D'Elia v. Arrow Products Inc
2:16-cv-00405
D.S.C.Jun 2, 2016Background
- Plaintiffs Bart and Jay D’Elias allege a defective water expansion tank distributed by Arrow caused flooding and $152,735.00 in property damage to their home.
- Universal North America Insurance Company paid the D’Elias $150,235.00 under their homeowner policy and thus holds a subrogation interest in any recovery.
- Universal executed an affidavit ratifying the D’Elias’ suit, waiving subrogation rights, and agreeing to be bound by the action’s outcome.
- Arrow moved to join Universal as a plaintiff under Federal Rules of Civil Procedure 17 and 19, arguing Universal is the real party in interest by virtue of partial subrogation.
- The parties and Universal agree joinder would be feasible and would not destroy diversity jurisdiction.
- The Court granted Arrow’s motion, ordering Universal joined as a plaintiff because Fourth Circuit precedent requires joinder of partial subrogees when feasible.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a partially subrogated insurer must be joined under Rules 17/19 | D’Elias: No; Universal ratified the suit, waived subrogation, and joinder is unnecessary and prejudicial (injects insurance into trial). | Arrow: Yes; Universal is a real party in interest and, upon timely motion, may be involuntarily joined as a plaintiff. | Court: Joined Universal — Fourth Circuit rule requires joinder of partial subrogees if feasible. |
Key Cases Cited
- Virginia Elec. & Power Co. v. Westinghouse Corp., 485 F.2d 78 (4th Cir. 1973) (partial-subrogee who does not destroy jurisdiction must be joined if feasible)
- Travelers Ins. Co. v. Riggs, 671 F.2d 810 (4th Cir. 1982) (reaffirming that partially subrogated insurer may be involuntarily joined if feasible)
- Jacobs Press, Inc. v. Hartford Steam Boiler Inspection & Ins. Co., 107 F.3d 866 (4th Cir.) (insurer-subrogee is real party in interest to extent of payment)
- Ga.-Pac. Corp. v. Ervin & Edwards Constr. Co., 891 F.2d 286 (4th Cir. 1989) (applying the circuit’s rule on joinder of subrogees)
- Edwards, Inc. v. Arlen Realty & Dev. Corp., 466 F. Supp. 505 (D.S.C. 1978) (district court compelled joinder of insurers despite prejudicial concerns; criticized Virginia Elec. rule but followed it)