In Depositors Ins. Co. v. Dollansky, 919 N.W.2d 684 (Minn. 2018), the Supreme Court of Minnesota considered whether the anti-subrogation rule set forth in Minn. Stat. §60A.41(a) precluded a motor home lessor’s insurer, Depositors Insurance Company (Depositors), from proceeding against the motor home lessee. Finding that the lessee was an insured under the lessor’s policy, the court held that Depositors could not pursue subrogation.
As result of damage caused to the property of its insured, Karavan Trailers, Inc., Depositors paid Karavan the sum of $199,895.05. Depositors then proceeded with an action against the lessee of the motor home, Craig Dollansky, who was contractually obligated to provide his own insurance for the motor home. Dollansky filed for summary judgment arguing that under Minn. Stat. §60A.41(a), Depositors was statutorily barred from pursuing him as he was an insured under Karavan’s policy. The district court agreed with Dollansky and dismissed the action. After unsuccessfully appealing to the Minnesota Court of Appeals, Depositors appealed to the Supreme Court of Minnesota.
In the United States, most states have adopted an anti-subrogation rule either by statute or through common law. Under an anti-subrogation rule, an insurer may not pursue its insured for monies paid to its insured. While some states limit their anti-subrogation rule to apply only to the named insured, other states have expanded the rule to include parties listed as additional insureds, and even (in some instances) implied insureds (those parties not specifically listed, but still considered an insured under the applicable policy).
In Dollansky, the court addressed whether a party not specifically listed as a named insured or additional insured could still be considered an insured under the policy for purposes of Minn. Stat. §60A.41(a). After parsing the language of the statute, and determining the best interpretation of the language thereof, the court concluded that §60A.41(a) prevents an insurer from pursuing “any party covered by some part of the insurance policy at issue.” After finding that Dollansky was an insured under the liability coverage of the policy, the court concluded that Depositors could not subrogate against him.
This case serves as a good reminder that, prior to filing suit, subrogation practitioners should be aware of the anti-subrogation rules in place in the applicable jurisdiction. In addition, practitioners should be aware that said rules may require a full review of their client’s insurance policy.