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Keith Rath and Dennis Faltis
v.
Arch Insurance Company
Appellant
Keith Rath and Dennis Faltis
Appellee
Arch Insurance Company
Attorney for the Appellant
Claire M. Diallo and James C. Larew
Attorney for the Appellee
Mollie Pawlosky
Court of Appeals
Court of Appeals Opinion
Opinion Number:
Date Published:
Summary
Appeal from the Iowa District Court for Linn County, David M. Cox, Judge. REVERSED AND REMANDED. Heard by Schumacher, P.J., Langholz, J., and Doyle, S.J. Opinion by Langholz, J. Dissent by Schumacher, P.J. (28 pages)
Keith Rath and Dennis Faltis appeal the district court’s grant of summary judgment dismissing their breach-of-contract and related claims because it concluded that they are not intended third-party beneficiaries of a force-placed insurance policy issued by Arch Insurance Company to their bank. OPINION HOLDS: Because the insurance policy includes an endorsement increasing the coverage above the bank’s interest and giving plaintiffs a right to payment as a loss payee, the policy manifests an intent to benefit plaintiffs. They are thus third-party beneficiaries under the insurance contract, and the district court erred in dismissing their claims. DISSENT ASSERTS: The force-placed insurance policy does not name the borrower as an additional insured, expressly delineate that the policy covers the borrower’s interest in the insured property, or otherwise state that the borrower is a beneficiary of the lender’s coverage, including as that of a third-party beneficiary. Rather the policy states no coverage, directly or indirectly, is provided to the borrower. On this basis, the trial court properly granted summary judgment, which we should affirm. As we do not, I respectfully dissent.
