Opinion ID: 1133441
Heading Depth: 4
Heading Rank: 2

Heading: An Insurer May Affect Its Own Subrogation Rights.

Text: In addition to the actions of an insured, [a]n insurer may relinquish its subrogation rights, either knowingly or unknowingly. It may do this expressly by waiving its right to subrogation or by engaging in conduct inconsistent with its exercise of its subrogation right. Thus, an insurer's failure to assert its subrogation right may be construed as a waiver. The Law of Liability Insurance, supra, § 23.04[2], at 23-45 to 23-46. In this context, we deem the Grain Dealers court's discussion regarding the insurer's responsibility to exercise reasonable diligence in protecting its subrogation rights apposite and persuasive. The Grain Dealers court stated: This right of subrogation ... is not absolute.... Equitable principles dictate that the subrogee exercise reasonable diligence to protect its subrogation interest. Consolidation Coal Co., Inc. v. Liberty Mutual Ins. Co., 406 F.Supp. 1292, 1301 (W.D.Pa.1976); Travelers Insurance Co. v. Hartford Accident & Indemnity Co., 222 Pa.Super. 546, 550, 294 A.2d 913, 915 (1972); Baker v. Fargo Building & Loan Ass'n., 64 N.D. 317, 252 N.W. 42 (1934). In a case falling within the ambit of HRS § 294-7, we hold that reasonable diligence requires at least that the no-fault insurer which claims subrogation rights give timely and reasonable notice of its claim to the tortfeasor and the tortfeasor's insurer. In the instant case, the record clearly indicates that Grain Dealers gave timely and reasonable notice to Pacific Insurance of its subrogation claim for fifty percent of no-fault benefits paid to [the insured]. Id. at 217-18, 768 P.2d at 230 (brackets and emphasis added); see also Taylor, at 311, 978 P.2d at 749 (citing Grain Dealers ). HRS § 663-10 (1993) [16] provides further support for an equitable requirement of diligence, insofar as it provides protection for an insurer that exercises due diligence by filing a timely notice of its claim. Therefore, we hold that an insurer may waive its subrogation right either expressly or impliedly. [17] Applying the above mentioned to the instant case, we also hold that a genuine issue of material fact remains as to whether State Farm Fire exercised due diligence in asserting its subrogation rights.