[Cite as Westfield Ins. Group v. Affinia Dev., L.L.C., 2012-Ohio-5348.]

COURT OF APPEALS 

KNOX COUNTY, OHIO 

FIFTH APPELLATE DISTRICT 

WESTFIELD INSURANCE GROUP : JUDGES: 

 : 

 : Hon. Patricia A. Delaney, P.J. 

 Plaintiff-Appellant : Hon. W. Scott Gwin, J. 

 : Hon. Sheila G. Farmer, J. 

-vs- : 

 : Case No. 12-CA-2 

AFFINIA DEVELOPMENT, LLC, ET 

AL. 

: 

: 

 : 

 : 

 Defendants-Appellees : O P I N I O N

CHARACTER OF PROCEEDING: Appeal from the Knox County Court of 

Common Pleas, Case No. 10OT04-0209 

JUDGMENT: AFFIRMED 

DATE OF JUDGMENT ENTRY: November 14, 2012 

APPEARANCES: 

For Appellant: For Appellee-Affinia Development, LLC: 

 

MICHAEL W. DEWITT ALAN E. MAZUR 

280 N. High St. 140 E. Town St. 

Suite 920 Suite 1015 

Columbus, OH 43215 Columbus, OH 43215 

 

DANIEL J. DE LUCA For Appellee-Jan Gabrysch d/b/a Intex: 

518 Township Line Road 

Suite 300 HEATHER R. ZILKA 

Blue Bell, PA 19422 M. ANDREW SWAY 

 65 E. State St., Suite 2000 

 Columbus, OH 43215 
Delaney, P.J. 

{¶1} Plaintiff-Appellant Westfield Insurance Group appeals the August 12, 

2011 and January 10, 2012 judgment entries of the Knox County Court of Common 

Pleas granting summary judgment in favor of Defendant-Appellee Affinia 

Development, LLC and Defendant-Appellee Jan Gabrysch d/b/a Intex. 

FACTS AND PROCEDURAL HISTORY 

{¶2} In July 2009, Knox County acquired ownership of a building located at 

One Avalon Road, Mount Vernon, Ohio (“the building”). The building was purchased 

for $187,000.00. Knox County conveyed the building to the Mid-East Ohio Regional 

Council (MEROC) for use as its headquarters. 

{¶3} MEROC procured commercial property insurance coverage for the 

building through Plaintiff-Appellant Westfield Insurance Group under Policy No. BOP 3 

098 240, effective from July 9, 2009 to July 9, 2010. The Westfield policy insured both 

the structure and the contents of the building. Property coverage for the building was 

$815,000.00. 

{¶4} On November 6, 2009, MEROC as Owner entered into a contract with 

Defendant-Appellee Affinia Development, LLC, as Contractor stating “[t]he scope of 

proposed construction includes renovations and improvements to existing-building 

located at 1 Avalon Rd., Mount Vernon, Ohio. Work includes, but may not be limited 

to, roof replacement, storm water improvements to the site, building ADA accessibility 

including access to building and restrooms, floor plan modifications for new layout 

including necessary alterations to plumbing, h.v.a.c. and electrical.” The contract 

amount was $201,635.00. 
{¶5} The parties utilized an American Institute of Architects contract, AIA 

Document A101-2007, entitled “Standard Form of Agreement Between Owner and 

Contractor.” The contract included AIA Document A201-2007, entitled “General 

Conditions of the Contract for Construction.” (Article §9.1.2). These documents shall 

be hereinafter referred to as the “Contract.” 

{¶6} Construction pursuant to the Contract commenced. Affinia 

subcontracted with Defendant-Appellee Jan Gabrysch d/b/a Intex to stain the trim 

woodwork. 

