Haren & Laughlin Construction Co. v. Jayhawk Fire Sprinkler Co.
330 S.W.3d 596
| Mo. Ct. App. | 2011Background
- Haren & Laughlin Construction (H&L) hired to build a senior living facility; KCHR Senior Care had a General Contract with indemnity and a broad waiver of subrogation for injuries covered by standard insurance forms.
- H&L subcontracted to Jayhawk Fire Sprinkler to install and maintain the sprinkler system; Subcontract required Jayhawk to indemnify H&L for damages caused by its defect within one year of final project acceptance.
- Section 3 of the Subcontract provides H&L with the same rights against Jayhawk as it had against KCHR under the General Contract.
- Project acceptance occurred November 26, 2007; a December 6, 2007 leak damaged floors and furniture, which H&L paid for through its insurer via subrogation.
- H&L sued Jayhawk, asserting multiple claims including indemnification; the trial court granted Jayhawk summary judgment finding waiver of subrogation barred the claims.
- The Missouri Court of Appeals reversed, holding unresolved issues about whether the waiver applied at the time of loss and whether the loss fell within the required insurance coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Jayhawk can rely on waiver of subrogation as a third-party beneficiary | H&L argues the Subcontract incorporates the waiver and Nodaway limits indemnity when insurance covers the loss. | Jayhawk contends the waiver applies through the General Contract and makes Jayhawk a third-party beneficiary, barring subrogation. | Waiver applies to Jayhawk as a third-party beneficiary; material issues remain about insurance coverage and timing. |
| Whether the waiver remained in effect at the time of the December 6, 2007 leak | Waiver persisted as long as insurance was required under the agreement, despite project completion. | Waiver may not remain after project completion or final payment; unclear if H&L still had obligation to maintain insurance. | Genuine dispute exists as to whether waiver was still in effect at time of loss. |
| Whether the damages were covered by the insurance required under the General Contract | H&L paid damages through its insurer; coverage under the required policy is contested on terms, not merely payment. | Payment by insurer does not prove coverage under required policy terms; disputed insurance scope. | Material fact issues exist about whether damages were within the required insurance coverage. |
| Whether summary judgment was proper given disputed facts about insurance coverage | Given Nodaway limitations, the waiver should not bar H&L’s claims if coverage is disputed. | If waiver applies and insurance covers the loss, subrogation is barred. | Because material facts are in genuine dispute, summary judgment was improper. |
Key Cases Cited
- Nodaway Valley Bank v. E.L. Crawford Constr., Inc., 126 S.W.3d 820 (Mo. App. W.D. 2004) (harmonizes indemnification with waiver of subrogation; third-party vs. owner claims)
- Butler v. Mitchell-Hugeback, 895 S.W.2d 15 (Mo. banc 1995) (waiver remains in effect if insurance is still required under contract)
- Knob Noster R-VIII Sch. Dist. v. Dankenbring, 220 S.W.3d 809 (Mo. banc 2008) (third-party beneficiary status can bind subcontractors via general contract waivers)
- Automobile Insurance Co. of Hartford, CT v. United H.R.B. Gen. Contractors, Inc., 876 S.W.2d 791 (Mo. App. E.D. 1994) (insurance still in effect does not necessarily extend waiver beyond life of contract)
- Peters v. Employers Mut. Cas. Co., 853 S.W.2d 300 (Mo. banc 1993) (third-party beneficiary concept utilized in contract interpretation)
- Wilson Mfg. Co. v. Fusco, 258 S.W.3d 841 (Mo. App. E.D. 2008) (contract interpretation; incorporate language of related contract provisions)