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Property Subrogation

How to prevent your California property subrogation case from getting too hot

By November 6, 2019November 22nd, 2019No Comments

When I’m not in court, I often spend a majority of my day as a California subrogation attorney in my office peering over stacks of paper – pleadings, discovery, motions, medical records (you get the idea). On some of my favorite days on the job, though, you’ll find me in a hard hat and my trusty steel-toed boots sifting through an accident scene trying to figure out what exactly happened to the site, and why. This is when I’m in what I love to call my “Veronica Mars” mode. I get to put on my investigating attorney hat and sift through the aftermath of a property loss – looking for clues to help me prove what happened, and who is to blame.

I happen to handle a lot of property loss cases involving fires that originate from the malfunction of an ordinary household product. Several of these have been the result of a microwave failure – they’re more common than you think – or are probably comfortable thinking about. When I get that call involving a property fire, the first thing I do is ensure the scene is secure and preserved, and then I grab my investigator gear and get to the scene as quickly as I can.

Preserving  the scene

Securing the scene and timing are essential in these situations. This is because any change in the scene can destroy your evidence. Trust me. Don’t let it happen to you. There will be a lot of well meaning people trying to get in to the property to do their jobs as quickly as possible. While this is great, and these people are appreciated, they can inadvertently annihilate any chance you have at subrogation recovery without meaning to. When you control the scene, you control your recovery potential.

So many things can happen to a loss site if you’re not proactive in stabilizing and preserving the scene. If you always keep in mind the basic “who, what, why” questions, it can help you better evaluate the best course of action for the scene. This includes the need for estimation for repair, clean up, and liability investigation. You have to make sure you’re aware of who is at the scene, why and what they are doing. Keeping track of this in a quick notes section is also extremely helpful when arguing your subrogation case because you can use that information to show the scene was not altered.

Preserving the scene also requires putting all potential liable parties on notice that they may be liable, and giving them the opportunity to inspect the scene themselves. This can be time consuming, and difficult when you are trying to mitigate damages and get all repairs completed as quickly as possible. If you don’t do this, however, those potentially liable parties will use your failure to provide them access to the scene before it is altered as evidence that the scene was not handled properly, and attempt to discredit your subrogation claim against them.

Securing the failed product

Most importantly, you have to get a hold of that microwave. Physically be in possession of the evidence and your subrogation recovery potential increases exponentially. As the property insurance carrier, our subrogation rights come from standing in the shoes of our insured. In these types of cases our insured is usually the owner of the property. When that is the case, it is a simple task of talking to the insured and our investigators to make sure the product is secured and taken into custody to be stored as evidence. This also makes the product easily available for further inspection and testing later on. If the insured isn’t the owner of the product, obtaining control of the product is more difficult, but can be done with some quick work and investigation into who owns the product.

A case study

Let’s look at a recent property case involving a microwave I was involved in, and how good old-fashioned investigation helped my client recoup 95% of their total damages.

The case involved a fire that started with a microwave in a large two story building. The event caused extensive fire damage, and the bottom floor had to be fully restored. The cause and origin of the damage clearly pointed to the area of the microwave, and since I’ve seen this exact scenario before, I moved to get control of the microwave right away.

It was very clear to my expert and cause and origin investigators that the fire must have originated with the microwave. Finding out what caused the microwave to malfunction, however, was a different hurdle to get over. I had my inspector inspect the subject microwave, and we acquired an exemplar unit to compare a new model with the damaged one. We took the damaged microwave apart piece by piece inspecting, xraying and documenting the state of that piece compared to the same piece in the exemplar machine – it took us an entire day.

Just when we thought we wouldn’t be able to find the exact issue that caused the malfunction and ultimately the fire: voila! We found a piece in the subject microwave that looked odd, a piece that did not match the exemplar and didn’t fit the specifications outlined in the microwave’s manual. In some cases of microwave failure, the issue stems from a rotator defect in the motor controlling the movement of the fan belt. When power is connected to the unit, and the product is faulty, that motor can “tell” the fan belt to run and run, never fully catching and running properly, until it finally overheats and catches fire. That’s exactly what happened in this case.

So, we sued the usual suspects for a product liability case: the designer, manufacturer and the supplier of the product – essentially anyone that benefited from the sale of the microwave. They were put on notice that we believed their product was defective and caused the fire and our damages. A claim was open and the defendants began their investigation into the issue. Case closed and they pay us our damages right?

Not quite.

Listen to your insureds

One of the most critical skills I have acquired as an attorney is to listen to the insured. They are always the ones with the most information, even if they don’t know it. I try to keep constant communication open with the insured, and those present at the scene prior to the incident. Something the insureds told me in this case really caught my attention. Before the fire, they had noticed a problem with the microwave and called a repair technician. The technician came out, inspected the machine and told the insured he would have to order a part and would come back to install it when it was in. According to the insured, he was in and out in only a few minutes and provided no further instruction, direction or warning. He also left the machine plugged in.

Between the time the technician looked at the microwave and the delivery of the new part, the fire occurred. Based on this information we had ourselves another defendant, the maintenance company that performed the inspection on the product. The maintenance company immediately contended they unplugged the machine and told the insured not to use it. Between the two conflicting stories no one ever agreed on the steps taken by the maintenance company. Having that open contact with the insured, however, gave us the ability to have our understanding and “story” of how the incident occurred. The insured was very credible and testified very well, ultimately helping us achieve a great recovery.

Of course, I would rather that products stop causing fires in peoples’ homes, but I was satisfied that for this case the insured got their home back to its pre-fire condition, and I was able to get my client a large recovery.

The keys to remember in pursuing a property product defect case in California:

  • Take control. Make that scene your scene and always know who is at the scene, why and what they are doing and document it. Don’t let someone else’s job ruin your chances at recovery.
  • Get dirty. Sift through the wreckage – preserve the scene, and get the information and physical documentation you need. If you don’t know what you need, talk with your investigator, expert and subrogation attorney.
  • Get control of the subject product. Try not to let someone hold it for you. Once the physical evidence is gone there is no getting it back.
  • Hire a good team of cause and origin inspectors, experts and attorneys that you trust and can help get you the pieces you need to put together your case.
  • Keep your ears open – listen to the insured.

Let me do the detective work

I’ve been successful in recouping damages not just in microwave failures, but also for refrigerators, toasters, ovens and pretty much any failure-prone appliance. I’m always happy to talk property product defect subrogation, and property and workers’ compensation subrogation in general. Give me a call at 619-525-7626.







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