The Guide is an invaluable online tool for litigation and transactional attorneys. The Guide provides for more than 70 common law causes of action:

- Each action’s elements;
- The most recent state and federal cases that cite the actions’ elements;
- The applicable statute of limitations for each action; and
- Defenses to each cause of action.
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Equitable Subrogation

1 Elements and Case Citations

“Subrogation arises when one party (the subrogee) indemnifies or pays the principal debtor’s obligation to the creditor or claimant (the subrogor).”

Chicago Title Ins. Co. v. AMZ Insurance Services, Inc.,188 Cal. App. 4th 401, 432 (2010).

“One who claims to be equitably subrogated to the rights of a secured creditor must satisfy certain prerequisites. These are:

‘(1) Payment must have been made by the subrogee to protect his own interest;
(2) The subrogee must not have acted as a volunteer;
(3) The debt paid must be one for which the subrogee was not primarily liable;
(4) The entire debt must have been paid; [and]
(5) Subrogation must not work any injustice to the rights of others.’”

Caito v. United Cal. Bank, 20 Cal. 3d 694, 704 (1978).

“The essential elements of an insurer’s cause of action for equitable subrogation are as follows:

[1] the insured suffered a loss for which the defendant is liable, either as the wrongdoer whose act or omission caused the loss or because the defendant is legally responsible to the insured for the loss caused by the wrongdoer;
[2] the claimed loss was one for which the insurer was not primarily liable;
[3] the insurer has compensated the insured in whole or in part for the same loss for which the defendant is primarily liable;
[4] the insurer has paid the claim of its insured to protect its own interest and not as a volunteer;
[5] the insured has an existing, assignable cause of action against the defendant which the insured could have asserted for its own benefit had it not been compensated for its loss by the insurer;
[6] the insurer has suffered damages caused by the act or omission upon which the  liability of the defendant depends;
[7] justice requires that the loss be entirely shifted from  the insurer to the defendant, whose equitable position is inferior to that of the insurer; and
[8] the insurer’s damages are in a liquidated sum, generally the amount paid to the insured.”

Interstate Fire & Cas. Ins. Co. v. Cleveland Wrecking Co., 182 Cal. App. 4th 23, 33-34 (2010).


California Supreme Court:Caito v. United Cal. Bank, 20 Cal. 3d 694, 704 (1978).

California 1st Dist.:  Interstate Fire & Cas. Ins. Co. v. Cleveland Wrecking Co., 182 Cal. App. 4th 23, 33-34 (2010).

California 2d Dist.:American Contractors Indem. Co. v. Saladino, 115 Cal. App. 4th 1262, 1268 (2004); see RLI Ins. Co. v. CNA Casualty of California, 141 Cal. App. 4th 75, 80 (2006) (re subrogation as between excess and primary insurers).

California 3d Dist.: Dobbas v. Vitas, 191 Cal. App. 4th 809, 817 (2011).

California 4th Dist.:  American Safety Indemnity Co. v. Admiral Ins. Co., 220 Cal. App. 4th 1, 8 (2013).

California 5th Dist.:  Essex Ins. Co. v. Heck, 186 Cal. App. 4th 1513, 1522-23 (2010).

California 6th Dist.:  None.


United States Court of Appeal for the 9th Circuit: Taxel v. Chase Manhattan Bank (In re Deuel), 361 B.R. 509, 517-18 (9th Cir. 2006) (applying California law); Bevan v. Socal Communications Sites, LLC (In re Bevan), 327 F.3d 994, 997 (9th Cir. 2003) (9th Circuit standard).

Central District:Salessi v. Commonwealth Land Title Ins. Co., No. SA CV 08-01274-DOC (JPRx), 2013 U.S. Dist. LEXIS 149766, at *19-20 (C.D. Cal. Oct. 16, 2013).

Eastern District: CUMIS Ins. Society, Inc. v. Gonzalez, No. 1:12-cv-01916 AWI BAM, 2013 U.S. Dist. LEXIS 85381, at *7 (E.D. Cal. June 14, 2013).

Northern District:  United States v. Moyer, No: C 07-00510 SBA, 2011 U.S. Dist. LEXIS 112909, at *9 (N.D. Cal. Sept. 30, 2011).

Southern District: Liberty Mut. Ins. Co. v. Indian Harbor Ins. Co.,No. 11-cv-0624 BEN (NLS), 2011 U.S. Dist. LEXIS 78371, at *12-13 (S.D. Cal. July 18, 2011).

