APL 2015-00048
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MILLENNIUM HOLDINGS, LLC,
-and-
Plaintiff,
THE NORTHERN ASSURANCE COMPANY OF AMERICA,
Plaintiff-Appellant
-and-
CERTAIN UNDERWRITERS AT LLOYD'S, LONDON
and CERTAIN LONDON MARKET INSURANCE COMPANIES,
Intervenor-Appellants
-against-
THE GLIDDEN COMPANY, n/k/a AKZO NOBEL PAINTS LLC
and AKZO NOBEL PAINTS LLC,
Defendants-Respondents.
New York County Index No.: 600920/08
BRIEF OF AMICUS CURIAE UNITED
POLICYHOLDERS IN SUPPORT OF THE
DEFENDANTS-RESPONDENTS THE GLIDDEN
COMPANY, n/k/a AKZO NOBEL PAINTS LLC and
AKZO NOBEL PAINTS LLC
OF COUNSEL:
Amy Bach1 Esq.
United Policyholders
381 Bush St., 8th Fl.
San Francisco, CA 94104
Tel: (415) 393-9990
Fax: (415) 677-4170
Dated: October 2 7, 20 15
nydocs 1-1057516.1
ANDERSON KILL P.C.
William G. Passannante, Esq.
John M. Leonard, Esq.
1251 A venue of the Americas
New York, New York 10020
Tel: (212) 278-1000
Fax: (212) 278-1733
Attorne)!_s for Amicus Curiae
United Policyholders
DISCLOSURE STATEMENT OF UNITED POLICYHOLDERS
PURSUANT TO 22 N.Y.C.R.R. 500.1(0
Pursuant to Rule § 500.1 (f) of the Rules of Practice of the Court
of Appeals, United Policyholders advises the Court that it is a non-profit
50l(c)(3) consumer organization and that it does not have a parent
corporation, subsidiary, or corporate affiliate.
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TABLE OF CONTENTS
PRELIMINARY STATEMENT ..................................................................... I
STATEMENT OF INTEREST OF AMICUS CURIAE .................................. !
QUESTIONS PRESENTED FOR REVIEW ................................................. 4
STATEMENT OF THE CASE AND STATEMENT OF FACTS ................. 5
ARGUMENT .................................................................................................. 5
I. APPELLANT INSURANCE COMPANIES ARE ATTEMPTING TO
USE SUBROGATION AS A WEAPON TO SEEK
REIMBURSEMENT FROM THEIR OWN POLICYHOLDER ......... 5
II. THE APPELLANTS DISINGENUOUSLY CONTEND THAT
PRECLUDING SUBROGATION AGAINST ITS OWN
POLICYHOLDER WOULD DISCOURAGE SETTLEMENT .......... 9
III. AFFIRMANCE WILL NOT AFFECT HOW INSURANCE
COMPANIES DO BUSINESS IN NEW YORK ............................... 12
CONCLUSION ............................................................................................. 15
nydocs1-1 057516.1
TABLE OF AUTHORITIES
Page(s)
CASES
A -One Oil, Inc. v. Mass. Bay Ins. Co.,
92 N.Y.2d 814 (1998) .......................................................................................... 3
Aetna Health, Inc. v. Davila,
542 u.s. 200 (2004) ............................................................................................. 3
Am. Home Assurance Co. v. Int 'l Ins. Co.,
90 N.Y.2d 433 (1997) .......................................................................................... 3
Belt Painting Corp. v. TIG Ins. Co.,
100 N.Y.2d 377 (2003) ........................................................................................ 3
Berm. Trust Co. v. Amero pan Oil Corp.,
266 A.D.2d 251 (2nd Dep't 1999) ..................................................................... 11
Bi-Economy Mkt., Inc. v. Harleysville Ins. Co. ofN. Y.,
10 N.Y.3d 187 (2008) .......................................................................................... 3
Chubb Ins. Co. v. DeChambre,
808 N.E.2d 37 (Ill. App. Ct. 2004) .................................................................... 13
Cohn v. Rothman-Goodman Mgmt. Corp.,
155 A.D.2d 579 (2nd Dep't 1989) ..................................................................... 11
Canso!. Edison Co. v. Allstate Ins. Co.,
98 N.Y.2d 208 (2002) .......................................................................................... 3
ELRAC, Inc. v. Ward,
96 N.Y.2d 58 (200 1) ........................................................................................ 7, 8
Farmers Ins. Exch. v. Enter. Leasing Co.,
708S.E.2d 852 (Va. 2011) .................................................................................. 13
Fitch v. Turner Constr. Co.,
