Insurance Companies Filing Subrogation Claims
Thursday, March 29th, 2018
An insurance company, asserting a subrogation action on behalf of its insured (who were homeowners), sued a contractor in connection with a construction project that the contractor performed on the Homeowners’ house located in Robertson County, Tennessee. The contractor filed a motion for summary judgment alleging that the suit was barred by the statute of repose contained in Tenn. Code Ann. § 28-3-202. After a hearing on the motion for summary judgment, the Circuit Court for Robertson County entered its order granting summary judgment to the contractor after finding and holding, inter alia, that the insurance company’s claim was for subrogation, the claim was subject to the four year statute of repose contained in Tenn. Code Ann. § 28-3-202, and as the claim had been filed more than four years after substantial completion of the work, the insurer’s claim was barred. The Court of Appeals affirmed and held that the claim was one for subrogation asserting a right pursuant to an alleged contract between the Homeowners and the contractor, that the insurer failed to show the existence of any contract between the Homeowners and the contractor, and that even if a contract between the Homeowners and contractor did exist, then coverage for such a contract would be excluded under the insurance policy between the insurer and the Homeowners. The case was Tennessee Farmers Mutual Insurance Company v. Southern Damage Appraisals, LLC.