Dunkin Donut Case Summary

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PLAINTIFF’S MEMORANDUM IN OPPOSITION TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

FACTS AND BACKGROUND

This case arises from a November 14, 2010 fire, which damaged a Dunkin Donuts (the “Property”) owned and operated by the Plaintiffs. The Plaintiff’s had hired the Defendant to renovate the property. The fire occurred while the Property was closed for renovations, and the Defendant was in sole possession and control of the Property during the renovation. The fire originated at or near a gas-fired water heater that was located in a storage/utility closet at the Property. The Plaintiff asserts that the Defendant placed combustible materials near the hot water heater, which then caught fire. Accordingly, the Plaintiff seeks reimbursement of proceeds …show more content…

The Virginia Supreme Court has held that “the assured stands in the relation of trustee to the insurer to the extent of the sum paid, and he cannot even release the right of action, nor the action itself, if one has been commenced, so as to defeat the claimant of the insurer to reimbursement from the wrongdoer for the injury.” Brighthope R. Co. v. Rogers, 76 Va. 443, 446-47 (1881); see also 16 Couch on Insurance §§ 224:113, 224:179 (3d ed. 2013). Here, the Plaintiff plainly lacked any authority to release the claims of its insurer as subgrogee, nor could any such purported release actually operate to the Plaintiff’s insurer’s prejudice, if the Defendant had notice of the Plaintiff’s Insurer’s subrogation rights. See Rogers, 76 Va. at 446-47. The prior settlement agreement between the Plaintiff and Defendant clearly conveyed such notice to the Defendant. Accordingly, even if the settlement of Plaintiff’s counterclaim in the mechanic’s lien action precluded the Plaintiff from raising the claims at issue here, the settlement could not similarly preclude the Plaintiff’s Insurer from raising the claims as Plaintiff’s subrogee. Therefore, the Defendant has failed to meet its burden to show that the Plaintiff’s claims are precluded and the motion for summary judgment should be denied. See Scales, 261 Va. at

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