241 A.D.2d 166 (1st Dep't 1998) ........................................................................ 6
11
nydocs 1-1057516.1
TABLE OF AUTHORITIES
(continued)
Fluor Corp. v. Superior Court,
Page(s)
191 Cal. Rptr. 3d 498 (2015) ............................................................................... 8
Fuller-Austin Insulation Co., v. Highlands Ins. Co.,
549 u.s. 946 (2006) ............................................................................................. 3
Home Ins. Co. v. Pinski Bros.,
500 P.2d 945 (Mont. 1972) .................................................................................. 6
Humana Inc. v. Forsyth,
525 u.s. 299 (1999) ............................................................................................. 3
Lexington Ins. Co. v. Raboin,
712 A.2d 1011 (Del. Super. Ct.) aff'd, 723 A.2d 397 (Del. 1998) .................... 13
Lodovichetti v. Baez,
31 A.D.3d 718 (2nd Dep 't 2006) ......................................................................... 8
Morales v. lOth St., LLC,
25 Misc. 3d 1202[A], 2009 N.Y. Misc. LEXIS 2401 (Sup. Ct.,
Kings County 2009) ............................................................................................. 7
Norfolk S. Ry. Co. v. Westchester First Ins. Co.,
999 F. Supp. 2d 906 (S.D. W.Va. 2014) ........................................................... 13
Pennsylvania Gen. Ins. Co. v. Austin Powder Co.,
68 N.Y.2d 465 (1986) ...................................................................................... 6, 7
Philip Morris USA v. Mayo/a Williams,
54 7 u.s. 1162 (2006) ........................................................................................... 3
Rosato v. Karl Koch Erecting Co.,
865 F. Supp. 104 (E.D.N.Y. 1994) ...................................................................... 7
Rush Prudential HMO, Inc. v. Moran,
533 U.S. 948 (200 1 ), aff'd, 536 U.S. 355 (2002) ................................................ 3
Sherwood Med. Co. v. B.P.S. Guard Servs.,
882 S. W.2d 160 (Mo. Ct. App. 1994) ................................................................ 13
111
nydocsl -I 057516.1
TABLE OF AUTHORITIES
(continued)
State Farm Mut. Auto. Ins. Co. v. Campbell,
Page(s)
538 U.S. 408 (2003) ............................................................................................. 3
Town of Harrison v. Nat'! Union Fire Ins. Co.,
89 N.Y.2d 308 ( 1996) .......................................................................................... 3
Travelers Cas. and Sur. Co. v. Certain Underwriters at Lloyd's of
London,
96 N.Y.2d 583 (2001) .......................................................................................... 3
Travelers Ins. Co. v. Nary Constr. Co.,
184 Misc. 2d 366 (Sup. Ct. Monroe County 2000) ........................................... 11
US. Fid.& Guar. Co. v. Am. Re-Insurance Co.,
21 N.Y.3d 923 (20 13) .......................................................................................... 3
US. Underwriters Ins. Co. v. City Club Hotel, LLC,
3 N.Y.3d 592 (2004) ............................................................................................ 3
Universal Am. Corp. v. Nat!. Union Fire Ins. Co.,
25 N.Y.3d 675 (20 15) .......................................................................................... 3
OTHER AUTHORITIES
22-141 Appleman on Insurance Law & Practice Archive, Sect. 141.2 .............. 6, 12
Jill Hamburg Coplan, 5 States With The Most Fortune 500
Companies, Fortune (June 30, 2015),
http:/ /fortune. com/20 15/06/30/states-most-fortune-5 00 . ................................... 12
Daniel Siegal, Lloyd's Knocks Bad Faith Claim In $132M Train
Crash Row, Law 360.com, (Aug. 25, 2015),
http://www.law360.com/insurance/articles/695197?nl_pk=
76390e5b-d6a5-4 776-b91 c-
8795b24a9112&utm source=newsletter&utm medium= - -
email&utm _ campaign=insurance ...................................................................... 10
IV
nydocs 1-1057516.1
TABLE OF AUTHORITIES
(continued)
John M. Sylvester, Max Louik, Policy Litigation Involving Claims
Handling by Resolute Management: 2015 Update, Insurance
