The Supreme Court of Alabama has held that an UM insurer’s subrogation claim against a tortfeasor was untimely when suit was filed days after settling with the insured, but more than two years after the accident in question. Pennsylvania Nat. Mut. Cas. Ins. Co. v. Bradford, 2014 WL 4798773 (Ala. Sept. 26, 2014).

Following an auto accident, an injured motorist sued the alleged tortfeasor and his own UM insurer. The UM insurer settled with the plaintiff and filed a cross-claim against the tortfeasor to assert its subrogation rights. The tortfeasor moved to dismiss on the basis that the cross-claim was filed after the two-year statute of limitations had elapsed. The trial court granted the motion to dismiss, and the UM insurer appealed.

The Supreme Court of Alabama affirmed, holding that the statute of limitations began to run on the date of the accident. The Supreme Court noted that insurance policies obligate the insured to protect insurers’ subrogation rights and that, in most instances, insurers may obtain reimbursement from the insured’s recovery against the tortfeasor. The concurring opinion noted that, because the insured’s claims against the tortfeasor remained pending, the UM insurer became the “beneficial owner” of the insured’s action. Both the majority opinion and the concurring opinion expressly noted that the insurer had not moved to be substituted as the real party in interest to the insured’s suit against the tortfeasor. The Supreme Court’s decision, therefore, strongly suggests that insurers’ subrogation rights must be enforced by assuming the insured’s cause of action, and not by asserting them in their own right, although the Court stopped short of so stating.