Doe v. Firemen’s Fund Ins. Co.

Plaintiff obtained a default judgment against Red Willow Dairy, LLC, and Jim and Ann Huffman. The day before the order granting the default judgment was signed and file stamped, Red Willow Dairy and the Huffmans filed for chapter 7 bankruptcy. Plaintiff settled her claim in return for an assignment of rights to any causes of action Red Willow Dairy and the Huffmans might have against Fireman’s Fund Insurance Company with respect to the underlying lawsuit. Plaintiff then sued Fireman’s for breach of its duty to defend Red Willow Dairy and Huffmans. The district court found that the filing of the default judgment violated the automatic stay of the U.S. Bankruptcy Court and therefore granted summary judgment in favor of Fireman’s. The Supreme Court affirmed, holding the the filing of the bankruptcy stayed any further proceedings in the underlying action, preventing the rendition and entry of the default judgment. View "Doe v. Firemen's Fund Ins. Co." on Justia Law