A Capehart Scatchard Blog

Third Party Unable to File Suit Against Insurance Company without Assignment of Rights

By on July 10, 2015 in Blog with 0 Comments

Defendants 48 Branford Place Associates and Palladium Associates were sued due to the death of Andre Henry and serious injuries of Benverneuto Webster arising from a shooting at a ballroom/night club operated by Palladium. Neither Palladium, nor 48 Bradford obtained liability insurance coverage for assault and battery. In Stephens v. 48 Branford Place Associates, 2015 N.J. Super. LEXIS 69 (Law Div. April 24, 2015), the plaintiff amended the complaint to add claims against several insurance carriers and insurance brokers for the defendants.

After amending the complaint, some of the carriers and brokers moved to dismiss the amended complaint, arguing that an injured party has no right to sue an insurance company of the defendant without an assignment. The trial court agreed that no direct claim against the insurance company existed.

The court cited to several Appellate Division decisions that supported this position. The cases cited in favor of such a claim were factually distinguished by this court.

However, the court pointed out that the law is not the same as to brokers. New Jersey does permit an injured third party to assert a claim against a broker as an intended beneficiary of the agreement to purchase the appropriate coverage. Because of the importance of liability insurance, members of the general public are deemed to be third party beneficiaries of an agreement between a business proprietor and its insurance broker to procure coverage.

Thus, there are two separate lines of cases that distinguish between third party claims against insurance carriers and insurance brokers. The law is clear that while an injured third party may not maintain a direct claim against a defendant’s insurance company without an assignment from the insured, an action is permitted against the broker.

Accordingly, the trial court granted the motion to dismiss filed by the insurance companies but denied the motion requesting a dismissal of the amended complaint by the brokers.


About the Author

About the Author:

Ms. Ramos is an Executive Committee Member and Co-Chair of the Litigation Department at Capehart Scatchard, P.A. located in Mount Laurel, New Jersey. She is an experienced litigator with over 30 years experience handling diverse matters. Practice areas include tort defense, business litigation, estate litigation, tort claims and civil rights defense, construction litigation, insurance coverage, employment litigation, shareholder disputes, and general litigation.

For the years 2020-2023, Ms. Ramos was selected for inclusion in The Best Lawyers in America© in the practice area of Litigation - Insurance. The attorneys on this list are selected based upon the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical area and legal practice area. A complete description of The Best Lawyers in America© methodology can be viewed via their website at: https://www.bestlawyers.com/methodology.

In 2021, Capehart Scatchard and Ms. Ramos received the “Best Law Firm” ranking in the area of Litigation – Insurance (Metro, Tier 3) published by U.S. News & World Report and Best Lawyers®. Law firms included on the list are recognized for professional excellence with consistently impressive ratings from clients and peers. To be eligible for a ranking, a firm must have at least one attorney who has been included in the current edition of Best Lawyers in America, which recognizes the top five percent of practicing lawyers in the United States. Betsy Ramos (Litigation – Insurance) was recognized for this prestigious award in the 2021 edition. For a description of the “Best Law Firm” selection methodology please visit: https://bestlawfirms.usnews.com/methodology.aspx.

“Best Law Firms” is published by Best Lawyers in partnership with U.S. News & World Report. For a description of the selection methodology please visit: https://bestlawfirms.usnews.com/methodology.aspx.

*No aspect of this advertisement has been submitted to or approved by the Supreme Court of New Jersey.


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