The Wisconsin Supreme Court in Dufour v. Progressive Classic Insurance Co., 881 N.W.2d 678 (Wis. 2016) held that insurance companies may retain funds obtained as subrogation for payments that the insurer had previously made, even though the insured may not have been fully compensated for the loss. The court found that it would look to the specific facts and equities in dictating whether the "made whole" doctrine would apply. Under the "made whole" doctrine, insurers are typically prevented from retaining funds received for its subrogation claims in cases where the insured has not been made whole. The court found that the "made whole" doctrine is an equitable doctrine and only applied when the equities favor the policyholder. In cases where there were reasonable reasons why the equities favored the insurance company, the doctrine would not be applied.
In RSUI Indemnity Co. v. Discovery P&C Ins. Co., 649 Fed.Appx. 534 (9th Cir. 2016), the primary insurer unreasonably had refused to pay a settlement demand within policy limits. In order to achieve a settlement, the excess insurer paid a portion of the settlement within its policy limits. The question before the Court was whether an excess insurance company could contribute to the settlement on behalf of the insured, and then sue the primary insurer to recover the amount of the settlement under the theory of equitable subrogation. The Ninth Circuit answered that question in the affirmative.