Category Archives: Subrogation

Gavel

“Bad Kamara/Good Karma” — Life After Hartford v. Kamara


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How the Pennsylvania Supreme Court’s Decision in Kamara Changes the Legal Landscape for Workers’ Compensation Subrogation and Successfully Moving Forward

On November 21, 2018, the Pennsylvania Supreme Court, in a 5-4 decision, reversed the Superior Court stating a right of action in Pennsylvania remains with the injured employee. Specifically, the court held that “unless the injured employee assigns her cause of action or voluntarily joins the litigation as a party plaintiff, the insurer may not enforce its statutory right to subrogation by filing an action directly against the tortfeasor.” Continue reading

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Gavel

A Tort Claim Is Not a Debt Within the Meaning of the Colorado’s Fair Debt Collection Practices Act


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In Ybarra v. Greenberg & Sada, P.C., 2018 CO 81, 2018 Colo. LEXIS 828 (Oct. 15, 2018), Francis Ybarra (Ybarra) filed a complaint against the law firm retained by State Farm Auto Insurance Company (State Farm) to pursue subrogation against Ybarra. In his suit, Ybarra alleged that the law firm violated Colorado’s Fair Debt Collection Practices Act (FDCPA) when it secured a default judgment against Ybarra. The Supreme Court of Colorado, agreeing that State Farm’s subrogation claim was not a transaction giving rise to a debt within the meaning of the FDCPA, held that the trial court properly dismissed Ybarra’s complaint for failure to state a claim. Continue reading

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Cargo

Carmack Amendment Loss Claims Should Indicate a Specified or Determinable Amount of Money


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In N.Y. Marine & Gen. Ins. Co. v. Estes Express Lines, Inc., 719 Fed. Appx. 691 (9th Cir. 2018), the United States Court of Appeals for the Ninth Circuit (Appeals Court) addressed the question of whether an insurer, N.Y. Marine & General Insurance Company (N.Y. Marine), could recover from a cargo carrier under the Carmack Amendment, 49 U.S.C. § 14706, if the insured’s loss claim did not state a specified amount of money. Finding that § 14706 requires that a party filing a cargo loss claim state a specified or determinable amount of money, the Appeals Court affirmed the district court’s holding that neither the carrier, Estes Express Lines, Inc. (Estes) nor the broker, Exfreight Zeta, Inc. (Zeta), was liable to N.Y. Marine. Continue reading

This entry was posted in Cargo - Transportation, Subrogation and tagged , .
Transportation

New York Federal Court Holds That the Montreal Convention Does Not Allow a Party to Recover Inspection Costs Where Cargo Suffers No Physical Damage


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In Indemnity Ins. Co. of N. Am. v. Agility Logistics Corp., 2018 U.S. Dist. LEXIS 104179 (S.D.N.Y.), the United States District Court for the Southern District of New York considered the “novel question” of whether the Montreal Convention allows recovery of inspection costs when there is no physical damage to the cargo at issue. Although acknowledging that its holding was, arguably, absurd, the court held that, based on the plain language of Article 18 of the Montreal Convention, the subrogating insurer could not recover the inspection costs its insured incurred. Continue reading

This entry was posted in Cargo - Transportation, Subrogation and tagged , , , .
Construction Defect

Northern District of Mississippi Finds That Non-Work Property Damages Are Not Subject to AIA’s Waiver of Subrogation Clause


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In recent months, the Northern District of Mississippi has grappled with how to interpret waivers of subrogation in American Institute of Architects (AIA) construction industry contracts and, specifically, how they apply to work versus non-work property. The distinction between work and non-work property has been commonly litigated and remains a hotly debated topic when handling subrogation claims involving construction defects. Continue reading

This entry was posted in AIA Contracts, Construction Defects, Mississippi, Subrogation, Waiver of Subrogation and tagged , , .
Water Loss

Connecticut Supreme Court Holds That Landlord’s Insurer Can Pursue Equitable Subrogation If Lease Requires Tenant Have Insurance and Holds Tenant Responsible for Damage


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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

This entry was posted in Connecticut, Landlord-Tenant, Subrogation, Subrogation – Equitable and tagged , .
Figures

Utah’s Supreme Court Addresses When an Insurer Can, Despite the Made Whole Doctrine, Proceed in Its Own Name


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In Wilson v. Educators Mut. Ins. Ass’n, 2017 UT 69, the Supreme Court of Utah considered whether an insurer had the right to bring a subrogation action in its own name despite the fact that its insured had not yet been made whole. The court held that, although the common law made whole doctrine generally bars an insurer from proceeding in its own name until after the insured has been made whole, the terms of an insured’s insurance policy can change the made whole doctrine. The Wilson case highlights the importance of reviewing the applicable insurance policy, in conjunction with the law of the applicable jurisdiction, to determine an insurer’s subrogation rights. Continue reading

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Where the Insured Has Been Made Whole, a Subrogating Insurer Proceeding in the Insured’s Name Need Not Respond to Discovery Issued to the Insured


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When an insurer files a subrogation suit in the insured’s name, questions often arise with respect to whether, by doing so, the insurer has to respond to discovery issued to the insured. In Aquatherm, LLC v. Centimark Corporation, 2017 U.S. Dist. LEXIS 85173 (C.D. Utah June 2, 2017), a case in which the insurer at issue made the insured whole, the District Court for the District of Utah answered the question in the negative. Continue reading

This entry was posted in Discovery, Made Whole, Subrogation, Utah and tagged , , .

Texas Clarifies the Notice Requirements for Damages Resulting from Construction Defects


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There has been a growing trend among states to enact statutes that impose specific notice requirements when bringing claims against construction professionals. These notice requirements may apply to the subrogated carrier bringing a claim against a construction professional for certain types of damages. Failure to comply with the notice requirements can result in a dismissal of the subrogation action. Accordingly, caution must be exercised when notifying construction professionals of certain claims, and not just claims for construction defects.

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This entry was posted in Construction Defects, Right to Repair Act, Subrogation, Texas and tagged , , .

Avoiding Split Decisions: The Pitfalls of Proceeding Separately from the Insured


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In subrogation actions, the insurer, as subrogee, steps into the shoes of its insured. However, problems can arise when an insured has uninsured losses. In this situation, both the insurer and the insured have a right to file suit against the tortfeasor. The possibility of two different lawsuits raises a number of issues, such as whether: 1) proceeding separately impermissibly splits the cause of action; 2) the insured’s attorney is entitled to attorney’s fees under the common fund doctrine; and 3) the insurer can proceed before the insured is made whole. In light of these issues, subrogating insurers should proceed with caution before filing suit separately from the insured.

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