Liberty Mutual Fire Insurance v. Perricone

In an action by an insurer, as subrogee, to recover amounts it paid to its insured due to the negligence of defendants, plaintiff appeals from an order of the Supreme Court, Suffolk County, dated July 2, 1976, which dismissed its complaint for failure to state a cause of action. Order reversed, with $50 costs and disbursements, and defendants’ motion to dismiss the complaint is denied. Matthew Buonpane, the son of the policy owner, and an insured under the policy, was injured while a passenger on a motorcycle owned by defendant Frank Perricone and operated by defendant Steven R. Perricone. The motorcycle was uninsured. Buonpane made a claim against plaintiff under the standard uninsured motorist endorsement contained in the contract of insurance. After a contested arbitration proceeding in which the arbitrator found that Buonpane had been injured as the result of the negligence of the Perricones, without contributory negligence on his part, the plaintiff paid an award to Buonpane. Plaintiff has now sued the Perricones, claiming a common-law right of subrogation to the extent of its payment to Buonpane. Special Term dismissed plaintiff’s complaint on motion of the defendants, finding that the suit was barred by section 13-101 of the General Obligations Law which, inter alia, prohibits transfers of causes of action to recover damages for personal injuries. This was error (see General Acc., Fire & Life Assur. Corp. v Zerbe Constr. Co., 269 NY 227). Subrogation is not a transfer of a cause of action. The cause of action still belongs to the Buonpanes, but plaintiff, having paid part of their claim under compulsion of its insurance contract, is entitled, pro tanto, to stand in their place (see 57 NY Jur, Subrogation, §§ 1, 2; 16 Couch, Insurance 2d, § 61:240; 31 NY Jur, Insurance, § 1620). Hopkins, Acting P. J., Martuscello, Damiani and Titone, JJ., concur.