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 may help to establish that the product was defective when it left the manufacturer’s possession and control. Despite the partial government shutdown, Hewlett Packard has announced an expansion of the battery recall that it first announced in January of 2018. The “batteries have the potential to overheat, posing a fire and burn hazard to customers.” As stated on the recall website:

Batteries affected by this program may have been ... Continue Reading

The Superior Court of New Jersey, Appellate Division, recently held, in N. J. Transit Corp v. Sanchez, No. A-0761-17T3, 2018 N.J. Super. LEXIS 168 (December 4, 2018), that pursuant to N.J.S.A. 34:15-40(f) (Section 40) of New Jersey’s Workers’ Compensation Act (WCA), workers’ compensation carriers have, without question, the independent right to seek reimbursement from negligent tortfeasors for economic damages. The court’s ruling cleared up years of confusion regarding the scope of recoverability of workers’ compensation subrogation liens. As noted by the court, a carrier’s workers’ compensation lien is NOT affected by New Jersey’s verbal threshold and no-fault statutes.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 may help to establish that the product was defective when it left the manufacturer’s possession and control. Despite the partial government shutdown, on January 19, 2019, TJX has announced a recall of its Aroma Home USB Heated Hottie Heating Pad. TJX announced the recall because the “heating pads can overheat during use, posing fire and burn hazards.”

To find out more about the recall, go to this website.Continue Reading

In Depositors Ins. Co. v. Dollansky, 919 N.W.2d 684 (Minn. 2018), the Supreme Court of Minnesota considered whether the anti-subrogation rule set forth in Minn. Stat. §60A.41(a) precluded a motor home lessor’s insurer, Depositors Insurance Company (Depositors), from proceeding against the motor home lessee. Finding that the lessee was an insured under the lessor’s policy, the court held that Depositors could not pursue subrogation.Continue Reading

In Travelers Prop. Cas. Co. of Am. v. Engel Insulation, Inc., 29 Cal. App. 5^th 830 (2018), the Third District Court of Appeals of California addressed whether a subrogating carrier can assert the rights of its corporate insured while the insured is suspended and thus barred from doing so itself. The court rejected the argument that Cal. Rev & Tax Code § 19719(b) (1998), which exempts subrogating carriers from the penalties for asserting the rights of a suspended corporation set forth in its own subsection (a), eliminated the prohibition against carriers bringing an action based on the subrogation rights of its suspended insured. Because Travelers’ claims were based solely on its derivative rights of subrogation and its corporate insured was suspended, the Court of Appeals affirmed the trial court’s ruling that Travelers had no right to bring its suit. The court’s holding reaffirms California case law that denies subrogating carriers any rights greater than those of their insureds. See Truck Ins. Exch. v. Superior Court, 60 Cal. App. 4^th 342 (1997).Continue Reading

The implied warranty of habitability allows a homeowner to recover damages for latent defects that interfere with the intended use of a home. In Sienna Court Condo. Ass’n v. Champion Aluminum Corp., 2018 IL 122022, 2018 Ill. LEXIS 1244 (2018), the Supreme Court of Illinois held that buyers of new homes cannot assert claims for breach of the implied warranty of habitability against subcontractors involved in the construction of the homes because the subcontractors have no contractual relationship with the homeowners and the damages are purely economic. As the court explained, the implied warranty of habitability is a creature of contract (not tort) and, therefore, only exists when there is contractual privity between the defendants and the homeowners.Continue Reading

In Kohler Co. v. Superior Court, 29 Cal. App. 5^th 55 (2018), the Second District of the Court of Appeal of California considered whether the lower court properly allowed homeowners to bring class action claims under the Right to Repair Act (the Act) against a manufacturer of a plumbing fixture for alleged defects in the product. After an extensive analysis of the language of the Act, the court found that class action claims under the Act are not allowed if the product was completely manufactured offsite. Since the subject fixture was completely manufactured offsite, the Court of Appeal reversed the lower court’s decision. The court’s holding establishes that rights and remedies set forth in the Right to Repair Act are not available for class action claims alleging defects in products completely manufactured offsite.Continue Reading

In Bridgwood v. A.J. Wood Construction, Inc., 105 N.E.3d 224 (Mass. 2018), the Supreme Court of Massachusetts determined that the statute of repose barred the plaintiff’s consumer protection claims commenced more than six years after the occurrence of the event that gave rise to the claims. In Bridgwood, the homeowner filed suit against the contractors who had performed renovations 15 years earlier. The homeowner asserted that concealed faulty electrical work caused a fire 11 years after the work was completed. The complaint alleged that the contractors, by violating Mass. Gen. Laws. Chapter 142A §17(10), committed an unfair and deceptive act pursuant to Mass. Gen. Laws Chapter 93A.Continue Reading