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July 18, 2017 | Blog Post| Subrogation Following a Hurricane is All Hands on Deck

Hurricane season began June 1st, and runs through November 30th.   However, we are about 30 days from approaching the peak of hurricane season, when the season becomes its most active.  Weather predictors are predicting an above-average number of storms this year, with 14 expected named storms.  As anyone who has worked “CAT” claims knows, when a hurricane hits, it’s “all hands on deck.”  This is true for subrogation professionals, as well.  There is a significant increase in the number of claims that must be triaged, with a goal of finding any claims that might have subrogation potential. 

When analyzing subrogation potential following a hurricane, there are few key items you will want to have at your fingertips.  The first is access to a wind speed chart.  If you determine that the wind speed at the subject location was less than that set forth by the applicable building code, you will then want to have handy the applicable Statute of Repose to confirm whether or not the work that may have led to the subject damage (such as a roof failure) is within the applicable Statute of Repose. 

Should you determine that the wind speed was under that set forth by the applicable building code, and the possible defective work was within the Statute of Repose, you will then want to consider engaging an expert to identify the specific cause of the failure.  For this final key item, it will be important to have handy a list of experts in the area where the storm hit. Getting someone to the loss site ASAP, once you have determined that there may be subrogation potential, will be critical.

Following a storm, one of the most valuable sources of information regarding the insured property will be the insured.  You will want to make sure that the adjuster knows that obtaining all information relating to the history of the property will be critical.  For example, if the loss involves a roof failure, knowing that a new roof was put on the building two years prior to the storm will be critical.  Further, some states have “right to repair” statutes.  If the storm hit in one of these states, it will be critical to immediately place the contractor on notice of the potential claim and offer them the opportunity to inspect before the expiration of the time period set forth in the “right to repair” statute. 

Another valuable avenue for information will be the local building department. Many building departments have on-line searches available, so you may be able to identify possible work on the property through searching the building department’s file on the subject property.  The building department can also provide the age of building, drawings, specifications, permits and inspection history, as well as the name of the architect, engineer and contractor. The applicable building codes can also often be identified through the building department.

The investigation of a subrogation case arising from a hurricane loss is not much different than the pursuit of any construction-related subrogation case. It is just a bit more hectic as you typically aren’t trying to investigate such a large volume of losses at one time.  The key is to be prepared in advance of the storm, and have the above information at the ready once the storm passes.  This will help you quickly weed out the claims that have no recovery potential so that you focus on the claims that might provide any avenue for recovery. 

Matthew W. Peaire

A Partner at Butler Weihmuller Katz Craig LLP in Tampa, Fl. Matthew practices in our Cyber Losses, Reinsurance, and Subrogation & Recovery departments.

November 09, 2017 Blog PostDon't Wreck Your Carmack Claim: Requirements for the Written Notice of Claim

Carmack claims are unique animals.  Carmack provides a shipper—or its subrogating insurance company—with the sole remedy for damages sustained when goods are shipped between states.  As the sole remedy, it’s imperative that a claimant strictly comply with Carmack’s notice of claim requirements and any additional notice requirements outlined in the bill of lading.  As subrogation professionals, when a cargo claim comes in, the bill of lading should be the first document reviewed to determine what needs to be done—in addition to the five items listed below—to provide proper notice of the claim to the carrier.  Failure to file proper written notice will bar the claim. 

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September 21, 2017 Blog PostThe Rule of Sevens: Evaluating Claims Involving a Child

As subrogation professionals, we may be tasked with evaluating property loss claims where a child caused or contributed to the property damage.  For example, is a child playing with matches or a lighter liable for a fire loss?  Or, is a child liable for driving a vehicle into the neighbor’s home? In some instances, a parent may be held liable for the child’s acts.   As more fully set forth below, when evaluating a claim involving a child, it is important to evaluate the age and capacity of the at-fault party, and to be familiar with state specific statutes regarding parental liability. 

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September 01, 2017 Blog PostHurricane Hindsight is 20/20

It took years of depositions and other discovery to realize that that most of my 2004-2005 hurricane condominium association claims were much simpler to defend than I thought.   The center of gravity of these claims was the proper calculation of Actual Cash Value (ACV).

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August 29, 2017 Blog PostThe Common Interest Doctrine: Maintaining Confidentiality

While confidentiality is usually destroyed when communications between an attorney and client take place in the presence of a third party or when work product is shared with others, those communications can remain protected if the common interest doctrine applies.

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August 23, 2017 Blog Post"It's Not Old, It's A Classic!": Risk in Aging Aircraft with GARA Protecting Manufacturers

The General Aviation Revitalization Act of 1994 (“GARA”) was a byproduct of aging aircraft, rising costs, and tort liability in the United States.  Congress was concerned that aircraft manufacturers were being devastated by liability costs for accidents occurring long after the planes left the manufacturer.  These liability costs drove up the price for aircraft beyond what the market would bear, and general aviation experienced a sharp decline.  The General Aviation Manufacturers Association reports the total U.S.-manufactured general aviation airplane shipments went from a high of 17,811 in 1978 to a low of 929 in 1994.  As a result many manufacturers stopped making certain model aircraft, including Cessna which ceased production of all piston aircraft in 1986. 

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August 15, 2017 Blog PostThe ABC's of ACV in Subrogation Claims

Oftentimes, during the course of a subrogation claim, third-party liability adjusters will refuse to pay the full amount of the “Repair Cost Value” (“RCV”) of the damages demanded, and contend that they only owe “Actual Cash Value” (“ACV”), regardless of the amount paid in the underlying first party property claim adjustment.   Oftentimes, this position is not necessarily predicated on a specific legal doctrine or theory, but rather a general “understanding” that is commonly used in the insurance context.   The true measure of damages, in the legal context, is always dictated by state law. 

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November 16, 2015 Blog PostWest Virginia Supreme Court Allows Landlord's Subrogation against Tenant

The West Virginia Supreme Court of Appeals recently opened the door further for a landlord’s insurer subrogating against a tenant for damages to the landlord’s property.

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October 13, 2014 Blog PostIs Texas Following Florida's Lead On Changing The Economic Loss Rule?

Practicing in both Florida and Texas I have seen the Economic Loss Rule evolve over the years, and its direct impact on the recovery potential for our subrogation claims appears to be moving in a positive direction. Recently, the Texas Supreme Court held in a per curium opinion in Chapman Custom Homes, Inc. v. Dallas Plumbing Co., 2014 WL 4116839 (Tex. Aug. 22, 2014), that a claimant can now bring a tort claim (negligence, in this case) against a party, as well as a breach of contract claim. In doing so, the Court applied ...

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