Court of Appeals of Indiana | Opinion 06A01-1708-CT-1969 | March 7, 2018 Page 1 of 10

ATTORNEY FOR APPELLANT

Kevin L. Moyer

Moyer Law Firm, P.C.

Indianapolis, Indiana

ATTORNEY FOR APPELLEE

Richard K. Milam

Lebanon, Indiana

I N T H E

COURT OF APPEALS OF INDIANA

Hoosier Insurance Company,

Appellant,

v.

Nicole R. Riggs and Michael J. 

Riggs,

Appellees.

March 7, 2018

Court of Appeals Case No.

06A01-1708-CT-1969

Appeal from the Boone Superior 

Court

The Honorable Matthew C. 

Kincaid, Judge

Trial Court Cause No.

06D01-1704-CT-416

Barnes, Judge.

Case Summary

[1] Hoosier Insurance Company (“Hoosier”) appeals the trial court’s order of 

dismissal entered in favor of Nicole R. Riggs and Michael J. Riggs (“the 

Riggses”). We reverse and remand with instructions.
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Issue

[2] The sole issue before us is whether the trial court erred in dismissing Hoosier’s 

subrogation claim because Hoosier was not a real party in interest for purposes 

of pursuing a breach of contract claim against the Riggses.

Facts

[3] During the relevant period, Frank and Leah Harker (“the Harkers”) owned real 

property (“the Premises”) in Lebanon. The Premises were insured under an 

insurance policy underwritten by Hoosier. In June 2013, the Harkers leased the 

Premises to the Riggses pursuant to a written agreement (“Lease”). Dustin 

Blevins also resided on the Premises during the Riggses’ lease term. On April 

22, 2015, the Premises sustained $42,497.27 in fire damage after Blevins 

allegedly left burning incense unattended. The Lease provided, in part, as

follows:

5. Use and Occupancy. [The Riggses] shall use the Leased 

Premises only for residential purposes and shall comply with all 

federal, state and local laws and ordinances. [The Riggses] shall 

commit no waste thereon, and shall deliver the premises to [the

Harkers] at the end of the lease term in as good of condition as 

when the lease commenced, normal wear and tear excepted. . . . 

* * * * *

7. Insurance. [The Riggses are] responsible for obtaining fire 

and extended coverage, including public liability[ ] insurance 

with [the Harkers] to be listed as an additional insured under the 

policy. [The Riggses] shall also be responsible for renter’s 
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coverage on [the Riggses’] own personal property located on the 

Leased Premises. [The Riggses] shall indemnify and hold [the 

Harkers] harmless from all claims of thi9rd [sic] parties for bodily 

injury, property damage or death arising from [the Riggses’] use 

or occupancy of the Leased Premises.

App. Vol. II pp. 9-10. After the fire, Hoosier paid $42,497.27 to or on behalf of 

the Harkers for repairs to the Premises. 

[4] On April 20, 2017, Hoosier filed a complaint for damages against the Riggses 

alleging breach of contract.1 Hoosier alleged that the Riggses had materially 

breached the Lease, causing $42,497.27 in damages. On April 27, 2017, the 

Riggses moved to dismiss on Indiana Trial Rule 12(B)(6) grounds, arguing that 

Hoosier was not a “landlord” as defined in Indiana Code Section 32-31-3-3 

and, therefore, was not a Trial Rule 17(A) “real party in interest” entitled to 

pursue a breach of contract claim against the Riggses. On May 19, 2017, the 

trial court granted the Riggses’ motion to dismiss. Hoosier now appeals.

Analysis

[5] Hoosier argues that the trial court erred in granting the motion to dismiss 

because, by paying damages to or on behalf of the Harkers, Hoosier became 

subrogated to the Harkers’ landlord rights, including their right to seek damages 

from the Riggses for breach of the Lease. The Riggses counter that Hoosier’s 

subrogation claim was properly dismissed because Hoosier is not a “real party 

 

1 Hoosier also brought a negligence claim against Blevins.
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in interest” pursuant to Indiana Trial Rule 17(A), which provides that “[e]very 

action shall be prosecuted in the name of the real party in interest.”2 We restate 

the issue before us as follows: When a landlord’s insurer pays insurance

benefits to or on behalf of its insured (the landlord), does the landlord’s right to 

pursue damages for breach of contract from the liable party (i.e., a negligent 

tenant) inure to the insurer, such that the insurer is a “real party in interest” for 

purposes of pursuing subrogation relief? 

