Product Fire

When an Insurer Proceeds as Subrogee, Defendants Cannot Assert Contribution Claims Against the Insured


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In Farmers Mut. Ins. Co. of Mason County v. Stove Builder Int’l, 2019 U.S. Dist. Lexis 46993 (E.D. Ky.), the United States District Court for the Northern Division of the Eastern District of Kentucky, by adopting a Magistrate Judge’s report and recommendations, see Farmers Mut. Ins. Co. v. Stove Builder, Int’l, Inc., 2019 U.S. Dist. LEXIS 48103 (E.D. Ky. Feb. 11, 2019), considered whether to allow the defendants to file a third-party complaint against the plaintiff’s insureds-subrogors. Finding that the defendants could not pursue contribution claims against the plaintiff’s insureds-subrogors, the court denied the defendant’s motion to file a third-party complaint. Continue reading

This entry was posted in Contribution-Apportionment, Kentucky, Subrogation and tagged , , , .
Time

Washington Court Tunnels Deeper Into the Discovery Rule


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Often times, properly analyzing when a statute of limitations begins to run – not just how long it runs – is crucial to timely pleading. In Dep’t of Transp. v. Seattle Tunnel Partners, 2019 Wash.App. LEXIS 281 (Was. Ct. App. Feb. 5, 2019), Division Two of the Court of Appeals of Washington addressed when the discovery rule starts the statute of limitations clock on a negligence cause of action. The court held that the statute of limitations begins to run when the plaintiff knows that the factual elements of the claim against the defendant exist. The clock starts to run even if the plaintiff wants to investigate the possibility of other contributing factors or the defendant identifies opposing viewpoints on the theory of the claim. Continue reading

This entry was posted in Statute of Limitations-Repose, Uncategorized, Washington and tagged , .
Gavel

California Court Invokes Equity to Stretch Anti-Subrogation Rule Principles


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By: Gus Sara and William L. Doerler

In Western Heritage Ins. Co. v. Frances Todd, Inc. 2019 Cal. App. Lexis 299, the Court of Appeals of California, First Appellate District, addressed whether a commercial condominium association’s carrier could subrogate against the tenants (aka lessees) of one of its member unit owners. After examining the condominium association’s declarations, as well as the lease terms between the owner and the lessees, the court held that the association’s carrier could not subrogate against the lessees because they were implied co-insureds on the policy. To reach its decision, the court explained that an insurer steps into the shoes of its insured, not the party with whom it is in privity. Although the first-party property portion of the association’s insurance policy did not, as required by the association’s declarations, have the owner listed as an additional named insured, the court held that it would be inequitable to treat the association as the sole insured for purposes of determining Western Heritage’s right to bring a subrogation action. Continue reading

This entry was posted in Anti-Subrogation Rule, California, Landlord-Tenant, Subrogation, Sutton Doctrine and tagged , , .
Recall Alert

Consumer Product Safety Commission Recalls Products Due To Fire Hazards


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In subrogation cases where the insured’s damages were caused by a defective product, the fact that the product at issue is or was subject to a recall announced by the Consumer Product Safety Commission (CPSC) may help to establish that the product was defective when it left the manufacturer’s possession and control. Recently, the CPSC announced the following recalls related to products that present fire hazards:

Tween Brands Recalls Light Up Bed Canopies Due to Fire and Burn Hazards;

DAVIDsTEA Recalls Valentine’s Day Stackable Mugs Due to Fire Hazard.

This entry was posted in CPSC Recalls, Products Liability and tagged .
Gavel

Privileged Communications With a Testifying Client/Expert


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In In re City of Dickinson, 568 S.W.3d 642 (Tex. 2019), the Supreme Court of Texas recently assessed whether a client’s emails with its counsel were subject to disclosure after the client was designated as a testifying expert witness. In re City of Dickinson involved a coverage dispute between a policyholder and its insurer. The policyholder moved for summary judgment on the issue of causation, essentially alleging that its insurer did not pay all damages caused by Hurricane Ike. In responding to the motion, the insurer relied upon an affidavit by one of its employees, a claims examiner, that included both factual testimony and expert witness testimony. Continue reading

This entry was posted in Discovery, Privilege, Texas and tagged , , , .
Product Recall

Arctic Cat Recalls Snowmobiles


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In subrogation cases where the insured’s damages were caused by a defective product, the fact that the product at issue is or was subject to a recall announced by the Consumer Product Safety Commission (CPSC) may help to establish that the product was defective when it left the manufacturer’s possession and control. On April 18, 2019, the CPSC announced the following recall related to a product that presents a fire hazard:

Arctic Cat Recalls Snowmobiles Due to Fire Hazard.