{¶7} The MEROC building is a three-story structure. The lower level was 

renovated first. By March 5, 2010, the remodeling work on the building was 

substantially complete. The lower level was fully completed and being occupied by 

MEROC as its administrative offices. The second floor renovations were in the final 

stages. The third floor contained an apartment and by March 5, 2010, renovations 

had not begun on that level. Intex workers did some staining work on Friday, March 5, 

2010 and left the building that evening. On the night of Saturday, March 6, 2010, a 

fire broke out in the reception area of the second floor. The fire caused damage to the 

entire structure. The Mount Vernon Fire Department investigator could not determine 

the cause of the fire. 

{¶8} Westfield paid MEROC in excess of $100,000 pursuant to the terms of 

the commercial property insurance for the damages caused by the fire. 

{¶9} On April 5, 2010, Westfield, as subrogee of MEROC, filed a complaint 

against Affinia and Gabrysch in the Knox County Court of Common Pleas claiming 
negligence, breach of contract, and breach of warranty. Westfield alleged the fire was 

caused by the negligence of Affinia and Gabrysch. 

{¶10} Affinia moved for summary judgment on April 11, 2011. In its motion for 

summary judgment, Affinia argued it was entitled to judgment as a matter of law as to 

all claims because the Contract between MEROC and Affinia contained a waiver of 

subrogation clause, preventing Westfield from pursuing its claims against Affinia. 

Gabrysch moved for summary judgment on August 15, 2011, arguing the waiver of 

subrogation clause found in the Contract applied to the subcontractor, similarly 

preventing Westfield from pursuing its claims against Gabrysch. 

{¶11} The trial court granted the motions for summary judgment on August 12, 

2011 and January 10, 2012. It is from these decisions Westfield now appeals. 

ASSIGNMENTS OF ERROR 

{¶12} Westfield raises two Assignments of Error: 

{¶13} “I. THE TRIAL COURT ERRED WHEN IT GRANTED SUMMARY 

JUDGMENT TO DEFENDANT-APPELLEE AFFINIA DEVELOPMENT, LLC. 

{¶14} “II. THE TRIAL COURT ERRED WHEN IT GRANTED SUMMARY 

JUDGMENT TO DEFENDANT-APPELLEE JAN GABRYSCH D/B/A INTEX.” 

ANALYSIS 

STANDARD OF REVIEW 

{¶15} The trial court’s decision to grant judgment in favor of Affinia and 

Gabrysch was rendered through Civ.R. 56. We review a summary judgment de novo 

and without deference to the trial court's determination. When an appellate court 

reviews a trial court's disposition of a summary judgment motion, it applies the same 
standard of review as the trial court and conducts an independent review, without 

deference to the trial court's determination. We must affirm the trial court's judgment if 

any grounds the movant raised in the trial court support it. Westbrook v. Swiatek, 5th 

Dist. No. 09CAE09–0083, 2011–Ohio–781, ¶ 43. 

{¶16} Pursuant to Civ.R. 56(C), summary judgment “shall be rendered forthwith 

if the pleadings, depositions, answers to interrogatories, written admissions, affidavits, 

transcripts of evidence, and written stipulations of fact, if any, timely filed in the action, 

show that there is no genuine issue as to any material fact and that the moving party 

is entitled to summary judgment as a matter of law.” 

{¶17} The moving party bears the initial responsibility of informing the trial 

court of the basis for the motion, and identifying those portions of the record before the 

trial court, which demonstrate the absence of a genuine issue of fact on a material 

element of the nonmoving party's claim. Dresher v. Burt, 75 Ohio St.3d 280, 292, 662 

N.E.2d 264 (1996). The nonmoving party then has a reciprocal burden of specificity 

and cannot rest on the allegations or denials in the pleadings, but must set forth 

“specific facts” by the means listed in Civ.R. 56(C) showing that a “triable issue of fact” 

exists. Mitseff v. Wheeler, 38 Ohio St.3d 112, 115, 526 N.E.2d 798, 801 (1988). 

