Court Opinion

ID: 5850117
Source: CourtListenerOpinion
Date Created: 2022-01-12 23:58:17.44507+00
Date Added: 2024-06-11T08:44:03.714435
License: Public Domain

Doerr and Denman, JJ. (dissenting).
We respectfully disagree. Under the “collateral source rule” a tort-feasor may not benefit because some or all of the injured party’s damages were paid for by a third party. In New York, however, where the insurance proceeds are derived from an insurance policy which was paid for by the wrongdoer himself, evidence of such proceeds is admissible in mitigation of damages (see Moore v Leggette, 24 AD2d 891, affd 18 NY2d 864; Matter of McKay v Town of West Seneca, 51 AD2d 373, 377, revd on dissent below 41 NY2d 931; Brink v Killeen, 48 AD2d 823, 824; Grynbal v Grynbal, 32 AD2d 427, 429; Szybura v City of Elmira, 28 AD2d 1154). In holding that the instant case does not fall within the exception to the collateral source rule, the majority emphasize that the lessor procured the policy and transmitted the premiums. The emphasis placed on procurement is misplaced, in view of the fact that the lessee was contractually bound to pay the cost of the premiums and did in fact pay the premiums. In Moore v Leggette (supra), New York recognized that the “collateral source” rationale has no place where the wrongdoer was prudent enough to take out an insurance policy protecting the plaintiff and where the wrongdoer paid the cost of premiums. In subsequent cases, courts have emphasized that it is the wrongdoer’s “prudence and expense” in providing for plaintiff’s protection which allows him to mitigate damages (see Grynbal v Grynbal, supra, p 430; see, also, McKay v Town of West Seneca, supra, p 377; Brink v Killeen, supra, p 824; Szybura v City of Elmira, supra, p 1155 [all noting that the proceeds from insurance which was “paid for” by the defendant may be used in mitigation]; see Overton v United States, 619 F2d 1299, 1307-1308; Driscoll v United States, 456 F Supp 143, 146 [holding that the tort-feasor’s right to offset hinges on -whether it contributed to the insurance fund from which plaintiff originally recovered]). Although there was privity between the defendant and the insurer in these cases and in those cited by the majority (see Precisionware, Inc. v Madison County Tobacco Warehouse, 411 F2d 42; Publix Theatres Corp. v Powell, 123 Tex 304), the holdings do not rest on whether there was privity but on whether the defendant somehow contributed to the cost of obtaining the insurance. The parties to the instant lease were prudent enough to realize the possibility of a fire loss. Therefore, they included in their lease a provision requiring the lessor to keep the premises insured and requiring the lessee to pay the cost of the premiums. Under these circumstances, the insurance proceeds paid to the plaintiff were not a windfall but an expected resolution of an unplanned but foreseeable disaster. Clearly, the rationale behind the collateral source rule is inapplicable to these facts. On the contrary, to apply the rule would result in a windfall to plaintiff, who would thus enjoy a double recovery. The majority claim that there would be no double recovery because the insurer is the real party in interest. We are of the view, however, that “[t]he insurance company is not a party to this suit” (Publix Theatres Corp. v Powell, supra, p 314). The insurer, as subrogee, “stands in the shoes” of the subrogor (United States Fid. & Guar. Co. v Smith Co., 46 NY2d 498, 504) and acquires no greater rights thán plaintiff would otherwise normally enjoy (State Bank of Albany v Dan-Bar Contr. Co., 12 AD2d 416, 417, affd 12 NY2d 804). (Appeal from order of Onondaga Supreme Court, Stone, J. — summary judgment.) Present — Simons, J.P., Hancock, Jr., Doerr, Denman and Moule, JJ.