According to the CPSC, “[w]hile operating the snowmobile the exhaust can flame from the muffler outlet, posing a fire hazard.”

This entry was posted in CPSC Recalls, Products Liability and tagged .
Fire

Fire Loss Subrogation Counsel and Origin and Cause Consultants Must Work Together in Responding to Opinion Admissibility Challenges


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Philadelphia Contributorship Ins. Co. a/s/o David Munz v. Ryan, Inc., 2019 N.J. Super. Unpub. LEXIS 62, involves a typical fire loss subrogation claim requiring expert testimony from an origin and cause consultant and a furnace consultant. The facts are straightforward. The Munz home lost heat. Munz called furnace service contractor Ryan, Inc. to check the system and make needed repairs. One month later, a fire originating in the furnace damaged the home. Munz’s insurer paid the first party claim and filed a subrogation action against Ryan, Inc. The underlying liability theory was that the Ryan, Inc. furnace technician should not have repaired the furnace and placed it back into service. Continue reading

This entry was posted in Evidence.
Gavel

New Jersey Court Washes Away Insurer’s Waiver of Subrogation Arguments


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Subrogating insurers often address waiver of subrogation clauses in the form contracts drafted by the American Institute of Architects. In ACE Am. Ins. Co. v. Am. Med. Plumbing, No. A-5395-16T4, 2019 N.J. Super. LEXIS 45 (App. Div.), ACE American Insurance Company (ACE) argued that the waiver clause in the AIA General Conditions form A201-2007 did not extend to the post-construction loss at issue. Adopting what the court termed the “majority” position, the Appellate Division held that, by reading §§ 11.3.5 and 11.3.7 together, the waiver applied to bar the insurer’s subrogation claim. The Appellate Court’s ruling makes pursuing subrogation against New Jersey contractors using AIA contract forms more difficult. Continue reading

This entry was posted in New Jersey, Waiver of Subrogation and tagged , .
Time

Arbitration: For Whom the Statute of Limitations Does Not Toll in Pennsylvania


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In Morse v. Fisher Asset Management, LLC, 2019 Pa. Super. 78, the Superior Court of Pennsylvania considered whether the plaintiff’s action was stayed when the trial court dismissed the plaintiff’s complaint after sustaining the defendants’ preliminary objections seeking enforcement of an arbitration clause in the contract at issue. The Superior Court—distinguishing between a defendant who files a motion to compel arbitration and a defendant who files preliminary objections based on an arbitration clause—held that, in the latter scenario, if the defendant’s preliminary objections are sustained, the statute of limitations is not tolled. This case establishes that, in Pennsylvania, plaintiffs seeking to defeat a challenge to a lawsuit based on a purported agreement to arbitrate need to pay close attention to the type of motion the defendant files to defeat the plaintiff’s lawsuit. Continue reading

This entry was posted in Arbitration, Pennsylvania, Statute of Limitations-Repose and tagged , , .
Large Property Loss

Fire Consultants Cannot Base Opinions on Speculation


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Larsen v. 401 Main St. Inc., 302 Neb. 454 (2019), involved a fire originating in the basement of the Quart House Pub (Pub) in Plattsmouth, Nebraska that spread to and damaged Plattsmouth Chiropractic Center, Inc., a neighboring business. Fire investigators could not enter the building because the structure was unsafe and demolished. The chiropractic center nevertheless sued the Pub alleging that its failure to maintain and replace basement mechanical equipment caused ignition. Continue reading

This entry was posted in Uncategorized.