The Subrogation Strategist

On June 25, 2021, the Texas Supreme Court held that Amazon cannot be liable for defective third-party products sold on its website, even when Amazon controls the transaction and delivery of the product, because Amazon never relinquishes or holds title to the products. This opinion should result in the reversal of a prior decision by the United States District Court for the Southern District of Texas – which found that Amazon was a “seller” under Texas law – and causes further division in the jurisdictions in the United States regarding whether Amazon can be held liable for defective third-party products.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 June 16, 2021, the CPSC announced the following recall related to a product that presents a fire hazard:

Cove Appliance Recalls Dishwashers Due to Fire Hazard.

According to the CPSC, “[t]he heating element in the dishwasher can fail to properly shut off and can ... Continue Reading

In Phila. Indem. Ins. Co., a/s/o Baldwin Real Estate Corp. v. Barker, 2021 U.S. Dist. LEXIS 87642 (N.D.N.Y. May 7, 2021), the United States District Court for the Northern District of New York considered whether the plaintiff, Philadelphia Indemnity Insurance Company (PIIC), a subrogating insurer, could prove its damages claim through the testimony of its adjuster, without an damages expert. The court held that, where the plaintiff’s damages proof was based on repair costs and the defendant offered no expert of its own related to the diminution in fair market value, the plaintiff could prove its damages using the adjuster’s testimony.Continue Reading

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