The economic loss doctrine is a legal principle that has confused and frustrated subrogation practitioners since its inception. Unfortunately, once practitioners understand the basic theory, they realize how frustrating it can be. If there was any doubt about the doctrine’s effect in New York, the Appellate Division put that to rest in a recent ruling on a subrogation case in which it bolstered the economic loss doctrine defense. Continue reading
Listen to the newest episode of the Subro Sessions #podcast where we launch a new series: “Subro Trauma Center – Discussions on Common Issues that Arise in Subrogation Claims and How to Address Them,” hosted by Gus Sara, Lian Skaf and Matthew I. Ferrie. The series analyzes common symptoms of subrogation claims, diagnoses potential problems and discusses how to treat the symptoms or problems to secure a recovery. Gus, Lian and Matt share their tips and experiences in “Part 1: Subrogor Problems – Handling Claims Involving an Uncooperative or Difficult Insured” to provide an explanation as to why the #insured is integral to the #subrogation process. They also discuss what the potential outcome is when the insured is not cooperative during the investigation.
Mark your calendars for “Part 2: A Long Way From Home – Pursuing Claims Against Foreign Entities,” available on June 20th!
In Ace American Insurance Company, et. al. v. Toledo Engineering Co., Inc., et. al., No. 18-11503, 2023 U.S. Dist. LEXIS 15222 (Ace American), the United States District Court for the Eastern District of Michigan determined whether insurers could pursue their subrogation claims against the defendants despite a waiver of subrogation in each of the contracts the insured had with the respective defendants. Based on the language of the contracts and the circumstances leading up to the loss, the court held that the insurers could not pursue their subrogation claims – other than their claims for gross negligence – due to waivers of subrogation in the applicable contracts.
In Ace American, the insured, Guardian Industries, LLC (Guardian), retained Toledo Engineer Co., Inc. (TECO) and Dreicor, Inc. (Dreicor) to renovate a glass furnace in the insured’s glass manufacturing plant. Guardian and TECO entered into a contract on December 6, 2016. Guardian and Dreicor entered into a contract on September 29, 2013, that the parties later updated on June 3, 2016. Both defendants began work on the project in the spring of 2017 and were finished with the portion of the work known as the “Cold Tank Repair” prior to the loss.
In the most recent episode of the Subro Sessions Podcast, Matt Ferrie, Gus Sara and Lian Skaf of the Subrogation Department are joined by Ihor Redkva, Field Property Claims Leader at Allstate, in part two of a discussion about the value first-party claims adjusters bring to subrogation efforts.
Did you miss Part 1 of this discussion? Click here to listen now.
In construction or similar ongoing projects, problems often pop up. Sometimes they can pop up again and again. Making things even more complicated, one problem may affect another, seemingly new problem. When these construction problems result in property damage, timelines tend to overlap and determining when a statute of limitation begins to run for a particular claim can be difficult. Especially in states with short statute of limitations for tort claims like Texas, knowing when a statute begins to run is crucial for a subrogation professional. Continue reading
Subrogation professionals have always been looking for ways to defeat onerous waiver of subrogation provisions in contracts signed by insureds. However, even when contracts are unsigned, if there is intent when the contract is made – usually long before a loss occurs – a waiver of subrogation can doom what otherwise may have been a strong case. The Superior Court of Delaware considered such a scenario to determine whether a waiver of subrogation provision applied to a multimillion-dollar subrogation case.
Courts across the country have historically taken positions encouraging settlements between civil litigants. Thus, as long as there is good faith involved in the negotiation process, settlements and their effects on other parties are generally upheld. Recently, the United States District Court for the Eastern District of California (District Court) considered whether a settlement between the plaintiff and one of several defendants met the good faith standard, thereby barring claims for contribution and indemnity from the co-defendants. Continue reading
Although the focus of most subrogation cases is usually on proving liability, determining the appropriate measure of damages is just as important. Sometimes turning on a nuanced argument for recoverability, an adverse holding can significantly boost or reduce the total damages in a case. The Court of Appeal of Florida, Fourth District (Court) recently decided such an issue in a case involving subrogation, holding that the defendants owed much more than they originally anticipated. Continue reading
Strict products liability cases have been the subject of much fluctuation in the Pennsylvania courts over the last few years. Utilizing hope created by the courts in recent strict liability cases, defendants have tried to revive defenses based on meeting industry standards and the plaintiff’s contributory negligence. Recently, the Superior Court of Pennsylvania tempered that hope with limitations of how far strict liability defenses can extend. Continue reading
The issue of whether a jury will be less inclined to award an insurance company plaintiff – versus an individual person or entity – a favorable verdict is a real one for subrogation professionals facing a potential trial. In states where the laws allow carriers to choose between filing in their own name or in the name of the insured, there are numerous factors attorneys must weigh before finalizing the caption. However, if a jury is allowed to know the extent of the carrier’s involvement, the notion of filing in the name of the insured becomes less appealing. Continue reading