The Subrogation Strategist

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 2, 2024, the CPSC announced the following recalls related to products that present fire hazards:

1. True Manufacturing Recalls Commercial Refrigerators with Secop Compressors Due to Fire Hazard. According to the CPSC’s website, “[t]he recalled commercial ...

In Johnson v. Amazon.com, Inc., No. 4:22-CV-04086, 2024 U.S. Dist. LEXIS 59196, the United States District Court for the Southern District of Texas held that Amazon.com, Inc. (Amazon) can be liable for negligent undertaking claims when products sold on its website are defective.

In Johnson, the Plaintiff, Joshua Johnson (Johnson), purchased a bathmat on Amazon. The bathmat was designed, manufactured and sold by Comuster, a Chinese entity. Nine months after purchasing the bathmat, the bathmat shifted while Johnson was taking a shower and caused him to fall. Johnson sustained a severe cut on his arm that required surgery and left significant scarring.Continue Reading

Matthew Ferrie, Partner, is back again to host the newest episode of the Subro Sessions podcast. Bert Davis, Principal for Romauldi, Davidson, & Associates and BDA Engineering, joins Matt for the second episode on investigating residential electrical fires entitled, “Investigating Residential Electrical Fires Part II - Arcing and Arc Mapping.” Bert and Matt dive into arc mapping and how it assists in identifying the area of origin and fire spread in subrogation cases involving residential electrical fires.

Listen to all of our episodes here. 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 April 11, 2024, the CPSC announced the following recalls related to products that present fire hazards:

1. Johnson Health Tech North America Expands Recall of Matrix T1 and T3 Commercial Treadmills Due to Fire Hazard (Recall Alert). According to the CPSC’s website ...

In subrogation cases where the insured’s damages were caused by a defective product, the fact that the Consumer Product Safety Commission (CPSC) issued a warning about the product at issue may help to establish that the product was defective when it left the manufacturer’s possession and control. On April 4, 2024, the CPSC issued a warning urging consumers to “immediately stop using True Brothers refillable fuel bottles sold by Shenzhen Yinglong Industrial.” According the CPSC, bottles “pose a risk of poisoning and burns to children due to lack of a child resistant ... Continue Reading

In subrogation cases where the insured’s damages were caused by a defective product, the fact that the Consumer Product Safety Commission (CPSC) issued a warning about the product at issue may help to establish that the product was defective when it left the manufacturer’s possession and control. On April 4, 2024, the CPSC issued a warning urging consumers “to immediately stop using refillable fuel bottles sold by Shenzhen Pink Vine Technology.” The fuel bottles were sold Walmart.com. According the CPSC, the bottles “pose a risk of poisoning and burns to children due to ... Continue Reading

In subrogation cases where the insured’s damages were caused by a defective product, the fact that the Consumer Product Safety Commission (CPSC) issued a warning about the product at issue may help to establish that the product was defective when it left the manufacturer’s possession and control. On March 28, 2024, the CPSC issued a warning urging consumers to “immediately stop using Elide Fire Extinguishing Balls due to failure to extinguish fires and risk of serious injury or death.” According the CPSC, “the products can fail to effectively disperse fire retardant ... Continue Reading

In a matter of first impression, the Superior Court of Connecticut (Superior Court), in American Commerce Ins., Co. v. Eastern Fuel Corp., No. CV-206109168-S, 2024 Conn. Super. LEXIS 380, held that a waiver of subrogation provision in a consumer fuel service/delivery contract violated public policy. The Superior Court overruled the motion for summary judgment filed by Eastern Fuel Corporation (Eastern) and determined that the clause was impermissible as the contract was entered into by two parties with unequal bargaining power.

American Commerce Insurance Company (American) provided property insurance to Arlene and James Hillas (the Insureds) for their home in Woodbridge, Connecticut. The Insureds hired Eastern to service their heating system on or around October 25, 2018. The service work at the property included inspecting the oil filters and flushing the fuel lines. On November 1, 2018, when the Insureds turned the heating system on for the first time that season, the two oil tanks on the property were allegedly full. After a series of deliveries, claims that the oil levels were lower than expected, discovering oil staining on the floor and Eastern’s replacement of the oil lines, Eastern delivered another 429 gallons. However, after the delivery, additional leaks were discovered relating to the oil line replacements. Ultimately, the Insureds submitted a claim to American and American paid in excess of $59,000 for the damage incurred.Continue Reading

The point at which an insurance carrier possesses the equitable right of subrogation is an issue on which the states have differed. Some allow carriers to pursue rights of subrogation immediately upon payment and some have taken stricter approaches. Missouri falls into the latter group. By not allowing the carrier the right to file suit against third-party tortfeasors until the insured provides its carrier with an assignment of all its rights, Missouri’s approach has opened the door for challenges to subrogation rights.

In Megown v. Auto Club Fam. Ins. Co., 2024 Mo. App. LEXIS 82, the plaintiff-insureds Michael and Jane Megown (the Megowns) suffered a house fire on February 8, 2016. Their insurance carrier, Auto Club Family Insurance Company (Auto Club) reimbursed the Megowns for their property damage in the amount of $722,433.56. Subsequently, the Megowns sued Auto Club for breach of contract and later amended their complaint to add claims against Tyberius Enterprises, LLC d/b/a Crag Electric (Craig Electric), the third-party tortfeasor, for direct negligence, alleging both property damage and personal injuries. Auto Club intervened in the Megowns’ claim against Craig Electric to protect its interest as subrogee for its property damage payment to the Megowns. Craig Electric settled prior to trial, paying $1,000,000.00 to both the Megowns and Auto Club, to be allocated at a later date. After a bench trial that apportioned the settlement with $722,433.56 paid to Auto Club and $277,566.44 paid to Megowns - and a jury trial awarding no further damages - the Megowns appealed.Continue Reading

Chris Konzelmann, Partner, hosts the newest episode of the Subro Sessions podcast entitled: “Pursuing Claims Against Minors and Their Parents.” In this episode, Chris revisits a case and discusses the problems that may arise when subrogation efforts are targeted towards children and their parents and whether either can be held responsible for tort claims.

Listen to all of our episodes here. Continue Reading