The California Court of Appeal has affirmed a ruling that a person not covered by an insurance policy cannot sue the insurer for alleged negligence for delaying payment to the person who is insured.
The ruling in Adelman v. Associated International Insurance Co. involved 20 owners of condominium units who sued Associated for an alleged delay in paying a claim to a condo association for damage from the 1994 Northridge earthquake. The overall complex was insured by Associated but the individual unit owners were not. The Court of Appeals ruling adopted the reasoning contained in a friend of the court brief filed by the National Association of Independent Insurers (NAII).
The condo association sued Associated for delays in paying the earthquake claim after disputes arose. The Superior Court granted Associated’s request for a summary judgment, concluding the company’s handling of the claim had been reasonable.
Adelman and the other unit owners then filed suit against Associated, alleging negligence in the company’s delay in paying the condo association’s claim. The Superior Court ruled in favor of Associated, and Adelman appealed to the Court of Appeal. The appellate court invited NAII to submit a brief on the case and, in its June 29, 2001, ruling agreed with the reasoning in that brief.
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