Insurer Has No Duty to Protect a Treating Physician’s Assigned Interest in Settlement Proceeds
August 5, 2020
In Erie v. McKinley, a chiropractor rendered treatment to a patient who had been injured in a motor vehicle accident. To pay for the services provided, the patient assigned to the chiropractor her rights to insurance and/or litigation proceeds she might be entitled to receive as a result of the accident. The chiropractor provided a copy of the assignment to the liability insurer for the negligent driver. The liability insurer subsequently settled with the patient without protecting the chiropractor’s assigned interest in the settlement monies. The chiropractor subsequently sued the insurer. The Virginia Supreme Court ruled that the chiropractor could not recover from the insurer because no right to recover damages exists until a claim has been reduced to an actual judgment. As the patient’s claim settled without a judgment being entered against the negligent driver, no right existed to enforce the assignment.