In Wilson v. Educators Mut. Ins. Ass’n, 2017 UT 69, the Supreme Court of Utah considered whether an insurer had the right to bring a subrogation action in its own name despite the fact that its insured had not yet been made whole. The court held that, although the common law made whole doctrine generally bars an insurer from proceeding in its own name until after the insured has been made whole, the terms of an insured’s insurance policy can change the made whole doctrine. The Wilson case highlights the importance of reviewing the applicable insurance policy, in conjunction with the law of the applicable jurisdiction, to determine an insurer’s subrogation rights. Continue reading
In subrogation actions, the insurer, as subrogee, steps into the shoes of its insured. However, problems can arise when an insured has uninsured losses. In this situation, both the insurer and the insured have a right to file suit against the tortfeasor. The possibility of two different lawsuits raises a number of issues, such as whether: 1) proceeding separately impermissibly splits the cause of action; 2) the insured’s attorney is entitled to attorney’s fees under the common fund doctrine; and 3) the insurer can proceed before the insured is made whole. In light of these issues, subrogating insurers should proceed with caution before filing suit separately from the insured.