In Nieves v. Allstate Ins. Co., the court heard an assignee’s appeal from the dismissal of her bad faith claim against the decedent insured-assignor’s carrier. The dispute arose from a car accident in which an individual driving the assignor’s automobile injured the assignee. After a $185,000 jury verdict in the assignee’s favor, the assignor-insured’s carrier paid the $50,000 limits of his automobile policy. However, the assignor-insured died a week before the jury verdict was affirmed on appeal.
In 2003, the assignee, who had not yet been assigned the assignor-insured’s rights under the automobile policy, brought a direct action against the carrier, alleging bad faith refusal to settle her claim. In 2004, the complaint was dismissed because she needed an assignment of rights in order to bring a direct action against the carrier. In 2007, the assignor-insured’s mother assigned her late son’s bad faith claim against the carrier to the assignee.
However, the trial court dismissed the bad faith claim on summary judgment, reasoning that the assignor-insured did not have a judgment executed against him during his lifetime and the decedent had no assets left in his estate. As such, the court concluded that there is no pecuniary loss that the decedent suffered during his life that could be enforced by way of assignment.
The assignee appealed, arguing that her claim accrued when the underlying jury verdict was affirmed and that any analysis of pecuniary harm to the decedent insured must be made at the time of accrual. The assignee also argued that the court should adopt the “judgment rule,” which holds that a claimant is permitted to recover damages if the insured is solvent at the time of the judgment.
The appellate court rejected both of these arguments. First, the court ruled that no claim accrued at the time of the judgment because the insured had no assets and was not threatened with any claim for the difference between the verdict and his policy limits. Second, the court refused to adopt the judgment rule because such an argument was not raised before the trial court. The court therefore affirmed the grant of summary judgment to the carrier.
Date of Decision: May 3, 2011
Nieves v. Allstate Ins. Co., No. A-6128-09T3, 2011 N.J. Super. Unpub. LEXIS 1096, Superior Court of New Jersey, Appellate Division (App.Div. May 3, 2011) (Fuentes, Ashrafi, Newman, JJ.)