Tales from A Subrogation Scene:
In many instances, we are retained on cases that look to be dead on arrival. Our client’s insured is at fault, the defendant is insolvent and uninsured, or the product that caused the loss is beyond the statute of repose. However, especially in the last instance, this does not always mean that there is no viable subrogation opportunity.
A great example of this was a fire investigation that we coordinated several years ago that occurred in a large church. Approximately, nine years prior to the fire, heating cable had been installed in the church’s attic to prevent freezing of the HVAC lines which ran through this area. Initially, the fire investigator determined that the fire originated from the area immediately surrounding the heat tape and that there was no other heat producing item near this area. The problem: the date code for the heat tape indicated it was more than 10 years old.
In Indiana, the statute of repose for products is ten years. This means that no action can be brought for product liability related to a product that was manufactured and sold more than ten years prior to the incident. Translation: It appeared our client had no opportunity at recovery because we were barred from pursuing the manufacturer of the heat tape.
We were not ready to give up that fast.
In conjunction with an electrical engineer and a fire investigator, we looked further into the installation methods of the heat tape. It became clear that the installer had violated several of the instructions and warnings. Even if the heat tape were defective, it was installed in such a way that created a much higher risk of fire. This, coupled with the clear area of origin, was more than enough to establish a causal connection. The good news was that this put us outside the realm of product liability and avoided any statute of repose argument.
While litigation was necessary considering the size of the loss and factual issues involving the identity of the installer, we were able to reach a successful settlement at mediation prior to trial.
The lesson here is that what looks like a “dead case” can be saved with creativity and perseverance from experienced counsel and experts. Never say never, until you have investigated all possibilities and legal theories. It’s not over until it’s over!