Ram Mutual Insurance Co. v. Rohde
2012 Minn. LEXIS 442
Minn.2012Background
- RAM Mutual Insurance pays JD Property’s claim for water damage caused at Rohde’s leased premises.
- RAM sues Rohde, a negligent tenant, for subrogation on contract, negligence, and promissory estoppel theories.
- District court granted summary judgment relying on Bruggeman, barring RAM’s subrogation against Rohde as co-insured.
- Court of Appeals affirmed; RAM granted review by Minnesota Supreme Court.
- Lease contains insurance-related provisions but no express obligation on Rohde to insure against water damage.
- Court adopts a case-by-case approach to subrogation in landlord-tenant context, overruling Bruggeman as default rule and remanding for application of case-by-case framework.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Bruggeman control subrogation here? | RAM argues Bruggeman is inapplicable due to express lease terms. | Rohde contends Bruggeman bars subrogation as co-insured. | Bruggeman rule rejected; case-by-case framework applies. |
| What framework should govern insurer vs. tenant subrogation in this context? | RAM supports case-by-case approach to reflect contracts and equities. | Rohde favors a consistent Bruggeman-like rule determining co-insurance. | Court adopts case-by-case approach to determine reasonable expectations and rights. |
| What guidance should remand provide for applying case-by-case analysis? | Remand to assess lease language and evidence of expectations to permit subrogation where appropriate. | N/A (Rohde's position rests on Bruggeman and co-insured concept). | Remand to allow district court to apply case-by-case framework with contract interpretation and equity considerations. |
Key Cases Cited
- Bruggeman, 505 N.W.2d 87 (Minn.App.1993) (no-subrogation against co-insured landlord-tenant default rule; case rejected)
- Osborne v. Chapman, 574 N.W.2d 64 (Minn.1998) (co-insureds not extended to lost rents; distinguishes property loss context)
- Rausch v. Allstate Ins. Co., 882 A.2d 801 (Md.2005) (case-by-case approach favored; considers lease expectations and equity)
- Am. Family Mut. Ins. Co. v. Auto-Owners Ins. Co., 757 N.W.2d 584 (S.D.2008) (case-by-case framework applied in landlord-tenant subrogation)
- Medica, Inc. v. Atl. Mut. Ins. Co., 566 N.W.2d 74 (Minn.1997) (subrogation arises to prevent unjust enrichment; equity-based)
- Dix Mut. Ins. Co. v. LaFramboise, 149 Ill.2d 314 (Ill.1992) (equitable considerations in subrogation; balancing equities)