Cases

The Supreme Court of Washington this week declared a broad interpretation of the MADE WHOLE DOCTRINE (please see below).

“Subrogation is the right that one party has against a third party following the payment, in whole or in part, of a legal obligation that ought to have been met by such third party…Its common law foundation applies as an equitable doctrine the essential purpose of which is to provide for a proper allocation of payment responsibility…the doctrine of subrogation enables an insurer that has paid an insured’s loss pursuant to a policy…to recoup the payment from the party responsible for the loss.”

The court, quoting Professor Keeton’s Fourth Rule for allocating proceeds of a recovery from a third-party tortfeasor, stated “Out of the recovery from the third party the insured is to be reimbursed first, for the loss not covered by insurance, and the insurer is entitled to any remaining balance, up to a sum sufficient to reimburse the insurer fully, the insured being entitled to anything beyond that.”