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As Fast as Their Legs Will Carry Them.
In every jurisdiction in the U.S. which has addressed the question, "Bad-Faith," extracontractual damages claims are held to be assignable to a Third-Party Claimant.
In every U.S. jurisdiction in which the question of such Assignments to Excess Carriers has been addressed, as well, the unanimous holding has been that such "Bad-Faith," extracontractual damages claims are assignable to an Excess Liability Insurer against the Policyholder's Primary Liability Insurer.
Recently, Courts applying Texas statutory law have reached conclusions that actions under various Texas Penalties Statutes are not assignable. E.g., Download Great American Insurance Co. v. Federal Insurance Co. (N.D. Tex. Case No. 3.04cv2267, Opinion Filed August 8, 2006), also published as Great American Insurance Co. v. Federal Insurance Co., 2006 WL 2263312 *9-*10 (N.D. Tex. August 8, 2006)(holding that claims under Texas Deceptive Trade Practices-Consumer Protection Act ["DTPA"] are not assignable by a Policyholder under a primary or Third-Party or Liability Insurance Policy, against the Primary Carrier, to the Policyholder's Excess Carrier)(subscription required to access Westlaw); cf. Download Launius ex rel. Glasgow v. Allstate Insurance Co. (N.D. Tex. Case No. 3.06cv0579, Opinion Filed April 17, 2007), also published as Launius v. Allstate Insurance Co., 2007 WL 1135347 *5-*6 (N.D. Tex. April 17, 2007)(holding that "extra-contractual claims" under Texas DTPA and under the infamous article 21.21 of the Texas Insurance Code did not survive the death of the Policyholder-Homeowner under a Homeowner's Insurance Policy)(subscription required to access Westlaw). The Online Docket of the Launius case reflects that it was settled after a jury verdict was returned, and that an Order was entered Dismissing the Case With Prejudice on July 26, 2007.
Cases deciding the validity of Assignments of various extracontractual Damages or "Bad Faith" claims and causes of action, are analyzed by Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" ยง 7:2 ("Actions by Third Parties -- Assignment") and 7:8 ("Actions by Excess Carriers--Assignment") (Shepard's/McGraw-Hill Second Edition, 2009 Supplement West Publishing Company).
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