In Jones v. Americas Ins. Co., 226 So. 3d 537 (La. Ct. App., 1st Cir., 2017), the Louisiana appellate court held that a homeowner's insurance carrier had no right of action against its insured's contractor for negotiating a check without the mortgage lender's/servicer's authorized endorsement.
The mortgagee was the mortgage lender/servicer and it did not authorize a stamped endorsement on the insurance company's check, accompanied by handwritten words which "endorsed" payment of the check over to the contractor.
As a result of this episode, the carrier had to reissue the check. The homeowner's carrier accordingly sued the contractor claiming that this episode thereby damaged it to at least the tune of the amount of the duplicate check.
In particular, the Louisiana appellate court ruled that the Louisiana Unfair Trade Practices and Consumer Protection Law invoked by the carrier in this case was expressly actionable only by the Louisiana Insurance Commissioner and that the carrier was not an intended beneficiary of the act even if the court tried to imply a cause of action not expressed in the Louisiana statute.
This result may be so in Louisiana, but in other places, as the song goes, it ain't necessarily so.
The appellate court affirmed the Louisiana trial court's judgment in favor of the contractor. The appellate court tacked on the costs of the appeal to be paid by the insurance carrier as well.
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