WESTFIELD’S ARGUMENTS ON APPEAL 

{¶18} Westfield raises three arguments as to why the language of the waiver of 

subrogation clauses found within the AIA Contract do not bar Westfield’s claim for 

damages to the building: 1) the waiver of subrogation clause is vague and ambiguous, 

requiring the court to examine the parties’ intent; 2) the waiver of subrogation clause 

waives Westfield’s right to sue for damages to the Work, but does not waive 
Westfield’s right to sue for damages to non-Work property; and 3) the waiver of 

subrogation clause is against public policy. 

{¶19} We address Westfield’s second argument because it is dispositive of this 

appeal.

{¶20} While the courts of Ohio have previously reviewed terms of AIA 

contracts, the specific arguments raised by Westfield are matters of first impression in 

the State of Ohio. As such, we look to other jurisdictions to guide our decision in 

whether the waiver of subrogation clause bars Westfield’s claim for damages. During 

our analysis of complex contract documents and discrete examination of words and 

intent, we are lightly cautioned on the subject matter of AIA contracts by our brethren 

in the State of California: “Appellate counsel for both sides have done an outstanding 

job, resulting in briefs that have been more than ordinarily helpful to the court. The 

fact remains that the issues are far from enthralling; they demand an almost 

microscopic examination of dry, lengthy contract documents. As we embark on the 

resolution of these issues, then, we think it only fair to suggest that the reader might 

want to be sitting in a comfortable chair, with a cup of strong coffee nearby.” 

American Guarantee and Liability Ins. Co. v. ADP Marshall, Inc., Cal. App. 4 Dist. No. 

E041182, 2007 WL 4239987 (Dec. 4, 2007). 

CONTRACT INTERPRETATION 

{¶21} The parties’ arguments as to the Contract’s waiver of subrogation 

clauses require this Court to engage in contract interpretation. Contractual 

subrogation clauses are controlled by the usual rules of contract interpretation. Acuity 

v. Interstate Const., Inc., 11th Dist. No. 2007-P-0074, 2008-Ohio-1022, ¶ 12 citing 
Blue Cross & Blue Shield Mut. of Ohio v. Hrenko, 72 Ohio St.3d 120, 122, 647 N.E.2d 

1358 (1995). When confronted with an issue of contract interpretation, our role is to 

give effect to the intent of the parties. We will examine the contract as a whole and 

presume that the intent of the parties is reflected in the language of the contract. In 

addition, we will look to the plain and ordinary meaning of the language used in the 

contract unless another meaning is clearly apparent from the contents of the 

agreement. When the language of a written contract is clear, a court may look no 

further than the writing itself to find the intent of the parties. “As a matter of law, a 

contract is unambiguous if it can be given a definite legal meaning.” Sunoco, Inc. (R & 

M) v. Toledo Edison, Co., 129 Ohio St.3d 397, 2011-Ohio-2720, 953 N.E.2d 285, ¶ 37 

citing Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-Ohio-5849, 797 N.E.2d 

1256, ¶ 11. 

RELEVANT CONTRACT PROVISIONS 

{¶22} In their motions for summary judgment, Affinia and Gabrysch referred to 

the Contract as barring Westfield’s claims for subrogation. AIA Document A101-2007 

incorporates the terms of AIA Document A201-2007. It is within AIA Document A201-

2007 we find the relevant provisions to this appeal. 

Commonly Used Terms

{¶23} We first review three relevant terms used by the Contract in defining the 

obligations of the Owner and Contractor – “Contract,” “Work,” and “Project.” AIA 

Document A201-2007 states as to “Contract:” “The Contract Documents form the 

Contract for Construction. The Contract represents the entire and integrated 

agreement between the parties hereto and supersedes prior negotiations, 
representations or agreements, either written or oral.” AIA Document A201-2007 

defines “Work” under §1.1.3 as meaning “the construction and services required by 

the Contract Documents, whether completed or partially completed, and includes all 

other labor, materials, equipment and services provided or to be provided by the 

Contractor to fulfill the Contractor’s obligations. The Work may constitute the whole or 

a part of the Project.” AIA Document A201-2007 defines “Project” under §1.1.4 as 

meaning “the total construction of which the Work performed under the Contract 

Documents may be the whole or a part and which may include construction by the 

Owner and by separate contractors.” 

