Author Archives: Gus Sara

Definitions Matter in Illinois: Tenant Held Liable Only for Damage to Apartment Unit


This entry was posted by on .

In Phila. Indem. Ins. Co. v. Gonzalez, No. 1-23-0833, 2024 Ill. App. Unpub. LEXIS 1372, the Appellate Court of Illinois considered whether the terms of a lease agreement limited a tenant’s liability for fire damages, a fire caused by her negligence, to her apartment unit only. The plaintiff insured the subject apartment building, which incurred damage to several units as result of a fire in the tenant’s unit. The lease defined “Premises” as the specific apartment unit occupied by the tenant and held the tenant responsible for damage caused to the Premises. While the court found that the lease permitted the plaintiff to subrogate against the tenant, it held that the lease terms limited the damages to the tenant’s apartment unit only.

In Gonzalez, the plaintiff’s insured owned a multi-unit apartment building in Chicago. In September 2019, the building owner entered into a lease agreement with the defendant for apartment Unit 601. The lease stated that Unit 601 was the “Leased Address (Premises).” Another provision stated that building owner “hereby leases to Tenant(s) and Tenant(s) hereby leases from Landlord(s) for use as a private dwelling only, the Premises, together with the fixtures and appliances (if any) in the premises…” The lease also stated that “Tenant shall be liable for any damage done to the premises as a result of Tenant’s or Tenant’s invitees, guests or others authorized to reside in the Premises [sic] direct action, negligence, or failure to inform Landlord of repairs necessary to prevent damage to the Premises.”

Continue reading →

This entry was posted in Illinois, Implied-Co-Insured, Landlord-Tenant, Subrogation, Sutton Doctrine and tagged , , , .

Water Losses 101: A Discussion of Common Causes of Water Losses and How to Investigate them – Part 2


This entry was posted by on .

The newest episode of the Subro Sessions podcast, is hosted by Gus Sara, Partner, and Michael DeBona, Counsel, who are joined by guest J. Pablo Ross, PE, of Ross Engineering. The episode, entitled “Water Losses 101: A Discussion of Common Causes of Water Losses and How to Investigate Them – Part 2,” gives insight into the role of the attorney in a joint-evidence investigation, steps that subrogation professionals and experts take to complete the analysis, make appropriate recommendations to the client and the process of evidence lab examinations.

Listen to all of our episodes here.

You can also listen to Subro Sessions on Apple Podcasts and Spotify.

This entry was posted in Podcast, Subrogation, Water Loss and tagged , , .
Gavel

Oh, THAT Contract: Ohio Court Bars Plaintiff’s Negligence Claim Based on Subrogation Waiver and Accelerated Limitations Period in Contract


This entry was posted by on .

In Ohio Sec. Ins. Co v. Brakefire, Inc., CA. No. 5:24-cv-267, 2024 U.S. Dist. LEXIS 97606 (Brakefire), the United States District Court for the Northern District of Ohio considered whether a subrogating plaintiff’s negligence claim against a fire sprinkler maintenance company was barred by the maintenance contract between the parties. The court held that even though the plaintiff only asserted a negligence claim, the action was essentially rooted in the contract and, thus, the subrogation waiver and accelerated one-year limitations period in the contract barred the plaintiff’s action entirely. In addition, the court held that because the claim was based on the obligations set forth in the contract, the plaintiff could not proceed in tort.

In Brakefire, the plaintiff’s insured, Skyways Petroleum, LLC owned and operated a Comfort Inn & Suites Hotel (Comfort) in Kent, Ohio. Prior to February 2022, Comfort contracted with defendant Brakefire, Inc. (Brakefire) for maintenance of the fire suppression sprinkler system.  The contract contained a limitation of liability provision which stated that no action shall be brought against the service provider “more than one (1) year after the accrual of the cause of action.” The provision also stated that the parties “agree that their respective insurance companies shall have no right of subrogation against the other on account thereof.” In February 2022, the hotel experienced a severe water loss caused by a sprinkler pipe freezing and bursting. As the hotel’s property insurance carrier, the plaintiff paid over $3.5 million to repair the damages.

Continue reading →

This entry was posted in Contracts, Independent Duty, Limitation of Liability, Negligence, Ohio, Statute of Limitations - Contractual, Subrogation, Waiver of Subrogation and tagged , , , , , , , .

Water Losses 101: A Discussion of Common Causes of Water Losses and How to Investigate Them – Part 1


This entry was posted by on .

The newest episode of the Subro Sessions podcast, is hosted by Gus Sara, Partner, and Michael DeBona, Counsel, who are joined by guest J. Pablo Ross, PE, of Ross Engineering. The episode, entitled “Water Losses 101: A Discussion of Common Causes of Water Losses and How to Investigate Them – Part 1,” explores the most common property damage claim our subrogation team encounters. Gus, Michael and Pablo define the causes, types of losses including product failures, HVAC failures, pipe freezes, overflows and give an overview of what a typical investigation looks like when developing a subrogation claim.

Be sure to mark your calendar for Part 2, being released on July 16.

Listen to all of our episodes here.

You can also listen to Subro Sessions on Apple Podcasts and Spotify.

This entry was posted in Podcast, Subrogation and tagged , , , .

A Matter Judged: Subrogating Insurers Should Beware of Prior Suits Involving the Insured


This entry was posted by on .

