From the Sperling Case Files: A Matter of Subrogation — Insurance Company v. Homebuilder

It was the spring of 2012 and one southern California family was living its American dream. A new house complete with all of the comforts of home including a new tankless water heater! (insert suspenseful music right here). Now the heated water was supposed to remain on the INSIDE of the unit and if that would’ve happened, everything would’ve been fine.

But, the FLOOD was coming and no one could stop it. As they do, the insurance company stepped in to help clean up the mess, which ended up being about a $15K matter for the courts between the insurance company and the homebuilder. Fairly routine, right?

Well, due to a fancy legal term called “subrogation” (which is when one person or party stands in the place of another), this matter became much more complicated. Subrogation issues surface when a person has damages and someone other than the person or party at fault pays for all or some of the damages. By definition, a subrogation claim allows the innocent paying party, also known as a “collateral source,” to stand in the shoes of the injured party or party with damages.) In this case, the insurance company stepped in on behalf of the insured in their legal battle with the home builder. Everyone good?

This matter dragged on for many months (as they tend to do) and a collection agency working on the case decide to call in their “ace in the hole,” Dean Sperling Law to finally get this matter resolved. Sperling acted quickly through many landmines including the privacy issues involved in this subrogation matter—and got the case in front of a judge for mediation.

The moral of our story is that a simple $15K lawsuit ended up costing more than $75K in legal fees and should’ve (could’ve) been settled MUCH earlier. As Dean often says, it is sometimes less expensive (and better) to settle a matter like this than go to trial. When it comes to YOUR business, when there’s even a hint of legal action, get Dean involved early and he’ll work to resolve YOUR matter with YOUR best interests in mind.