For years, trial lawyers have been threatening and filing class action lawsuits in multiple states in an effort to thwart their arch nemesis—subrogation. States such as Montana have gone so far as to hold that it is the burden of the subrogated insurance company to determine and prove that its insured has been fully made whole before it can take any action toward recovering its subrogated insurance payments.
A growing list of states such as Montana, Washington, Arkansas, and New York have seen class action and bad faith lawsuits filed simply because an insurance company made a subrogation demand or took some efforts to recover its subrogated interest before it was established that its insured had been made whole for all of its damages. Trial lawyers in other states have undertaken efforts to flip those state into anti-subrogation paradises by attempting the same thing. Connecticut is one such state.
Connecticut is a state in which, until recently, the Made Whole Doctrine had not been applied outside the context of a bankruptcy proceeding in Connecticut. However, in 2004, the Connecticut Supreme Court gave us a clue as to how it would treat this issue in the future. That court held that while a right of true contractual subrogation may be provided for in a contract, the exercise of that right will have its basis in general principles in equity, rather than in contract, which will be treated as merely a declaration of the principles of law already existing. However, the discussion in Wasko v. Manella regarding the Made Whole Doctrine was considered dicta and wasn’t binding. In 2013, however, the Connecticut Supreme Court broadly adopted the equitable Made Whole Doctrine in that state for the first time.
Nonetheless, Connecticut case law intimates that the Made Whole Doctrine can be overridden by contract terms in a plan or policy and the courts will allow these contract terms to override the application of this equitable doctrine. In an action for reimbursement of monies paid out on policy of collision insurance, the court held that the insurer had the burden of proving that the judgment recovered by the insured included compensation for property damage and that as a result the insurer was entitled to recover, either on unjust enrichment theory or on theory that insured had violated his contract by refusing to cooperate with the insurer in effecting recovery.
In 2020, Connecticut trial lawyers tried to flip their state into an anti-subrogation state. In Davis v. Adeoye, Erin Davis was in an accident with Christine Adeoye and filed suit against Adeoye. Davis’ auto insurer, Liberty Mutual, had paid repair costs for Davis’ vehicle, but the lawsuit claimed that Davis had suffered diminution in value to her vehicle, loss of use, out of pocket expenses, inconvenience, lost time, and loss of life’s enjoyment and annoyance. Therefore, the lawsuit also named Liberty Mutual, alleging “wrongful subrogation” by Liberty for making a property subrogation recover from Adeoye’s liability carrier before Davis was made whole.
The court rejected any notion that Connecticut recognized a tort for “negligent subrogation”, acknowledging that the Made Whole Doctrine does not prevent an auto insurer who has paid for repairs under a policy from pursuing its subrogation rights until after the plaintiff has fully recovered from the tortfeasors. Rather, the court indicated that the Made Whole Doctrine merely stands for the proposition that an insured enjoys a priority of recovery in a scenario where the total amount of damages awarded is insufficient to satisfy both an insured’s claim and an insurer’s subrogation claim.
In 2011, the 2nd Circuit Court of Appeals, interpreting Connecticut law, had held that boilerplate subrogation language in a policy does not displace the Make Whole Doctrine in Connecticut. That court stated that an insurer’s right of equitable subrogation is subject to the Made Whole Doctrine, which provides that the insurer may enforce its subrogation rights only after the insured has been fully compensated for all of its loss. The 2nd Circuit held that when insurance coverage compensates a policyholder for less than her full loss, the insurer must first use any recovery from a third party to compensate the policyholder for the remainder of its loss before keeping anything for itself. On certified question from the Court of Appeals, the Connecticut Supreme Court, in a footnote, clarified that the Made Whole Doctrine is merely the default rule and that parties are free to provide differently in their insurance contract, provided they do so expressly.
The Superior Court ruling in Davis v. Adeoye appears to retain made whole sanity in a state which has only recently recognized the limited application of the Made Whole Doctrine. For a chart which details the made whole law in all 50 states, see HERE.
 In re DeLucia, 261 B.R. 561 (Banc. Ct. 2001).
 Wasko v. Manella, 849 A.2d 777 (Conn. 2004).
 Fireman’s Fund Ins. Co. v. TD Banknorth Ins. Agency, Inc., 72 A.2d 36 (Conn. 2013).
 Automobile Ins. Co. of Hartford v. Conlon, 216 A.2d 828, 829 (Conn. 1966).
 Davis v. Adeoye, 2022 WL 16570653 (Conn. Super. 2022).
 The court cited decisions from other states, including Winkelmann v. Excelsior Ins. Co., 85 N.Y.2d 577, 584, 650 N.E.2d 841, 626 N.Y.S.2d 994 (1995) (holding that insurer has no legal obligation to hold its subrogation claim against tortfeasor in abeyance until after insureds resolved their claims).
 Fireman’s Fund Ins. Co. v. TD Banknorth Ins. Agency Inc., 644 F.3d 166 (2nd Cir. 2011).
If you have questions regarding subrogation or how the equitable Made Whole Doctrine might affect your rights of recovery, contact Gary Wickert at [email protected].
Gary L. Wickert is an insurance trial lawyer and partner with the law firm of Matthiesen, Wickert & Lehrer, S.C. Gary has nearly four decades of litigation experience and is regarded as one of the world’s leading experts on insurance subrogation. He is the author of several subrogation books and legal treatises and a national and international speaker and lecturer on subrogation and motivational topics.