Farmers & Mechanics Mut. Ins. v. Allen (Signed Opinion)
Annotate this CaseTenant died in a fire that he caused on property he rented from Landlords. Insurer paid Landlords, its insureds, for the property damage caused by the fire. Plaintiff, individually and in his capacity as the administrator of Tenant’s estate, filed a wrongful death claim against Landlords. Landlords filed an answer, which included a counterclaim filed by Insurer asserting a subrogation claim against Tenant’s estate for the proceeds Insurer paid to Landlord following the fire. The estate, in turn, argued that Tenant was an additional insured under Insurer’s homeowner’s policy and that Insurer could not seek subrogation against its own insured. Insurer filed a motion for summary judgment, arguing that Tenant was not an insured under the homeowner’s policy. The circuit court concluded that Tenant was an “equitable insured” of Landlord’s insurance policy and, therefore, Insurer could not maintain a subrogation action against tenant’s estate. The Supreme Court reversed, holding that Insurer had a right of subrogation against Tenant where (1) Tenant was not a named or definitional insured of Landlord’s policy; (2) Tenant purchased his own renter’s insurance after being advised to do so by Landlord; and (3) the lease agreement stated that Tenant was solely responsible for any damage he caused to the property.
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