Coverage Litigation Committee CLE Seminar (March 4-7, 20 15),
http://www .americanbar .org/ content/dam/abal
Page(s)
administrati ve/litigation/materials/20 15 _inscle _materials/written_
materials/5 _3 _policyholder _litigation _involving_ claims_ handling
_by _resolute_ management.authcheckdam. pdf .................................................... 9
Restat. 1st of Restitution, § 162, comment b ........................................................... 11
v
nydocsl-1057516.1
PRELIMINARY STATEMENT
United Policyholders respectfully submits this brief in support
of the arguments made by Defendants-Respondents The Glidden Company,
n(kla AKZO Nobel Paints LLC and AKZO Nobel Paints LLC ("ANP") in its
brief to the New York State Court of Appeals. United Policyholders seeks
to fulfill the role of amicus curiae by supplementing the information the
parties are providing the Court in this case on insurance principles that will
impact New York residents.
STATEMENT OF INTEREST OF AMICUS CURIAE
United Policyholders, a non-profit 501 ( c )(3) organization
founded in 1991, serves as an independent information resource and a voice
for insurance consumers in all 50 states. Donations, foundation grants and
volunteer labor fuel the organization. United Policyholders' Board of
Directors includes the former Chief Justice of the Arizona Supreme Court
and the former Washington State Insurance Commissioner.
United Policyholders divides its work into three program areas:
( 1) the Roadmap to Recovery program provides tools and resources that help
individuals and businesses solve insurance problems that can arise after an
accident, illness, disaster, or other adverse event; (2) the Roadmap to
Preparedness program promotes insurance and financial literacy as well as
nydocs 1-1057516.1
disaster preparedness; and (3) the Advocacy and Action program advances
policyholders' interests in courts of law, legislative and public policy
forums, and in the media.
United Policyholders participates in the proceedings of the
National Association of Insurance Commissioners ("NAIC") as an official
consumer representative. United Policyholders interfaces with the
Insurance Division of the Department of Financial Services when providing
disaster recovery and claim help to New York State residents through a
"Roadmap to Recovery" program. United Policyholders maintains an
extensive free library of publications, legal briefs, sample policies, forms,
and articles on commercial and personal lines insurance products, coverage,
and the claims process on its website, www.unitedpolicyholders.org.
In addition to serving as a resource for individuals and
commercial policyholders, United Policyholders monitors legal and
marketplace developments in the Empire State. United Policyholders has
participated in legislative and other public forums related to home, auto and
title insurance rates and claim practices, and is currently working in
partnership with the Touro Law Center on Long Island on Super Storm
Sandy recovery.
2
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United Policyholders has filed ten briefs in the New York
Court of Appeals, 1 as well as amicus curiae briefs in numerous cases before
the United States Supreme Court.2 The U.S. Supreme Court referenced
United Policyholders' amicus curiae brief in its opinion in Humana, Inc. v.
Forsyth, 525 U.S. 299 (1999).
United Policyholders has a vital interest in ensuring that
insurance companies fulfill the promises they make to their New York
policyholders. While insurance companies earn profits through risk
assumption, businesses and individuals rely on insurance to protect property
and livelihoods. United Policyholders seeks to prevent insurance companies
from shifting risk back to policyholders through schemes that are not
authorized by insurance contracts or public policy. The organization works
to counter-balance the able representation of insurance companies through
2
Universal Am. Corp. v. Natl. Union Fire Ins. Co., 25 N.Y.3d 675 (2015); US. Fid.&
Guar. Co. v. Am. Re-Insurance Co., 21 N.Y.3d 923 (2013); Bi-Economy Mkt., Inc. v.
