In Melrose Gates, LLC v. Chor Moua, et al., 875 N.W.2d 814 (Minn. 2016), the Supreme Court of Minnesota, applying the factors the court first articulated in RAM Mutual Insurance Company v. Rohde, 820 N.W.2d 1 (Minn. 2012), analyzed whether the parties to an apartment lease reasonably expected that the tenants would be liable in subrogation for fire damage caused by the tenants’ negligence. The Melrose Gates court held that, based on the language of the lease, the type of insurance the parties purchased, and the fact that the building was a multi-unit structure, the parties intended that the tenants would be responsible for damage to their leased unit but not for damage to other property. Thus, while the landlord’s insurer could recover the amount it paid to repair the damage to the tenants’ unit, it could not recover the amount it paid to repair other units or common areas of the building.
Many subrogation specialists are aware of the potential issues posed by the Sutton Doctrine. Decided by the Oklahoma Court of Appeals in 1975, Sutton v. Jondahl, 532 P.2d 478 (Okla. App. 1975), holds that, absent an express agreement to the contrary, a tenant is presumed to be a co-insured under the landlord’s fire insurance policy. Because subrogation is forbidden against one’s own insured, the Sutton Doctrine can bar landlord/tenant subrogation actions. West Virginia, like many states, however, has adopted its own approach to landlord/tenant subrogation.