Mr. Ulloa opposed the motion. He conceded that he was not the named insured under the Integon insurance policy but argued that, as the owner of the property, he had an insurable interest that allowed him to have standing as a third-party beneficiary.

In addition, Mr. Ulloa contended that he was not seeking relief for himself but rather was seeking to protect the interests of Financial Freedom by seeking to enforce the promise that Integon had made to Financial Freedom to pay Financial Freedom for damage to the property.

Finally, he argued that there was a loss payee provision in the policy that contemplated an intention to benefit his interests:

LOSS Payment. WE will adjust each LOSS with YOU and will pay YOU. If the amount of the LOSS exceeds the UNPAID PRINCIPAL BALANCE, the BORROWER may be entitled, as a simple LOSS payee only, to receive payment for any residual amount due for the LOSS, not exceeding the lesser of the applicable Limit of Liability indicated on the NOTICE OF INSURANCE AND THE BORROWER'S insurable interest in the damaged or destroyed property on the DATE OF LOSS. Other than the potential right to receive such payment, the BORROWER has no rights under this RESIDENTIAL PROPERTY FORM.

Integon pointed out that the insurance policy expressly stated that Integon and Financial Freedom – the named insured – were the only parties to the contract and that it was not intended to benefit Mr. Ulloa, who was designated as the borrower. Integon noted that the policy stated:

The contract of insurance is only between the NAMED INSURED and Integon National Insurance Company. There is no contract of insurance between the BORROWER and Integon Insurance Company. The insurance purchased is intended for the benefit and protection of the NAMED INSURED, insures against LOSS only to the dwelling and OTHER structures on the DESCRIBED LOCATION, and may not sufficiently protect the BORROWER'S interest in the property.

The Court's Decision

The court decided that Integon's motion should be granted.

In its decision, the court explained that, to be able to move forward, Mr. Ulloa had to demonstrate that there was a “clear or manifest intent of the contracting parties that the contract primarily and directly benefit [Mr. Ulloa], the third party.”

The court decided that Integon's motion was “well taken” because Mr. Ulloa could “not plausibly allege a claim as a third-party beneficiary when the policy expressly state[d] that [Mr. Ulloa was] not a named insured and exclude[d him] from coverage.”

As a matter of law, the court ruled, Mr. Ulloa was not a third-party beneficiary with standing to state a claim for breach of an insurance policy. According to the court, “when a policy include[d] an unambiguous provision that the named insured [was] the only beneficiary, that foreclose[d] a third-party beneficiary claim.”

The court concluded that the only way that Mr. Ulloa could state a plausible claim for breach of contract under the policy was if he plausibly alleged entitlement to insurance proceeds as a “simple LOSS payee,” where the amount of the loss exceeded the unpaid principal balance. The court said that Mr. Ulloa should be permitted to amend his complaint if he could allege that the amount of the covered loss exceeded the unpaid principal balance at the time of the loss.

The case is Ulloa v. Integon National Ins. Co., No. 18-23069-Civ-WILLIAMS/TORRES (S.D. Fla. March 13, 2019). Attorneys involved include: For Roger B. Ulloa, Plaintiff: Ramon Julio Diego, LEAD ATTORNEY, Law Office of Ramon J. Diego, P.A., Miami, FL. For Integon National Insurance Company, Defendant: Ana Laura Olman, Keller Landsberg, P.A., Fort Lauderdale, FL; Katie Drozd, LEAD ATTORNEY, Fort Lauderdale, FL.