General Release Does Not Extinguish Subro Rights

Insureds’ jewelry burglarized, September 2008. Insurer, Unitrin, promptly pays a portion of claim. October 2008, Unitrin sends a letter to building owner and management company notifying them of a lien interest. Insureds then asserted a claim against the building for  balance not covered by Unitrin. Building’s insurer, OneBeacon, subsequently paid the balance in exchange for a  General Release, dated July 1, 2009. Unitrin subrogates against Building; building produces release as a bar. Court rules: A general release can prejudice the rights of an insurance subrogee by extinguishing the right of subrogration; but, a party cannot extinguish another’s right to subrogation where that party has knowledge about the other’s right to subrogation.

Unitrin Auto & Home Ins. Co. v Rudin Mgt. Co., Inc.

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