228 A.3d 736
Md.2020Background
- A March 2014 fire heavily damaged a near-complete apartment project owned by Upper Rock; damages were ~ $22 million.
- The Prime Contract (AIA A102/A201 form) between Upper Rock and Gables Construction, Inc. (GCI) required owner-bought builder’s-risk insurance and contained a waiver of subrogation (owner and contractor waive claims against each other to the extent covered by insurance).
- Upper Rock sued Red Coats (hired to provide fire watch/security). Red Coats impleaded GCI for contribution under Maryland’s UCATA (CJ § 3-1401 et seq.).
- Upper Rock and Red Coats settled for $14 million (Red Coats paid $4M out-of-pocket; insurer paid $10M); settlement included Red Coats’ admission of joint tortfeasor status and extinguished other joint-liability claims.
- At trial a jury found GCI negligent and awarded Red Coats $7M contribution (later reduced by the court of special appeals to $2M). GCI appealed further to the Court of Appeals.
- The Court of Appeals held that because the contractual waiver of subrogation precluded any direct tort liability by GCI to Upper Rock, GCI was not a “joint tortfeasor” under the UCATA and Red Coats’ statutory contribution claim failed; the Court of Special Appeals judgment was reversed.
Issues
| Issue | Plaintiff's Argument (Red Coats) | Defendant's Argument (GCI) | Held |
|---|---|---|---|
| Whether a defendant can be liable for contribution under the UCATA when a contractual waiver of subrogation bars the defendant’s direct tort liability to the injured party | Waiver in the Prime Contract is a contract matter between owner and contractor and should not defeat a third party’s UCATA contribution claim; Red Coats was not party to that waiver | UCATA requires the party from whom contribution is sought to be "liable in tort" to the injured party; the waiver prevents any direct liability, so contribution is unavailable | Held for GCI: contractual waiver that precludes the injured party’s claim also precludes contribution; a joint tortfeasor must be legally liable to the injured party under UCATA |
| Whether a waiver of subrogation should be treated differently from other defenses (e.g., immunity, contributory negligence, or statute of limitations) for UCATA purposes | Waiver differs because it was negotiated pre-injury and Red Coats was not a party; should not be equated with immunity or contributory negligence | Waiver, like immunity or contributory negligence, prevents legal responsibility to the injured party from the moment of the wrong and therefore bars contribution; statute-of-limitations is the narrow, recognized exception because it depends on post-injury litigation conduct | Held for GCI: waiver is like other pre-existing defenses (immunity, contributory negligence) and bars contribution; statute-of-limitations remains a distinct exception but is not applicable here |
Key Cases Cited
- Montgomery County v. Valk Mfg. Co., 317 Md. 185 (1989) (UCATA contribution requires the defendant to be legally liable to the injured party; contribution is derivative)
- Baltimore Transit Co. v. State ex rel. Schriefer, 183 Md. 674 (1944) (workers’ compensation immunity bars contribution; contribution predicated on plaintiff’s right of action against third party)
- Ennis v. Donovan, 222 Md. 536 (1960) (interspousal immunity prevents contribution because injured party had no right of action against spouse)
- Parler & Wobber v. Miles & Stockbridge, P.C., 359 Md. 671 (2000) (refused to create a public‑policy exception to UCATA for attorney‑client privilege; reiterates that contribution rests on common liability)
- John L. Mattingly Constr. Co. v. Hartford Underwriters Ins. Co., 415 Md. 313 (2010) (recognizes prevalence and policy rationales for contractual waivers of subrogation in construction contracts)
- Bozman v. Bozman, 376 Md. 461 (2003) (abrogated interspousal immunity; discussed in relation to earlier UCATA jurisprudence)