South-Western Legal Studies in Business

Houseguest Who Causes Fire Not Subject to Subrogation
Description Appeals court held that it would not be in the interest of equity to require a houseguest to be liable to an insurance company that paid for the loss suffered by the homeowner due to a fire started by the negligence of the houseguest. There is no right of subrogation in such instance.
Topic Insurance
Key Words Subrogation; Houseguest
C A S E   S U M M A R Y
Facts The Waskos owned a vacation home in Connecticut. They allowed a friend, Manella, to use it one weekend. He negligently burned the house down. The Waskos' insurer, Middlesex Mutual, paid them $132,505 for the damage suffered. Middlesex sued Manella for subrogation. The jury found Manella negligent and awarded Middlesex $132,505 in damages. Manella appealed, contending that as a social houseguest, he should be considered an "implied co-insured" under the policy.
Decision

Reversed. Subrogation clauses in homeowners' insurance policies state that the insurer may require an assignment of rights of recovery and that the insured must cooperate. It is a concept rooted in doctrines of equity and applied by operation of law. What is equity is a matter for the court to decide. Conventional subrogation is close to the principle of assignment and arises only by agreement between two parties when one, under no obligation to do so, pays the debt of another. Equitable subrogation arises in equity to promote justice. It will not be allowed in a case where the negligence of a houseguest causes damage to the property of an insured homeowner.

Citation Wasko v. Manella, --- A.2d --- (2002 WL 31716760, App. Ct., Conn., 2002)

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