Heritage Bank v. Lovett
Supreme Court of Iowa
613 N.W.2d 652 (2000)
An employee of Culligan Water Conditioning (Culligan) (defendant), while servicing the Buells' home, stole an ATM card linked to their account at Heritage Bank (Heritage) (plaintiff) and used it to steal nearly $10,000. Heritage reimbursed the Buells for almost the entire loss and then sued Culligan for negligent hiring, arguing it was subrogated to (standing in the shoes of) the Buells' rights against Culligan. The trial court granted Culligan summary judgment, reasoning that Heritage, not the Buells, actually suffered the loss, so Heritage wasn't subrogated to any claim the Buells themselves held; Heritage appealed.
Whether a bank that reimburses a depositor for funds stolen via an ATM card may be subrogated to the depositor's own claim against the third party responsible for the theft.