This section contains the nature of the case and procedural background.

The Hospital planned to build an addition onto its facilities. It purchased from Assurance (D) a 'builder's risk' insurance policy. The terms of the policy stated that it may not be transferred without D's written consent except in the case of the death of an individual named insured. The Hospital contracted with Wehr (P) for the installation of concrete sub-surfaces and vinyl floors as part of a project to expand the hospital. A portion of the floors and subsurface done by P was damaged. The Hospital claimed a loss of $75,000.00, and D denied the claim. P filed suit against the Hospital in state court to recover money alleged to be due from the Hospital. P and the Hospital settled the claim. As part of that settlement, the Hospital agreed to, and did, assign to P any claim or rights the Hospital had against D arising out of the builder's risk insurance policy. The assignment occurred after the damage to the floors had occurred. If the loss was covered under the builder’s risk policy, D was at the time of the assignment already liable for payment under the insurance policy. P, as the assignee, brought suit in federal court seeking to recover payment due under the builder's risk policy. D pleaded the anti-assignment provision of the policy in defense. P argued that since the loss for which the Hospital sought coverage had already occurred at the time of the assignment and the basis for the insurer's potential liability was fixed, the Hospital's right to the proceeds under the policy was a chose in action that was freely assignable and, as such, the assignment did not require the insurer's consent, and that pursuant to the rule applicable in the vast majority of states, such an anti-assignment clause is unenforceable. The court certified a question. As necessity may require, may contractual provisions be held to be unenforceable as against public policy?

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