The New York Court of Appeals determined whether a plaintiff may commence a direct action against the insurer of the underlying tortfeasor where the plaintiff has not yet won a judgment over the underlying tortfeasor (see prior post that discussed the case and Appellate Division decision). The Court held that Section 3420 of the Insurance Law requires the plaintiff securing a judgment over the underlying tortfeasor before commencing an action against the tortfeasor’s insurer.
Notably, the Court offered a word of advice at the end of the decision, noting that insurers should commence declaratory judgment actions against its insureds where the question of coverage is close. It reasoned that the insurer could protect itself and inject itself early on in the matter rather than being stuck defending a declaratory judgment action against the plaintiff after he or she has secured a judgment against the underlying tortfeasor.
New York Civil Law 