The full details of the injuries suffered by 12 year-old Rasheed Hilson, the trial and the $10.1 million final judgment, after Amica Mutual Insurance failed to settle for its $50,000 policy before trial, have been previously reported.
On YouTube, under Rasheed Hilson, can be found the exhibits introduced into evidence at trial recreating the collision sequence, showing the driver’s view approaching the driveway of a school and a running child. The resulting impact to a child when hit at 33 mph per hour dramatically presents the forces involved in a pedestrian-automobile collision.
When a judgment in excess of a reasonable offer to settle for policy limits is not paid, it is necessary to file a bad faith action against the non-settling carrier.
The right to sue belongs to the insured as a result of the the insurance company violating the covenant of good faith and fair dealing for not protecting its insured from an expected judgment in excess of the insured’s coverage. Such a claim is commonly referred to as a bad faith action.
A bad faith case can be prosecuted by the insured or, more commonly, by the injured party holding the judgment. That requires an assignment by the insured of their rights against the insurance company to the injured party in exchange for the injured party not immediately collecting the judgment from the assets of the insured. It also requires the insured to cooperate in the prosecution of a bad faith lawsuit to collect the judgment from the insurance company.
The agreement in exchange for an assignment provides that as long as Judgment Debtor reasonably cooperates in the prosecution of the bad faith lawsuit, the injured party agrees not to levy upon the insured’s real or personal property and will not seek execution or collection of the judgment. Only after the bad faith lawsuit is resolved, dismissed or a final judgment is entered the covenant not to execute in favor of the insured become permanent.
The insured, in addition to having a claim for breach of the covenant of good faith and fair dealing, also has “personal” claims for emotional distress and punitive damages against the insurance company.
California law requires that all three claims be joined together in one lawsuit by the insured and by the injured party.
Below is one example of an agreement not to execute or collect a judgment against the insured until it is collected from the insurance company.
The term “judgment creditor” describes the person who won the judgment at trial; the term “judgment debtor” is the individual who lost at trial and as a result has suffered a judgment against their assets.
If we can help you, please call us at 1.888.777.1776 or email us.
Delay can result in the permanent loss of rights.
Call for a free legal consultation Monday through Friday 7 am to 9 pm Pacific; Saturday and Sunday 10 am to 9 pm Pacific.
No recovery: no fees, no costs.
Onward,
Richard Alexander
ASSIGNMENT, COVENANT NOT TO EXECUTE AND
AGREEMENT TO COOPERATE IN LITIGATION
This agreement is between __________________________ Judgment Creditor and _______________________ Judgment Debtor.
Recitals:
1. A lawsuit for personal injuries was filed by ______________________ Judgment Creditor against ____________________ Judgment Debtor, _____________ County Superior Court case number __________ entitled _______________________ _____________________________________ (“ injury lawsuit”), which has been tried to verdict and final judgment. Judgment Creditor now has a judgment against Judgment Debtor in the amount of ____________________, plus interest (“judgment”).
2. On ______________ Judgment Creditor suffered severe personal injuires when he was struck by a car driven by Judgment Debtor. Judgment Debtor was insured under an automobile liability insurance policy number ________________________ (“the insurance policy”) issued by ABC Insurance Company with a liability policy coverage limit of $__________________ per accident.
3. On_________________, Judgment Creditor made a reasonable offer to ABC to settle all claims against Judgment Debtor for the full amount of Judgment Debtor’s liability insurance policy limits with ABC. The settlement offer was conditioned on acceptance within 30 days.
4. By the time ABC had received the reasonable offer to settle, ABC knew that its insured was liable for causing severe personal injuries. The reasonable offer to settle by Judgment Creditor confirmed the following severe personal injuries were suffered by Judgment Creditor: ______________________________________. In addition the offer provided that unless it was accepted within thirty days, it would be withdrawn and not renewed and Judgment Creditor would take the claim to trial and prove that Judgment Debtor was liable for having caused severe personal injuries.
5. During the thirty-day period, it is believed that ABC did not conduct an adequate or appropriate investigation. ABC’s failures include: .
6. ABC did not agree to pay Judgment Debtor’s $____________ policy within the 30 day deadline, did not make a conditional offer of settlement pending a medical examination or review of medical records and did not ask for an extension of time to respond. ABC’s inaction constituted a rejection of Judgment Creditor’s good faith settlement offer.
7. At trial, as stated in the offer to settle, Judgment Creditor proved that Judgment Debtor was liable and obtained a final judgment of $____________________ in favor of Judgment Creditor and against Judgment Debtor.
8. ABC’s rejection of the reasonable offer to settle and the resulting judgment against Judgment Debtor provides Judgment Debtor a cause of action against ABC for ABC’s breach of contract and breach of the implied covenant of good faith and fair dealing by failing to accept a reasonable settlement offer in not paying to Judgment Creditor its $__________________ policy in light of (i) the nature and scope of the injuries suffered by Judgment Creditor, (ii) the probable liability of the insured, (iii) the substantial risk of a recovery in excess of the offer and (iv) the danger, however slight, of a judgment in excess of the limits.
