In Youell v. Cincinnati Ins. Co., 2018 Ind. App. LEXIS 497 (2018), the Court of Appeals of Indiana considered whether a landlord’s carrier could bring a subrogation claim against a commercial tenant for fire-related damages when the lease, which did not reference subrogation, explicitly required the landlord to maintain fire insurance coverage for the leased premises. The court held that subrogation was barred because the provision requiring the landlord to maintain fire insurance established an agreement to provide both parties with the benefits of insurance. The Youell case establishes that, in Indiana, if the lease explicitly states that the landlord will maintain fire casualty insurance for the building, the lease evidences an agreement by the parties to shift the risk of loss to the insurer. This agreement bars a landlord’s insurance carrier from subrogating against a commercial tenant in the event of a casualty. Continue reading
In Amica Mutual Insurance Company v. Muldowney, 328 Conn. 428 (2018), the Connecticut Supreme Court considered whether a landlord’s insurance carrier could subrogate against the landlord’s tenants for property damage when the lease did not specifically authorize subrogation. The court held that, while subrogation was not expressly allowed, the language in the lease requiring the tenants to have liability insurance and holding them liable for damage was sufficient to overcome Connecticut’s common law presumption that a landlord’s carrier cannot subrogate against a tenant. This case emphasizes the importance of analyzing every aspect of a lease when determining the true intent of the parties with respect to subrogation. Continue reading
In Melrose Gates, LLC v. Chor Moua, et al., 875 N.W.2d 814 (Minn. 2016), the Supreme Court of Minnesota, applying the factors the court first articulated in RAM Mutual Insurance Company v. Rohde, 820 N.W.2d 1 (Minn. 2012), analyzed whether the parties to an apartment lease reasonably expected that the tenants would be liable in subrogation for fire damage caused by the tenants’ negligence. The Melrose Gates court held that, based on the language of the lease, the type of insurance the parties purchased, and the fact that the building was a multi-unit structure, the parties intended that the tenants would be responsible for damage to their leased unit but not for damage to other property. Thus, while the landlord’s insurer could recover the amount it paid to repair the damage to the tenants’ unit, it could not recover the amount it paid to repair other units or common areas of the building.