Contractor’s Obligations Under the Contract

{¶24} Article 11 of AIA Document A201-2007, entitled “Insurance and Bonds,” 

outlines the insurance obligations for the Contractor and Owner. 

{¶25} §11.1 of AIA Document A201-2007 establishes the Contractor’s 

responsibility to procure liability insurance. Article 10 of AIA Document A101-2007 

requires the Contractor to purchase and maintain insurance and provide bonds as set 

forth in Article 11 of AIA Document A201-2007. §11.1 states: 

The Contractor shall purchase from and maintain in a company or 

companies lawfully authorized to do business in the jurisdiction in which 

the Project is located such insurance as will protect the Contractor from 

claims set forth below which may arise out of or result from the 

Contractor’s operations and completed operations under the Contract 

and for which the Contractor may be legally liable, whether such 

operations be by the Contractor or by a Subcontractor or by anyone 
directly or indirectly employed by any of them, or by anyone for whose 

acts any of them may be liable: 

* * * 

 .5 Claims for damages, other than to the Work itself, because of 

injury or destruction of tangible property, including loss of use resulting 

therefrom; 

* * * 

§11.1.4 The Contractor shall cause the commercial liability coverage 

required by the Contract Documents to include (1) the Owner, the 

Architect and the Architect’s Consultants as additional insureds for 

claims caused in whole or in part by the Contractor’s negligent acts or 

omissions during the Contractor’s operations; and (2) the Owner as an 

additional insured for claims caused in whole or in part by the 

Contractor’s negligent acts or omissions during the Contractor’s 

completed operations. 

Owner’s Obligations Under the Contract

{¶26} Article §11.3 establishes the property insurance the Owner is required to 

purchase under the Contract. §11.3 also contains the waiver of subrogation clause 

relevant to this appeal: 

 §11.3.1 Unless otherwise provided, the Owner shall purchase and 

maintain, in a company or companies lawfully authorized to do business 

in the jurisdiction in which the Project is located, property insurance 

written on a builder’s risk “all-risk” or equivalent policy form in the amount 
of the initial Contract Sum, plus value of subsequent Contract 

Modifications and cost of materials supplied or installed by others, 

compromising total value for the entire Project at the site on a 

replacement cost basis without optional deductibles. Such property 

insurance shall be maintained, unless otherwise provided in the Contract 

Documents or otherwise agreed in writing by all persons and entities who 

are beneficiaries of such insurance, until final payment has been made 

as provided in Section 9.10 or until no person or entity other than the 

Owner has an insurable interest in the property required by this Section 

11.3 to be covered whichever is later. This insurance shall include 

interests of the Owner, the Contractor, Subcontractors and Subsubcontractors in the Project. 

 §11.3.1.1 Property insurance shall be on an “all-risk” or equivalent 

policy form and shall include, without limitation, insurance against the 

perils of fire (with extended coverage) and physical loss or damage 

including, without duplication of coverage, theft, vandalism, malicious 

mischief, collapse, earthquake, flood, windstorm, falsework, testing and 

startup, temporary buildings and debris removal including demolition 

occasioned by enforcement of any applicable legal requirements, and 

shall cover reasonable compensation for Architect’s and Contractor’s 

services and expenses required as a result of such insured loss. 