Harleysville Ins. Co. of N.Y., 10 N.Y.3d 187 (2008); US. Underwriters Ins. Co. v.
City Club Hotel, LLC, 3 N.Y.3d 592 (2004); Belt Painting Corp. v. TIG Ins. Co., 100
N.Y.2d 377 (2003); Consol. Edison Co. v. Allstate Ins. Co., 98 N.Y.2d 208 (2002);
Travelers Cas. and Sur. Co. v. Certain Underwriters at Lloyd's of London, 96 N. Y.2d
583 (2001); A-One Oil, Inc. v. Mass. Bay Ins. Co., 92 N.Y.2d 814 (1998); Am. Home
Assurance Co. v. Int'l Ins. Co., 90 N.Y.2d 433 (1997); Town of Harrison v. Nat'l
Union Fire Ins. Co., 89 N.Y.2d 308 (1996).
See, e.g., Fuller-Austin Insulation Co., v. Highlands Ins. Co., 549 U.S. 946 (2006);
Philip Morris USA v. Mayola Williams, 547 U.S. 1162 (2006); Aetna Health, Inc. v.
Davila, 542 U.S. 200 (2004); State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S.
408 (2003); Rush Prudential HMO, Inc. v. Moran, 533 U.S. 948 (2001), aff'd, 536
U.S. 355 (2002); Humana Inc. v. Forsyth, 525 U.S. 299 (1999).
3
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its advocates and lobbyists by advocating for large and small policyholders
throughout the country.
In this case, United Policyholders seeks to appear as amicus
curiae to address certified questions before the Court concerning New
York's anti-subrogation rule and voluntary payments made by insurance
companies to policyholders. These questions will affect policyholders
throughout the state of New York. Unpaid volunteer counsel performed all
of the legal research and writing in this brief, and no party to this appeal
participated in the drafting of this brief or funded this work.
QUESTIONS PRESENTED FOR REVIEW
The following questions have been presented to this Court by
the Supreme Court of the State of New York, Appellate Division, First
Department:
1. Should the First Department's unanimous decision be
affirmed where it applied clear precedent of this Court and the Appellate
Division to hold that New York's anti-subrogation rule bars a claim for
subrogation by an insurer against a business (later spun off) that was covered
by the insurance policies, both when the policies were issued and when the
liability arose, and the liability arose from the very risk that the policies were
purchased to insure?
4
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2. Should the First Department's unanimous decision be
affirmed where it applied clear precedent of this Court and the Appellate
Division to hold that when an insurer rejects coverage of a claim but
nevertheless pays to indemnify an insured, knowing full well that there was
no obligation to make such payment and not acting under any mistake of fact
or law, and a court later rules that such payment was in fact voluntary and
not covered under the policies, an insurer is not entitled to pursue a
subrogation claim for such a voluntary payment?
STATEMENT OF THE CASE AND STATEMENT OF FACTS
United Policyholders adopts the Preliminary Statement and
Statement of Facts of the policyholder, ANP, as set forth in its brief
submitted to the Court of Appeals. See, Brief for Respondents, dated July 8,
2015, at pp. 1-10.
ARGUMENT
I. APPELLANT INSURANCE COMPANIES ARE
ATTEMPTING TO USE SUBROGATION AS A
WEAPON TO SEEK REIMBURSEMENT FROM THEIR
OWN POLICYHOLDER
It is well-settled that an insurance company has no recourse to
seek reimbursement from its premium-paying policyholders. "An insurer has
no right of subrogation against its own insured for a claim arising from the
5
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very risk for which the insured was covered." Pennsylvania Gen. Ins. Co. v.
Austin Powder Co., 68 N.Y.2d 465,468 (1986). This proposition is good
law and good policy. The policy considerations giving rise to this anti-
subrogation rule are self-evident.