[6] A motion to dismiss under Trial Rule 12(B)(6) tests the legal sufficiency of the 

plaintiff’s claim, not the facts supporting it. Thornton v. State, 43 N.E.3d 585, 

587 (Ind. 2015). Dismissals are improper under Rule 12(B)(6) “unless it 

appears to a certainty on the face of the complaint that the complaining party is 

not entitled to any relief.” State v. American Family Voices, Inc., 898 N.E.2d 293, 

296 (Ind. 2008) (citations omitted). We review rulings on a Rule 12(B)(6) 

motion to dismiss de novo, with no deference to the trial court’s decision. 

Liberty Landowners Ass’n, Inc. v. Porter Cnty. Comm’rs, 913 N.E.2d 1245, 1249 

(Ind. Ct. App. 2009); Veolia Water Indianapolis, LLC v. Nat’l Trust Ins. Co., 3 

N.E.3d 1, 4 (Ind. 2014). In reviewing the complaint, we take the alleged facts 

to be true and consider the allegations in the light most favorable to the 

 

2 A real party in interest is the person who is the true owner of the right sought to be enforced. Hammes v. 

Brumley, 659 N.E.2d 1021, 1030 (Ind. 1995). He or she is the person who is entitled to the fruits of the 

action. Id.
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nonmoving party, drawing every reasonable inference in that party’s favor. 

Veolia Water Indianapolis, LLC, 3 N.E.3d at 4-5.

[7] The equitable doctrine of subrogation “applies whenever a party, not acting as a 

volunteer, pays the debt of another that, in good conscience, should have been 

paid by the one primarily liable.” Erie Ins. Co. v. George, 681 N.E.2d 183, 186 

(Ind. 1997). The ultimate purpose of the doctrine, as with other equitable 

principles, is to prevent unjust enrichment. Id.

Because subrogation is an equitable remedy, in determining 

whether an insurer may bring a subrogation action in a particular 

case, courts must weigh “the principles of equity and good 

conscience.” RAM Mut. Ins. Co. v. Rohde, 820 N.W.2d 1, 16 

(Minn. 2012) (citing Dix Mut. Ins. Co. v. LaFramboise, 149 Ill.2d 

314, 173 Ill.Dec. 648, 597 N.E.2d 622, 626 (1992) (explaining 

that the equities of the case should be considered in addition to 

examining “the provisions of the lease as a whole [and] the 

reasonable expectations of the parties”)); Am. Family Mut. Ins. 

Co., 757 N.W.2d at 595 (allowing landlord’s insurer to maintain 

a subrogation action against tenant’s liability insurer after 

examining the lease and “[c]onsidering the equitable 

underpinnings of subrogation”). When the insurer claims a right 

through subrogation, it stands in the shoes of the insured and 

takes no rights other than those which the insured had. 

LBM Realty, LLC v. Mannia, 19 N.E.3d 379, 386 (Ind. Ct. App. 2014) (internal 

citation omitted).

[8] There are “three different approaches used by courts across the country to 

address subrogation claims of landlords’ insurers against negligent tenants”:
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(1) the no-subrogation (or implied co-insured) approach (i.e., the 

“Sutton rule”), in which, absent an express agreement to the 

contrary, a landlord’s insurer is precluded from filing a 

subrogation claim against a negligent tenant because the tenant is 

presumed to be a co-insured under the landlord’s insurance 

policy; (2) the pro-subrogation approach, in which, absent an 

express term to the contrary, a landlord’s insurer is allowed to 

bring a subrogation claim against a negligent tenant; and (3) the 

case-by-case approach, in which courts determine the availability 

of subrogation based on the reasonable expectations of the parties 

under the facts of each case.

Id. at 383 (quoting LBM Realty, LLC v. Mannia, 981 N.E.2d 569, 573 (Ind. Ct. 

App. 2012)).

[9] The Mannia panel advocated that Indiana should adopt the case-by-case 

approach, “finding that a tenant’s liability to the landlord’s insurer for damagecausing negligence depends on the reasonable expectations of the parties to the 

lease as ascertained from the lease as a whole and any other admissible 

evidence.” 19 N.E.3d at 393-94. The panel further reasoned:

Although the case-by-case approach is said to provide less 

predictability than either the pro- or no-subrogation approaches, 

we find that this approach best effectuates the intent of the parties 

by simply enforcing the terms of their lease. In determining the 

expectations of the parties as articulated in the lease, courts 

should look for evidence indicating which party agreed to bear 

the risk of loss for a particular type of damage. For instance, if 

the lease indicates that the landlord has agreed to procure 

insurance covering a particular loss, a court “may properly 

conclude that, notwithstanding a general ‘surrender in good 

condition’ or ‘liability for negligence’ clause in the lease,” the 

landlord and tenant reasonably expected “that the landlord 
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would look only to the policy, and not to the tenant, for 

compensation for . . . loss[es] covered by the policy.” Likewise, 

if a lease obligates a tenant to procure insurance covering a 

particular type of loss, such a provision will provide evidence that 

the parties reasonably anticipated that the tenant would be liable 

for that particular loss, which would allow another insurer who 

pays the loss to bring a subrogation action against the tenant. 