In New Jersey Mfrs. Ins. Co. v. Lallygone LLC, No. A-2607-22, 2024 N.J. Super. Unpub. LEXIS 120, the Appellate Division of the Superior Court of New Jersey (Appellate Division) considered whether New Jersey Manufacturers Insurance Company (the carrier) could bring a subrogation action after its insured, Efmorfopo Panagiotou (the insured), litigated and tried claims related to the same underlying incident with the same defendant, Lallygone LLC (the defendant). The Appellate Division affirmed the trial court’s finding that the prior lawsuit extinguished the carrier’s claims. Continue reading →

This entry was posted in New Jersey, Res Judicata, Subrogation and tagged , , , , .

Stop Suing Yourself: A Brief Discussion on the Anti-Subrogation Rule


This entry was posted by on .

The newest episode of the Subro Sessions podcast is out now. This episode is entitled, “Stop Suing Yourself: A Brief Discussion on the Anti-Subrogation Rule” and is hosted by Gus Sara, Partner, and Katherine Dempsey, Associate. Gus and Katherine share their expertise on the Anti-Subrogation Rule by discussing its history, purpose and how it applies in various states across the country.

Listen to all of our episodes here. 

This entry was posted in Subrogation.
Community

Certificates of Merit: Is Your Texas Certificate Sufficient?


This entry was posted by on .

In Eric L. Davis Eng’g, Inc. v. Hegemeyer, No. 14-22-00657-CV, 2023 Tex. App. LEXIS 8899, the Court of Appeals of Texas (Court of Appeals) considered whether the plaintiffs’ certificate of merit, in support of their professional malpractice claim against the defendant engineers, adequately set forth the experience and qualifications of the expert who submitted the certificate. The defendants filed a motion to dismiss, alleging that the certificate of merit was inadequate because it failed to establish that the expert practiced in the same specific areas as the defendants in relation to the work at issue. The lower court denied the defendants’ motion. The Court of Appeals affirmed the lower court’s decision, finding that there was sufficient information for the lower court to have reasonably found that the plaintiffs’ expert practiced in the same area as the defendants.

In Hegemeyer, the plaintiffs sued Eric L. Davis Engineering, Inc. (Davis) and Kenneth L. Douglass (Douglass), alleging improper design of their home’s foundation. The plaintiffs retained Davis to design and engineer the home and Douglass prepared the plans for the home. The plans called for the installation of post-tension cables in the home’s foundation. The plaintiffs alleged that the foundation design was improper and brought professional malpractice claims against Davis and Douglass.

Continue reading →

This entry was posted in Certificate of Merit, Litigation, Malpractice, Texas and tagged , , , .

Drawing the Line: In Tennessee, the Economic Loss Doctrine Does Not Apply to Contracts for Services


This entry was posted by on .

In Commercial Painting Co. v. Weitz Co. LLC, No. W2019-02089-SC-R11-CV, 2023 Tenn. LEXIS 39 (Weitz), the Supreme Court of Tennessee (Supreme Court) considered whether the economic loss doctrine barred the plaintiff’s claims for fraud, negligent misrepresentation and punitive damages arising out of a contract with the defendant for construction services. The court held that the economic loss doctrine only applies to product liability cases and does not apply to claims arising from contracts for services. This case establishes that, in Tennessee, the economic loss doctrine does not bar tort claims in disputes arising from service contracts.

In Weitz, defendant, Weitz Co. LLC (Weitz), was the general contractor for a construction project and hired plaintiff Commercial Painting Co. (Commercial) as a drywall subcontractor.  Weitz refused to pay Commercial for several of its payment applications, claiming that the applications were submitted untimely and contained improper change order requests.  Commercial filed a lawsuit against Weitz seeking over $1.9 million in damages, alleging breach of contract, unjust enrichment, enforcement of a mechanic’s lien, and interest and attorney’s fees under the Prompt Pay Act of 1991. Weitz filed a counterclaim for $500,000 for costs allegedly incurred due to Commercial’s delay and defective workmanship. In response, Commercial amended its complaint to add claims for fraud, intentional and negligent misrepresentation, rescission of the contract and $10 million in punitive damages. Commercial alleged that Weitz received an extension of the construction schedule but fraudulently withheld this information from Commercial and continued to impose unrealistic deadlines.

Continue reading →

This entry was posted in Contracts, Economic Loss Rule, Tennessee and tagged , , .

Reading the Small Print: A Discussion of Contractual Impediments to Subrogation


This entry was posted by on .

Gus Sara, Partner, and Joe Kuffler, Counsel, reunite to host another episode of Subro Sessions, entitled, “Reading the Small Print: A Discussion of Contractual Impediments to Subrogation” to discuss common issues with contractual provisions.

Subrogation professionals run into various contractual provisions, including subrogation waivers, limitation to liability and damages caps, accelerated statute of limitations, indemnification/hold harmless clauses, notices and pre-suit requirements and venue/forum clauses. Gus and Joe present relevant case scenarios and stress the importance of reading the small print and knowing what terms are enforceable. 

Check the all of our Subro Sessions podcast episodes.

This entry was posted in Contracts, Subrogation and tagged , , .

New York Court Holds Insurer Can Recover Before Insured Is Made Whole


This entry was posted by on .

In State Farm Fire & Cas. Co. v. Tamagawa, Index No. 510977/2021, 2023 N.Y. Misc. Lexis 5434, the Supreme Court of New York considered whether an insurance carrier can settle its property subrogation lawsuit with the defendant, and discontinue the lawsuit, while the carrier’s insured still had pending claims with the carrier and claims for uninsured losses against the defendant. The court held that the carrier’s claims for the amount paid are divisible and independent of the insured’s claims and that the carrier’s settlement did not affect the insured’s right to sue for any unreimbursed losses. The court’s decision reminds us that, in New York, a carrier can resolve its subrogation claim before the insured is made whole.

Continue reading →

This entry was posted in Made Whole, New York, Subrogation and tagged , , .