Court of Appeals Holds that No-Fault Act Did Not Preclude Motor Vehicle Insurer From Enforcing Subrogation Clause

On February 27, 2014, the District of Columbia Court of Appeals decided Hubb v. State Farm Mutual Automobile Insurance Co., No. 12-CV-1952, slip op. (D.C. Feb. 27, 2014), in which it held that the District of Columbia’s Compulsory / No-Fault Motor Vehicle Insurance Act (the “No-Fault Act”) did not preclude a motor vehicle insurer from enforcing a subrogation clause requiring its insured to reimburse it for personal injury protection (PIP) benefits if the insured obtained compensation from another party. Id. at 1-3, 17-18. The Court of Appeals explained that the No-Fault Act specifically authorizes subrogation, and nothing in the No-Fault Act indicates an intent to abrogate the common law rule that subrogation clauses generally are enforceable. Id. at 7-17.