Also known as: subrogation right · rights of subrogation · subrogation
Written by attorneys · grounded in primary & secondary sources — see below
A right arising when a party performs an obligation owed by another, entitling the performing party to enforce the original creditor's claims against the primary obligor to the extent of the payment made.
Simone Sanders owed Stonehaven Properties $120,000 on a licensing debt. Synergy Systems contracted with Simone to pay the sum directly to Stonehaven. After Stonehaven obtained judgments against both parties, Synergy paid the full amount. Stonehaven's claim is satisfied, and Synergy now holds subrogation rights to pursue Simone for reimbursement.
Samuel Soto suffered a workplace injury caused by a third-party contractor. His employer paid workers' compensation benefits through its carrier. The carrier then asserted subrogation rights to recover those payments from the contractor in a separate tort action.
Stella Shapiro's property was damaged by a negligent neighbor. Her insurer paid the full loss under the policy. The insurer then exercised subrogation rights to sue the neighbor for the amount paid, standing in Stella's position.
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Sylvia Santos received medical care paid by a federal program after an accident involving Standard Oil vehicles. The government asserted subrogation rights against the company to recover the costs it had advanced on her behalf.
Simon Stern paid off a senior mortgage on property owned by Starlight Media after the primary borrower defaulted. He then asserted subrogation rights to enforce the mortgage lien against the property in priority to junior interests.
Selena Singh guaranteed a corporate obligation and later paid the creditor in full. She then invoked subrogation rights to step into the creditor's position and enforce the security interest against Solstice Ventures' assets.
A promisee acquires subrogation rights when it pays an intended beneficiary's claim that the promisor was obligated to satisfy. The right allows the promisee to enforce the beneficiary's claim against the promisor once the beneficiary is fully paid.
Supporting sources
Reimbursement is a direct claim by the secondary obligor against the primary obligor for amounts paid. Subrogation instead assigns the original creditor's rights and any related security to the paying party, allowing enforcement against the primary obligor or collateral.
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Recordation of a satisfaction does not automatically defeat subrogation. Equity preserves the lien in the hands of the paying party to prevent unjust enrichment when the payment was made to protect an interest in the property.
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An insurer generally cannot enforce subrogation rights against its own insured because that would undermine the indemnity purpose of the policy and allow the insurer to recover from the party it was obligated to protect.
…resides there, and he has candidly told us that he was retained by insurance companies interested presumably because of subrogation. His affidavits and argument are devoted to controverting claims as to defendant’s inconvenience rather than to showing that the present forum serves any convenience of his own, with one…