Ambiguous Contract to Repair not an Assignment

By Barry Zalma on May 8, 2026

The Right to Negotiate with Insurer is Not an Assignment of Claims

Post number 5347

See the full video at https://rumble.com/v79is1s-ambiguous-contract-to-repair-not-an-assignment.html and at https://youtu.be/pqCp6zffExs

Nebraska Requires an Actual Assignment to Allow Contractor to Sue Insurer

In Millard Gutter Company, a corporation doing business as Millard Roofing and Gutter v. Farmers Mutual Insurance Company of Nebraska, also known as Farmers Mutual Insurance, also known as Farmers Mutual, No. A-24-818, Court of Appeals of Nebraska (May 5, 2026) Millard sued Farmers as an assignee of Jane Anzalone who had hired Millard Gutter to repair the roof of her home and agreed to allow Millard Gutter to coordinate with her insurer, Farmers Mutual, concerning reimbursement for repairs authorized under her insurance policy.

FACTUAL BACKGROUND

In 2013, An authorization agreement was executed on May 11, 2013, and signed by both Anzalone and a representative of Millard Gutter. The language of the authorization agreement gave Millard Gutter the authority to “negotiate approval for payment or reimbursement of expenses associated with any necessary repair work” with Farmers Mutual. The authorization agreement further “assigns to [Millard Gutter] the right and power to make demand upon any potentially liable insurance company for payment subject to [the insured’s] continuing obligation, if any to make payment of deductible.”

Millard Gutter claimed to be an assignee of the insurance contract and filed suit against Farmers Mutual seeking damages for breach of contract. After a jury trial in Douglas County District Court, Millard Gutter obtained a judgment against Farmers Mutual.

The district court found by the plain language of the authorization agreement, Anzalone did not assign Millard Gutter her entire claim, but did assign the right to demand payment for work it completed.

The jury entered a verdict for Millard Gutter in the amount of $4,525.77. The district court entered judgment on the verdict and denied the post trial motions filed by Farmers Mutual and awarded Millard Gutter prejudgment interest and some of its requested attorney fees and costs.

LAW

The case involves principles of assignment of insurance contract rights, breach of contract, and the ability of a third party contractor to sue an insurer as an assignee. Nebraska law governs the assignment and enforcement of contractual rights, particularly in the insurance context. A contract written in clear and unambiguous language is not subject to interpretation or construction and must be enforced according to its terms.

DISCUSSION

The dispute centered on whether Millard Gutter had valid standing as an assignee to pursue damages against the insurer. The Court of Appeals considered the nature of the authorization agreement and whether it constituted a valid assignment of rights under the insurance policy.

The authorization agreement only gave Millard Gutter the right to “proceed with the insurance repair work” on the property. The form included a series of check boxes to indicate the “materials damaged” on the house, and the boxes checked included roofing, gutters, and windows. The agreement also authorized Millard Gutter to “negotiate approval for payment or reimbursement” of the expenses associated with any necessary repair work with Farmers Mutual.

CONCLUSION

The Court of Appeals concluded that the authorization agreement in this case did not provide a valid assignment of Anzalone’s claim against her insurance company. Rather, it only granted Millard Gutter the right to negotiate with Farmers Mutual for approval and receipt of the insurance proceeds. As such, Millard Gutter was not the real party in interest with standing to pursue the claim against Farmers Mutual.

The “customer” (Anzalone) only agreed to assign to Millard Gutter the right to make demand for payment upon the insurance company. No further documentation assigning Anzalone’s claim against Farmers Mutual to Millard Gutter was submitted in this case and, as a result, there was not an enforceable assignment.

The Court of Appeals reversed the decision of the district court and remanded the cause with instructions to dismiss Millard Gutter’s complaint with prejudice. Because the resolution of the validity of the purported assignment was determinative, the Court of Appeals did not need address the remaining assignments of error.

ZALMA OPINION

It is interesting that this case went to trial and appeal to the Court of Appeals for less than $5,000. The parties did insurers and insureds in Nebraska a favor because it explained what is necessary to actually assign a claim. The contract between Millard Gutter and the Anzalones, did not assign rights to policy proceeds but only a right to negotiate its payment with the insurer. A first year law student could draft a real assignment of rights to insurance proceeds but Millard Gutter did not.

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