Judge Joins Subrogation Action with the Separate Action Filed by the Insured

Often, the insured will claim to have suffered damages above and beyond what they were paid by their insurance company (I call these “uninsured losses”). In some instances, so long as there is consent, one attorney will represent both the subrogating carrier and the insured. In other instances, the insured will retain separate counsel. If separate counsel is retained, the subrogating carrier will file one lawsuit and the insured will file a separate lawsuit against the same defendant(s).

Where there are two lawsuits, the two attorneys usually work with each other to coordinate and save effort and expense, such as sharing expert witness costs, responding to (and serving) paper discovery, and conducting a single deposition for each witness. In some instances, discovery is “informally” coordinated between the two lawsuits. In other instances, a formal order is presented to the judge asking that the two cases be joined for purposes of discovery, and for trial. [1]

In a case reported July 15, a judge granted plaintiff’s motion to join two cases for purposes of trial. [2]  The judge noted that an insured filed a personal injury action in March 2013 in Kings County (i.e., Brooklyn). In September 2013, the insured’s carrier, Geico, filed a subrogation action stemming from the same incident in Queens County (i.e., Queens). [3]  The defendant named was the same in both lawsuits. The court noted that New York law provides that, where two actions “involve[e] a common question of law or fact” and are “pending in different courts,” a judge may, upon motion, remove to itself the other action and have the two cases tried together. [4]  The court has “wide discretion” to grant such a motion and the motion should be granted “absent a showing of prejudice to a substantial right by a party opposing the motion.” While prejudice might result from the two cases being tried before the same jury, since it will bring to the jury’s attention the existence of insurance, any such prejudice would be outweighed by the possibility of inconsistent verdicts if separate trials ensue. Generally, the proper venue is where the first action was commenced; although the placement of venue rests with the sound discretion of the court. In this instance, since the insured sued first in Brooklyn, the judge ordered that the two cases were joined and would be tried before one jury in Brooklyn (not Queens).

Bottom Line:  Where your insured brings a separate action seeking damages against the same defendant(s) the subrogating carrier is pursuing, consideration should be given to joining the two cases for purposes of discovery and for having one joint trial before one jury. There will be cost savings in conducting paper discovery, working with experts and conducting one set of depositions. Most defendants will not oppose such a motion since their carrier would realize cost savings as well.

[1] Some judges and attorneys incorrectly refer to this as “consolidation.” However, where two cases involve different parties (i.e., insurance carrier plaintiff and insured-plaintiff), the correct term is “joinder,” not consolidation.
[2] Vargas v. Lancaster, 2014 NY Misc. LEXIS 3116 (SCt Kings County July 15, 2014)
[3]The decision doesn’t say what the incident was, but was presumably an automobile accident.
[4] CPLR 602

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