Category Archives: Subrogation

New York Preserves Subrogation Rights

This entry was posted by Lian Skaf on August 7, 2023.

The insurer’s right of subrogation is equitable in nature, even if not based in contract. However, since the insurer steps into the shoes of its insured and is limited to the rights of its insured, an integral part of the investigation process is determining what rights the insured has. Whether or not the insured can settle with the tortfeasor and that whether the settlement would also apply to the subrogated carrier is a question the Supreme Court of New York, a trial court, recently addressed.

In Utica First Ins. Co. v. Homeport I LLC, et al., No. 150448/2022, 2023 N.Y. Misc. LEXIS 3087 (N.Y. Sup. Ct.), the plaintiff insurance carrier’s insured, SI Waterfront Management Inc. (SI Waterfront), owned and operated a restaurant called Wynwood at 24 Navy Pier Court in Staten Island, New York. The owner of the property was Homeport I LLC (Homeport). Significant construction work pertaining to plumbing and draining lines at the property was done by Ironstate Holdings, LLC (Ironstate), the plumbing portion of which was conducted by subcontractor Claire Construction Corp. (Claire). As a result of the construction work, on June 8, 2021, SI Waterfront allegedly sustained property damage from flooding.

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This entry was posted in New York, Settlement, Subrogation, Subrogation – Equitable and tagged New York, Settlement, Subrogation.

Know Your Limits: An Intro to Statutes of Limitations

This entry was posted by Kyle Rice and David Huberman on July 18, 2023.

The newest episode of the Subro Sessions #podcast is out now. This episode tackles a central part of the #subrogation process: the statute of limitations and is hosted by David Huberman, Partner and Kyle Rice, Associate

In the latest episode of Subro Sessions, these White and Williams professionals tackle the core principles and issues brought up by the statute of limitations. They briefly explain what statutes of limitations are and explain the best ways to view and handle statutes in the subrogation process.

If you want to hear more about relevant subrogation topics, tune in on the third Tuesday of every month for the newest episode of Subro Sessions!

Check the all of our Subro Sessions podcast episodes.

This entry was posted in Podcast, Subrogation and tagged Podcast, Subrogation.

Insurer Springs a Leak in Its Pursuit of Subrogation

This entry was posted by Katherine Dempsey on July 17, 2023.

In Nationwide Prop & Cas. Ins. Co. v. Fireline Corp., No. 1:20-cv-00684, 2023 U.S. Dist. LEXIS 104241, the United States District Court for the District of Maryland (District Court) considered whether the events giving rise to the plaintiff’s claims fell within the scope of a previously formed agreement, thereby rendering the plaintiff’s claims subject to the agreement’s time limitation and waiver of subrogation provisions. The District Court found that the claims fell within the scope of the agreement. Continue reading →

This entry was posted in Maryland, Statute of Limitations-Repose, Subrogation, Waiver of Subrogation and tagged Maryland, Standing, Statute of Limitations - Contractual, Subrogation, Waiver of Subrogation.

Subro Trauma Center – Part 2: A Long Way From Home – Pursuing Claims Against Foreign Entities

This entry was posted by Gus Sara, Lian Skaf and Matt Ferrie on June 20, 2023.

ELD Strikes Again! Michigan Court Hits the Brakes on Plaintiffs’ Economic Loss Claims

This entry was posted by Gus Sara on May 30, 2023.

In HDI Glob. SE v. Magnesium Prods. of Am., Inc., No. 360385, 2023 Mich. App. LEXIS 2602 (Magnesium Prods.), the Court of Appeals of Michigan (Court of Appeals) considered whether the lower court erred in dismissing the plaintiffs’ claim for loss of income based on the economic loss doctrine. The court found that while the defendant manufacturer owed a duty to the general public to exercise reasonable care in its manufacturing process, that duty did not apply to the economic damages alleged by the plaintiffs.

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This entry was posted in Contracts, Economic Loss Rule, Michigan, Subrogation, Uncategorized and tagged Contracts, Economic Loss Doctrine, Michigan, Subrogation.

Part 1: Subrogor Problems – Handling Claims Involving an Uncooperative or Difficult Insured

This entry was posted by Gus Sara, Lian Skaf and Matt Ferrie on May 16, 2023.

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!

Check out all our other Subro Sessions podcast episodes.

This entry was posted in Podcast, Subrogation.

Waiver of Subrogation and Lack of Contractual Privity Bars Commercial Tenants’ Claims

This entry was posted by Melissa Kenney on April 25, 2023.

In United States Automatic Sprinkler Corporation v. Erie Insurance Exchange, et al., No. 2SS-CT-264, 2023 Ind. LEXIS 105, the Supreme Court of Indiana (Supreme Court) reversed an order of the trial court that denied a motion for summary judgment filed by a sprinkler contractor. At issue was whether commercial tenants – one who contracted with the sprinkler contractor and others who did not – could recover for their respective property damages. The court held that under the contract’s subrogation waiver and agreement to insure, the contracting tenant waived its insurer’s rights to recover through subrogation. With respect to the non-contracting tenants, who sought to recover only property damages, the court held that the absence of contractual privity barred their recovery.

