A tactic that’s not uncommon among personal injury lawyers who have clients with injuries more severe than the resources of the people who hit them (the tortfeasor) is to allege that the tortfeasor has some sort of bad faith claim against the tortfeasor’s insurer. Then what happens is this. Injured party gets a judgment against the tortfeasor. The tortfeasor’s insurer pays out the limits of the tortfeasor’s insurance policy. Then, the tortfeasor doesn’t pay the remainder of the judgment because he or she simply doesn’t have that kind of money. The injured party takes the tortfeasor to court in what’s called a proceeding supplemental — used to determine a judgment debtor’s income and assets — and has the court force the tortfeasor/judgment debtor to assign his or her interest in any bad faith claim he might have against his insurance company. Presto – the injured party now has a direct claim against the deep pockets of the tortfeasor’s insurance company.
The Indiana Supreme Court imposed a slight restriction to this practice yesterday, holding that a tortfeasor can’t be compelled to involuntarily assign a bad faith claim against his or her insurer. As a practical matter, I don’t think this will come up that often — I suspect it will be the rare judgment debtor, faced with an overwhelming debt to an injured party, who won’t willingly roll over on his or her insurer, assigning whatever bad faith claim he she may have — even if she doesn’t think the insurer actually did anything wrong — in exchange for the injured party looking elsewhere for satisfaction of the debt.
Leave a Reply