Indalex, Inc. v. Nat’l Union Fire Ins. Co., 99 A.3d 926 (Pa. 2014)

In a per curiam decision without a published opinion, the Pennsylvania Supreme Court denied National Union Fire Insurance Company of Pittsburgh’s (“National”) appeal from a Superior Court decision holding that National had a duty to defend its insured, Indalex, Inc. (“Indalex”) in multiple state court lawsuits.  The Superior Court opinion, reported at 83 A.3d 418, highlighted the limits of prior case law and confirmed an insurer’s duty to defend under commonly-used commercial general liability policy language when the underlying claimant alleges personal injury or damage to other property resulting from the insured’s negligence.

Continue Reading Pennsylvania Supreme Court Denies Appeal In Coverage Dispute; Superior Court Decision Recognizing a Duty to Defend Where Tort Claims Allege Damage to Other Property Stands

Travelers Indem. Co. v. Crown Corr, Inc., 2014 U.S. App. LEXIS 21101 (9th Cir. 2014)

This action arose out of the construction of the University of Phoenix Stadium (the “Stadium”), home of the Arizona Cardinals.  Tourism and Sports Authority (the “Owner”) entered into a Design/Build Agreement with the Arizona Cardinals and Hunt Construction Group (the “Contractor”) for the design and construction of the Stadium (the “Prime Contract”).  The Contractor then entered into a subcontract with Crown Corr, Inc. (the “Subcontractor”) for the design of the Stadium’s exterior enclosure system (the “Subcontract”).

Continue Reading Ninth Circuit Enforces Waiver of Subrogation Clause in Design/Build Agreement Against Post-Construction Property Insurer

Bd. of Comm’rs v. Teton Corp., 3 N.E.3d 556, 2014 Ind. App. LEXIS 43 (Ind. Ct. App. 2014)

This action arose out of a repair and renovation project to the Jefferson County Courthouse in Madison, Indiana (the “Project”). The Jefferson County Board of Commissioners (the “Owner”) contracted with Teton Corporation (the “Contractor”) for the work. The parties’ agreement incorporated a form construction contract prepared by the American Institute of Architects (the “AIA Contract”). The AIA Contract required the Owner to provide builder’s risk insurance for the Project, or to notify the Contractor so that the Contractor could procure the insurance and pass the cost on to the Owner through a change order. The AIA Contract also provided for a mutual waiver of the right to subrogation between and among the Owner, Contractor, and all subcontractors. The Owner did not obtain separate property (or builder’s risk) insurance for the Project, instead relying on its existing property and casualty insurance policy. And, the Owner also did not inform the Contractor that it was not securing separate insurance for the Project.

During the renovations, a fire broke out, causing over $6 million in damage to the property, including damage beyond the scope of the Contractor’s “Work” as defined in the AIA Contract. After the Owner’s insurance company paid under the terms of its policy, the Owner sued the Contractor and its subcontractors for the damages. The Contractor moved for summary judgment. The Contractor argued that the Owner agreed to provide insurance for the Project, and the Owner waived its subrogation rights against the Contractor; therefore, the Owner was not entitled to recover damages from the Contractor that were caused by the fire. The trial court agreed with the Contractor and granted summary judgment. The Owner appealed.

Continue Reading Indiana Court of Appeals Holds Waiver of Subrogation Clause in Standard AIA Contract Not Limited to Damage to Contractor’s “Work”