92 N.E.3d 685
Ind. Ct. App.2018Background
- The Harkers owned a rental property insured by Hoosier; they leased it to Nicole and Michael Riggs in June 2013.
- Dustin Blevins lived on the premises during the Riggses’ lease. On April 22, 2015 a fire (allegedly from unattended incense) caused $42,497.27 in damage.
- The Lease required tenants to obtain fire/extended coverage, list the Harkers as additional insureds, obtain renter’s insurance for personal property, and to indemnify the Harkers for third-party claims arising from the tenant’s occupancy.
- Hoosier paid the $42,497.27 to or on behalf of the Harkers and then sued the Riggses (breach of contract/subrogation) alleging the Riggses breached the Lease.
- The Riggses moved to dismiss under T.R. 12(B)(6), arguing Hoosier was not the real party in interest under T.R. 17(A) and could not pursue the landlord’s breach-of-lease claim. The trial court granted dismissal; the Court of Appeals reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an insurer that pays a landlord’s loss may, by subrogation, stand in the landlord’s shoes and sue the tenant for breach of lease | Hoosier: payment to insured subrogates Hoosier to the Harkers’ rights under the lease, making Hoosier a real party in interest entitled to sue | Riggses: Hoosier is not the landlord or real party in interest under T.R. 17(A); without being named landlord, Hoosier cannot pursue breach-of-contract claims | Reversed dismissal — it is not certain on the complaint face that Hoosier lacks relief; subrogation may apply and the trial court must examine the lease and equities (case-by-case) |
Key Cases Cited
- Erie Ins. Co. v. George, [citation="681 N.E.2d 183"] (Ind. 1997) (defines subrogation as equitable relief when one pays another’s debt not as a volunteer)
- LBM Realty, LLC v. Mannia, [citation="19 N.E.3d 379"] (Ind. Ct. App. 2014) (advocates case-by-case approach to landlord-insurer subrogation; analyze lease and parties’ expectations)
- LBM Realty, LLC v. Mannia, [citation="981 N.E.2d 569"] (Ind. Ct. App. 2012) (same line of authority applying lease terms and expectations to subrogation claims)
- RAM Mut. Ins. Co. v. Rohde, [citation="820 N.W.2d 1"] (Minn. 2012) (subrogation requires weighing equitable principles and parties’ reasonable expectations)
- Dix Mut. Ins. Co. v. LaFramboise, [citation="597 N.E.2d 622"] (Ill. 1992) (courts should consider equities and lease provisions in subrogation disputes)