 §11.3.1.2 If the Owner does not intend to purchase such property 

insurance required by the Contract and with all of the coverages in the 
amount described above, the Owner shall so inform the Contractor in 

writing prior to the commencement of the Work. The Contractor may 

then effect insurance that will protect the interests of the Contractor, 

Subcontractors and Sub-subcontractors in the Work, and by appropriate 

Change Order the cost thereof shall be charged to the Owner. If the 

Contractor is damaged by the failure or neglect of the Owner to purchase 

or maintain insurance as described above, without so notifying the 

Contractor in writing, then the Owner shall bear all reasonable costs 

properly attributable thereto. 

* * * 

 §11.3.5 If during the Project construction period the Owner insures 

properties, real or personal or both, at or adjacent to the site by property 

insurance under policies separate from those insuring the Project, or if 

after final payment property insurance is to be provided on the completed 

Project through a policy or policies other than those insuring the Project 

during the construction period, the Owner shall waive all rights in 

accordance with the terms of Section 11.3.7 for damages caused by fire 

or other causes of loss covered by this separate property insurance. All 

separate policies shall provide this waiver of subrogation or otherwise. 

* * * 

§11.3.7 WAIVERS OF SUBROGATION 

 The Owner and Contractor waive all rights against (1) each other 

and any of their subcontractors, sub-subcontractors, agents and 
employees, each of the other, and (2) the Architect, Architect’s 

consultants, separate contractors described in Article 6, if any, and any 

of their subcontractors, sub-subcontractors, agents and employees, for 

damages caused by fire or other causes of loss to the extent covered by 

property insurance obtained pursuant to this Section 11.3 or other 

property insurance applicable to the Work, except such rights as they 

have to proceeds of insurance held by the Owner as fiduciary. The 

Owner or the Contractor, as appropriate, shall require of the Architect, 

Architect’s consultants, separate contractors described in Article 6, if 

any, and the subcontractors, sub-subcontractors, agents and employees 

of any of them, by appropriate agreements, written where legally 

required for validity, similar waivers each in favor of other parties 

enumerated herein. The policies shall provide such waivers of 

subrogation by endorsement or otherwise. A waiver of subrogation shall 

be effective as to a person or entity even though that person or entity 

would otherwise have a duty of indemnification, contractual or otherwise, 

did not pay the insurance premium directly or indirectly, and whether or 

not the person or entity had an insurable interest in the property 

damaged. 

GENERAL VALIDITY OF SUBROGATION CLAUSES 

{¶27} “In Ohio, there are three distinct kinds of subrogation: legal, statutory, 

and conventional. Legal subrogation arises by operation of law and applies when one 

person is subrogated to certain rights of another so that the person is substituted in 
the place of the other and succeeds to the rights of the other person. State v. Jones

(1980), 61 Ohio St.2d 99, 100–101, 15 O.O.3d 132, 133, 399 N.E.2d 1215, 1216–

1217. Statutory subrogation is a right that exists only against a wrongdoer. 

Conventional subrogation is premised on the contractual obligations of the parties, 

either express or implied. The focus of conventional subrogation is the agreement of 

the parties. Id. at 101, 15 O.O.3d at 133, 399 N.E.2d at 1217.” Blue Cross & Blue 

Shield Mut. of Ohio v. Hrenko, 72 Ohio St.3d 120, 121, 647 N.E.2d 1358, (1995).

{¶28} Waiver of liability clauses are valid expressions of the parties' freedom to 

contract. Hanover Ins. Co. v. Cunningham Drug Stores, 8th Dist. No. 44066, 1982 WL 

5341, *3 (May 6, 1982). Ohio courts have held that “such a clause * * * which mutually 

prohibits the owner [and] contractor * * * from enforcing their rights against each other 

for damages caused by fire or other perils covered by insurance * * * is not void as 

being against public policy.” Acuity v. Interstate Const., Inc., 11th Dist. No. 2007-P0074, 2008-Ohio-1022, ¶ 13 quoting Insurance Co. of North America v. Wells, 35 Ohio 

App.2d 173, 177, 300 N.E.2d 460 (10th Dist. 1973). Ohio courts have repeatedly held 

that waiver-of-subrogation provisions are valid and enforceable. Nationwide Mutual 

Fire Ins. Co. v. Sonitrol, Inc. of Cleveland, 109 Ohio App.3d 474, 482, 672 N.E.2d 687 

(8th Dist. 1996); Len Immke Buick, Inc. v. Architectural Alliance, 81 Ohio App.3d 459, 

464, 611 N.E.2d 399 (10th Dist. 1992).

