Aetna Insurance Company, a Corporation v. Craftwall of Idaho, Inc., an Idaho Corporation, D/B/A Heritage Cabinets

Aetna Insurance Company appeals the grant of summary judgment of the U.S. District Court of the District of Idaho, Ryan, J., in favor of Craftwall of Idaho, Inc. Aetna seeks to recover $291,890 which it paid to an insured landlord, Hahn Enterprises, as a result of a fire allegedly caused by the negligence of Craftwall, one of Hahn’s commercial tenants.

In August or September 1980, Paul Hay-man, the general manager of Hahn, orally agreed with Bruce Sweeney, an officer of Craftwall, to lease space to Craftwall. Between September and November 6, 1980, Craftwall occupied a portion of Hahn’s building pursuant to the oral lease. A fire occurred on November 6, damaging Craft-wall’s leasehold and other portions of the building, which Hahn had leased to two other commercial tenants. At the time of the fire, Craftwall and Hahn had not entered into a written lease.

Aetna paid Hahn Enterprises for the fire damage and brought this subrogation action based upon diversity jurisdiction. 28 U.S.C. § 1332 . Craftwall moved to dismiss Aetna’s action on the ground that Craftwall was an implied co-insured of the landlord, and therefore immune from a subrogation action. Craftwall moved in the…