Penn-America Insurance Co. v. Osborne

Beecher Osborne filed a lawsuit against Allegheny Wood Products, Inc. and Heartwood Forestland Fund, IV, Limited Partnership. The parties entered into a pre-trial settlement agreement containing (1) a consent judgment in which the defendants agreed to a $1 million judgment against them, (2) a covenant not to execute in which Osborne promised not to collect the judgment from the defendants, and (3) an assignment from the defendants to Osborne of all claims they may have had against Penn-America Insurance Company for failing to provide them a defense in the lawsuit. Osborne subsequently dismissed his lawsuit against Allegheny and Heartwood and filed a new lawsuit against Penn-America on his assigned claims to collect the consent judgment. The circuit court granted summary judgment in favor of Osborne and ordered Penn-America to pay Osborne the consent judgment. The Supreme Court reversed, holding (1) the consent judgment was not binding on Penn-America because it was not a party to the underlying lawsuit; and (2) under the facts of this case, the assignment by Allegheny and Heartwood to Osborne of any claims they may have had against Penn-America was void. Remanded with direction to enter summary judgment for Penn-America and to dismiss Penn-America from Osborne’s lawsuit with prejudice. View "Penn-America Insurance Co. v. Osborne" on Justia Law