First, the insurer should not be permitted to pass along the loss
to its insured and thereby avoid the very coverage the insured
purchased from the insurer. Second, the insurer should not be
put in the position where a conflict of interest might develop
and the insurer would manage the litigation in such a way as to
reduce its liability.
Fitch v. Turner Constr. Co., 241 A.D.2d 166, 170 (1st Dep't 1998).
The anti-subrogation rule is founded in law and common sense.
"To allow subrogation against the insured would be to pass the risk of loss
onto the insured and avoid the coverage that the insured had purchased."
22-141 Appleman on Insurance Law & Practice Archive § 141.2. The
Insurance industry would be bizarre if insurance companies were allowed to
pursue subrogation claims against those who paid premiums for the risks
insured, rather than against true third party tortfeasors. There would be no
reason to purchase insurance, pay premiums to insurance companies, and
rely on coverage if insurance companies were allowed "to pass the incidence
of the loss ... from itself to its own insured and thus avoid the coverage which
its insured purchased." Austin Powder, 68 N.Y.2d at 471, quoting Home
Ins. Co. v. Pinski Bros., 500 P.2d 945,949 (Mont. 1972).
6
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Appellants cite to the 1986 Agreement under which ANP
allegedly agreed to pay 1 00% of the expenses for lead litigation cases filed
eight years or more after the agreement. See, Appellants' Brief, p. 10.
Further, Appellants claim that "ANP's liability for the claims against
Millennium ... arises solely from the 1986 Agreement." Appellants' Brief, p.
39. However, where "insurers' subrogation rights are implicated, overriding
policies, rather than the parties' agreement, must guide the analysis."
Morales v. lOth St., LLC, 25 Misc. 3d 1202[A], 1202A, 2009 N.Y. Misc.
LEXIS 2401, at *9 (Sup. Ct., Kings County 2009). See also, Austin Powder,
68 N.Y.2d at 4 70-4 71. This "applies even where a third party tortfeasor --
also covered by the policy-- has expressly agreed to indemnify the insured."
Morales, 2009 N.Y. Misc. LEXIS, at *9. See also, ELRAC, Inc. v. Ward, 96
N.Y.2d 58, 76 (2001) ("an insurer may not step into the shoes of its insured
to sue a third-party tortfeasor--ifthat third party also qualifies as an insured
under the same policy--for damages arising from the same risk covered by
the policy"). New York requires that the anti-subrogation rule apply "even
if the insured has contractually agreed to indemnify the party whose rights
have been subrogated to the insured." Rosato v. Karl Koch Erecting Co.,
865 F. Supp. 104, 107 (E.D.N.Y. 1994).
7
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These legal rules undermine Appellants' arguments on two
fronts: first, the longstanding and established anti-subrogation rule takes
precedence over any contractual indemnity provision upon which the parties
may have agreed. Second, even were ANP not a direct policyholder under
the policy (which it wasi, the damages arose from the very same risk
covered by the policy, and which Appellants were paid to assume.
The Appellants cite ELRAC, in which this Court ruled that a
self-insured rental car company was bound by the anti-subrogation rule up to
the amount of coverage that it was legally bound to provide. ELRAC at 77.
Only for amounts above the statutory minimum would ELRAC be able to
obtain subrogation. Since neither Millennium nor ANP is seeking coverage
beyond the policy limits, Appellants do not have a viable subrogation claim.
See also, Lodovichetti v. Baez, 31 A.D.3d 718, 719 (2nd Dep't 2006). Thus,
the subrogation claim should be barred.
3 Although it did not involve a subrogation claim, Fluor Corp. v. Superior Court, 191
Cal. Rptr. 3d 498 (20 15), recently decided by the Supreme Court of California, presents a
similar fact-pattern to the case here. The Court ruled that the ability of a policyholder to
assign rights to claim indemnification coverage provided by prior and existing insurance
policies concerning the policyholder's previous conduct was protected in the course of
transferring assets and liabilities to another business entity in connection with a corporate
sale or reorganization.
8
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No case under New York law has held that an insurance
company may obtain subrogation from its policyholder for the very risk it
accepted premiums to insure. This Court should reject Appellants' argument.
