The insurer's subrogation dispute reversed in the second instance shall be remanded for retrial

A warehouse operated by Company F suffered heavy rain and backflooding, resulting in damage to Company C's goods. After settling claims with Company C, the insurance company applied to Company F for subrogation, which was supported by the court. After accepting the entrust of F Company, lawyers Wang Yu and Zheng Caihui of Dehe Hantong Law Firm finally remanded the case for retrial through efforts, and settled the case after remanded the case. At present, the case has been completed.

The case involved the retrial of the insurer's subrogation dispute, demonstrating the importance of the law in the protection of corporate rights and interests. The case has high reference value.

Background of the case

F Company is the network operator of C Company, a well-known clothing logistics enterprise, responsible for logistics distribution in Xuzhou, Huai 'an and other places. In July 2020, Xuzhou was hit by a heavy rainstorm, and the warehouse where the “First Branch of Xuzhou” operated by F Company was flooded with rainwater, resulting in serious damage to the goods delivered by C Company to the “Xuzhou Branch”. After settling claims with Company C, the insurance company insured by Company C shall exercise the right of subrogation against Company F in accordance with the law.

Difficulty of the case

In the first instance, F Company's defense opinion that the accident was caused by force majeure was not supported by the court. F Company believed that the accident was caused by force majeure and should not be liable for compensation. However, the first-instance court did not accept its defense opinion and held that F Company should bear the full compensation liability. In the second trial, F company put forward new defense reasons and evidence, but these evidence are not enough to overturn the judgment of the first trial.

Key points of the second trial

In the process of the second trial, lawyers Wang Yu and Zheng Caihui accepted the entrust of F Company, and put forward the possibility of F company's defense from multiple perspectives through in-depth study of all the files of the first trial and multiple communications with F Company. Dewo's lawyer believes that if the case is to achieve a breakthrough, as the defendant must find its defense.

After formulating the litigation strategy, Dehe lawyer assisted F company to recall the process of the dispute for many times in order to collect more evidence, submitted several investigation orders to the court to obtain relevant evidence, submitted a lot of new evidence in the second trial, and put forward a number of reasons for appeal from a new perspective. Key points include:

1、Additional insured Company D is the third party: as the actual beneficiary of the insurance, Company D has an important influence on the occurrence and loss of the insured accident. Therefore, Dehe lawyer requested this addition as a third party, which is conducive to finding out the facts of the case and clarifying the responsibility.

2、Propose F Company's liability for breach of contract to C Company: Lawyer Dehe started from the constitutive elements of “subrosive claim”, considering that the claim right of insurance company on behalf of C is based on the liability for breach of contract of F Company to C Company, and then communicated with F Company for several rounds from the perspective of whether C Company is at fault, and raised the issue that F Company may have liability for breach of contract such as delivery delay or compensation for goods damage. And provided the court with a number of pieces of evidence that were not presented in the first trial.

3、Obtain relevant evidence of Company C: Dehe lawyers consider that the logistics industry has its own characteristics, C company compensates for the loss of goods with the tag price of clothing, which is likely due to the high premium it charges customers, while F company, as the service provider of terminal distribution, is only “piece rate”. If C company collects the premium but transfers the responsibility to F Company, it will obviously cause a serious imbalance of rights. It violates the principle of fairness. Therefore, lawyer Dehe submitted an application for obtaining evidence to the court, requesting the court to obtain the agreement between C Company and the shipper.

4、Prove that F Company is at fault for the occurrence of the accident and the expansion of the loss: By studying the details of the case and obtaining relevant evidence, lawyer Dehe put forward the possibility that F company may have improper handling after the accident and lead to the expansion of the loss. This view was supported by the court and became one of the key points in the reversal of the second instance.

5、Obtaining official documents of short-term precipitation at the site of the incident: In order to prove that the accident was caused by force majeure, Dehe lawyers obtained official documents of short-term precipitation at the site of the incident. The documents showed that when the accident occurred, the local precipitation reached the level of heavy rain, affecting the normal use of the warehouse and the safety of goods. This new evidence became one of the key points in the reversal of the second trial.

