Bird v. Best Plumbing Grp., LLC
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When an insured defendant believes its insurer is refusing to settle a plaintiff's claims in bad faith, the insured can negotiate an independent pretrial settlement with the plaintiff, typically involving a stipulated judgment, a covenant not to execute the judgment, and an assignment of the insurer's bad faith claim to the plaintiff (collectively, a "covenant judgment). When accepted by the trial court, the settlement amount becomes the presumptive measure of damages in the later bad faith action. The issue on appeal to the Supreme Court concerned whether article I, section 21 of the Washington Constitution entitles the insurer to have the reasonableness of the covenant judgment determined by a jury. Upon review, the Supreme Court held that it does not, and affirmed the trial and appellate courts.
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