Opinion ID: 2399153
Heading Depth: 2
Heading Rank: 2

Heading: The Reach and Apply Statute

Text: [¶ 14] The reach and apply statute, 24-A M.R.S.A. § 2904 (2000), enables a judgment creditor to have insurance money applied to the satisfaction of the judgment by bringing an action against the judgment debtor's insurer if the judgment debtor was insured for the liability forming the basis of the judgment. Hunnewell v. Liberty Mutual Fire Ins. Co., 588 A.2d 300, 301-02 (Me.1991). The statute provides, in relevant part: Whenever any person, administrator, executor, guardian, recovers a final judgment against any other person for any loss or damage specified in section 2903 [referring to accidental loss or damage due to personal injury, death or accidental damage to property that is covered by insurance], the judgment creditor shall be entitled to have the insurance money applied to the satisfaction of the judgment by bringing a civil action, in his own name, against the insurer to reach and apply the insurance money, if when the right of action accrued, the judgment debtor was insured against such liability and if before the recovery of the judgment the insurer had had notice of such accident, injury or damage. 24-A M.S.R.A. § 2904. A final judgment against the tortfeasor is a condition precedent to the injured party's right to institute an action against the tortfeasor's liability insurer. Associated Hospital Service of Maine v. Maine Bonding & Casualty Co., 476 A.2d 189, 190 (Me. 1984). [¶ 15] Ashe contends that the reach and apply statute allows him to recover his damages from the Enterprise bond because he is, by virtue of section 2708-A, entitled to benefit from the mandatory coverage on the vehicle. Unless Ashe can obtain a judgment against Enterprise, however, he is not entitled to recover from Travelers through the reach and apply statute. Absent a finding that Enterprise is liable to Ashe, Travelers's contractual liability to Enterprise is not triggered by Ashe's claims. [¶ 16] Nor can Ashe recover his damages by a direct action against the bond. The bond states: [T]his bond is written to assure compliance by the principal as a rental car company with the laws of such State and the rules and regulations of the Commission relating to insurance or other security for the protection of the public, and shall inure to the benefit of any person or persons who shall recover a final judgment or judgments against the principal for any of the damages herein described. Thus, by the bond's express terms, its proceeds are available only in the event of a judgment entered against Enterprise. [¶ 17] Because the mandatory coverage provision, former section 2708-A, does not create a right of action for a passenger against the rental car owner, and because such an action is otherwise not viable under the common law, no judgment can be entered for Ashe against Enterprise and no obligation on the part of Travelers is created under either the reach and apply statute or the bond. The entry is: Judgment affirmed.