Fluor Corp. v. Superior Court of Orange County

This case concerned an insured’s assignment of the right to invoke defense and indemnification coverage under a liability policy issued by Hartford Accident & Indemnity Company. The Supreme Court held in Henkel Corp. v. Hartford Accident & Indemnity Co., a case decided on similar facts, that the consent-to-assignment clause was enforceable and precluded the insured’s transfer of the right to invoke coverage without the insurer’s consent even after the coverage-triggering event had already occurred. At issue here was whether Cal. Ins. Code 520 - a statute that was not considered by the Court when it Henkel - changes the Court’s determination in Henkel. Section 520 specifically restricts an insurer’s ability to limit an insured’s right to transfer or assign a claim for insurance coverage. The court of appeal below concluded that section 520 does not apply to liability insurance and that, even assuming the statute applies, it should be construed to reflect the same rule articulated in Henkel. The Supreme Court reversed, holding (1) in light of the relevant language and history of section 520, the statute applies to third party liability insurance and bars an insurer from refusing to honor an insured’s assignment of policy coverage regarding injuries that predate the assignment; and (2) consequently, the decision in Henkel cannot stand. View "Fluor Corp. v. Superior Court of Orange County" on Justia Law