In Liberty Mut. Ins. Co. v. Altfillisch Constr. Co. (1977) 70 Cal. App. 3d 789, an insurer had compensated its insured for equipment damage that the insured's lessee had committed. When the insurer sued the lessee in subrogation to the insured's rights, the lessee successfully defended on the basis that the insured by prior agreement with the lessee had effectively relinquished any right to sue it. The policy contained a provision that "The insured shall do nothing after loss to prejudice the right of subrogation." ( Id. at p. 796.) Affirming the insurer's recovery of its payment from the insured, the court confronted the fact that the agreement with the lessee had been made before the loss, and thus did not violate this specific provision. However, the court ruled that "it was clearly a breach of the insured's implied covenant of good faith and fair dealing . . . to . . . contract away such opportunity for subrogation before the loss occurred." ( Id. at p. 797.) Liberty Mut. Ins. Co. v. Altfillisch Constr. Co., was a property insurance case, the insurer had taken no action prior to the insured owner's entering into a contract with the owner's lessee of the property which cut off the insured owner's right -- and therefore the insurer's right -- to recover from the lessee for damage to the property resulting from the lessee's negligence. The Altfillisch court held that the insured owner's contract with its lessee constituted a breach by the insured owner of the subrogation clause of its insurance contract with the insurer.