COA remands subrogation claim for fire damages

March 7, 2018

The Boone Superior Court must reconsider a subrogation claim arising from a fire on leased property after the Indiana Court of Appeals remanded the case for further examination of whether the property owners’ insurer has the right to seek damages from the tenants who caused the fire.

In June 2013, Frank and Leah Harker leased a Boone County property to Nicole and Michael Riggs, who shared the property with Dustin Blevins. Two years later, the property sustained nearly $43,000 in fire damage after Blevins allegedly left burning incense unattended.

The property was insured by Hoosier Insurance Company, which paid the full amount of damages to or on behalf of the Harkers for repairs. The insurance company then filed a damages complaint against the Riggses, alleging they had breached the lease.

The Riggses responded with a Trial Rule 12(B)(6) motion to dismiss, which the Boone Superior Court granted. The insurance company appealed in Hoosier Insurance Company v. Nicole R. Riggs and Michael J. Riggs, 06A01-1708-CT-1969, and the Indiana Court of Appeals reversed the dismissal Wednesday.

The crux of Hoosier Insurance’s argument was that because it paid damages to or on behalf of the Harkers, it had become subrogated to the Harkers’ landlord rights and, thus, was entitled to seek damages from the Riggses. Judge Michael Barnes — relying on the case-by-case approach to analyzing subrogation claims advocated in LBM Realty, LLC v. Mannia, 19 N.E.3d 379, 386 (Ind. Ct. App. 2014) — wrote for the unanimous appellate panel that it did not appear “to a certainty of on the face of the complaint that Hoosier is not entitled to any relief ... .”

There are two main questions that must be answered to decide the case, Barnes said: whether the lease explains who should bear the risk of fire loss, and whether the Harkers’ right to seek damages inures to Hoosier Insurance. Thus, on remand, the appellate court instructed the trial court to analyze the lease, “weigh and balance the equities” and determine the Riggses’ liability.


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