Why Matt Cannot Sue Zach for Burning Down His Restaurant?

Explanation:

It is NOT possible for Matt to sue Zach for the damages to his restaurant if the insurer has already paid out the claim and is pursuing Zach for the amount through subrogation. In the concept of subrogation, once the insurance company has compensated the insured party, they acquire the rights to pursue any third party responsible for the loss to recover the costs. Essentially, this prevents the responsible party from being sued twice for the same damages. The principle stems from the premise that the party causing the damage should be liable, but also from the need to prevent unjust enrichment of the insured party should they receive compensation from both the insurance company and the responsible party.

Applying the concept of property rights as explained by economist Ronald Coase, Matt does not have the right to sue because his rights to seek compensation have been effectively transferred to his insurer once the claim was settled. This prevents an endless squabble between Matt and Zach since Matt's right to seek compensation has been clearly defined and exercised through his insurance policy.