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The Coblentz Agreement from a Plaintiff’s Perspective: Maximizing Your Recovery when the Defendant’s Insurance Company Denies Coverage

Just because a plaintiff has a strong personal injury case does not guaranty that he will end up collecting money to compensate him for his injuries.  Unfortunately, a personal injury plaintiff can sometimes find himself in a situation where even though his case is strong, the likelihood of ever seeing money, even after a favorable judgment, is weak.

For example, some defendants are simply broke.  In these cases, plaintiffs will learn fast the old adage about not being able to take blood from a stone.  In other cases, defendants may file for bankruptcy after a judgment is entered against them, thereby negatively impacting a plaintiff’s ability to collect.  For these reasons, plaintiffs are always relieved upon discovering the defendant was insured under a liability insurance policy.  But this fact alone, albeit often times promising, still does not guaranty the payout that the harmed plaintiff deserves.  Why?  Because insurance companies don’t always do what they are supposed to do.

At the Barbuto & Johansson personal injury law firm, we know how to handle cases if confronted with a defendant whose insurance company refuses to do what it is legally obligated to do.  In situations like these, the Coblentz Agreement is often utilized.

A classic fact pattern where a Coblentz Agreement may be useful is as follows:  Reckless Randy negligently operated a motor vehicle, causing severe injury to Pedestrian Paul.  Pedestrian Paul sued Reckless Randy, but when Reckless Randy submitted the lawsuit to his insurance carrier for help, his insurance company refused to cover the claim and provide a legal defense in the lawsuit.  Pedestrian Paul is now concerned because Reckless Randy is broke, and without the insurance company covering the claim, the chances of collecting any money to help compensate him for his damages is slim.

Therefore, in lieu of litigating the case for 2-3 years, and expending time and money through a jury trial, only to receive a judgment that may not be collectible, litigants may consider entering into a Coblentz Agreement.  Using the above fact pattern, it would be utilized as follows:

Reckless Randy and Pedestrian Paul would either consent to an early money judgment or agree to participate in binding arbitration, which would end in a quick money judgment.  Upon obtaining the money judgment, Reckless Randy would assign his rights against his insurance company to Pedestrian Paul.  This would allow Pedestrian Paul to sue the insurance company, for failing to cover and provide a legal defense to Reckless Randy.

A Coblentz Agreement can help a plaintiff by obtaining an early money judgment, and it allows the Plaintiff to be proactive in his case against the insurance company in an effort to collect on the judgment.  But why would the defendant agree to an early money judgment?  In many Coblentz Agreements, one of the terms is that the Plaintiff will not pursue an collection efforts against the defendant.  Therefore, in the above fact pattern, once Reckless Randy assigns his rights against the insurance company to Pedestrian Paul, Pedestrian Paul will go after the insurance company only, and he will not seek to collect the judgment (or record the judgment) against Reckless Randy.

Anthony M. Barbuto, Esq., of Barbuto & Johansson, P.A., has experience with utilizing the Coblentz Agreement.  Please contact Barbuto & Johansson, P.A. today at (561) 444-7980 if you have any questions about your personal injury case or Coblentz Agreements.  We look forward to helping you.