Court Denies Insureds’ Attempt to “Piggyback” Claims Onto Carrier’s Subrogation Action

Mr. and Mrs. Erlich purchased a water cooler from Greenway in April 2008 and installed it in the basement of their Brooklyn residence.  A few days later, the water cooler malfunctioned and caused a fire, which damaged their home and contents.  Their carrier, NHIC, paid $124,123.81, to or on behalf of the Erliches as the actual cash value (“ACV”) of their damages and the Erliches suffered a $1,000 deductible.   NHIC held back $11,167.20 in replacement cost, which was available if the Erliches timely rebuilt and/or replaced contents.


Governor Signs Law Affecting Health Care Subrogation

In 2009, New York passed a law whose intent was to eliminate the right of health care insurers to subrogate and assert a lien or otherwise encumber a personal injury or wrongful death action.  The law did not affect the ability of property insurance carriers to subrogate.  In the opinion of the New York Assembly, health insurers were “imperiling and preventing” the settlement of lawsuits by accident victims and others, which in turn “caus[ed] undue burdens and pressures upon the court system.”   Consequently, this 2009 legislation added provisions to New York’s General Obligations Law [1] to “protect parties to a personal injury or wrongful death settlement from lien, reimbursement and subrogation claims.”  The law contained an exception for “payments as to which there is a statutory right of reimbursement.”  Thus, for example, workers compensation carriers could still assert liens on tort actions notwithstanding the 2009 law, because the NY workers compensation law contains a statutory right of reimbursement.


Statute of Limitations and the “Relation Back” Doctrine

Last month’s newsletter discussed a recent case out of Westchester Supreme Court involving a puff back that occurred at the home of Victoria Subin.  Ms. Subin thought she had retained Castle Oil to perform service work on her oil boiler and burner prior to the loss; but in fact, Castle Oil had made arrangements to have a separate company, “Dynamic Plumbing and Heating Incorporated” (“Dynamic”) to actually do the work.   Dynamic was instructed to use an unmarked vehicle when performing its service work (presumably, so as to keep Dynamic’s name a secret to the customer).


Black Sheep Web Design set this site apart from the flock