In most jurisdictions, and within most jurisdictions, an assignment of bad faith rights is allowed from a policyholder to an injured claimant, and their agreement is called just that, an assignment.
In South Florida, such agreements are known as "Coblentz agreements," named after a famous Federal Appellate Court decision which arose from South Florida.
In a recent decision, a U.S. District Judge in the Southern District of Florida defined what such an agreement means, how it works, and what is required in order for Courts to enforce one in Florida:
In this case, Plaintiff is seeking to enforce a Coblentz agreement. A Coblentz agreement is a negotiated final consent judgment entered against an insured which was not defended by the insurer. Wrangen v. Penn. Lumbermans Mut. Ins. Co., 593 F.Supp.2d. 1273, 1278 (S.D.Fla.2008). Generally, under a Coblentz Agreement, an insured defendant “enter[s] into a settlement that assigns to the plaintiff the insured's rights against the insurer in exchange for a release from personal liability.” See Perera v. U.S., Fidelity and Guar. Co., 35 So.3d 893, 903 (Fla.2010). A Coblentz agreement is enforceable against the insurer where “damages are covered by the policy; (2) the insurer wrongfully refused to defend; and (3) the settlement is reasonable and made in good faith.” Id. Additionally, the party seeking to enforce the settlement agreement against the insurer has the burden of initially producing evidence sufficient to make a prima facie showing of that the settlement was reasonable and made in good faith. Shook v. Allstate Ins. Co., 498 So.2d 498, 500 (Fla.Dist.Ct.App.1986).
Mobley v. Capitol Specialty Ins. Corp., 2013 WL 3794058 *2 (S.D. Fla. July 19, 2013).
That case involved a discovery dispute. In pertinent part, the District Judge granted the defendant's alternative motion to abate the bad faith claim until damages were determined, if ever.
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