Commercial Division Blog

Posted: June 3, 2015 / Categories Commercial, Insurance

Plaintiffs Whose Insurance Claim Was Paid Not Entitled to Proceeds of Subrogation Action

On May 26, 2015, the First Department issued a decision in Ehrlich v. American Intl. Group, 2015 NY Slip Op. 04411, holding that plaintiffs who "received the full value of their claim under [an] insurance policy . . . are not entitled to any of the proceeds of the settlement of the insurer's subrogation action against the third-party tortfeasor to recover their uninsured losses, i.e. their deductible and the loss due to depreciation" because "[p]laintiffs failed to allege that they commenced an action directly against the tortfeasor and that the tortfeasor lacked the funds to compensate them for these uninsured losses."