When an insurer pursues a subrogation claim, can the defendant rely on the insureds' factually deficient discovery responses in a motion for summary judgment? The court in Great American Ins. Co. v. Gordon Trucking, Inc., F053336 (Cal. Ct. App. July 29, 2008) held the defendant could not rely on the insureds' factually deficient discovery responses.
A fire originated from defendant's truck and spread to a truck owned by plaintiff's insureds, the Gandys. Both vehicles were damaged. Great American covered the Gandy's damages and was subrogated to pursue an action against defendant for general negligence in the maintenance and upkeep of defendant's truck.
Defendant moved for summary judgment, asserting it did not breach any duty owed to the Gandys and there was no causal connection between the maintenance of its truck and the fire. Defendant relied on factually devoid discovery responses of the Gandys, not on discovery responses of Great American. The trial court ruled that because Great American stood in the shoes of its insureds, the Gandy's discovery responses could be used against Great American. Defendant's motion for summary judgment was granted.
On appeal, the court noted that because subrogation rights are purely derivative, an insurer cannot acquire anything by subrogation to which the insured has no right nor claim any right the insured does not have. When, however, the insured is asked for facts supporting his allegations regarding matters not within his personal knowledge, there is no basis for binding the insurer to that representation or factually devoid answer. The insurer should be allowed to conduct its own investigation and discovery, and make its own representations about the facts its learns. To the extent the Gandys' interrogatory responses were factually deficient, they could not be used by defendant to prove that Great American lacked facts or evidence to support its claims. Consequently, the judgment in favor of defendant was reversed with directions to vacate the order granting summary judgment.
Hawai`i also recognizes that an insured may affect its insurer's subrogation rights because they are derivative, and the insurer steps into the shoes of the insured. State Farm Fire v. State Farm Mut. Auto., 90 Hawai`i 315, 329 (1999). Whether the insurer, in pursuing a subrogation claim, would be bound by the insureds' deficient discovery responses has not yet been addressed by Hawai`i courts, however.