II. THE APPELLANTS DISINGENUOUSLY CONTEND
THAT PRECLUDING SUBROGATION AGAINST ITS
OWN POLICYHOLDER WOULD DISCOURAGE
SETTLEMENT
The insurance companies contend that treating the payment of
$3.2 million "as 'voluntary,' and not subject to recoupment in subrogation,
would not only discourage settlement and encourage more coverage
litigation, but also would produce an inequitable result." Brief for
Appellants at p. 5. Perhaps the supposed concern for judicial resources
would be better received if the entity managing the claims for these insurers
were other than Resolute Management.
Resolute Management has come under scrutiny for
discouraging settlement and encouraging litigation. In a paper submitted for
an American Bar Association Insurance Coverage Committee Litigation
Section seminar in 2015, John Sylvester and Max Louik, attorneys at the
Pittsburgh law firm K&L Gates, detailed questionable tactics taken by
9
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Resolute in its claims handling capacity.4 The paper details thirty-five cases
alleging either bad faith, tortious interference, or both in claims handled by
Resolute. Indeed, Appellants concede that they were threatened with a bad
faith claim by the plaintiff, Millennium Holdings, had they refused to settle.
Further, Certain Underwriters at Lloyd's London is currently
embroiled in yet another bad faith action in the Superior Court of the State
of California, County ofLos Angeles. In Case No. BC493509, claims have
arisen that the insurance company is again employing litigation tactics
designed to stall the resolution of the case and seek remuneration from its
policyholder. Veolia Transportation, Inc., a subsidiary of Connex Railroad
LLC, has alleged that Lloyd's has acted in bad faith and violated the implied
covenant of good faith and fair dealing in seeking a post-settlement
exclusion to deny coverage.5
4 See, John M. Sylvester, Max Louik, Policy Litigation Involving Claims Handling by
Resolute Management: 2015 Update, Insurance Coverage Litigation Committee CLE
Seminar (March 4-7, 2015), http://www.americanbar.org/content/dam/aba/
administrative/litigation/materials/20 15 _inscle_ materials/written_ materials/5 _3 _polic
yholder _litigation_ involving_ claims_ handling_ by _resolute_ management.authcheckd
am.pdf.
Daniel Siegal, Lloyd's Knocks Bad Faith Claim In $132M Train Crash Row, Law
360.com, (Aug. 25, 20 15), http://www.law360.com/insurance/articles/695197?n1 pk=
76390e5b-d6a5-4776-b91 c-8795b24a9112&utm source=news1etter&utm medium= - -
email&utm _ campaign=insurance.
10
nydocs 1-1 057516.1
Given Appellants' history to the contrary, this Court should
give little weight to their argument that they seek to encourage settlement
and discourage litigation.
Additionally, New York courts consistently have held that
insurance companies have no right to obtain reimbursement for voluntary
payments. Travelers Ins. Co. v. Nary Constr. Co., 184 Misc. 2d 366, 371
(Sup. Ct. Monroe County 2000). "Equitable subrogation is unavailable if
payments are made voluntarily." Berm. Trust Co. v. Ameropan Oil Corp.,
266 A.D.2d 251 (2nd Dep't 1999). See also, Cohn v. Rothman-Goodman
Mgmt. Corp., 155 A.D.2d 579 (2nd Dep't 1989) (doctrine of subrogation
applies when one party pays the debt of another under compulsion or
protection of self-interest, but the payment may not be voluntary); Restat. 1st
of Restitution, § 162, comment b (when a party discharges a lien or
obligation owed by another, and does so officiously, the discharging party is
not entitled to subrogation).
Appellants attempt to disclaim their own litigation history. An
entity that consistently refuses to settle should not be allowed to reverse
course and hail the merits of settlement and judicial economy when it suits
its purposes. Accordingly, this Court should dismiss this argument by
Appellants.
11
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III. AFFIRMANCE WILL NOT AFFECT HOW INSURANCE
COMPANIES DO BUSINESS IN NEW YORK
Appellants cry wolf that"( d]iminishing insurers' right to
subrogation from a non-insured will increase risk to insurers in New York,
which will incentivize them to raise premiums ... move their business to other
markets, or both." Appellants' Brief at p. 41. This scare tactic by
Appellants should be disregarded, as it ignores relevant law and facts.
