Westminster American v. Bond, A.
2023 Pa. Super. 272
Pa. Super. Ct.2023Background
- Westminster American Insurance Company (as subrogee of Androulla M. Tofalli) sought to pursue a subrogation claim against tenants (Amy S. Bond a/k/a Amy S. Safin, t/a Blondie's Salon) after a fire, allegedly caused by tenants' negligence, damaged the landlord's property.
- The leases in question did not specifically require the landlord to obtain fire insurance for the premises, nor did they identify tenants as co-insureds on any landlord policy.
- The trial court permitted the insurer’s subrogation claim, applying Pennsylvania’s case-by-case approach to determine the parties’ reasonable expectations based on the lease and insurance policy.
- On appeal, the Superior Court panel affirmed, holding that absent a lease provision obligating the landlord to obtain fire insurance, the tenants were not implied co-insureds and thus the insurer could pursue subrogation.
- The concurring opinion expressed concerns about the clarity and predictability of Pennsylvania’s current case-by-case subrogation analysis and suggested that an en banc court or the Supreme Court should review the issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May a landlord’s insurer bring a subrogation claim against tenants for fire damage caused by the tenants’ negligence when the lease is silent/ambiguous about fire insurance? | Westminster: The terms of the lease required the landlord to maintain fire insurance, thus tenants are implied co-insureds, barring subrogation. | Bond: Lease did not obligate landlord to insure; tenants not co-insured; subrogation should be allowed under PA law. | Court held subrogation is allowed unless lease expressly or impliedly makes tenant a co-insured; PA applies a case-by-case analysis based on lease and policy terms. |
Key Cases Cited
- Joella v. Cole, 221 A.3d 674 (Pa. Super. 2019) (explains case-by-case, pro-subrogation, and anti-subrogation (Sutton Rule) approaches; adopts case-by-case for PA)
- Remy v. Michael D's Carpet Outlets, 571 A.2d 446 (Pa. Super. 1990) (applies case-by-case approach; bars subrogation only if lease requires landlord to maintain fire insurance for tenant’s benefit)
- DiLullo v. Joseph, 792 A.2d 819 (Conn. 2002) (warns of economic waste from duplicative insurance in subrogation context)