Tag Archives: Subrogation

Gavel

Waive Your Claim Goodbye: Louisiana Court Holds That AIA Subrogation Waiver Did Not Violate Anti-Indemnification Statute and Applied to Subcontractors


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In 2700 Bohn Motor, LLC v. F.H. Myers Constr. Corp., No. 2021-CA-0671, 2022 La. App. LEXIS 651 (Bohn Motor), the Court of Appeals of Louisiana for the Fourth Circuit (Court of Appeals) considered whether a subrogation waiver in an AIA construction contract was enforceable and, if so, whether the waiver also protected subcontractors that were not signatories to the contract. The lower court granted the defendants’ motion for summary judgment based on the subrogation waiver in the construction contract. The plaintiffs appealed the decision, arguing that the subrogation waiver violated Louisiana’s anti-indemnification statute. The plaintiffs also argued that even if enforceable, the subrogation waiver did not apply to the defendant subcontractors since they were not parties to the contract. The Court of Appeals ultimately held that the subrogation waiver did not violate the anti-indemnification statute because the waiver did not shift liability, which the statute was intended to prevent. In addition, the Court of Appeals found that the contract sufficiently satisfied the required elements for the defendant subcontractors to qualify as third-party beneficiaries of the contract.

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This entry was posted in AIA Contracts, Contracts, Indemnification, Louisana, Waiver of Subrogation and tagged , , , , , , , .
House Flood

Tenants Underwater: Indiana Court of Appeals Upholds Privity Requirement for Property Damage Claims Against Contractors


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In United States Automatic Sprinkler Corp. v. Erie Ins. Exch., et al., No. 21A-CT-580, 2022 Ind. App. LEXIS 87 (Automatic Sprinkler), the Court of Appeals of Indiana (Court of Appeals) considered whether there is a privity requirement for property damage claims against contractors. The court imposed a privity requirement. The court also addressed whether a subrogation waiver in a contract with a tenant applied to damage caused by work done outside the contract, at the landlord’s request. The court held that the waiver did not apply. Continue reading

This entry was posted in Construction Defects, Indiana, Landlord-Tenant, Privity, Subrogation, Waiver of Subrogation and tagged , , , , , .
Fire

Kaboom! Illinois Applies the Anti-Subrogation Rule to Require a Landlord’s Subrogating Property Insurer to Defend a Third-Party Complaint Against Tenants


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In Sheckler v. Auto-Owners Ins. Co, 2021 IL App (3d) 190500, 2021 Ill. App. LEXIS 593, Auto-Owners Insurance Company (Insurer) paid its insured, Ronald McIntosh (McIntosh), for property damage following a fire in an apartment he rented to Monroe and Dorothy Sheckler (the Shecklers). Insurer filed suit against Wayne Workman (Workman), who performed service work on an oven in the Shecklers’ apartment that leaked gas and resulted in a fire. Workman filed a third-party complaint against the Shecklers for contribution and the Shecklers tendered the defense of the claim to Insurer. Insurer refused the tender and the Shecklers filed a declaratory judgment action. In the court below, the Shecklers argued that, as tenants, they were co-insureds on McIntosh’s property insurance policy. Following a liberal interpretation of precedent from the Supreme Court of Illinois in Dix Mutual Insurance Co. v. LaFramboise, 597 N.E. 2d 622 (Ill. 1992), an Illinois appellate court ruled that Insurer – who provided property insurance – must defend the tenants of a rental property from contribution claims if the tenants are co-insureds under the landlord’s policy. Continue reading

This entry was posted in Anti-Subrogation Rule, Illinois, Implied-Co-Insured, Landlord-Tenant, Sutton Doctrine and tagged , , .
Signing Agreement

The Right of Workers’ Compensation Reimbursement is Alive and Well in Indiana


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When the direct door to a subrogation recovery closes, the reimbursement door remains open.

The United States District Court for the Northern District of Illinois, construing Indiana law, recently clarified the distinction between workers’ compensation subrogation rights and workers’ compensation lien rights. Workers’ compensation subrogation professionals should always keep this critical difference between direct subrogation and reimbursement in mind when evaluating any claim. Continue reading

This entry was posted in Illinois, Indiana, Subrogation, Waiver of Subrogation, Workers' Compensation and tagged , , , , , .
Fire

Pennsylvania Court Finds that Two Possible Causes Can Prove a Product Malfunction Theory of Liability


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In Allstate Ins. Co. v. LG Elecs. USA, Inc., No. 19-3529, 2021 U.S. Dist. LEXIS 127014, the United States District Court for the Eastern District of Pennsylvania considered whether plaintiff’s expert engineer’s opinion that there were two possible causes of a fire—both related to alleged product defects within a refrigerator manufactured by the defendant—was sufficient to support the malfunction theory of products liability. The court found that because both potential causes imposed liability on the product manufacturer and the expert ruled out misuse of the product, as well as all external causes of the fire, it was not necessary for the engineer to identify a specific cause under the malfunction theory. The court also found that the expert’s investigation and opinions met the criteria set forth in Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993) and the Federal Rules of Evidence and, thus, were admissible. Continue reading

This entry was posted in Experts, Experts – Daubert, Pennsylvania, Products Liability, Subrogation and tagged , , , , , .
Gavel

Florida Court Gives Parties Assigned a Subrogation Claim a Math Lesson


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Although the focus of most subrogation cases is usually on proving liability, determining the appropriate measure of damages is just as important. Sometimes turning on a nuanced argument for recoverability, an adverse holding can significantly boost or reduce the total damages in a case. The Court of Appeal of Florida, Fourth District (Court) recently decided such an issue in a case involving subrogation, holding that the defendants owed much more than they originally anticipated. Continue reading

This entry was posted in Damages - Real Property, Florida, Subrogation and tagged , , , .
Fire

An Insured In-Part: Michigan Court Holds That Tenant Is an Implied Co-Insured on Landlord’s Property Insurance Only With Respect to the Leased Premises


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In Westfield Inc. Co. v. Ritcher, No. 20-CV-12692, 2021 U.S. Dist. Lexis 94926, the United States District Court for the Eastern District of Michigan considered whether a residential tenant was an implied co-insured on the landlord’s insurance policy, and thus shielded from a subrogation claim brought by the landlord’s carrier for fire damage caused by the tenant’s negligence. The court found that the tenant was an implied co-insured on the landlord’s insurance policy, but only with regards to the apartment that the tenant leased. The tenant was not shielded from claims for damage to the rest of the building, the contents of other residents and the landlord’s rental loss income. Continue reading

This entry was posted in Anti-Subrogation Rule, Landlord-Tenant, Michigan, Subrogation, Sutton Doctrine and tagged , , , .

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


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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


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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


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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 , , , .