Can a state court action be brought against an insurance company for encouraging an insured to petition for bankruptcy?

In Choy v. Redland Insurance Co., 103 Cal. App. 4th 789, 127 Cal.Rptr.2d 94 [2002], the plaintiff brought a state court action against an insurance company and associated defendants. The plaintiff alleged that the defendants encouraged the insured to petition for bankruptcy for the "real purpose" of "frustrat[ing]" the plaintiff's "ability to seek and obtain a judgment against [the insured]" in excess of defendant insurer's policy limit ( id. at 794, 127 Cal Rptr 2d 94 ). The claims were preempted because the "gist" of the plaintiff's complaint was the defendants' "misuse[ ][of] the bankruptcy process" and state court remedies cannot serve as a vehicle to "circumvent well established federal rules relating to redress" for such misuses ( id. at 802, 127 Cal Rptr 2d 94 ). Although bankruptcy law references state

[164 N.E.3d 1009]