Appellate Court Affirms Dismissal of Subrogation Suit Where Truck Had Been "Modified" Prior to Fire

Many subrogation matters involve the failure of a product which causes a fire.  In order to hold a manufacturer or distributor liable in products liability, the subrogating carrier must show, among other things, that the product was defective at the time it was in the hands of the defendant and that the product was not altered or modified in any significant way prior to the fire’s occurrence.


Appellate Court Allows Subrogation Suit Against City of Ithaca to Proceed

A water meter ruptured in the basement of State Farm’s insured, a dental office. The ruptured meter caused water damage to property, for which State Farm paid. State Farm brought a subrogation action against the City of Ithaca alleging that this loss was caused by the City’s negligent operation of its water system. Defendant Ithaca moved for summary judgment, asking the Court to dismiss the complaint because there was no duty for the City to inspect the water meter. State Farm responded by arguing that its theory wasn’t that Ithaca was supposed to inspect this water meter; rather, State Farm’s theory of liability is that there was actual negligence on the part of the City which caused the meter to rupture.


Judge Dismisses Subrogation Lawsuit Against Sprinkler and Alarm Companies

Loehmann’s is the anchor store in a strip mall in Brooklyn.  A restaurant owned and operated by AGG was next door to Loehmann’s.   On November 21, 1999, fire broke out at AGG. The strip mall had a sprinkler system, but it did not activate.  The fire spread to Loehmann’s and caused extensive damage and loss of business.  Travelers paid Loehmann’s over $1.1 million under its policy.  A post-fire inspection revealed that a valve in AGG’s part of the sprinkler system had been turned off.  That valve had been covered by a drop ceiling and, therefore, was not visible.  Travelers brought a subrogation action naming: (a) the manager of the strip mall; (b) AGG; (c) the company (“Chief Fire”) that was supposed to inspect AGG’s sprinkler system; and (d) the company (“High Rise”) that was supposed to monitor valves and other aspects of the sprinkler system through an electronic alarm system.  The owner of the strip mall was originally named in the complaint but was dropped by plaintiff due to “waiver of subrogation” language contained in Loehmann’s lease.


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