The Subrogation Strategist

In Patton v Pearson, No. M2022-00708-COA-RC-CV, 2023 Tenn. App. LEXIS 231, the Court of Appeals of Tennessee (Court of Appeals) considered whether the lower court erred in dismissing an insurance carrier’s lawsuit against its insured’s tenant for damages sustained in a fire. While the lawsuit was filed in the name of the landlord (i.e., the insured), discovery revealed that the lawsuit was actually a subrogation lawsuit, brought by the landlord’s insurance carrier. The lower court granted the tenant’s motion for summary judgment based on the Sutton Doctrine, holding that the tenant was an implied co-insured under the landlord’s policy. The Court of Appeals affirmed, finding that although the lease agreement did not reference insurance, the Sutton Doctrine applied, which barred the landlord’s carrier from subrogating against the tenant.

In Brown v. City of Oil City, No. 6 WAP 2022, 2023 Pa. LEXIS 681 (2023), the Supreme Court of Pennsylvania (Supreme Court) recently held that a contractor can be liable for dangerous conditions it creates even if the hazard is obvious or known by the property owner. In City of Oil City, the City of Oil City (Oil City) contracted with Harold Best and Struxures, LLC and Fred Burns, Inc. (collectively Contractors) to reconstruct the concrete stairs to the city library. Contractors completed their work at the end of 2011. In early 2012, Oil City received reports of issues with the stairs. Oil City notified Contractors that it considered the stairs dangerous and that Contractors’ defective workmanship created the condition. Neither Oil City or Contractors took any action to fix the stairs or warn of the danger and the stairs’ condition worsened with time.

In subrogation cases where the insured’s damages were caused by a defective product, the fact that the product at issue is or was subject to a recall announced by the Consumer Product Safety Commission (CPSC) may help to establish that the product was defective when it left the manufacturer’s possession and control. On June 8, 2023, the CPSC announced the following recalls related to products that present fire hazards:

1. Ashley Furniture Industries Recalls Party Time Power Loveseats, Sofas and Recliners Due to Fire Hazard. According to the CPSC’s website, “[t]he power ...

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.Continue Reading

In subrogation cases where the insured’s damages were caused by a defective product, the fact that the product at issue is or was subject to a recall announced by the Consumer Product Safety Commission (CPSC) may help to establish that the product was defective when it left the manufacturer’s possession and control. On May 18, 2023, the CPSC announced the following recall related to a product that presents a fire hazard:

Polaris Recalls RZR Pro XP and Turbo R Recreational Off-Road Vehicles Due to Fire Hazard (Recall Alert).

According to the CPSC’s website, “[a] fuel leak can ... Continue Reading

The economic loss doctrine is a legal principle that has confused and frustrated subrogation practitioners since its inception. Unfortunately, once practitioners understand the basic theory, they realize how frustrating it can be. If there was any doubt about the doctrine’s effect in New York, the Appellate Division put that to rest in a recent ruling on a subrogation case in which it bolstered the economic loss doctrine defense.

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 ... Continue Reading

In subrogation cases where the insured’s damages were caused by a defective product, the fact that the product at issue is or was subject to a recall announced by the Consumer Product Safety Commission (CPSC) may help to establish that the product was defective when it left the manufacturer’s possession and control. On May 11, 2023, the CPSC announced the following recall related to a product that presents a fire hazard:

Bombardier Recreational Products (BRP) Expands Recall of Snowmobiles Due to Fire Hazard (Recall Alert).

According to the CPSC’s website, “[t]he fuel ... Continue Reading

On May 4, 2023, Montana changed its product liability laws when the Governor signed SB 216, which was effective upon passage and applies to claims that accrue on or after May 4, 2023. Among the changes is the adoption of a sealed container defense and the application of comparative negligence principles in strict liability actions. Montana also adopted a defense based on certain actions not being brought within 10 years. In addition, Montana adopted a rebuttable presumption with respect to a product’s defective condition. A jury must be informed about this rebuttable presumption with respect to certain warnings claims, premarket licensing procedures or claims involving drugs and/or medical devices. The changes to the Montana Code are further described below.