California, United States of America
The following excerpt is from Andrade v. Jennings, 54 Cal.App.4th 307, 62 Cal.Rptr.2d 787 (Cal. App. 1997):
11 In Pruyn v. Agricultural Ins. Co., supra, 36 Cal.App.4th 500, 42 Cal.Rptr.2d 295, a case involving the enforceability in a direct action against an insurer of a stipulated judgment accompanied by a covenant not to execute, the appellate court stated: "A nonparty insurer must be given a fair opportunity to litigate the question of whether the settlement was unreasonable or was the product of fraud or collusion." (Id. at p. 526, 42 Cal.Rptr.2d 295.) The appellate court observed that the "critical question" remained, to wit, "was the settlement reasonable and free of fraud and collusion? It is upon the resolution of that issue that plaintiff's case will depend." (Id. at p. 522, 42 Cal.Rptr.2d 295.)
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