First, ANP seeks affirmation of the longstanding anti-
subrogation rule.
The anti-subrogation rule prevents an insurer from asserting a
right of subrogation against its own insured if the defendant is
either the insured, a co-insured, or an additional insured under
the subrogating insurer's policy. Allowing subrogation in these
cases would compromise the special relationship between the
insured and the insurer.
22-141 Appleman on Insurance Law & Practice Archive § 141.2. Thus,
Appellants promise regarding a change in law is mistaken.
Secondly, that an affirmance would make insurance companies
flee the State ofNew York strains credulity. In 2015, fifty-five companies
in the Fortune 500 are headquartered in New York,6 the highest number of
any state. Among those corporations headquartered in New York are AIG,
6 Jill Hamburg Coplan, 5 States With The Most Fortune 500 Companies, Fortune (June
30, 2015), http:/lfortune.com/2015/06/30/states-most-fortune-500.
12
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Travelers, New York Life Insurance, and MetLife. This Court's ruling in
this case will not have the impact claimed by the Appellants.
Third, where will insurance companies move their businesses if
this Court affirms the anti-subrogation rule? Not Illinois, where "it is well
settled that an insurer may not subrogate against its own insured or any
person or entity who has the status of a co-insured under the insurance
policy." Chubb Ins. Co. v. DeChambre, 808 N.E.2d 37, 41 (Ill. App. Ct.
2004). Nor Virginia, where "[t]he anti-subrogation rule provides that an
insurance company may not seek indemnification from its insured."
Farmers Ins. Exch. v. Enter. Leasing Co.,708 S.E.2d 852, 856 (Va. 2011).
Similarly, not West Virginia/ Delaware,8 or Missouri9 would provide safe
havens for the insurance companies to pursue subrogation against their own
policyholders.
7
8
9
Norfolk S. Ry. Co. v. Westchester Fire Ins. Co., 999 F. Supp. 2d 906 (S.D. W.Va.
2014).
Lexington Ins. Co. v. Raboin, 712 A.2d 1011, 1015 (Del. Super. Ct.) aff'd, 723 A.2d
397 (Del. 1998) ("No right of subrogation exists, however, against the insured, co-
insured, or where the wrongdoer is an insured under the same policy.")
Sherwood Med. Co. v. B.P.S. Guard Servs., 882 S.W.2d 160, 162 (Mo. Ct. App.
1994) ("The no subrogation rule holds where an insurance company attempts to
recover, as a subrogee, from a coinsured generally covered under the policy, whose
negligent act occasioned the loss, the action must fail in the absence of design or
fraud on the part of the coinsured.") (internal quotations omitted).
13
nydocs 1-1 057516.1
The list could go on, but the point is simple-insurance
companies have long done business in New York under the rule that they
cannot recoup voluntary payments to insureds under a subrogation theory,
and they will continue to do so for the forseeable future. This baseless
rhetorical threat of an exodus of insurance companies from the State of New
York should be rejected by this Court.
14
nydocs 1-1057516.1
CONCLUSION
For the foregoing reasons amicus curiae United Policyholders
respectfully requests that this Court answer the certified questions in the
affirmative and hold that policyholders like ANP are protected by the anti-
subrogation rule, and an insurance company is not entitled to pursue
subrogation for a voluntary payment.
Dated: October 27, 2015
New York, New York
OF COUNSEL:
Amy Bach, Esq.
Executive Director
United Policyholders
381 Bush St., 8th Fl.
San Francisco, CA 94104
Tel: (415) 393-9990
Fax: (415) 677-4170
nydocs 1-1057516.1
Respectfully submitted,
By UJ
15
William G. Passannante, Esq.
John M. Leonard, Esq.
1251 Avenue ofthe Americas
New York, New York 10020
Tel: (212) 278-1000
Fax: (212) 278-1733
Attorneys for Amicus Curiae
United Policyholders