In Penn-Am. Ins. Co. v. Osborne, ___ S.E.2d ___, No. 15-1018, 2017 WL 878716, at *4 (W. Va. March 1, 2017), the Supreme Court of Appeals of West Virginia reaffirmed this long-standing rule: “A consent or confessed judgment against an insured party is not binding on that party's insurer in subsequent litigation against the insurer where the insurer was not a party to the proceeding in which the consent or confessed judgment was entered, unless the insurer expressly agreed to be bound by the judgment. Therefore, an attack on the consent or confessed judgment in the subsequent litigation by an insurer who did not expressly agree to such judgment is a permissible direct, not collateral, attack on the consent or confessed judgment.”
This holding by West Virginia's highest court expresses the rule followed throughout the United States in cases of indemnity. Where one party now seeks to enforce a previous consent or confessed judgment against another party by demanding that it pay indemnity, the rule holds that the consent or confessed judgment is simply not binding where the party from which indemnity is sought was not a party to the previous proceeding.
Shh! Insurance lawyers and insurance companies like to think that they are unique.
And so we usually are unique, but in a case like this the rules of indemnity apply and the rules of insurance are only an example of how the ancient rules of indemnity apply.
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