Wednesday, July 09, 2008

S.C. Court of Appeals holds that professional negligence claims are assignable

In Fowler v. Hunter, the court of appeals considered the assignability of professional negligence claims. The Fowlers were seriously injured when the motorcycle they were riding was struck by a car driven by Sallie Hunter. The car was owned by Gynecologic Oncology Associates (“GOA”) for use by Mrs. Hunter’s husband, Dr. James Hunter. Auto-Owners Insurance Company insured the car under a business automobile policy with limits of one million dollars. At least two other policies potentially provided coverage. One was a commercial umbrella policy for four million dollars procured by GOA through Insurance Associates and issued by Selective. The other policy at issue was a personal catastrophic liability policy for two million dollars carried by the Hunters and also issued by Selective.

After settling certain claims, the Hunters and GOA assigned their professional negligence claim against Insurance Associates to the Fowlers, and the Fowlers signed a covenant not to execute against the Hunters and GOA. The Hunters and GOA agreed to cooperate with the Fowlers in the prosecution of the professional negligence claim, and the Fowlers and Selective agreed to split equally any recovery from either the professional negligence or indemnification claim. The trial court held that such an assignment was impermissible and granted summary judgment. The court of appeals reversed.

The Court of Appeals held that this assignment was permissible and stressed that there was little evidence of collusion between the settling parties. "In light of our State’s willingness to place the interests of the injured party above such a technical application of the law, we believe it was inappropriate for the claim to be dismissed at the summary judgment stage."

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