Also known as: direct actions against insurer · direct action against insurers · direct action · direct insurer suit
Written by attorneys · grounded in primary & secondary sources — see below
A procedural mechanism that allows an injured party to bring suit directly against a liability insurer without joining the insured as a defendant.
Diego Duarte sued Delta Dynamics' liability insurer alone after a workplace injury. The insurer was incorporated in State D with its principal place of business in State E, but the insured company had its principal place of business in State A where Diego was domiciled. The court treated the insurer as a citizen of State A under the direct action rule and dismissed the case for lack of complete diversity.
Denise Donovan, a member of an LLC that issued liability policies, sued another member and the LLC itself to enforce her rights under the operating agreement after the LLC refused to honor a coverage decision affecting her personally. She pleaded an injury distinct from any harm to the entity and maintained the action without first pursuing a derivative claim.
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Damian Decker, a limited partner in a partnership that wrote insurance policies, filed a direct action against the general partner to protect his individual distribution rights under the partnership agreement. He sought an accounting of partnership affairs and alleged harm separate from any injury to the partnership as a whole.
Darius Dixon, a member of an insurance-writing LLC, brought a direct action against the managing member for selective denial of his personal coverage benefits. He alleged and proved an actual injury that was not merely derivative of harm to the LLC and satisfied the statutory pleading requirement for maintaining the direct claim.
Delilah Duran sued an out-of-state driver and his insurer directly in the forum state after an accident. The insurer handled the defense and bore the financial impact of any judgment within policy limits, making it the real party whose contacts with the forum supported jurisdiction over the direct action.
Deborah Dunn, a Florida resident, brought a direct action against her insurer in Florida court after an accident in another state. The policy had been issued elsewhere, yet Florida law governed the direct action because the insurer was subject to suit in the forum and the insured's citizenship was imputed under the direct action statute.
In a direct action against the liability insurer where the insured is not joined as a party defendant, the insurer is deemed a citizen of every state of which the insured is a citizen in addition to its own states of incorporation and principal place of business. This imputation can destroy complete diversity even when the insurer and plaintiff appear diverse on the face of the pleadings.
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A member must plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited liability company. The member may then enforce rights under the operating agreement or the act against another member, a manager, or the LLC itself.
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A partner may maintain a direct action with or without an accounting as to the partnership's activities and affairs. The action enforces the partner's rights under the partnership agreement or the act and protects interests arising independently of the partnership relationship.
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…beyond what he would face if the suit were in his home State. The real impact on the named defendant is the same as it is in a direct action against the insurer, which would be constitutionally permissible. Watson v. Employers Liability Assurance Corp. , 348 U. S. 66 (1954); Minichiello v. Rosenberg , 410 F. 2d 106, 109-110…