People ex rel. Allstate Ins. Co. v. Dahan

If the state does not intervene in an insurance false claims case, the plaintiff insurer may enforce the entire judgment against the defendants without first having the court determine the insurer’s share of the proceeds of the action.  Under Ins. Code 1871.7(g)(2)(A), if an insurer brings a qui tam insurance false claims case in which the state does not join, the court is to award the insurer between 30 and 50 per cent of the proceeds of the action for “collecting the civil penalty and damages” together with the insurer’s reasonable expenses including attorney fees.  Since the statute refers to “collecting,” this decision holds that the award to the insurer is to be made after, not before, the insurer undertakes efforts to collect the judgment and that the insurer therefore is entitled to enforce the entire judgment against the defendants.  For that reason, the defendants have no interest in how the judgment or amounts collected under it are split between the state and the insurer.  Hence, the defendants are not aggrieved by an order splitting the proceeds of the action and have no standing to appeal from it.

California Court of Appeal, Second District, Division 3 (Aldrich, J.); September 15, 2016; 2016 WL 4917188

 

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