Board of Commissioners v. Teton Corp.
30 N.E.3d 711 | Indiana Supreme Court | 2015
What This Case Means for Subcontractors
A property owner tried to recover damages from a fire that occurred during courthouse repairs by suing the contractor, claiming the subrogation waiver in their AIA contract only covered construction-related damage. The Indiana Supreme Court ruled that subrogation waivers in AIA contracts bar recovery for all damages covered by the owner's property insurance policy, regardless of whether the damage relates to the construction work itself. This 'any insurance' approach means if the owner's insurance covers it, the owner cannot sue the contractor for it—even non-construction damage. Subcontractors benefit because they're protected from liability for a broader range of incidents once a subrogation waiver is in place.
Key Takeaways
- •If your contract includes an AIA standard form with a subrogation waiver, you are protected from owner claims for any damage covered by the owner's property insurance—not just work-related damage.
- •Make sure your contract clearly incorporates the AIA language about waiving subrogation rights 'to the extent covered by property insurance' to get maximum protection under Indiana law.
- •Verify that the owner has property insurance in place before work begins; the waiver's scope depends on what their policy actually covers.
Waiver applies to all damages covered by property insurance, not just work-related damages.
Frequently Asked Question
If a fire damages the building during my work, can the owner sue me even though we signed an AIA contract with a subrogation waiver?
No, not in Indiana. If the owner's property insurance covers the fire damage, the subrogation waiver blocks the owner from suing you for it. The waiver applies to all damages covered by the owner's insurance policy, regardless of whether they relate to your construction work. This is called the 'any insurance' approach and protects you broadly.
Related Cases
Fitzgerald v. Advanced Spine Fixation Systems, Inc.
A manufacturer must indemnify an innocent seller for products liability litigation costs under Texas Civil Practice & Remedies Code § 82.002(a), even if the seller did not sell the particular defective product that injured the plaintiff, provided the seller qualifies as a 'seller' under the statute.
Green International, Inc. v. Solis
No-damages-for-delay clauses in construction contracts need not meet the conspicuousness requirement established in Dresser for exculpatory negligence clauses, and such clauses are enforceable to bar delay damages absent specific exceptions.
Associated Indemnity Corp. v. CAT Contracting, Inc.
A surety does not owe a common law duty of good faith to its principal, but good faith is a contractual condition precedent to indemnification, requiring proof of improper motive or willful ignorance rather than mere negligence.
Entergy Gulf States, Inc. v. Summers
A premises owner that contracts for work performance and provides workers' compensation insurance to contractors' employees qualifies as a statutory employer entitled to the exclusive remedy defense under the Texas Workers' Compensation Act.
Lee Lewis Construction, Inc. v. Harrison
A general contractor owes a duty of care to a subcontractor's employee for fall protection when it retains actual control over safety measures, and the evidence sufficiently supported findings of negligence and gross negligence.
Rory v. Continental Insurance
Unambiguous contractual limitations periods in insurance policies must be enforced as written unless they violate law or public policy; judicial assessments of reasonableness cannot override clear contract terms.