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Plaintiff insurer brought an action for declaratory relief against defendant assignee

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Tim Southy

Procedural Posture

Plaintiff insurer brought an action for declaratory relief against defendant assignee, claiming that it was not obligated to defend or indemnify the insured in an insurance coverage lawsuit. The Los Angeles County Superior Court, California, entered judgment in favor of the assignee, but ruled that the assignee was not entitled to Brandt attorney fees. The insurer appealed, and the assignee cross-appealed.

 

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The assignee argued the trial court erred in ruling that it was not entitled to Brandt fees. The instant court held that an insured could assign its right to recover as damages attorney fees incurred in obtaining the benefits of an insurance policy that were denied as a result of the insurer's bad faith. The insured assigned to the assignee its claims against the insurer, including its claims for breach of the insurance contract and breach of the implied covenant of good faith and fair dealing. Thus, the insured assigned its right to recover the policy benefits in full, undiminished by the attorney fees incurred in bringing the action to recover those benefits. The identity of the party incurring attorney fees to vindicate the insured's rights under the insurance policy was irrelevant--the right that was assigned was the right to recover the policy benefits in full. This right to recover the policy benefits in full was not the kind of personal right that was not assignable. Therefore, the trial court erred when it found that the assignee was not entitled to Brandt fees.

 

Outcome

The instant court reversed the judgment to the extent it did not include damages to which the assignee was entitled, affirmed the judgment in all other respects, and remanded the matter to the trial court to determine the amount of Brandt fees to which the assignee was entitled.

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Tim Southy
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