Is a judgment against the insured a precondition to transferring a common law bad faith action against the insurer?
California, United States of America
The following excerpt is from McLaughlin v. National Union Fire Ins. Co., 23 Cal.App.4th 1132, 29 Cal.Rptr.2d 559 (Cal. App. 1994):
A judgment against the insured (or actual payment by the insured in settlement of a claim) has also been held to be a precondition to his or her right to transfer a common law bad faith action against the insurer. (Smith v. State Farm Mut. Auto. Ins. Co. (1992) 5 Cal.App.4th 1104, 1114, 7 Cal.Rptr.2d 131.)
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