Category Archives: Subrogation

Update – Property Owner’s Defense Goes up in Smoke in Careless Smoking Case


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Property owners owe a duty of reasonable care to avoid causing harm to neighboring properties. In Steamfitters Local Union No. 602 v. Erie Ins. Exch., 2020 Md. LEXIS 347 (July 27, 2020) (Steamfitters Local), a matter originally discussed in a June 2019 blog post, the Court of Appeals of Maryland affirmed that, where the property owner knows or should have known that people are habitually discarding hundreds of cigarette butts into a mulch bed along the boundary of the neighboring property, the property owner owes a duty to its neighbors to prevent the risk of fire. Continue reading

This entry was posted in Experts, Maryland, Negligence, Premises Liability, Subrogation and tagged , , , , .
Gavel

First-Dollar Risk Allocated to the Insured Is Not Subject to the Made Whole Doctrine


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Pursuant to the equitable made whole doctrine, where there are limited funds available, an insurer cannot pursue subrogation until the insured has been made whole – i.e., fully compensated – for its injuries. In City of Asbury Park v. Star Ins. Co., No. A-20, 083371, 2020 N.J. LEXIS 746, the Supreme Court of New Jersey (Supreme Court) addressed the question of whether the equitable made whole doctrine applies to first-dollar risk an insured takes on, such as a deductible or self-insured retention (SIR). More specifically, the Supreme Court considered whether the insured, here the City of Asbury Park, was entitled to recover all its $400,000 SIR before the insurer, Star Insurance Company (Insurer) could assert its subrogation rights. The court held that the made whole doctrine does not apply to first-dollar risk allocated to the insured. Continue reading

This entry was posted in Made Whole, New Jersey, Subrogation, Workers' Compensation 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

This entry was posted in Anti-Subrogation Rule, Insurance Coverage, Massachusetts, Subrogation and tagged , , , , .
Fire

Mississippi Supreme Court Applies AIA Subrogation Waiver to Non-Work Property Damage


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In Liberty Mutual Fire Ins. Co. v. Fowlkes Plumbing., L.L.C., No. 2019-FC-10285-SCT, 2020 Miss. LEXIS 44, the Supreme Court of Mississippi considered whether the subrogation waiver in the General Conditions of the Construction Contract, American Institute of Architects (AIA) form A201-2007, applied to claims for damages to property unrelated to the construction work. Siding with the majority of jurisdictions that have addressed this issue, the court interpreted the AIA subrogation waiver to apply to any property damage, whether or not related to the construction work (i.e. the Work), if the property insurance covering the non-Work property also insured the construction work. Continue reading

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

COVID-19 and Subrogation: The Coronavirus’ Impact on Property Losses and Subrogation Claims


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Will COVID-19 impact subrogation? Like so much else, the answer is “yes.”

The global effect of COVID-19 is unlike any event in human history. More than 4 billion people—over half of the world’s population—are currently under confinement measures. In just a few short weeks, COVID-19 has impacted nearly every aspect of life across the globe. In the United States, stay-at-home orders started in mid-March. We can only speculate how long this will be the new norm. On March 29th, President Trump suggested the spread of the coronavirus will not peak for at least another two weeks and he extended the national social distancing guidelines through April 30th.

Continue reading

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

Commercial Tenant’s Subrogating Insurer Barred by Lease Terms from Pursuing Landlord


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In Travelers Indem. Co. of Am. v. Schwarz Props., L.L.C., 2020 U.S. Dist. LEXIS 18176, the United States District Court for the Western District of North Carolina considered whether the lease between a commercial tenant and its landlord barred the tenant’s insurance carrier from subrogating against the landlord for damages to the tenant’s goods. The court found that the tenant’s carrier could not subrogate against the landlord because the lease clearly and explicitly stated that the landlord was not responsible for the tenant’s property. In addition, the lease required the tenant to insure its own property and to hold the landlord harmless for any damage to the tenant’s goods. This case establishes that, in North Carolina, negligence claims between a landlord and tenant may be barred if the lease includes clear and explicit exculpatory and indemnification provisions. Continue reading

This entry was posted in Landlord-Tenant, North Carolina, Subrogation, Sutton Doctrine and tagged , , , , .
Large Property Loss

Massachusetts Court Holds Statute of Repose Does Not Apply to Claims for Failure to Maintain Property


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In Penn-America Insurance Company v. Bay State Gas Company, 96 Mass. App. Ct. 757 (2019), the Appeals Court of Massachusetts considered whether the plaintiff’s claims against the defendant, arising from an alleged defect in the defendant’s natural gas line, were time-barred by the six-year statute of repose for improvements to real property. The Appeals Court held that the statute of repose did not apply to the plaintiff’s claims, which were related to the defendant’s alleged failure to maintain its property. Thus, in Massachusetts, the statute of repose does not apply if the plaintiff’s claim is rooted in the failure to maintain an improvement, rather than negligent design or construction of the improvement. Continue reading

This entry was posted in Construction Defects, Massachusetts, Statute of Limitations-Repose, Subrogation and tagged , , , .

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 , , .
Pointing out a Problem

Amazon Feels the Heat From Hoverboard Fire Claims


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In State Farm Fire & Cas. Co. v. Amazon.com, Inc., No. 3:18CV166-M-P, 2019 U.S. Dist. LEXIS 189053 (Oct. 31, 2019), the United States District Court for the Northern District of Mississippi considered a Motion for Judgment on the Pleadings filed by defendant Amazon.com, Inc. (Amazon). Amazon argued that, because it was a “service provider” who cannot be held liable under Mississippi’s Product Liability Act (MPLA), Miss. Code § 11.1.63, the negligence and negligent failure to warn claims filed against it by plaintiff State Farm Fire & Casualty Company (State Farm) failed as a matter of law. The court, looking beyond the MPLA, held that State Farm’s complaint stated a claim against Amazon. Continue reading

This entry was posted in Mississippi, Products Liability, Subrogation and tagged , .
Fire

Careless Smoking Causation Defense Goes Up in Smoke in Connecticut


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In Conn. Interlocal Risk Mgmt. Agency v. Jackson, 2019 Conn. LEXIS 230 (Sept. 1, 2019) (Conn. Interlocal), the Supreme Court of Connecticut considered a careless smoking case and whether, as a matter of first impression, Connecticut should adopt the alternative liability doctrine first set forth in Summers v. Tice, 199 P.2d 1 (Cal. 1948). Recognizing that the doctrine is a sound one, the court adopted it for cases proceeding in Connecticut. Continue reading

This entry was posted in Connecticut, Negligence, Subrogation and tagged , , , .