February 2021 Subrogation Newsletter – Texas Winter Storm Special Edition

Successful subrogation against power companies is not a given. The Texas Supreme Court is currently reviewing whether ERCOT will be granted governmental immunity. The potential exposure from the losses sustained by property owners as a result of power outages will be in the hundreds of millions of dollars. The Texas Supreme Court ruling will have overreaching implications for Texas residents and their insurance companies. A favorable ruling will open the door for subrogation claims to proceed forward. An unfavorable ruling will shut that door completely. Given the six-month notice requirement, companies will need to act fast in putting ERCOT on notice of their claims, so as to protect any potential right they might have in the future.

All too often insurance claims professionals assume that cold weather in a southern climate is an “Act of God”, excusing any third party responsible for not protecting the home from the foreseeable flooding. In Texas, insurance claims resulting from water damage from frozen pipes alone could be in the tens of millions of dollars. Ice on the roads does not excuse drivers from exercising caution and will also lead to tens of millions of dollars in property damage claims. Plumbers will be in high demand and homeowner insurance claims will certainly be on the rise. While frozen water itself may be an act of nature, care should be taken to investigate what caused the water to freeze. Good investigation may reveal a liable third party and subrogation may be available.

Injury and workers’ compensation cases involving slips and falls on snow and ice during winter in America’s northern states, and southern states this year, continue to be a perplexing subrogation puzzle for insurance claims and subrogation professionals. During the winter months, our office sees a flood of cases involving slips and falls on ice, snow, and slush during winter conditions. It is important to understand when and how liability attaches in such cases – and when it does not.

Matthiesen, Wickert & Lehrer, S.C. (“MWL”) is pleased to welcome Matthew M. Spolsky, a new litigation associate, to the firm. Matt has been employed with MWL for the past two and a half years, serving as a hearing representative in our California office. He studied for and took the difficult California State Bar Exam while working at MWL and was sworn in on January 15, 2021. Matt brings with him a wealth of administrative workers’ comp experience with the W.C.A.B. and will now be handling additional subrogation cases throughout California. Matt’s practice will focus on workers’ comp lien matters, property and casualty, workers’ comp, and auto subrogation cases throughout California and across the country. His understanding of the workers’ comp case in chief will provide welcome assistance to the subrogation practice here at MWL.

California is one of the most complicated states when it comes to workers’ comp subrogation. In California, workers’ comp is mandatory for all employers, even if the company has one employee. We will discuss the many nuances of California workers’ comp subrogation, including statutory rights, who can bring a third-party action, notice requirements, when to intervene, allocation of third-party recovery, how employer negligence effects allocation, Exclusive Remedy Rule, and many other issues affecting subrogation. This webinar will be beneficial to claims professional in all levels of experience who have subrogation responsibilities in the Golden State.