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Stateline Steel Erectors12/9/2003
judgment, we consider the affidavits and other evidence, and all inferences properly drawn from them, in the light most favorable to the non-moving party. Sintros v. Hamon, 148 N.H. 478, 480 (2002). If our review of that evidence discloses no genuine issue of material fact, and if the moving party is entitled to judgment as a matter of law, we will affirm. Id. We review the trial court's application of the law to the facts de novo. Id.
As this case presents an issue of first impression, we look to other jurisdictions for guidance. See id. There is a split of authority as to whether an insured who has been released from the legal obligation to pay an excess judgment has any right against an allegedly negligent insurance agent, which could be assigned to others. The majority of jurisdictions have found such assignments valid. See McLellan v. Atchison Ins. Agency Inc., 912 P.2d 559, 565 (Haw. Ct. App. 1996); Lageman v. Frank H. Furman, Inc., 697 So. 2d 981 (Fla. Dist. Ct. App. 1997); Campione v. Wilson, 661 N.E.2d 658, 659-63 (Mass. 1996); Red Giant Oil Co. v. Lawlor, 528 N.W.2d 524 (Iowa 1995) (rejecting Freeman v. Schmidt Real Estate & Ins., 755 F.2d 135, 136-30 (8th Cir. 1985), and holding that assignment together with covenant not to execute on excess judgment is valid); Kobbeman v. Oleson, 574 N.W.2d 633, 636 (S.D. 1998); Tip's Package Store, Inc. v. Commer. Ins. Manag., 86 S.W.3d 543, 553-55 (Tenn. Ct. App. 2001); Steinmetz v. Hall-Conway-Jackson, Inc., 741 P.2d 1054, 1056-57 (Wash. Ct. App. 1987); see also Note, Judicial Approaches to Stipulated Judgments, Assignments of Rights, and Covenants Not to Execute in Insurance Litigation, 47 Drake L. Rev. 853, 856-60 (1999) (trend "seems to lean overwhelmingly toward the majority rule" that upholds assignment of insurance claim accompanied by covenant not to execute on judgment). But see Oregon Mutual Ins. Co. v. Gibson, 746 P.2d 245, 247 (Or. Ct. App. 1987).
Jurisdictions have used different approaches to find such assignments valid. Many jurisdictions distinguish between a release and a covenant not to execute on a judgment. In these jurisdictions, an assignment is valid if it is coupled with a covenant not to execute because the insured remains liable for the excess judgment; an assignment coupled with a release is void because the release extinguishes the insured's liability. See, e.g., Kobbeman, 574 N.W.2d at 637; Lageman, 697 So. 2d at 983; Tip's Package Store, 86 S.W.3d at 555. These jurisdictions deem a covenant not to execute merely a contract, not a release; if the assignee sought to collect the judgment from the insured, the insured could sue for breach of contract. See Kobbeman, 574 N.W.2d at 636.
In other jurisdictions, the legal basis for the insured's claim against its insurance agent still exists even though the insured is insulated from liability by either a release or a covenant not to execute. See Campione, 661 N.E.2d at 661-63.
A minority of jurisdictions have ruled that even a covenant not to execute extinguishes an insured's liability for an excess judgment. As the Oregon Court of Appeals has explained:
Had insurance agents procured the coverage alleged to be deficient, that coverage would not have become implicated, unless the insured became legally obligated to pay more than what was already paid on his behalf by his insurer. Under the covenant, however, he can never be required to pay any more than the coverage under the existing insurance.
Oregon Mutual, 746 P.2d at 247.
"For the most part, these conflicting decisions reflect a balancing of policy considerations." Campione, 661 N.E.2d at 662. Chief among these considerations is concern about the ris
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