On September 8, 2009, we published a blog on the LexisNexis Workers’ Compensation Law Center with respect to CIGA’s liability on “assigned” claims. On 10/5/09 the California Court of Appeals, Fifth Appellate District, decided the case of Catholic Healthcarewest v. California Insurance Gurarantee Association.

The case dealt with several issues, including the issue of assignment, a topic we covered in our prior blog.

We note that in Part 6 “Assignee” of its decision, the court held:

“CIGA also contends that Catholic Healthcare West is an assignee of an original insured and thus excluded from coverage by the language in section1063.1, subdivision ©(9) that states a covered claim ”does not include any claim asserted by an assignee…” in Baxter, the court concluded that BHC was an assignee because substantially all of the assets of AHSC were transferred to a predecessor corporation pursuant to a document titled “Assignment and Assumption.” (Baxter, supra, 85 Cal. App. 4^th at p. 309.) In this case, the record does not contain an assignment document. Furthermore, we will not interpret the word “assignee” so broadly as to include the surviving corporation of the mergers that occurred in this case. Doing so would defeat, rather than promote, the legislative purpose of the statute.” (emphasis added)

We believe that this decision reinforces the proposition that the court in its interpretation of assignment requires a complete assignment retaining no financial interest in the claim for Labor Code Section 1063.1 et seq. to bar recovery.

This blog was written by Reid Steinfeld , Esq., and Richard Boggan, J.D.