6、Obtaining Witness Testimonies of other merchants: In order to further confirm the force majeure nature of the accident, Dehe lawyers also obtained witness testimonies of other merchants according to law. These testimonies show that other local businesses suffered similar losses during the incident. This new evidence became one of the key points in the reversal of the second trial.

Since then, the court of the second instance directly recorded in the ruling that because the appellant reappointed a lawyer in the second instance, the new agent put forward a number of new reasons and views for appeal and submitted corresponding evidence in the second instance, which was not mentioned in the first instance, and the evidential materials involved the internal management of Company C, which needed the response of Company C to properly deal with, so it should be sent back to the court of the original instance for retrial. The second instance court finally quashed the original judgment and remanded it for retrial.

After the case was sent back for retrial, through the joint efforts of the court, F Company and Dehe lawyers, the final mediation closed the case. At present, the mediation letter has been performed, realizing “the case is closed”.

The case has also won unanimous praise from all parties.

Enlightenment of the case

1、Attach importance to legal risks: Enterprises should fully understand the legal risks involved in their business, including cargo transportation and insurance claims. In case of disputes, we should actively seek legal solutions and fully prepare evidentiary materials.

2、In-depth analysis of cases: By analyzing similar cases, enterprises can understand the legal opinions and basis of such disputes, so as to strive for better results for their own cases. In this case, lawyer Dehe put forward the possibility of F company's defense from multiple angles through in-depth study of all the files of the first instance and multiple communications with F company in the second trial, thus successfully reversing it.

3、Strengthen cooperation and communication: In this case, the close cooperation and communication between Dehe lawyers and F Company is one of the keys to success. Enterprises can strengthen cooperation and communication with lawyers, relevant departments and parties, so as to better protect their rights and interests.

4、Reasonably expected litigation outcome: In this case, the second trial successfully reversed the first trial judgment, but this outcome is not always possible. Enterprises shall maintain reasonable expectations of the outcome of litigation and take further measures to safeguard their rights and interests when necessary.

The enlightenment of this case has important guiding significance for enterprises to reasonably safeguard their own rights and interests. Through full understanding of legal risks, in-depth analysis of cases, strengthening cooperation and communication, and reasonable expectation of litigation results and other measures, enterprises can better cope with legal risks and achieve better litigation results.

Introduction to Lawyers

Lawyer Zheng Caihui

Lawyer of Shanghai Dehe Hantong Law Firm

Master of Law from Renmin University of China, engaged in legal work for many years, the main practice areas are complex commercial litigation and arbitration, corporate governance, corporate compliance.

Lawyer Zheng Caihui has sponsored and participated in many complex commercial litigation and arbitration cases, and is good at designing litigation strategies and planning litigation schemes. Successfully obtained the results of return, change of judgment and mediation through litigation, negotiation and mediation in a number of second-instance cases, which were well received by customers.

Email:chzheng@dehehantong.com

Lawyer Yu Wang

Partner of Shanghai Dehe Hantong Law Firm

Master of Law from Shanghai University of International Business and Economics, main practice areas are corporate affairs, commercial dispute resolution (inter-company commercial disputes, internal corporate governance disputes).

Lawyer Wang Yu is deeply engaged in difficult and complex commercial litigation and arbitration, familiar with the case process of the second trial and retrial, and good at difficult and complex second trial or retrial civil and commercial cases and achieving the effect of litigation reversal. In the four second trial cases he represented from 2022 to 2023, all of them achieved good results of retrial or complete change.

The representative cases include: acting as an agent for a state-owned enterprise to deal with the sino-foreign cooperative operation contract dispute with a certain enterprise, and striving for a good situation to reach a settlement with the other party by filing lawsuits such as the shareholder's right to know lawsuit; Acting as an agent for many overseas banks to file lawsuits of debt accession and personality denial in China, successfully collecting huge creditor's rights for many overseas banks; Acting as an agent for a state-owned enterprise to deal with the second trial case of a dispute between a shareholder of a company and the interests of creditors, the court of first instance ruled that the state-owned enterprise lost the lawsuit, and successfully obtained the good result of retrial in the second trial stage.

Email:yuwang@dehehantong.com