NEW WV ASSIGNMENT OF RIGHTS CASE

If you handle West Virginia cases involving assignments of rights, Penn-American v. Osborne might provide some useful guidance.  In Penn-American v. Osborne, plaintiff Osborne sued Allegheny Wood and Heartland Forest, who were insured by Penn-America.  Allegheny Wood and Heartland Forest confessed a $1M judgment and assigned “all claims they may have had against Penn-America Insurance Company for failing to provide them a defense in Mr. Osborne’s lawsuit.” 

Osborne agreed not to collect against Allegheny Wood and Heartland Forest, dismissed the case, and sued Penn-America pursuant to the assignments of right.  The Wyoming County Circuit Court ordered Penn-America to pay $1M.  The Supreme Court reversed, finding “[t]he consent judgment is not binding on Penn-America because it was not a party to the pre-trial settlement agreement or the lawsuit in which the consent judgment was entered. Moreover, under the particular facts of this case, the assignment by Allegheny and Heartwood of any claims they may have had against Penn-America to Mr. Osborne is void.”  The Court remanded the case with instructions that Penn-America be dismissed.