ASG again told to pay insurer $6 Mil for Laufou fire
In a decision issued last Wednesday, the Trial Division of the High Court upheld its decision issued more than two years ago, awarding some $6 million to Progressive Insurance Company following the 2002 fire that destroyed the old Laufou Shopping Center, which housed Forsgren Ltd.
The new 14-page decision, signed by Associate Justice Lyle Richmond and Associate Judge Mamea Sala Jr., had some very interesting opening comments and observations when laying out the background on this case.
According to the judges, the complaint that “breathed life” into this on-going litigation was filed in 2004 by Progressive against ASG due to the 2002 fire. Following a trial, the lower court in July 2007 awarded Progressive $6.60 million in Progressive’s claim under the Government Tort Liability Act.
“Like the military conflict that raged between 1756 - 1763, this litigation itself a ‘Seven Year War’ spanning a good part of the globe and full of high emotion combined with creative tactics,” the judges observed. “The parties are by now well aware of the facts and procedural history associated with each earlier theater of this engagement.”
The court says Progressive has already paid Forsgren in full following the fire, and sought recovery from ASG under the theories of both subrogation and assignment.
(Subrogation, according to West’s Encyclopedia of American law, refers to “the substitution of one person for another with respect to legal rights such as a right of recovery”. It occurs when a third person, such as an insurance company, has paid a debt of another ... and succeeds to all legal rights which the debtor or person against whom the claim was asserted may have against other persons.”
After the ruling in favor of Progressive, the government filed an appeal.
In its January 2010 decision, the appellate division reversed and remanded the case back to the lower court, “solely on jurisdictional grounds.”
The appellate division instructed the lower court “to decide, on remand, whether Progressive’s claim as assignee merged with its claim as subrogee,” the lower court judges pointed out. “If the two claims merged, the Appellate Division directed us to dismiss this action to allow Progressive to pursue its prerequisite administrative remedy.”
However, if the two claims did not merge, the appellate division directed that Progressive “may proceed to trial on the sum certain amounts in each category of loss as previously presented to the Attorney General.”
The judges found that “Progressive still retains a separate cause of action as subrogee”. They also found that, based on the “evidence and arguments presented at the trial on merits, Progressive is entitled to $4.87 million on its subrogation claim, based on its payment to Forsgren in the same amount for the loss sustained as a result of ASG stipulated negligence”.
The judges went on to say that Progressive had filed with the Attorney General in December 2002 an administrative claim letter which contained written notification of the incident — by way of a detailed description of the fire and subsequent damages — accompanied by a claim for money damages for a sum certain — $6 million.
Pursuant to the binding precedent of the appellate division, this is sufficient to exhaust the prerequisite jurisdictional requirements under the local law (ASCA 43.1205), the judges point out.
“Because Progressive exhausted its prerequisite administrative remedies under ASA 43.1205, the trial division did not lack subject matter jurisdiction over Progressive’s claim as assignee,” said the judges, who agreed with the appellate division’s suggestion that the lower court “may have lacked jurisdiction over any amount greater than the sum certain presented in Progressive's administrative claim to the Attorney General.”
“Progressive’s total award amount must... be limited to $6 million for both its subrogation clim and its claim as assignee — $4,875,750 of which is awarded specifically on Progressive’s claim for subrogation,” the judges notes.
In conclusion the trial division ruled “in favor of Progressive” in the amount of $6 million for both its claim as subrogee in the amount of $4.87 million and its separate claim as Forsgren’s assignee in the amount of $1.12 million.