A United States Appellate Court ruled that a business owner could not sue in her own name under a policy that named only her company as the insured. The case is Griffin v. Travelers Prop. Cas. Co. of Am., 2026 LX 62917 (2d Cir. 2026).
Background
W.A. Griffin, a physician and the owner of Dermatology Boutique LLC, alleged that she discovered hidden cameras near the entrance of her office that she believed were placed to spy on her and Dermatology Boutique's patients and staff.
Griffin sought to recover under insurance policies with Travelers and Fidelity. She sued both insurers, asserting breach of contract and bad faith. The insurers moved to dismiss her amended complaint, which a district court granted, concluding that Griffin lacked standing to sue under the Fidelity policy and had otherwise failed to state a claim against either defendant.
Appellate Court
Griffin appealed and the case was brought to a United States Court of Appeals for the Second Circuit. The court agreed with the district court that Griffin lacked standing to sue for breach of contract under the insurance policy. The court cited Mid-Hudson Catskill Rural Migrant Ministry, Inc. v. Fine Host Corp., which states that "a plaintiff must have standing under both Article III of the Constitution and applicable state law in order to maintain a cause of action."
The court found that Griffin was not a party to the insurance contract since the only named insured listed was the business itself, Dermatology Boutique LLC. Under Georgia law, a third party has standing to enforce or reform a contract only if it appears clearly from the contract that it was intended for the third party's benefit; the mere fact that the third party would benefit from the contract is not enough.
The panel found that the policy's property coverage section, under which Griffin was suing, did not clearly reflect an intent to benefit Griffin. Unlike other sections of the policy, the section used "you" and "your," which the policy defined as "the named insured," and the only listed named insured was the business.
Griffin countered that she had standing because she was the sole owner of the business. The panel disagreed, citing a Georgia Court of Appeals decision which stated that a member of a limited liability company is considered separate from the company and is not a proper party to a proceeding by or against the company solely by reason of being a member.
Since she was a pro se litigant (representing herself without a lawyer), Griffin could not substitute the LLC into the action. A limited liability company may only appear in federal court through a licensed attorney.
For the Travelers policy, the court agreed with the district court that Griffin failed to state a claim for breach of the policy. The Travelers policy provided coverage when the insured became "legally obligated to pay as damages" for certain claims, but Griffin did not allege that she had become legally obligated to pay any damages.
On the claim of bad faith, the court looked to the Georgia law definition of bad faith. Under OCGA Section 33-4-6, an insurer is liable for bad faith if three elements are met: there was a loss covered by an insurance policy; the insurer refused to pay within sixty days after a demand by the policyholder; and the refusal was in bad faith.
However, bad faith claims under the Georgia insurance code "are available only as between insureds and their insurers." Since Griffin was not an insured under the policy, she again lacked standing to bring a claim under Section 33-4-6 against the insurers.
Editor's Note
The court upheld the dismissal of the suit, holding that Griffin could not sue in her own name even as the sole owner of the LLC. This case shows how courts will treat the exact language of an insurance contract. Since the only named insured on the policy was the business itself, coverage was not extended to Griffin.
Ray Sugrim
Ray Sugrim is an Insurance Editor with FC&S Expert Coverage Interpretation, a division of National Underwriter Company and Arc Network. Ray is responsible for helping develop and edit content for subscribers. Ray is a St John’s University graduate with a degree in Risk Management & Insurance and is a CPCU candidate.