TEXAS COURT OF APPEALS CONCLUDES THAT INSURER WAIVED RIGHT TO ENFORCE ANTI-ASSIGNMENT CLAUSE
Last week, the Court of Appeals of Texas, Houston Division, concluded that Safeco Insurance Company waived its right to enforce policy’s anti-assignment clause. In Safeco Insurance Co. v. Clear Vision Windshield Repair, LLC, No. 14-17-00103-CV, 2018 WL 6175914, (Tex. App.—Houston [14th Dist.] November 27, 2018, mem. op.), Clear Vision repaired chips in the windshields of automobiles owned by four of Safeco’s insureds. Each of the insureds' policies contained an anti-assignment clause which provided that their “rights and duties under the policy may not be assigned without [Safeco’s] written consent.” Without Safeco’s written consent, all four of the insureds signed documents assigning to Clear Vision their right to payment for the windshield repairs, as well as their causes of action in the event Safeco failed to pay for the repairs. After Clear Vision completed the repairs, it submitted invoices to Safeco seeking payment for the repairs. However, Safeco failed to timely pay three of the invoices and rejected the fourth invoice. Consequently, Clear Vision sued Safeco for breach of contract. A bench trial was held and the trial court entered a final judgment in favor of Clear Vision, finding that Safeco waived enforcement of the anti-assignment clauses.
On appeal, Safeco unsuccessfully challenged the legal and factual sufficiency of the evidence supporting the trial court’s waiver finding. The Court of Appeals held that there was legally and factually sufficient evidence of waiver because (1) Safeco paid three of the invoices; (2) Safeco rejected the fourth invoice based on the fact it did not include sales tax, not based on a lack of written consent by Safeco to the assignment; (3) Safeco did not inform Clear Vision or the insureds that it considered the signed assignments to be void until it made such arguments during litigation; (4) Clear Vision had previously billed Safeco for approximately 2,500 windshield repairs and Safeco paid eighty-five percent of the invoices, and for the fifteen percent of invoices that were not paid, Safeco never gave the anti-assignment clause as the reason for non-payment; and (5) Safeco never informed Clear Vision that it needed Safeco’s written consent for any assignments of insureds' claims. The court reasoned that Safeco’s intentional conduct in paying Clear Vision for three of the invoices was inconsistent with Safeco’s later claim that it owed Clear Vision nothing because it had not consented to any assignment. The court further reasoned that Safeco’s delay in asserting its anti-assignment right, and failure to previously assert the right, showed Safeco’s intention to waive that right.