CX Reinsurance v. Johnson

Summary

The Court held that tort claimants do not become intended beneficiaries of commercial general liability policies until they obtain a final judgment against an insured or enter into an approved settlement. Claimants who had obtained judgments before the insurers’ rescission settlements could enforce the policies’ pre-settlement terms, while claimants without judgments or approved settlements were only incidental beneficiaries and could not enforce those terms if the settlements were made in good faith. The Court affirmed as to the three judgment holders, reversed as to the remaining claimants, and remanded for a factual determination of good faith.