Category Archives: Anti-Subrogation Rule

Wyoming Supreme Court Picks a Side After Reviewing the Sutton Rule


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In a matter of first impression, the Supreme Court of Wyoming (Supreme Court), in West American Insurance Company v. Black Dog Consulting Inc., No. S-23-0052, 2023 WY 109, 2023 Wyo. LEXIS 111, examined whether a landlord’s insurer could pursue a subrogation claim against a tenant who caused a fire loss. The Supreme Court, applying a case-by-case approach, found that the insurer could not subrogate against the tenant.

West American Insurance Company (West) insured Profile Properties (Profile), which owned commercial property in Cheyenne, Wyoming. Black Dog Consulting Inc., d/b/a C.H. Yarber (Yarber) leased commercial space from Profile where it operated a metal fabrication business. The lease agreement between Profile and Yarber required Yarber to pay the full expense of Profile’s blanket insurance policy, which included general commercial liability insurance and fire and extended coverage insurance on the building.

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Large Property Loss

Let’s Give ‘Em Sutton to Talk About: Tennessee Court Enforces Sutton Doctrine


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In Patton v Pearson, No. M2022-00708-COA-RC-CV, 2023 Tenn. App. LEXIS 231, the Court of Appeals of Tennessee (Court of Appeals) considered whether the lower court erred in dismissing an insurance carrier’s lawsuit against its insured’s tenant for damages sustained in a fire. While the lawsuit was filed in the name of the landlord (i.e., the insured), discovery revealed that the lawsuit was actually a subrogation lawsuit, brought by the landlord’s insurance carrier. The lower court granted the tenant’s motion for summary judgment based on the Sutton Doctrine, holding that the tenant was an implied co-insured under the landlord’s policy. The Court of Appeals affirmed, finding that although the lease agreement did not reference insurance, the Sutton Doctrine applied, which barred the landlord’s carrier from subrogating against the tenant. Continue reading →

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Gavel

Supreme Court of Illinois Clarifies Who Qualifies as a Co-Insured


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The Supreme Court of Illinois (Supreme Court) reversed a 2021 appellate court decision which held that an insurer had to duty to defend the property owner’s tenant following a fire at the property.  In Sheckler v. Auto-Owners Insurance Co., 2022 IL 128012, the state’s highest court ruled that the appellate court’s reliance on Dix Mutual Insurance Co. v. LaFramboise, 597 N.E. 2d 622 (Ill. 1992) was misplaced as the ruling in Dix was limited to a specific set of facts, which did not apply to the current case.

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

An Insured In-Part: Michigan Court Holds That Tenant Is an Implied Co-Insured on Landlord’s Property Insurance Only With Respect to the Leased Premises


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In Westfield Inc. Co. v. Ritcher, No. 20-CV-12692, 2021 U.S. Dist. Lexis 94926, the United States District Court for the Eastern District of Michigan considered whether a residential tenant was an implied co-insured on the landlord’s insurance policy, and thus shielded from a subrogation claim brought by the landlord’s carrier for fire damage caused by the tenant’s negligence. The court found that the tenant was an implied co-insured on the landlord’s insurance policy, but only with regards to the apartment that the tenant leased. The tenant was not shielded from claims for damage to the rest of the building, the contents of other residents and the landlord’s rental loss income. Continue reading →

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Fire

New Hampshire Applies Crete/Sutton Doctrine to Bar Subrogation Against College Dormitory Residents


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Pursuant to the Sutton Doctrine, first announced in Sutton v. Jondahl, 532 P.2d 478 (Okla. Ct. App. 1975), some jurisdictions consider a tenant a coinsured of its landlord absent an express agreement to the contrary. In Ro v. Factory Mut. Ins. Co., No. 2019-0620, 2021 N.H. LEXIS 34 (Mar. 10, 2021), the Supreme Court of New Hampshire held that the Sutton Doctrine, adopted by New Hampshire in Cambridge Mut. Fire Ins. Co. v. Crete, 846 A.2d 521 (N.H. 2004), extends to resident students in a college dormitory. Thus, absent specific language to the contrary, a student is an implied coinsured under the fire insurance policy issued for his or her dormitory. Continue reading →

This entry was posted in Anti-Subrogation Rule, Landlord-Tenant, New Hampshire, Subrogation, Sutton Doctrine and tagged , , , .
Construction Defect

Massachusetts District Court Holds Contractors Are Not Additional Insureds on Developer’s Builder’s Risk Policy


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In Factory Mut. Ins. Co. v. Skanska United States Bldg., No. 18-cv-11700-DLC, 2020 U.S. Dist. LEXIS 95403 (Skanska), the United States District Court for the District of Massachusetts considered whether contractors on a construction job were additional insureds on the developer’s builder’s risk insurance policy. After a water loss occurred during construction, the builder’s risk insurance carrier paid its named insured for the resultant damage, and subsequently filed a subrogation action against two contractors. The defendants filed a motion for summary judgment, claiming that the anti-subrogation rule barred the carrier from subrogating against them because they were additional insureds on the policy. The court found that based on the particular language of the additional insured provision in the policy, the defendants were not additional insureds for purposes of the subrogation action. Continue reading →

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Pennsylvania Superior Court Fires up a Case-By-Case Analysis for Landlord-Tenant, Implied Co-Insured Questions


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In Joella v. Cole, 2019 PA Super. 313, the Superior Court of Pennsylvania recently considered whether a tenant, alleged by the landlord’s property insurance carrier to have carelessly caused a fire, was an implied co-insured on the landlord’s policy. The court found that the tenant was an implied co-insured because the lease stated that the landlord would procure insurance for the building, which created a reasonable expectation that the tenant would be a co-insured under the policy. Since the tenant was an implied co-insured on the policy, the insurance carrier could not maintain a subrogation action against the tenant. This case confirms that Pennsylvania follows a case-by-case approach when determining whether a tenant was an implied co-insured on a landlord’s insurance policy. Continue reading →

This entry was posted in Anti-Subrogation Rule, Landlord-Tenant, Pennsylvania, Subrogation, Sutton Doctrine 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 →

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Fire

Tenants Who Negligently Cause Fires in Florida Beware: You May Be Liable to the Landlord’s Insurer


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In Zurich Am. Ins. Co. v. Puccini, LLC, 2019 Fla. App. LEXIS 1487, 44 Fla. L. Weekly D 383, Florida’s Third District Court of Appeals considered whether a landlord’s carrier, Zurich American Insurance Company (Zurich), was precluded from pursuing a subrogation claim against the landlord’s tenant, Puccini, LLC (Puccini), for fire-related damages. After the fire, Zurich paid its insured, Lincoln-Drexel Waserstein, Ltd. (Lincoln), over $2.1 million. Zurich then proceeded with an action against Puccini. Puccini filed for summary judgment arguing that it was an additional insured under the Zurich policy. The trial court agreed with Puccini and dismissed the action. Zurich then appealed the case to Florida’s Third District Court of Appeals. Finding that the lease contemplated both liability on the part of the tenant and indemnification in favor of the landlord, the court held that the tenant was not an implied co-insured under Zurich’s policy. Thus, the court allowed Zurich’s subrogation action. Continue reading →

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Gavel

Minnesota Reaffirms Statutory Anti-Subrogation Rule


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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. Continue reading →

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