Liberty Mutual Insurance v. Altfillisch Construction Co.

Preface

The plaintiff began the action in the trial court as supposed subrogee of its insured, the eventual intervener and cross-defendant, after plaintiff had paid a casualty claim for property damage to a scraper leased to the defendant by its insured’s predecessor. The eventual judgment which is before us on appeal resulted in a recovery by plaintiff of what it had paid to its insured in settlement of the casualty claim. The reason for this result is traceable to an agreement between the insured and its lessee that the former would insure lessee against risks resulting from its possession and use of the scraper. This undertaking was given in consideration for the lessee’s payment to the insured of a specified cash premium. The legal result of the agreement noted was to cut off any possible subrogation rights which the plaintiff would have had after payment of any loss to its insured because of damage to the scraper resulting from lessee’s negligence. When this agreement came to light after the litigation had begun, the plaintiff cross-complained against its intervening insured on the theory that the policy had been thereby breached and that plaintiff was entitled to…