Coblentz Agreement — Denial of Coverage results in $800,000 Settlement

During June 2021, our client, Mr. Jones (not his real name), slipped and fell on water in the hallway of his condominium building.  From the outset, it was clear that the water came from the building’s HVAC System.  Consequently, Mr. Jones hired Randy Weber to represent him.  Unfortunately, the insurance carrier for the building and management company completely denied coverage based on an exclusion in its policy (no coverage for accidents that happen due to leaks in “appliances”).  On that basis, the insurance company denied both a defense to the building as well as indemnity for our client’s harms and losses.  In other words, Mr. Jones was out of luck.

Fortunately, Mr. Weber had a solution: A Coblentz Agreement.  This is a relatively little-known litigation tool that allows an insured whose insurance company denies coverage – to enter into an agreement whereby they assign their rights to sue their own insurance company for coverage.  What’s more, as a part of the Coblentz Agreement, the parties are permitted to enter into a “consent judgment” for a certain amount of money.  The consent judgment will be enforced and upheld provided that it was a negotiated, arms length settlement.  In this case, the parties went to mediation and entered into a consent judgment for more than $500,000.00.