Can counties sue insurers directly without first attempting execution against the insured? Davis County v. Progressive Northwestern Insurance Explained

Background and Facts

Davis County obtained a judgment against James Jensen, a tortfeasor, and his insurer Progressive Northwestern Insurance. After the Utah Supreme Court’s decision in Speros v. Fricke held that intentional acts could not be excluded from insurance coverage under Utah law, the County refiled its claim against Progressive. The County claimed its attempts to execute on the judgment were “returned nulla bona” and that Jensen could not be located after reasonable inquiry.

Key Legal Issues

The central issue was whether the County satisfied the statutory prerequisites under Utah Code section 31A-22-201 for pursuing a direct action against an insurer. This statute requires that “execution against the insured is returned unsatisfied” before an action may be maintained against the insurer. The question became whether inability to locate the insured satisfies the “returned unsatisfied” requirement.

Court’s Analysis and Holding

The Utah Court of Appeals affirmed the trial court’s summary judgment in favor of Progressive. The court emphasized that under Speros, “an unsatisfied attempt to execute on a judgment against an insured is a prerequisite element” for standing under the statute. Here, the County not only failed to provide evidence of attempted execution but also failed to demonstrate that such execution would have been futile. The court distinguished cases where plaintiffs made actual efforts to locate defendants, noting the County “admits that it never even attempted to obtain a writ of execution, let alone tried to serve the tortfeasor in any fashion.”

Practice Implications

This decision establishes that Utah’s direct action statute requires actual execution attempts, not mere assertions of futility. Practitioners must document concrete efforts to execute on judgments against tortfeasors before pursuing their insurers directly. The court’s analysis suggests that reasonable diligence in pursuing claims includes making genuine attempts to locate and serve judgment debtors, with evidence supporting any claims of futility.