Involuntary Assignment of Bad Faith Claim Improper
State Farm Mut. Auto. Ins. Co. v. Estep (Ind. Sept. 25, 2007)
Insurer repeatedly offered settlement of auto accident claim for full policy limits, but plaintiff refused. When jury returned verdict in excess of limits, trial court ordered assignment of insured’s bad faith claim over insured’s objection. Bad faith claim was premised on perceived conflict in defense counsel’s representation of insured. Court held that involuntary assignment of claims against carriers whose insureds do not believe they have been wronged by their insurers was inconsistent with direct action rule. Permitting forced assignments would result in multiple litigation, would adversely impact settlement negotiations, and would increase costs to insureds who never make a claim and find their insurance service satisfactory.
