Charles Smith, et al. v. Clear Blue Insurance Company

Summary

The United States District Court for the Western District of Louisiana denied Charles Smith’s motion for partial summary judgment in a bad-faith action assigned by the insured tortfeasor against Clear Blue Insurance Company. The court held that Clear Blue may be entitled to a credit for payments made by an underinsured motorist carrier because the insurers may share a solidary obligation, while finding genuine factual disputes concerning waiver of subrogation and the validity or effect of the assignment agreement. The court also concluded that Clear Blue’s policy did not clearly and unambiguously prohibit post-loss assignment of the bad-faith claim.

Holdings

1. The policy's general provision requiring written consent for transfer of rights and duties did not clearly and unambiguously prohibit a post-loss assignment of the insured's bad-faith cause of action.
2. A liability insurer and a tort victim's underinsured motorist carrier may be solidary obligors, and payment by one solidary obligor may be credited against the common obligation; however, the court did not adopt a categorical rule resolving whether a waiver of subrogation is always required.
3. The Receipt and Release was ambiguous regarding whether Indian Harbor waived its subrogation rights, and the parties' conflicting language created a genuine dispute of material fact.

Questions Presented

1. Whether the anti-assignment provision in Clear Blue's policy clearly and unambiguously prohibited Ceasar from assigning his post-loss bad-faith claim without Clear Blue's written consent.
2. Whether Clear Blue was entitled to a credit or offset for Indian Harbor's underinsured motorist payment based on solidarity between the liability insurer and the underinsured motorist carrier.
3. Whether the Receipt and Release between Smith and Indian Harbor was ambiguous and created a genuine dispute concerning Indian Harbor's waiver or retention of subrogation rights.
4. Whether Smith was entitled to partial summary judgment precluding Clear Blue's credit or offset defense.

Disposition

other