When an insurer, as subrogee of its insured, files suit against a defendant to recover its subrogated payments, the defendant, not infrequently, files a third-party complaint against the insured. Typically, the defendant alleges that, if it is liable, then the insured, based on his or her contributory negligence, is liable to the defendant for contribution. Insureds, however, cannot be liable in tort to themselves.
In Truck Ins. Exchange v. Campbell, No. 1956 of 2014, G.D., 2015 WL 5766270 (Pa. C.C.P. Fayette Cty. July 1, 2015), the Pennsylvania Court of Common Pleas, Fayette County, in an unreported decision, discussed a case where the defendant in a subrogation case sought to pursue a contribution claim against the insured. The Truck Ins. Exchange case arose out of a fire at the home of Stephen Patterson and Stephanie Patterson, a home that the Pattersons purchased from James D. Campbell, Jr. In their complaint, the Pattersons alleged that Campbell negligently performed electrical work at the home and that Campbell’s negligent work caused the fire.
Campbell filed a complaint to join the Pattersons as additional defendants. In his complaint, Campbell alleged that the Pattersons were solely liable for the loss or, alternatively, were liable to him for contribution. In response, the plaintiff filed Preliminary Objections, arguing that the court should dismiss Campbell’s complaint to join the Pattersons as additional defendants.
As noted by the court, subrogation is an equitable doctrine, wherein the subrogating insurance company steps into the shoe of its insured. Subrogation allows the insurer to recover the amounts it paid to its insured from the tortfeasor, the party that is primarily liable. As noted by the court, an insured cannot be liable, in tort, to himself. Consequently, the insured cannot be liable in contribution to the defendant for damage to the insured’s property. Because a subrogating insurance company stands in its insured’s shoes and the insured cannot be liable in contribution to the defendant, the defendant cannot bring a third-party claim for contribution against the insureds. According to the court, the proper procedure is for the defendant to file an affirmative defense or counterclaim based on the insureds’ comparative negligence. Because Campbell failed to state a claim against the Pattersons, the court sustained the plaintiff’s Preliminary Objections.
Consistent with the foregoing analysis, if the defendant in a subrogation action files a third-party claim against the insured, insurers should move to dismiss the third-party claim. While the defendant in a subrogation case may properly ask that a jury consider the insured’s negligence and impute the insured’s negligence to the subrogating insurance company, a court should not allow the defendant to pursue a third-party contribution claim against the insurance company’s insureds.