Filed Under:Claims, Catastrophe & Restoration

Subrogation and the Act of God defense

Following Hurricanes Harvey, Irma and Marie, some policyholders and insurers may be wondering if there are subrogation opportunities for some of their losses. (Photo: Shutterstock/NASA images)
Following Hurricanes Harvey, Irma and Marie, some policyholders and insurers may be wondering if there are subrogation opportunities for some of their losses. (Photo: Shutterstock/NASA images)

Perhaps no legal cause of action is more frequently applied or universal than one sounding in negligence.

We bring it when another driver damages our vehicles, when our buildings are damaged from faulty construction, and when a medical procedure leaves a patient worse off than before.

While some negligence actions may be held to a heightened standard (i.e., professional malpractice, or may be codified to require particular facts), negligence is largely evaluated under the same four elements in any variation: Duty, breach, causation and damages.

When a party is damaged, be it through personal injury, property damage or other harm, the party will look to recover his damages from potential sources of the injury. Initially, the injured party must evaluate whether he was owed a duty of care from some person or entity relating to the injury. But what about a party who is injured in the course of a natural disaster, or in legal terminology, an “Act of God”?

An “Act of God” has been defined in the context of a legal action to mean any irresistible disaster, the result of natural causes, such as earthquakes, violent storms, lightning and unprecedented floods, which could not have been reasonably anticipated, guarded against or resisted. [Piqua v. Morris (1918)] It is “[a] providential occurrence or extraordinary manifestation of the forces of nature which could not have been foreseen and the effect thereof avoided by the exercise of reasonable prudence, diligence and care or by the use of those means which the situation renders reasonable to employ.” [Southern Air Transport v. Gulf Airways]

Who can recover?

Can a party who sustains personal injury, property damage or other harm during such an event recover against another person or entity? It is widely accepted in U.S. and state courts that an “Act of God” may serve as an affirmative defense to a negligence action, where the injury results from an Act of God.

While the Act of God defense is frequently raised as an affirmative defense in negligence actions, there are circumstances under which another entity may be responsible for damages sustained during the course of a natural disaster or “Act of God.” If proper care and diligence on the part of a person or entity would have avoided certain damage, then the injury is not excusable as an Act of God.

Hurricane Harvey flood damage to building in Houston

Floodwaters from Hurricane Harvey damaged hundreds of structures in the Houston, Texas area. (Photo: American Technologies, Inc.)

The Act of God defense and natural disasters


In order for the Act of God defense to bar a plaintiff's negligence claim at the summary judgment stage, there must be no evidence in the record under which a reasonable mind could conclude that a defendant acted negligently concurrently with the Act of God, proximately causing the plaintiff's injury, or that the defendant could have reasonably anticipated, guarded against and foreseen the Act of God causing the injury.

In Lord & Taylor LLC v. Zim Integrated Shipping Servs., Ltd., the Southern District of New York concluded that a shipping contractor was not responsible for merchandise damaged while in its custody during Hurricane Sandy. In this matter, plaintiff Lord and Taylor brought an action seeking to recover $206,972 in damages that it suffered when 211 cartons containing Lord and Taylor women's sweaters and cardigans were ruined due to flooding at the New York Container Terminal.

The Lord and Taylor Court evaluated whether the Act of God (i.e., the weather conditions resulting from Hurricane Sandy) was unforeseeable at the given time and place such that Zim had no reasonable precautions available to prevent the damage at issue. Unique to this case were the facts that in its 50-year history, the New York Container Terminal had never experienced flooding from a storm surge, Hurricane Sandy was unusually destructive, and the relevant forecasts predicting the level of destruction that Sandy caused did not arrive until later in the weekend, when nothing more could have been done to prevent damage to the cartons at New York Container Terminal.

However, because this is a fact-intensive inquiry, different conclusions will frequently be reached on whether the Act of God defense will serve to bar a plaintiff's claim for negligence.

In Borries v. Grand Casino of Miss., Inc., the Borries Construction Company asserted claims of negligence and gross negligence against the Grand Casino for property damage it suffered when the Grand Casino's gambling barges broke loose from their moorings and collided with Schooner Pier and surrounding structures during Hurricane Katrina. While proclaiming the popular rule, that the Act of God defense will not bar recovery for an injury which could have been prevented through the use of ordinary care even though no one is liable for an injury proximately caused by an Act of God exclusively, the Borries Court held that Grand Casino could not rely on the affirmative defense to avoid liability for its own conduct which may have failed to meet the applicable standard of care.

Specifically, if Grand Casino failed to moor its barge to withstand foreseeable storm surges, like those which may occur in a natural disaster such as Hurricane Katrina, then Grand Casino may be a concurrent cause of Borries’ damages and liable for negligence. Under this holding, it is apparent that the Act of God defense will not be dispositive when any facts are established under which reasonable minds could conclude that a party failed to meet its duty of care to the injured party.

Related: Coverage disputes and 'arising out of' claims

Flooded parking lot in Houston, Texas after Hurricane Harvey

There may be subrogation potential for damage from flooding, wind and other Acts of God. (Photo: American Technologies, Inc.)

Is there subrogation potential?


When property damage or other injuries occur in the context of an Act of God, an insurer should not conclude that subrogation is not possible due to the Act of God defense. Although the Act of God may be a large contributing factor to a particular injury or damage claim, there is potential for subrogation against a party whose human factor contributed to the damages sustained.

In reality, subrogation in the context of an Act of God is not different from subrogation in the context of any property damage or injury claim. That is, because the insurer stands in the shoes of its insured, if the insured could have a cause of action against a party who failed to meet its duty of care in relation to the damage sustained, then it follows that the insurer, too, would have the ability to pursue the same claim in a subrogation action for negligence.

In the Alabama Southern District Court, Skandia Insurance Co. brought an action sounding in negligence to recover damages to cargo of its insured that occurred in surge flooding associated with a hurricane. [Skandia Ins. Co. v. Star Shipping AS]

Skandia alleged that its insured's cargo was damaged as a result of the defendants’ failure to move the cargo out of harm's way when it had ample notice of the impending hurricane. In response to Skandia's claim, the defendants had the burden of establishing that the force of the storm was “truly irresistible and unforeseen and that all precautions had been taken.”

Once again, the court concluded that because of the unpredictable nature of Hurricane George and the inability of weather forecasting to “tame” that inherent nature, coupled with the fact that the defendants had no prior notice of any flooding in the container yards in question or that the cargo would be in any danger, defendants took all reasonable precautions, under the circumstances, to care for the cargo and were free of negligence.

In sum, when an Act of God occurs it is important to consider all potential sources of injury, including whether there is any actor who had a duty to exercise reasonable care to avoid the harm, and if that actor met his duty. If there is an actor who failed to meet his duty of taking reasonable measures and precautions against the injury, then both an injured party, and/or his subrogee could maintain a negligence action against that actor.

Ariel M. Lipsky (alipsky@KeisGeorge.com) is an attorney with Keis George LLP and concentrates in insurance subrogation litigation, including but not limited to automobile, fire, construction defect and product liability.

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