Alexander Manufacturing, Inc. Employee Stock Ownership Plan & Trust v. Illinois Union Insurance

Plaintiff Alexander Manufacturing, Inc. Employee Stock Ownership Plan and Trust, the sole shareholder of Alexander Manufacturing, Inc. (“AMI”), sued Defendant Illinois Union Insurance Company, seeking to recover under an insurance policy that Defendant had issued to AMI. Plaintiff was the assignee of post-loss claims under the policy. The district court held that, under Oregon law, the insurance policy’s anti-assignment clause prevented post-loss assignment of the claims to Plaintiff. We read the policy and Oregon law differently and, accordingly, reverse.

FACTUAL AND PROCEDURAL HISTORY

Plaintiff is an employee stock ownership plan, a pension plan defined by 29 U.S.C. § 1002 (2)(A) of the Employee Retirement Income Security Act of 1974 (“ERISA”), which was organized in Oregon effective in 1998. Plaintiff was the sole shareholder of AMI.

Plaintiff filed an action against three of its former fiduciaries, William Klutho, Daniel Spofford, and Donald Thoreson, alleging breach of fiduciary duty under ERISA. These same individuals were also former directors and officers of AMI. Plaintiff also brought a derivative action against them, alleging that they had breached certain duties owed…