Type of Case: An insurance subrogation action

Background: A 10-year-old car caught fire allegedly due to a defect in design or manufacture and was declared a total loss by its insurer.

Suit Filed: The insurance carrier sought recovery from the automobile manufacturer for the amount it paid to the car’s owner.

Client’s Concern: The automobile manufacturer wanted to discourage future insurance subrogation lawsuits by aggressively contesting this claim.

Action Strategy: Aaronson Rappaport moved to dismiss the case under the “economic loss doctrine,” which holds that a remote purchaser may not use a product liability theory to recover for property damage to the item purchased. This was a novel approach because this principle had not been applied to insurers in the past.

Result: In a decisive ruling in favor of Aaronson Rappaport’s client, the judge dismissed the case. This decision will serve to expand the “economic loss doctrine” to subrogation claims.

600 Third Avenue
New York, NY 10016

390 Old Country Road
Garden City, NY 11530