{¶29} “It is axiomatic that an insurer-subrogee cannot succeed to or acquire any 

right or remedy not possessed by its insured-subrogor.” Chemtrol Adhesives, Inc. v. 

Am. Mfrs. Mut. Ins. Co., 42 Ohio St.3d 40, 537 N.E.2d 624 (1989), paragraph one of the 

syllabus.
SCOPE OF WAIVER OF SUBROGATION – MINORITY VS. MAJORITY VIEW

{¶30} Westfield argues that while §11.3.7 of the Contract may waive 

Westfield’s right to sue for damages to the Work, Westfield did not waive its right to 

sue Affinia and Gabrysch for damages to the non-Work property. Affinia and 

Gabrysch argue the waiver of subrogation clause bars all recovery for damages to 

property, regardless if it is Work or non-Work property. “Work” is defined as, “the 

construction and services required by the Contract Documents, whether completed or 

partially completed, and includes all other labor, materials, equipment and services 

provided or to be provided by the Contractor to fulfill the Contractor’s obligations. The 

Work may constitute the whole or a part of the Project.” The Project is the total 

construction of which the Work is performed under the Contract. The Contract stated 

the scope of construction included: “renovations and improvements to existing-building 

located at 1 Avalon Rd., Mount Vernon, Ohio. Work includes, but may not be limited 

to, roof replacement, storm water improvements to the site, building ADA accessibility 

including access to building and restrooms, floor plan modifications for new layout 

including necessary alterations to plumbing, h.v.a.c. and electrical.”

{¶31} On the date of the fire, the renovations to the first level were completed. 

The second level was in the process of being renovated. The third floor was not 

renovated. 

{¶32} The waiver of subrogation provision in §11.3.7 states in relevant part, 

“the Owner [Westfield as subrogee] and Contractor [Affinia] waive all rights against *** 

each other and any of their subcontractors [Gabrysch] * * * for damages caused by fire 
or other causes of loss to the extent covered by property insurance obtained pursuant 

to this Section 11.3 or other property insurance applicable to the Work.” 

{¶33} §11.3.1 required MEROC to purchase a builder’s risk “all-risk” or 

equivalent policy form in the amount of the initial Contract sum compromising the total 

value for the entire Project at the site. MEROC did not purchase a separate builder’s 

risk policy covering the Work, but instead relied upon its commercial property 

insurance coverage through Westfield. The Contract amount was $201,635.00. The 

amount of insurance coverage on the building was $815,000.00. §11.3.5 states that if 

the Owner insures properties at or adjacent to the site by property insurance separate 

from those insuring the Project, the Owner shall waive all rights in accordance with the 

terms of §11.3.7 for damages caused by fire or other causes of loss covered by this 

separate property insurance. 

{¶34} As stated above, the argument raised by Westfield is a matter of first 

impression in the State of Ohio. The Eleventh District Court of Appeals in Acuity v. 

Interstate Const., Inc., 11th Dist. No. 2007-P-0074, 2008-Ohio-1022, reviewed an AIA 

contract and the scope of the waiver of subrogation provision, but under different 

circumstances. In Acuity, the owner and contractor entered into a construction 

contract utilizing the AIA contract with the waiver of subrogation provision recited 

above. The contractor finished construction on the project in 1998. In 2001 and 2003, 

the owner purchased insurance covering property damage. Water pipes froze and 

burst at the property, causing damage to the property in 2002 and 2004. Id. at ¶ 2-3. 

