Washington Court of Appeals holds that insurance company of a condominium association could not subrogate against unit owner's tenant

On September 20, 2011, the Washington Court of Appeals held that the insurer of a condominium association could not subrogate against a tenant of a unit owner to recover funds paid for a fire loss. Community Ass'n Underwriters of America, Inc. v. Kalles, 2011 WL 4357763 (Wash. App. 2011). The court reasoned that the tenant was presumed to be a coinsured of the landlord absent an express agreement to the contrary. In reaching this result, the court rejected the insurer’s argument that the presumption of coinsured status should not attach because the insurer issued its policy to the owners association and not to the unit owner that was in privity with the tenant. The Court of Appeals also held that the tenant was entitled to recovery of the attorney fees it had incurred in defending the lawsuit under Olympic Steamship v. Centennial Insurance Co.

Insurance Coverage and Ligitagation