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(Article from Insurance Law Alert, September 2018)

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A Connecticut appellate court ruled that an insurer’s equitable subrogation claim against an alleged tortfeasor was not subject to two statutes of limitations applicable to the underlying negligence claims.  Gov’t Employees Ins. Co. v. Barros, No. 184 Conn. App. 395 (Aug. 28, 2018).

An automobile insurer paid the policy limit for bodily injury to its policyholder after a car accident.  More than three years after the accident, the insurer brought an equitable subrogation claim against the other driver.  The driver argued that the claim was barred by two statutes of limitations applicable to the underlying claims for negligent operation of a motor vehicle.  A Connecticut trial court disagreed and entered judgment in the insurer’s favor.  The appellate court affirmed.

The appellate court ruled that equitable subrogation claims are not subject to statutes of limitations, but rather may be barred by a defense of laches, which applies only if there has been an unreasonable and prejudicial delay in bringing suit.  The court further held that the driver waived a defense of laches, and that even if he had not, there was no evidence of an unreasonable delay or prejudice.  The court also rejected the driver’s contention that the statutes of limitations for the underlying tort claims should apply to the equitable subrogation claim because the insurer “stands in the shoes” of the policyholder.