9. Judgment Debtor’s cause of action against ABC in tort for breach of the covenant of good faith and fair dealing and for breach of contract includes damages for the difference between the policy limits and the judgment (plus interest), emotional distress and punitive damages.
The Parties Agree and Promise as Follows:
10. Judgment Debtor, either herself or through any attorney(s) or agent(s), following the Judgment Creditor’s policy limits offer to settle and during the thirty day (30) period Judgment Creditor’s offer was open and could be accepted by ABC::
(i) did not make any demand or request to ABC, or any of its agents or insurance brokers, that ABC not settle Judgment Creditor’s claim; and
(ii) did nothing to impair ABC:’s assessment of the risk of a substantial likelihood of an excess judgment.
11. Judgment Debtor confirms she has not previously assigned any claim in this matter to any other person or entity and that she has not, either herself or through any attorney(s) or agent(s) acting on her behalf, made any agreement(s) with ABC that would in any way limit, impair or inhibit Judgment Debtor’s or Judgment Creditor’s legal or actual ability to fully and successfully prosecute any action against ABC, and collect from ABC, of all of the assigned and personal damages without any condition or dollar limit.
12. Judgment Debtor irrevocably assigns to Judgment Creditor all legally assignable rights, remedies, titles and/or interest in her claim for damages against ABC for breach of contract, breach of the covenant of good faith and fair dealing, attorneys fees, fraud and declaratory relief (“contract/tort claims”) arising from the failure of ABC to accept Judgment Creditor’s reasonable offer to settle for Judgment Debtor’s policy limits.
13. Judgment Debtor retains her claims for emotional distress and punitive damages (“personal claims”) and for this reason this assignment does not include Judgment Debtor’s personal claims for emotional distress suffered by Judgment Debtor as a result of ABC:’s breach of the covenant of good faith and fair dealing and ABC:’s failure to protect its insured from litigation and a judgment in excess of her coverage and does not include Judgment Debtor’s personal claims for punitive damages against ABC.
14. The parties agree that as a result of this assignment of Judgment Debtor’s contract/tort claims they have mutual interests in a lawsuit against ABC that has one cause of action (”bad faith lawsuit”), which in turn has both assignable (contract/tort) and nonassignable (personal) claims for damages. A cause of action cannot be split. For that reason a lawsuit will be brought against ABC with both parties as named plaintiffs asserting the contract/tort and personal claims for damages.
15. Judgment Debtor agrees to fully cooperate in the prosecution of a joint bad faith action against ABC, including, but not limited to:
(a) obtaining a copy of her entire client file from Judgment Debtor’s defense lawyers in the underlying trial:
(b) providing Judgment Creditor with copies of all documents and correspondence between Judgment Debtor and ABC relating to the claim involved in the above-described litigation, and
(c) directing Judgment Debtor’s trial counsel to cooperate fully with Judgment Creditors attorneys with the claims against ABC, including producing the attorneys’ complete file including all work product including internal memorandum and email, correspondence, working papers, and reports to ABC.
d) answering interrogatories in a timely manner, attending deposition, settlement conferences and trial and fully participating in the prosecution of the bad faith lawsuit; and
e) meeting and conferring with counsel for Judgment Creditor in the prosecution of the bad faith lawsuit.
16. In exchange for this assignment, as long as Judgment Debtor reasonably cooperates in the prosecution of the bad faith lawsuit, Judgment Creditor agrees not to levy upon Judgment Debtor’s real or personal property and will not seek execution of the judgment; once the bad faith lawsuit is resolved, dismissed or a final judgment is entered this covenant not to execute in favor of Judgment Debtor will become permanent.
17. The parties agree to execute any additional documents reasonably required from time to time hereafter to effect this agreement.
18. The language in all parts of this agreement shall in all cases be construed as a whole according to its fair meaning and not strictly for or against any party. The parties agree that each party has reviewed this agreement and has had the opportunity to have independent counsel review the same and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this agreement or any amendment or any exhibits thereof.
19. In the event of the death of Judgment Debtor during the pendency of this agreement:
(a) Judgment Debtor’s personal rights for emotional distress shall expire as allowed by law;
(b) Judgment Debtor’s personal representative and estate shall be substituted as plaintiffs, and shall continue as a plaintiff
(c) and this agreement shall be binding upon Judgment Debtor’s heirs, beneficiaries, assigns, trustee, and any other person or entity claiming through Judgment Debtor.
20. In the event any provision of this Agreement is found to be illegal or unenforceable, such illegality or unenforceability shall not prevent enforcement of all other provisions.
21. California law shall govern the construction and enforcement of this Agreement and the parties agree that any litigation pertaining to this agreement shall be filed in ____________________ County.
AGREED:
If we can help you, please call us at 1.888.777.1776 or email us.
Delay can result in the permanent loss of rights.
Call for a free personal injury consultation Monday through Friday 7 am to 9 pm Pacific; Saturday and Sunday 10 am to 9 pm Pacific.
No recovery: no fees, no costs.
Onward,
Richard Alexander
Find more like this: Auto Accident, Insurance Bad Faith, Personal Injury
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