American Zurich Insurance Company as Subrogee of the Varsity Golf Club, LTD D/B/A the University of Texas Golf Club v. Barker Roofing, L.P.
387 S.W.3d 54
Tex. App.2012Background
- AZIC, as subrogee of UT Golf Club, sues Barker for a clubhouse fire allegedly caused by Barker; damages include UT's business interruption and insured losses.
- UT/HCB contract required UT to maintain builder's risk property insurance and included a waiver of subrogation among Owner, Contractor, and subcontractors for fire-related damages to the extent covered by insurance (or other property insurance applicable to the Work).
- Barker's subcontract with HCB required Barker to carry liability insurance and to waive subrogation against UT, HCB, and others for fire losses to the extent covered by builder's risk insurance; Barker also indemnified UT and HCB for its performance.
- UT obtained builder's risk insurance (declaratory limits ~$5.8M, $5k deductible) that covered fire-related damages; AZIC paid about $500k in business interruption to UT.
- Fire recovery and subrogation rights are at issue; trial court granted Barker traditional summary judgment on waiver; AZIC amended pleadings to include indemnity claim; appellate review affirmed the judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver of subrogation bars AZIC's subrogation claim | AZIC argues Barker not named in waiver and indemnities negate waiver. | Barker argues waiver applies to subrogation via UT/HCB contract, covering all subcontractors. | Waiver bars AZIC's subrogation claim. |
| Business interruption losses fall within waiver | AZIC contends BI losses are not within 'Work' or UT's property insurance. | Waiver covers damages to property insured under the Work; BI losses covered by UT AZIC policy. | BI losses covered by UT's property insurance and within waiver scope; rights waived. |
| AZIC's uninsured losses are barred by waiver | AZIC seeks uninsured losses; subrogation follows insured losses. | Subrogee stands in insured's shoes; waiver extends to all insured losses covered by insurance. | AZIC's uninsured losses barred; subrogation rights limited to insured loss amount. |
| AZIC's no-evidence on waiver | AZIC argues Barker didn't move for no-evidence on waiver. | Waiver defense properly supported by contract language and record. | No-evidence motion on waiver not error; outcome upheld. |
| Breach of contract claims independent of waiver | AZIC asserted Barker breached indemnity provisions; motion not amended. | Waiver defense applies to all theories; motion sufficiently broad. | Affirmative defense of waiver applies; breach claims precluded. |
Key Cases Cited
- TX C.C., Inc. v. Wilson/Barnes Gen. Contractors, Inc., 233 S.W.3d 562 (Tex.App. -- Dallas 2007) (waiver of subrogation used to shift risk to insured property coverage, avoiding litigation for fire-related losses)
- Walker Eng'g, Inc. v. Bracebridge Corp., 102 S.W.3d 837 (Tex.App. -- Dallas 2003) (waiver of subrogation extends to subcontractors to protect property insurance coverage)
- Trinity Universal Ins. Co. v. Bill Cox Constr., Inc., 75 S.W.3d 6 (Tex.App. -- San Antonio 2003) (scope of AIA waiver determined by insurance coverage for property loss, not by Work vs non-Work)
- Temple Eastex, Inc. v. Old Orchard Creek Partners, 848 S.W.2d 724 (Tex.App. -- Dallas 1992) (construction waiver principles recognizing subrogation waivers in building contracts)
- In re Service Corp. Int'l, 355 S.W.3d 655 (Tex. 2011) (contract interpretation when multiple instruments are integrated; give effect to whole agreement)