The case centered around a sprinkler system that malfunctioned and flooded the Sycamore Springs Office Complex (Landlord), causing extensive property damage to four commercial tenants. Surgery Center, one of the four tenants, requested permission from the Landlord to install a sprinkler system inside the building. Landlord agreed, in exchange for Surgery Center agreeing to be solely responsible for maintaining the sprinkler system. Surgery Center hired United States Automatic Sprinkler (Automatic Sprinkler) to both install and conduct periodic inspection and testing of the sprinkler system. The contract terms outlined the scope of work to be performed by Automatic Sprinkler and the work was limited to the inspection and testing of the sprinkler system. Although repairs and emergency services were excluded from the contract, each could be performed upon the request and authorization of Surgery Center for an additional cost. The contract also contained certain risk allocation provisions including a waiver of subrogation and an agreement to insure.

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This entry was posted in Duty, Duty, Indiana, Negligence, Privity, Subrogation, Waiver of Subrogation and tagged Independent Contractor, Indiana, Negligence – Duty, Privity, Subrogation, Waiver of Subrogation, Water Damage.

No Signature, No Problem: Texas Court Holds Contractual Subrogation Waiver Still Enforceable

This entry was posted by Gus Sara on March 29, 2023.

In Chubb Lloyds Inc. Co. of Tex. v. Buster & Cogdell Builders, LLC, No. 01-21-00503-CV, 2023 Tex. App. LEXIS 676, the Court of Appeals of Texas, First District (Court of Appeals) considered whether the lower court properly dismissed the plaintiff’s subrogation case by enforcing a subrogation waiver in a construction contract which was not fully executed. The contract was signed by only one of the two subrogors and was not signed by the defendant general contractor. The Court of Appeals affirmed the trial court’s decision, holding that despite the lack of signatures, the evidence established mutual assent to the contractual terms by all parties.

The plaintiff’s subrogors, Jeffrey and Mary Meyer (collectively, the Meyers), retained defendant Buster & Codgell Builders (BCB) to expand their residence. BCB drafted a contract using the American Institute of Architects (AIA) standard form contract for residential construction. The AIA contract included, by reference, a subrogation waiver that applied to BCB and its subcontractors. Prior to beginning the work, BCB emailed Jeffrey Meyer a version of the contract that only had one signature block for both Jeffrey and Mary Meyer. Minutes later, BCB sent a second version of the contract which had a signature line for each of the Meyers. However, Jeffrey Meyer signed the first version of the contract and emailed it back to BCB. In the subject line of his email, Mr. Meyers asked that BCB countersign and return the contract. BCB did not sign and return the contract.

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This entry was posted in AIA Contracts, Contracts, Subrogation, Texas, Waiver of Subrogation and tagged AIA Contract, Contracts, Contracts - Formation, Subrogation, Texas, Waiver of Subrogation.

A Tort, By Any Other Name, is Just a Tort: Massachusetts Court Bars Contract Claims That Sound in Negligence

This entry was posted by Gus Sara on March 3, 2023.

In University of Massachusetts Building Authority v. Adams Plumbing & Heating, Inc., 2023 Mass. App. Unpub. LEXIS 28, 102 Mass. App. Ct. 1107, the Appeals Court of Massachusetts (Appeals Court) considered whether the lower court properly held that the plaintiff’s breach of contract and indemnification claims were time-barred by the statute of repose because they sounded in tort. The Appeals Court held that while the six-year statute of repose only applies to tort claims, they can also bar claims for breach of contract and indemnification if they sound in tort. The Appeals Court affirmed the lower court’s ruling, finding that the plaintiff’s breach of contract and indemnification claims were just negligence claims disguised as non-tort claims.

In 2013 and 2014, the University of Massachusetts (UMass) retained various contractors to renovate the dining hall for one of its campus buildings, which included the installation of new ductwork for the kitchen’s exhaust system. The dining hall opened for service in September 2014. In the Spring of 2018, it was discovered that the ductwork for the kitchen had collapsed. Further investigation revealed other deficiencies with the exhaust system. On December 1, 2020, UMass filed a lawsuit against various contractors, asserting negligence, breach of contract, and indemnification. The breach of contract claims alleged breach of express warranties.

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

Michigan Court Waives Goodbye to Subrogation Claims, Except as to Gross Negligence

This entry was posted by Lian Skaf on February 28, 2023.

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.

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This entry was posted in Michigan, Subrogation, Uncategorized, Waiver of Subrogation and tagged Michigan, Subrogation, Waiver of Subrogation.