Chris Greeley recently appeared in the Middlesex County Superior Court for a hearing on our motion to dismiss a Third-Party Complaint that was brought against our client/homeowner. In this interesting subrogation matter, various claims arose from the release of fuel oil in our client’s Waltham, Massachusetts residence. One of the Defendant oil companies delivered to our client’s street address, when they were supposed to deliver to a road of the same name miles away. The accidental delivery resulted in a full tank load drop into our client’s tank despite our client having no relationship with the delivery company.
Within days of this fuel drop, our client’s usual oil company responded to make an automatic delivery, unaware that the tank had been filled by the other oil company. Fuel was pumped in under pressure, and this caused a pipe to let go, and a fuel spill in the client’s basement. A claim was submitted to our client’s homeowner’s insurer, which paid for the cleanup and then brought a subrogation lawsuit against the two oil companies. Soon after, one of the oil companies filed a Third-Party Complaint against our client, alleging that our client failed to notify his oil company of the improper delivery, and this caused or contributed to the event.
We immediately moved to dismiss, observing that subrogating insurer stands in the shoes of its insured (our client) pro tanto – up to the amount of the claim payment. While there are no published Massachusetts cases on the subject of whether a defendant can bring a Third-Party Complaint against an insured-subrogor in a subrogation suit, Chris focused his argument on what it means for an insurer to “step in the shoes” of an insured-subrogor, noting that when an insurer makes a payment to its insured, it acquires from the insured certain rights – that are derivative in nature, and that are no greater than the insured’s rights. Such rights are also subject to any limitations, such as waiver or defenses based on comparative fault.
As such, Chris argued that allowing the Defendant to file a third-party complaint against our client would be redundant and would serve no legal purpose whatsoever, as the subrogating insurer’s claims were already subject to any defenses that the Defendants could directly assert against the insured-subrogor, and thereby rendering any direct claims against our client entirely superfluous. Chris went on to clarify that an individual cannot be liable in tort to his or herself, and stated that therefore the appropriate vehicle for raising such defenses would only be through affirmative defenses, which may be waived if not raised by the Defendant(s). The court agreed, and dismissed the Third-Party Complaint.