Category Archives: Subrogation

When an Insurer Proceeds as Subrogee, Defendants Should Not Assert Counterclaims Against the Insured/Subrogor


This entry was posted by on .

In a subrogation action, one party is substituted to the rights and remedies of another with respect to a lawful claim. The substituted party (the subrogee) is legally able to pursue any right or seek any remedy that would be available to the subrogor regarding that claim. But can a defendant in a subrogation action assert any claim against the subrogee that it would have against the subrogor? In Federated Mut. Inc. Co. v. Kosciusko County, No. 3:20-CV-960, 2021 U.S. Dist. Lexis 88735, the United States District Court for the Northern District of Indiana considered whether a defendant could assert counterclaims against the insureds/subrogors in an action filed in the name of their subrogee. The court held that since the insurerds/subrogors were not a party to the action and the defendant could assert the substance of its counterclaim as a defense, the defendant could not file counterclaims against the insureds/subrogors in the insurer’s subrogation action. Continue reading →

This entry was posted in Indiana, Litigation, Parties, Subrogation and tagged , , , , .

Examination of the Product Does Not Stop a Pennsylvania Court From Applying the Malfunction Theory


This entry was posted by on .

Pennsylvania recognizes the malfunction theory in product liability cases. This theory allows a plaintiff to circumstantially prove that a product is defective by showing evidence of a malfunction and eliminating abnormal use or reasonable, secondary causes for the malfunction. The malfunction theory is available to plaintiffs as an alternative to proving a traditional strict product liability case in those circumstances where direct evidence of a product defect is not found. In Pa. Nat’l Mut. Cas. Ins. Co. v. Sam’s East, Inc., 727 MDA 2020, 2021 Pa. Super. Unpub. LEXIS 752, the Superior Court of Pennsylvania (Superior Court) considered whether the plaintiffs could avail themselves to the malfunction theory if the plaintiffs’ expert was able to examine the product. Continue reading →

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

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


This entry was posted by on .

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 , , , .
Gavel

What’s the Gist? Massachusetts Court Looks Past the Labels to the Gist of the Plaintiff’s Allegations to Find Claims Barred by the Statute of Repose


This entry was posted by on .

In Lennar Northeast Props. v. Barton Partners Architects Planners, Inc, C.A. No. 16-cv-12330-ADB, 2021 U.S. Dist. LEXIS 11800, the United States District Court for the District of Massachusetts considered whether a property owner’s construction defect claims against a contractor were barred by the six-year statute of repose for improvements to real property. Massachusetts’ statute of repose, Mass. Gen. Laws ch. 260, § 2B, bars tort actions against those involved in the design, planning, construction or general administration of an improvement to real property more than six years after the earlier of the dates of (1) the opening of the improvement to use; or (2) substantial completion of the improvement and the taking of possession or occupancy by the owner. Finding that, despite the fact that the plaintiff’s actions were labeled as contract, breach of warranty and consumer protection act claims, the complaint alleged actions sounding in tort. Thus, the court applied the statute of repose to these claims. Continue reading →

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

What the Jury Doesn’t Know about Insurance Won’t Hurt Them


This entry was posted by on .

The issue of whether a jury will be less inclined to award an insurance company plaintiff – versus an individual person or entity – a favorable verdict is a real one for subrogation professionals facing a potential trial. In states where the laws allow carriers to choose between filing in their own name or in the name of the insured, there are numerous factors attorneys must weigh before finalizing the caption. However, if a jury is allowed to know the extent of the carrier’s involvement, the notion of filing in the name of the insured becomes less appealing. Continue reading →

This entry was posted in Evidence, Massachusetts, Parties, Subrogation and tagged , , , , .

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


This entry was posted by on .

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


This entry was posted by on .

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


This entry was posted by on .

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


This entry was posted by on .

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


This entry was posted by on .

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 .