Strauss, Factor, Laing & Lyons Strauss, Factor, Laing & Lyons
Contact us Today to Schedule your initial consultation
Finding creative solutions to complex Legal problems
401-456-0700 open menu

Subrogation-The R.I. Supreme Court rejects application of "anti-subrogation" rule

The Rhode Island Supreme Court rejected the application of the "anti-subrogation" rule where Nationwide, the insurer of a home, brought a subrogation claim against D.F. Pepper Construction, a corporation owned by the homeowner. Pepper, the homeowner, was operating a dump truck owned by his corporation when he crashed into his home causing over $200,000 in damage. Merchants defended the construction company and it argued the claim was barred by the "anti-subrogation" rule which prohibits subrogation claims against the subrogee's insured.

The Court observed that Rhode Island has never adopted the "anti-subrogation" rule. Nonetheless, it found the rule would not apply because Nationwide was not suing its insured, Pepper; it was suing his construction company, a corporation. Merchants argued that suing the construction company merely circumvented the rule because Merchants, having paid the claim for the corporation, could now subrogate against Pepper, meaning that Nationwide would have essentially recovered from its insured. The Court commented that if Merchant sued Pepper that would be the time to consider the application of the "anti-subrogation" rule because Merchant's policy might cover Pepper who was using the truck with consent. Nationwide Property & Casualty Insurance Co. v. D.F. Pepper Construction, Inc., No. 2011-308 (R.I. Jan. 28, 2013).

No Comments

Leave a comment
Comment Information