Missouri: Subrogation Against Condominium Unit Owners and Members of the Household
The subrogating carrier of a unit owner or condominium association to pursue subrogation against another condominium unit owner, renter and/or member of the household of the unit varies by jurisdiction.
Unlike most jurisdictions, the state of Missouri utilizes a statute which requires policies covering condominium properties to waive subrogation against unit owners and members of their household. The reasoning behind the statute is that the property insurance premium on the building and common areas paid by and through the association, which is funded by the assessment monies of the unit owners, all of whom have an ownership interest in the common elements. Therefore, the association members all benefit from the insurance protection on the common elements versus the individual protection afforded on personal condominium property or contents and on the use of the property by and through a separate condominium policy issued to a unit owner. From this statute, policies issued to condominium associations in Missouri now commonly contain a “Condominium Association Coverage Endorsement,” which essentially precludes carriers from recoveries against a unit owner and/or its liability policy. In fact, the endorsement trumps the terms of the condominium by-laws, regulations and building rules, which were traditionally documents that dictated subrogation opportunities under these circumstances.
Despite the statute, subrogation may still be viable in Missouri when presented with similar facts. In a different coverage scenario, where a property insurance carrier has provided separate condominium coverage to a unit owner, successful recovery efforts have been achieved in Missouri as to the unit owner’s loss of personal property and as to the loss of the use of the property. In these cases, successful arguments have been made that the statute does not apply because (1) there is no joint interest in the insured property of a separate owner against another owner and (2) there is no sharing of the risk. This model remains a viable avenue to pursue in Missouri by subrogated carriers when the insured is a unit owner, and many policies of insurance include arbitration clauses or provisions that facilitate the adjudication of these claims under this particular setting.
You have a fire loss at a commercial premise, and the insured's tenant is clearly at fault for the same. Is there subrogation? Not so fast, preparing that demand or settlement brief may be premature as there may be language in the lease precluding subrogation against the tenant. In a trilogy of cases, the Supreme Court of Canada set forth the legal principles which may act to bar a subrogated claim in the context of a commercial tenancy. In Cummer-Yonge Investments Ltd. v. Agnew Surpass Shoe Stores Ltd., [1976] 2 S.C.R. 221 and Smith v. T. Eaton Co., [1978] 2 S.C.R. 749, the subject leases contained a covenant from the landlord to insure the property against loss from fire. The Supreme Court of Canada held that the covenant established that the landlord had intended to eliminate any right of action against the tenant. Since the insurer is in no better position than the insured as against the third party, the subrogated claim was dismissed. In Ross Southwood Tire Ltd. v. Pyrotech Products Ltd., [1976] 2 S.C.R. 35, the lease required the tenant to pay part of the cost of the property insurance secured by the landlord. The Supreme Court of Canada held that since the tenant contributed to the cost of the policy, the landlord and tenant were essentially joint insureds and the subrogated claim could not proceed. .jpg)
Defectively manufactured drywall has been in the news for the past two years. Recently, there have been a string of favorable rulings, verdicts, and settlement for those damaged by the defective drywall. 
Have you ever experienced this scenario: Your expert has identified the cause of a loss in the United States, but the manufacturer of the failed product is overseas? If so, then you have to start thinking about issues such as how you will serve process on the overseas defendant and will the foreign defendant be subject to personal jurisdiction in the United States? Congress is currently reviewing a bill designed to circumvent much of the frustration with serving process and obtaining jurisdiction over foreign manufacturers. Currently, in order to obtain jurisdiction in the United States over an overseas product manufacturer, you have to prove that the overseas defendant has sufficient contacts with the state in which you are filing suit. To prove sufficient contacts exist you have to gather as much information as you can on the defendant's contacts with your forum state, including:
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The lesson of the Essex case is simple. In order to preserve equitable subrogation and/or indemnity rights, the insurer must carefully craft all settlement documents and releases. The court will not attempt to glean what amounts are made on behalf of the insured, as opposed to bad faith or fraud claims. The Essex case reiterates the most basic tenet of subrogation-you can only stand in the shoes of your insured for payments made on its behalf. 
