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ANTISUBROGATION RULE DOES NOT APPLY TO A PARTY NOT COVERED BY THE RELEVANT POLICY.

The Court of Appeals, in a full-fledged opinion by Judge Abdus-Salaam, reversing the Appellate Division, re: claims stemming from lead paint exposure, determined the antisubrogation rule did not apply to a party, ANP, which was not covered by the relevant policy:

… [T]he antisubrogation rule is an exception to the right of subrogation … . Under that rule, “an 'insurer has no right of subrogation against its own insured for a claim arising from the very risk for which the insured was covered . . . even where the insured has expressly agreed to indemnify the party from whom the insurer's rights are derived'” … . In effect, “an insurer may not step into the shoes of its insured to sue a third-party tortfeasor . . . for damages arising from the same risk covered by the policy” … , even where there is an express subrogation agreement … . The two primary purposes of the antisubrogation rule are to avoid “a conflict of interest that would undercut the insurer's incentive to provide an insured with a vigorous defense” and “to prohibit an insurer from passing its loss to its own insured” … .  * * *

The antisubrogation rule … requires a showing that the party the insurer is seeking to enforce its right of subrogation against is its insured, an additional insured, or a party who is intended to be covered by the insurance policy in some other way … . Here, as recognized by the courts below, ANP and its predecessor were not insured under the relevant insurance policies. … Thus, the principal element for application of the antisubrogation rule — that the insurer seeks to enforce its right of subrogation against its own insured, additional insured, or a party intended to be covered by the insurance policy — is absent. Millennium Holdings LLC v Glidden Co., 2016 NY Slip Op 03543, CtApp 5-5-16

INSURANCE LAW (INSURANCE LAW, ANTISUBROGATION RULE DOES NOT APPLY TO A PARTY NOT COVERED BY THE RELEVANT POLICY)/SUBROGATION (INSURANCE LAW, ANTISUBROGATION RULE DOES NOT APPLY TO A PARTY NOT COVERED BY THE RELEVANT POLICY)/ANITSUBROGATION RULE  (INSURANCE LAW,  ANTISUBROGATION RULE DOES NOT APPLY TO A PARTY NOT COVERED BY THE RELEVANT POLICY)

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