A recent federal trial court opinion out of the Northern District of Illinois serves as a good reminder that the plaintiff must be appropriately identified and have standing to sue on behalf of the insured. In Alassaf v. Travelers Casualty Insurance Company of America,1 Travelers moved for summary judgment arguing that the case should be dismissed because the named Plaintiff did not have standing to sue on behalf of the insured. On February 1, 2011, ABC Carwash, located in Alsip, Illinois, was damaged by fire. At the time of the fire, the carwash was insured by Travelers. Within the policy, the carwash was designated as a corporation. Travelers denied the claim on the basis that the fire was intentionally set. Thereafter, Mohamed Alassaf brought suit in his individual name against Travelers alleging the ABC Carwash was his business.
The court dismissed the original complaint finding that Alassaf had failed to allege facts to support standing and adequately describe his relationship to ABC Carwash. Following which, Mr. Alassaf refiled his complaint in his individual name “d/b/a ABC Carwash a sole proprietorship.”
Travelers argued that Alassaf was not entitled to recovery under the insurance policy because he was not the named insured, an assignee, or third party beneficiary. In particular, Travelers argued that the insurance policy covered—and was intended to cover—a corporation, not a sole proprietorship. To support its contention, Travelers relied upon Mr. Alassaf’s deposition testimony in which he testified that the carwash was owned and operated by a legal entity incorporated in Illinois and relied upon the corporate tax returns filed by the carwash.
The court was unpersuaded by the arguments advanced by the Plaintiff where he attempted to distinguish the various legal entities. The court was also unpersuaded by the argument advanced that Travelers had considered Alassaf the insured under the policy. In that regard, the court noted that Travelers contact with Alassaf was not as the insured, but as the “point of contact for the insured” noting that all communications were to ABC Carwash in care of Alassaf.
Ultimately, the court concluded that because the policy’s named insured was “ABC Carwash” and it was listed as a corporation in the policy, there was no reason to construe the policy as having insured Mohamed Alassaf d/b/a ABC Carwash, a sole proprietorship. The court noted that Alassaf would have been an indirect beneficiary as a shareholder of the carwash and not a third-party beneficiary under the contract.
Since the court ruling, Mr. Alassaf has sought leave to substitute the corporation as the named Plaintiff in the action. At this time, the motion has not been ruled on. The Alassaf case serves as a good reminder to always understand (and research if necessary) who the named insured is under a policy, what type of entity is insured, and any/all relationships an individual has to the named insured.