A note on subrogation.
There are two types of subrogation recognized in Florida: (1) conventional subrogation; and (2) equitable subrogation.
“‘Conventional subrogation arises or flows from a contract between the parties establishing an agreement that the party paying the debt will have the rights and remedies of the original creditor.’” Certain Underwriters at Lloyd’s, London a/s/o Restoration Hardware, Inc. v. Crisco, Commercial Industrial Roof Services Company, 2025 WL 712060, *2 (M.D.Fla. 2025) (citation omitted).
When pursuing a conventional subrogation claim, the subrogee needs to identify and substantiate the contract “‘establishing an agreement that the party paying the debt [subrogee] will have the rights and remedies of the original creditor [subrogor].’” Id.
This would be the circumstance of an insurance carrier pursuing subrogation pursuant to an insurance policy (i.e., a contract).
“‘Equitable subrogation is generally appropriate where: (1) the subrogee made the payment to protect his or her own interest, (2) the subrogee did not act as a volunteer, (3) the subrogee was not primarily liable for the debt, (4) the subrogee paid off the entire debt, and (5) subrogation would not work any injustice to the rights of a third party.’ When seeking to sue under equitable subrogation, the subrogee…is required to establish all five elements.” Crisco, Commercial Industrial Roof Services Company, supra, at *2 (citations omitted).
When pursuing equitable subrogation, the subrogee needs to identify and substantiate that it paid the entire debt of the subrogor. Id.
In Crisco, Commercial Industrial Roof Services Company, the trial court dealt with cross motions for summary judgment. The case involved a property insurance carrier pursuing subrogation against a roofer due to flooding damage caused to the insured. As a threshold question, the trial court noted that the insurer failed to identify and substantiate its basis of subrogation. This threshold question is important because, as the trial court noted, if the insurer fails to prove this at trial the defendant roofing company would be entitled to a motion for directed verdict. Now, while conventional subrogation should be the basis based on the property insurer’s insurance policy/contract with its insured, the insurer simply relied on statements of subrogation from its lawyer. There was no evidence to support the subrogation basis. The trial court maintained statements by a party’s counsel in motions are not evidence to support that a party can bring a claim as a subrogee. See Crisco, Commercial Industrial Roof Services Company, supra, at *3.
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