Id. at 394 (internal citations omitted).

[10] In Mannia, a fire loss occurred to the insured premises—a multiunit apartment 

building. The landlord’s insurer, LBM Realty (“LBM”), paid benefits to or on 

behalf of its insured and subsequently sought subrogation relief from the 

tenant—Mannia. Mannia moved for summary judgment, which was granted. 

Although these cases are factually distinguishable in that the insured premises 

was a multiunit building,3the Mannia panel’s reasoning is apposite. 

[11] In analyzing whether Mannia was liable to LBM for negligence-caused fire 

damage, the Mannia panel considered the following provisions within the 

parties’ lease: (1) “[LBM] recommends [Mannia] obtain renter’s insurance”; 

and (2) “[Mannia is liable for] any injury or damage done to the Leased 

Premises, common areas or any other property of [LBM]”. Id. at 395. The 

panel also addressed an omission from the lease noting, 

 

3 Mannia provides that “with regard to tenants in a multiunit dwelling, . . . absent clear notice—ideally in the 

form of an unambiguous, enforceable lease provision—that a negligent tenant will be held liable for damages 

to areas of the building beyond the tenant’s leased premises, such liability would not be within the tenant’s 

reasonable expectations and is therefore barred.” Mannia, 19 N.E.3d at 394 (emphasis in original).
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. . . [T]here is no clear and enforceable lease provision putting 

Mannia on notice that she would be held liable for damage 

caused by negligence to areas of the multiunit apartment building 

beyond the leased premises (and should obtain liability insurance 

to provide for that possibility). 

Id. Lastly, the panel considered Mannia’s prior deposition testimony that: (1)

although she was told that LBM had insurance coverage for the building, she 

was notified that she was still obligated to obtain renter’s insurance; and (2) she

did not believe, when she executed the lease, that she would be covered under 

LBM’s insurance policy. 

[12] In light of the evidence, as to fire loss to areas beyond the leased premises, the 

Mannia panel upheld the trial court’s entry of summary judgment in favor of 

Mannia; however, with respect to damage of the leased premises, the panel

found that the trial court had erred in granting summary judgment in Mannia’s 

favor. Accordingly, the Mannia panel remanded to the trial court with 

instructions “to engage in the analysis of the case-by-case approach” as follows:

First, that the court should consider the lease and any other 

relevant and admissible evidence, including . . . the insurance 

maintained by each party as evidence of each party’s 

expectations with respect to liability for damage to the leased 

premises. Second, because subrogation is an equitable remedy, 

the trial court must also weigh “the principles of equity and good 

conscience” . . . . In sum, the trial court should analyze all 

relevant and admissible evidence in order to determine the 

parties’ expectations and should weigh and balance the equities 

of the case—as well as addressing the issue of Mannia’s 

negligence—in order to determine Mannia’s liability for the 

damage to the leased premises.
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Id. at 395-96 (internal citations omitted).

[13] Applying the case-by-case approach to addressing subrogation claims of 

landlords’ insurers against negligent tenants, and upon review of the Lease to 

determine the parties’ expectations with respect to liability for damage to the 

Premises, we cannot say that it appears to a certainty on the face of the 

complaint that Hoosier is not entitled to any relief on the related threshold 

questions of (1) whether the Lease manifests the parties’ intent regarding the 

appropriate party to bear the risk of fire loss; and (2) whether the Harkers’ right 

to pursue damages for breach of contract from the Riggses inures to Hoosier, 

such that Hoosier is a real party in interest entitled to pursue subrogation relief. 

See Mannia, 981 N.E.2d at 394 (“[I]f a lease obligates a tenant to procure 

insurance covering a particular type of loss, such a provision will provide 

evidence that the parties reasonably anticipated that the tenant would be liable 

for that particular loss, which would allow an[ ] insurer who pays the loss to 

bring a subrogation action against the tenant.”). 

[14] Based upon the foregoing, we reverse the trial court’s judgment dismissing

Hoosier’s subrogation claim and remand for further proceedings. On remand, 

the trial court should analyze the Lease and all other relevant and admissible 

evidence to determine the parties’ expectations; and weigh and balance the 

equities—including the issue of the Riggses’ negligence—to determine the 

Riggses’ liability for the damage to the Premises. 
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Conclusion

[15] The trial court erred in dismissing Hoosier’s subrogation claim. We reverse and 

remand with instructions.

[16] Reversed and remanded with instructions.

Najam, J., and Mathias, J., concur.