§ 7.4 Judicial Assignment of Claims Against Insurer
As discussed above in § 7.3, in Reeves the Supreme Court touched upon the fact that when the District Court first recognized the assignability of bad-faith claims in tort, the District Court did so pursuant to the Survival Statute. The Supreme Court in Reeves observed that "[t]o reach its conclusion the bad-faith claim was assignable, the district court in Schneider relied exclusively on the applicability of the South Carolina survival statute," which applies only to individuals and insolvent or defunct corporations.56 Does this mean that, for example, a limited liability company or solvent corporation is unable to contractually assign its right of action in tort for insurance bad faith to the plaintiff holding an excess judgment? Maybe. If so, what are the options?
Depending on the entity-defendant's solvency, the plaintiff could execute against the corporate-defendant's assets and pursue supplemental proceedings. Another option would be for the plaintiff to negotiate for the entity-defendant to pursue the bad-faith action against the insurer on its own, and, if successful, let the corporate-defendant satisfy the plaintiff's excess judgment out of the proceeds collected from the insurer.
Yet another, more efficient option has been presented by Professor Constance Anastopoulo: judicial assignment through supplemental proceedings.57 The judgment-holding plaintiff would initiate the execution process against the defendant, and the sheriff would inevitably complete a return nulla bona (as the sheriff always does). The plaintiff would then initiate supplemental proceedings against the defendant pursuant to South Carolina Code section 15-39-310. During the supplemental proceedings, the master-in-equity could assign to the plaintiff the defendant's right of action against the insurer.
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