Black Compean & Hall L.L.P.

Attorneys at Law

BCH Continues to Shape California Insurance Law

Posted on 11/09/2011

Black, Compean & Hall L.L.P. continues to shape the development of California Insurance Law.  On October 28, 2011, the Court of Appeal for the Fourth Appellate District certified its opinion and decision for publication in Kenneth Clark v. Cal. Ins. Guarantee Association (2011) 200 Cal.App.4th 391 [133 Cal.Rptr.3d 1](pet. rev. denied).  Frederick G. Hall of Black, Compean, Hall & Eli, now Black, Compean & Hall L.L.P., successfully represented the California Insurance Guarantee Association (CIGA) in the matter.  The opinion establishes that in a direct action under Insurance Code §11580, a judgment creditor cannot recover the interest and cost portion of a judgment directly against the judgment debtor’s insurer who defended the underlying suit.  The court held that since the costs and interest portion of the judgment is payable under the Supplementary Payments provision of the policy, which is part of the insurer’s defense duty, the third party judgment creditor is, at most, merely an incidental beneficiary with no direct rights under that portion of the policy.  The court held that this rule applies irrespective of whether or not the insurer defended the judgment debtor in the underlying action, and that this rule may be asserted by CIGA where the insurer has become insolvent.


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