In accordance with Article 682 of the Commercial Act, the scope of the insurer's subrogation right which the insurer may exercise against the third party.

Article 682 of the Commercial Act

Supreme Court Decision 2011Da100312 Decided August 30, 2012 (Gong2012Ha, 1602)

ELA Co., Ltd. (Attorney Su-young, Counsel for the defendant-appellant)

Es safety glass Co., Ltd. (Seoul General Law Firm, Attorneys Yoon Sang-il et al., Counsel for the plaintiff-appellant)

Alternative Construction Co., Ltd. and one other (Law Firm CSS, Attorney Lee Jae-in, Counsel for the plaintiff-appellant)

Seoul Central District Court Decision 201Na33930 decided February 10, 2012

The appeal is dismissed. The costs of appeal are assessed against the Plaintiff’s Intervenor, and the remainder are assessed against the Plaintiff.

The grounds of appeal are examined.

1. As to the assertion of misapprehension of legal principles as to comparative negligence

If the victim was negligent in causing or expanding damage in a tort compensation case, it should be taken into account as a matter of course in determining the scope of liability for damages. However, fact-finding or determining the ratio of comparative negligence is within the exclusive authority of a fact-finding court unless it is deemed that it is considerably unreasonable in light of the principle of equity (see Supreme Court Decision 2010Da79947, Jan. 12, 2012, etc.).

According to the reasoning of the judgment below, after compiling the adopted evidence, the court below acknowledged the circumstances as stated in the judgment, and determined that it is reasonable to limit the defendants' liability for damages related to the fire of this case to 20% of the amount of damages. Examining the related evidence in light of the legal principles as seen earlier, the above judgment of the court below is just and acceptable, and there is no violation of law as otherwise

2. As to the assertion of misapprehension of legal principles as to Article 682 of the Commercial Act

For the reasons indicated in its reasoning, the lower court determined that the Plaintiff’s exercise of the right to the above part of Defendant 2’s liability by subrogation of the Plaintiff’s Intervenor pursuant to the proviso to Article 682 of the Commercial Act was not permitted as a result of the Plaintiff’s infringement of the above right against Defendant 2, on the grounds that the Plaintiff’s failure to receive compensation equivalent to KRW 343,035,214 remains due to the Plaintiff’s payment of insurance proceeds, and Defendant 2’s failure to receive compensation within the scope of said damage is still entitled to directly claim damages against Defendant 2.

In light of the relevant legal principles and records, the above determination by the court below is just and acceptable, and contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles on Article 682 of the Commercial Act.

3. As to the misapprehension of legal principles as to the agreement and the assertion of violation of the rules of evidence

Article 682 of the Commercial Act provides, “When a loss has occurred due to a third party’s act, an insurer who has paid the insured amount shall obtain the right of a policyholder or the insured with respect to such third party within the limit of the amount paid. However, when the insurer has paid part of the insured amount to be compensated, the insurer may exercise its right to the extent not impairing the rights of the insured.” Thus, where the insured has not been compensated even after having received the insurance amount from the insurer, the amount calculated by deducting the insurance amount paid by the insurer from the total amount of damage of the insured (hereinafter referred to as “unpaid amount”) out of the claim for damages corresponding to the fault of the insured against the third party is still left as the insured’s right, and only the insurer may claim directly against the third party by subrogation of the insurer (see Supreme Court Decision 2011Da100312, Aug. 30, 2012). Therefore, if the insured’s claim for damages against a third party is not effective, the insurer’s right of subrogation may not be exercised even if the insurer exercises its right of subrogation.

In conclusion, the scope of the insurer's right of subrogation is determined to only exercise the remainder after deducting the amount of non-compensation from the total amount of compensation for damages held by the insured against a third party under Article 682 of the Commercial Act. Since the insured's right of compensation for damages against a third party within the scope of non-compensation amount is the right of the insured, the insurer cannot exercise the insurer's right of subrogation against that part regardless of whether the insured exercises or disposes of it.

However, according to the reasoning of the judgment below, the plaintiff's intervenor has the right to claim damages against the defendant company with KRW 303,196,334, and the amount of non-compensation damage of the plaintiff's intervenor is 343,035,214. In light of the above legal principles, the plaintiff cannot exercise the right of subrogation against the defendant company regardless of whether the plaintiff's intervenor renounced the right to claim damages against

The court below’s rejection of the Plaintiff’s claim, regardless of the propriety of the judgment on this part of the court below, is justified, and thus, it cannot be accepted.

4. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the Intervenor and the remainder are assessed against the Plaintiff. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Poe-dae (Presiding Justice)