RLI Insurance Co. v. Southern Union Co.
341 S.W.3d 821
| Mo. Ct. App. | 2011Background
- Explosion at Triumph Foods hog plant in St. Joseph (Oct 12, 2005) caused by natural gas ignition; Triumph’s builder’s risk insurer RLI paid $7,990,000 to reconstruct the Plant.
- Triumph contracted with MGE for gas transportation; MGE contract silent on subrogation waivers and did not incorporate Triumph’s AIA General Conditions.
- Triumph used Epstein Construction Manager and AIA Contract waivers 11.3.7 to extend waivers to other parties involved in Project.
- MGE sought summary judgment as an intended third-party beneficiary to the waiver; trial court granted on Subrogation Damages and related issues.
- Final Judgment dismissed counts seven–ten without prejudice; the combined effect with the Summary Judgment Order constituted a final appealable judgment.
- Appellate court held MGE is an intended third-party beneficiary of the waiver, and jurisdiction to appeal exists; MGE’s tariff/defenses addressed as alternative grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MGE is an intended third-party beneficiary of the waiver of subrogation | RLI/MGE contract absence argues no beneficiary status | MGE is within the identifiable class of 'Owner’s other Contractors and own forces' under Article 6 | Yes; MGE is an intended beneficiary under the waiver. |
| Whether MGE falls within 'construction or operations related to' the Project to be within Article 6 | MGE's work was not construction/operations | MGE’s gas line, meter, and regulatory work were integral to Project and within Article 6 | Yes; MGE activities fall within 'construction or operations related to' the Project. |
| Whether the appellate court has jurisdiction to review the interlocutory summary judgment | There is a final judgment despite partial interlocutory order | Final Judgment dismissals without prejudice preclude appeal | Jurisdiction exists; combined order/final judgment constitutes appealable finality. |
Key Cases Cited
- Butler v. Mitchell-Hugeback, Inc., 895 S.W.2d 15 (Mo. banc 1995) (third-party rights to enforce waivers beyond contract language)
- Frisella v. RVB Corp., 979 S.W.2d 474 (Mo.App. E.D.1998) (integration clause; collateral agreements not barred by parole evidence)
- Nodaway Valley Bank v. E.L. Crawford Constr., Inc., 126 S.W.3d 820 (Mo.App. W.D.2004) (waiver of subrogation policy aims to protect insureds and insurers)
- Magee v. Blue Ridge Professional Building Co., 821 S.W.2d 839 (Mo. banc 1991) (combination of orders can form final judgment for appeal)
- Denny's Inc. v. Avesta Enter., Ltd., 884 S.W.2d 281 (Mo. App. W.D.1994) (identifiable class for third-party beneficiary construction)
- Holt v. Myers, 494 S.W.2d 430 (Mo. App. 1973) (subrogee rights and impact of contracts on waiver)