The Office of General Counsel issued the following informal opinion on October 12, 2001, representing the position of the New York State Insurance Department.
RE: Statute of Limitations in a Subrogation Suit Involving Property Damage Caused by a Fire.
What is the statute of limitations in a subrogation suit brought by an insurance company against a third party tortfeasor for negligently causing injury to property by a fire?
An insurers subrogation suit is subject to the same statute of limitations that would apply if the insured had brought a suit against the third party tortfeasor. Therefore, the applicable statute of limitations for an action to recover for injury to property is three years from the date of the injury, which in this case is the date of the fire. N.Y. C.P.L.R § 214(4)(McKinney 2000).
The inquirer stated that more than three years ago, John Doe had a fire in his apartment, which was located on the third floor of a building. John Doe settled the case with his landlords insurance company. The insurance company for a store located in a neighboring building, which was also damaged by the fire, intends to bring a subrogation suit against John Doe on the ground that he negligently caused the fire by failing to turn off an iron. The inquirer would like to know whether this subrogation suit is barred by the statute of limitations, since the fire occurred more than three years ago.
It is well settled that an insurer which is subrogated to the rights of its insured against a third-party tortfeasor takes no rights other than the rights of the subrogor insured. Winkelmann v. Excelsior Ins. Co., 85 N.Y.2d 577, 650 N.E.2d 841, 626 N.Y.S.2d 994 (1995); Seven Sixty Travel, Inc. v. American Motorists Ins. Co., 98 Misc. 2d 509, 414 N.Y.S.2d 254 (Sup. Ct. Albany County 1979). Thus, the insurer is subject to all the defenses which the third party tortfeasor could have asserted against the insured, including the defense of the statute of limitations. Seven Sixty Travel, 414 N.Y.S.2d at 256-257. The statute of limitations for a subrogation action is the same statute of limitations, measured from the date of the injury, that would apply to the insureds suit against the third-party tortfeasor. Nationwide Mut. Ins. Co. v. Schwartz, 172 Misc. 2d 503, 660 N.Y.S.2d 623 (Sup. Ct. New York County 1997).
Based upon the limited facts provided, this case would be characterized as a tort action to recover for negligent injury to property, which is governed by a three year statute of limitations, measured from the date of the injury. N.Y. C.P.L.R. § 214(4) (McKinney 2000). Therefore, the insurers subrogation suit would be barred if it sued more than three years after the date of the fire.
For further information, you may contact Attorney Pascale Joasil at the New York City office.