2 Defenses to Claim for Equitable Subrogation

(1)   Cal. Code Civ. Proc. § 431.30(b)(2) (pleading affirmative defenses), and other standard defenses.  See Chapter 1 for all defenses.

(2)   Statute of Limitations: Cal. Code Civ. Proc. § 339.1 (two years); American States Ins. Co. v. National Fire Ins. Co. of Ha, 202 Cal. App. 4th 692, 699-700 (2011) (rejecting conclusion of Liberty Mut. Ins. Co. v. Colonial Ins. Co., 8 Cal. App. 3d 427 (1970) that a four-year statute of limitations under Cal. Code Civ. Proc. § 337(1) for agreements in contract applied).

(3)    Subrogation in equity is not available to a volunteer.   A volunteer has been defined as a stranger or intermeddler who has no interest to protect and is under no legal or moral obligation to pay under the circumstances.  State Farm Fire & Cas. Co. v. Coop. of Am. Physicians, 163 Cal. App. 3d 199, 203 (1984).

(4)   All defenses against insured:  “‘Because subrogation rights are purely derivative, an insurer cannot acquire anything by subrogation to which the insured has no right and can claim no right the insured does not have.’ . . . ‘The subrogated insurer is said to “‘stand in the shoes’” of its insured, because it has no greater rights than the insured and is subject to the same defenses assertable against the insured.’”  Great American Ins. Cos. v. Gordon Trucking, Inc., 165 Cal. App. 4th 445, 451 (2008); see Employers Mutual Liability Ins. Co. v. Tutor-Saliba Corp., 17 Cal. 4th 632, 638-39 (1998).

(5)   Interplay with “Collateral Source Rule”:  “The subrogation doctrine, however, modifies the collateral source rule. . . . The collateral source rule states that if an injured party receives some compensation for injuries from a source wholly independent of the tortfeasor, such payment should not be deducted from the damages that the plaintiff would otherwise collect from the tortfeasor. . . . [H]owever, . . . the collateral source rule does not require that a tortfeasor pay double for his or her wrong to both the injured party and to reimburse the collateral source. . . . Thus, the collateral source rule addresses whether the insured may recover against tortfeasors even though it has been compensated by the insurer; it does not address the insurer's right to recover in a subrogation action for its payments to the insured.”  Garbell v. Conejo Hardwoods, Inc., 193 Cal. App. 4th 1563, 1572 (2011).

(6)   Application Under Workers’ Compensation:  Although
employer who compensates an employee under workers’ compensation is entitled to seek equitable subrogation from third parties also responsible for the worker’s injury, “[a]n employer is accountable for its own negligence in causing the employee’s injury, and therefore is only reimbursed for the amount by which its compensation liability exceeds its proportional share of the injured employee’s recovery. . . . The employee’s fault in causing the injury is not attributed to the employer for purposes of reducing reimbursement.”  Employers Mutual Liability Ins. Co. v. Tutor-Saliba Corp., 17 Cal. 4th 632, 638 (1998).

(7)   Culpable and Inexcusable Neglect:  “Equitable subrogation is not available where the party invoking it is ‘chargeable with culpable and inexcusable neglect’ or the superior equities of the otherwise senior lienholder would be prejudiced by granting equitable subrogation.”  Citizens Business Bank v. Gevorgian, 218 Cal. App. 4th 602, 628 (2013).

(8)   Party Charged Not Wrongdoer:  “An insurer cannot establish its position is equitably superior to the party to be charged if the party is not the wrongdoer whose act or omission caused the underlying loss or is not otherwise legally responsible for the underlying loss.”  San Diego Assemblers, Inc. v. Work Comp for Less Ins. Services, Inc., 220 Cal. App. 4th 1363, 1368 (2013).

(9) Bona Fide Purchaser for Value:  Equitable subrogation will not work as against a bona fide purchaser for value.  Chase Manhattan Bank USA, N.A. v. Taxel (In re Deuel), 594 F.3d 1073, 1079-80 (9th Cir. 2010) (concluding in bankruptcy case that “[e]quitable subrogation cannot operate here, because the trustee is treated as though he were a bona fide purchaser for value without notice of [the debtor’s] condominium, later surprised by an unrecorded lien based on a discharged lien claimed by [the bank].  A bona fide purchaser for value of the [debtor’s] condo would learn from a title search that [the bank] had discharged its lien, not that it still had one.”); see also id. at 1080 (noting that “California courts give priority to a bona fide purchaser over one claiming equitable subrogation”).