An insurance company client calls to ask whether it would be worthwhile to pursue the following scenario in subrogation:
Palsgraf has a few drinks and gets into his car. A mile from his home, he strikes a utility pole, damaging the pole and shorting power in the neighborhood.
Some hours later, the pole is repaired and put back into service. The next day, an energized line connected to the pole detaches at the next pole down the line (evidently from strain caused by the impact or the stress on the pole) and falls to the ground.
The line comes into contact with a piece of rebar in the yard where the lines are located, which energizes itself. This causes a gas fire because the rebar is in contact with a gas line, for some reason.
In addition to destroying the house served by the gas line, the fire melts vinyl siding, paint, and trim on the house adjacent to that where the fire began, causing $4,000 worth of damage. My client insures the homeowner whose vinyl was damaged, and wishes to sue Palsgraf, or the power utility, or the builder of the adjoining house who left the rebar in the yard, or the gas company.
Fortunately, there is a solution to the problem of who to sue:
No one. I informed my client that legal fees would exceed the damages involved by a factor of ten. Palsgraf gets a pass.