433 S.W.3d 37
Tex. App.2013Background
- Concierge sued Brae Burn and several subcontractors for water damage and mold after project completion.
- Concierge settled with Brae Burn; Brae Burn assigned its contractual rights against the subcontractors to Concierge.
- Subcontracts contain indemnity provisions 6.1 and 6.2; dispute over the meaning of 'property' in 6.1; 6.2 defines 'Property' as tangible personal property.
- After settlement, Concierge asserted indemnity claims against the subcontractors as Brae Burn’s assignee; subcontractors moved for summary judgment; trial court granted.
- Court held Brae Burn retained the original claim burdened by insurers’ subrogation rights; assignment to Concierge valid; 6.1 indemnity covers broad property damage; reversed and remanded for further proceedings on indemnity and breach evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Brae Burn’s assignment to Concierge valid notwithstanding subrogation rights? | Concierge | Subcontractors | Assignment valid; Brae Burn retains the claim burdened by insurer rights. |
| Does 6.1 indemnity cover property damage to the finished building? | 6.1 uses ordinary 'property' meaning | 6.1 should be limited to tangible property under 6.2 | 6.1 applies ordinary meaning; covers damage to the building. |
| Is there sufficient evidence of breach causation to support indemnity? | Stanford affidavit shows causation | Affidavit allegedly conclusory | Stanford affidavit competent; creates triable causation link. |
Key Cases Cited
- Frost Nat’l Bank v. L & F Distribs., 165 S.W.3d 310 (Tex. 2005) (contract construction; business activity considered)
- Fortis Benefits v. Cantu, 284 S.W.3d 642 (Tex. 2007) (subrogation rights; contract interpretation)
- Rushing v. Int’l Aviation Underwriters, Inc., 604 S.W.2d 239 (Tex.App.-Dallas 1980) (insurer subrogation rights; pro tanto ownership)
- Guillot v. Hix, 838 S.W.2d 230 (Tex.1992) (subrogation rights; derivative nature of insurer’s rights)
- State Farm Fire & Cas. Co. v. Gandy, 925 S.W.2d 696 (Tex.1996) (assignmentability; general rule)