Westfield Ins. Group v. Affinia Dev., L.L.C.
982 N.E.2d 132
Ohio Ct. App.2012Background
- Knox County owned and insured MEROC building at 1 Avalon Rd., Mount Vernon, Ohio with Westfield property policy.
- MEROC entered a contract with Affinia Development, LLC to renovate the building; Gabrysch d/b/a Intex was a subcontractor.
- Westfield paid MEROC over $100,000 for fire damages after a March 2010 fire during renovation; origin of fire undetermined.
- The MEROC/Owner-Contractor contract (AIA form) included a waiver of subrogation clause §11.3.7; Owner insured the Work under §11.3 and relied on Westfield’s policy.
- Westfield, as MEROC’s subrogee, sued for negligence, breach of contract, and warranty; Affinia and Gabrysch moved for summary judgment arguing the waiver barred the claim; trial court granted summary judgment; affirmance on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of waiver of subrogation under the contract | Westfield: waiver limits only Work damages | Affinia/Gabrysch: waiver bars all insured damages | Waiver applies to all damages paid by owner’s insurance (majority view) |
| Whether damages to non-Work property are barred | Westfield claims non-Work damages protected by separate insurance | Affinia/Gabrysch argue waiver covers all insured damages | Waiver bars subrogation for damages insured under the owner’s policy, regardless of Work vs non-Work |
Key Cases Cited
- Haemonetics Corp. v. Brophy & Phillips Co., 501 N.E.2d 526 (Mass. App. Ct. 1986) (waiver extends to insurance proceeds under contract)
- Lloyd's Underwriters v. Craig and Rush, Inc., 32 Cal.Rptr.2d 144 (Cal. App. 1994) (waiver limited by insurance proceeds paying for the loss)
- S.S.D.W. Co. v. Brisk Waterproofing Co., 557 N.E.2d 1097 (N.Y. 1990) (waiver based on proceeds of insurance under contract)
- Trinity Universal Ins. Co. v. Bill Cox Constr., 75 S.W.3d 6 (Tex. Civ. App. 2001) (majority/minority approach to scope of waiver (work vs non-work))
- Lexington Ins. Co. v. Entrex Communication Servs., Inc., 749 N.W.2d 124 (Neb. 2008) (majority view: waiver covers proceeds of insurance applicable to the Work)
- Copper Mountain, Inc. v. Industrial Systems, Inc., 208 P.3d 692 (Colo. 2009) (Colorado Supreme Court adopted majority approach toward waiver scope)