The Supreme Court of Virginia held that when an injured party assigns its rights of recovery from a tortfeasor and its insurer, the assignee is barred from maintaining an action against the tortfeasor’s insurer until a claim against the tortfeasor is reduced to judgment. Erie Ins. Co. v. McKinley Chiropractic Center, P.C., 294 Va. 138, 803 S.E.3d 741 (2017).

A woman was injured in an automobile accident and visited a chiropractor for treatment. To satisfy any debts incurred to the chiropractor, the injured woman assigned to the chiropractor all rights stemming from the wreck against the tortfeasor and its insurer. The tortfeasor and its insurer then settled directly with the injured woman, and the chiropractor sued the tortfeasor’s insurer, claiming the insurer had failed to honor the assignment. An intermediary appellate court agreed with the chiropractor, and the Supreme Court of Virginia reversed.

The Supreme Court reasoned that an injured party has no right to recover tort damages from a tortfeasor’s insurer until the injured party’s claim against the tortfeasor is reduced to judgment. Because the injured party’s claim against the tortfeasor had not been reduced to a judgment, the injured party could not maintain an action against the insurer. And, because the injured party had no right to maintain a claim against the insurer, the Court concluded that the injured party’s assignee likewise could not maintain an action against the insurer.