am now licensed in the State of Connecticut to handle all your property damage claims! Call me or email me to talk about your claim.
I leave you with a quote from writer, director, and actor, Seth MacFarlane, about Connecticut:
I’m from Connecticut, and we don’t have any dialects. Well, I don’t think we have any dialects, and yeah, it’s very complex. That Rhode Island/Massachusetts New England region is arguably the hardest dialect to nail.
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1Liberty Transportation v. Massachusetts Bay Ins. Co., 189 Conn.App. 595 (2019).
2Id., fn. 2.