The insurer filed an action as subrogee of its insured to recover its damages. The 

issue in that case was whether the waiver of subrogation provision contained in the 
AIA contract between the owner and contractor applied to damage covered by 

insurance purchased after construction was completed. Id. at ¶ 1. The Eleventh 

District Court of Appeals reviewed the same waiver of subrogation clause as found in 

the present case, but answered a different question as to the scope of the waiver of 

subrogation provision from that raised in our case. In our case, there is no argument 

that MEROC purchased insurance after the completion of construction; MEROC 

purchased the property insurance before construction. We look to Acuity for guidance 

but it is not dispositive of this appeal. 

{¶35} We therefore look to other jurisdictions to examine the issue of the scope 

of the waiver of subrogation clause in the AIA contract. As pointed out by the parties, 

other state courts have ruled on this issue in such a manner as to result in a “minority” 

and “majority” approach. In Trinity Universal Ins. Co. v. Bill Cox Const., 75 S.W.3d 6 

(Tex.Civ.App. 2001), the Texas Court of Appeals summarized the two approaches:

 Courts addressing similar AIA contracts agree that the contract 

bars the owner, or its subrogee insurance company, from bringing suit 

against either general contractors or subcontractors for damages caused 

by fire or other peril. However, the courts disagree as to the scope of the 

waiver. A review of cases from other jurisdictions involving language 

identical to or substantially similar to the language in the AIA Agreement 

here reveals two approaches to the question of when an insurer's 

subrogation rights are barred: one approach makes a distinction between 

Work (as that word is defined in the contract) and non-Work property and 

limits the scope of the waiver to damages to the Work; and the second 
approach draws no distinction between Work and non-Work, but instead, 

limits the scope of the waiver to the proceeds of the insurance provided 

under the contract between the owner and contractor. 

 The courts that interpret the scope of the waiver by drawing a 

distinction between Work and non-Work property ask only whether the 

Work was damaged -- if yes, then the waiver applies; if no, then the 

waiver does not apply. See Fidelity & Guar. Ins. Co. v. Craig–Wilkinson, 

Inc., 948 F.Supp. 608, 611 (S.D.Miss.1996), aff'd, 101 F.3d 699 (5th 

Cir.1996) (plaintiff's claim for damage to non-work property not barred 

because contractual waiver provided solely for waiver of claims for 

damage to Work); Town of Silverton v. Phoenix Heat Source Sys., Inc., 

948 P.2d 9, 12 (Colo.Ct.App.1997) (waiver limited to value of work 

performed under contract and inapplicable to other parts of town hall 

damaged by fire); S.S.D.W. Co. v. Brisk Waterproofing Co., 76 N.Y.2d 

228, 557 N.Y.S.2d 290, 292–93, 556 N.E.2d 1097 (1990) (waiver applies 

only to damage to areas within the limits of the Work). Under this 

interpretation, “It makes no difference whether the policy under which 

subrogation is sought is one which the owner purchased specifically to 

insure the Work pursuant to [the contract] or some other policy covering 

the owner's property in which the owner has also provided coverage for 

the Work. In either event, the waiver clause, if given its plain meaning, 

bars subrogation only for those damages covered by insurance which 

the owner has provided to meet the requirement of protecting the 
contractor's limited interest in the building- i.e., damages to the Work 

itself.” S.S.D.W., 557 N.Y.S.2d at 292–93, 556 N.E.2d 1097. 

 However, the majority of jurisdictions considering the issue 

criticize the work/non-work distinction as ignoring the language defining 

the scope of claims falling within the waiver clause. These courts 

interpret the scope of the waiver as limited to the proceeds of the 

insurance provided under the contract, and ask whether the owner's 

policy was broad enough to cover both Work and non-Work property and 

whether the policy paid for damages. ASIC II Ltd. v. Stonhard, Inc., 63 

F.Supp.2d 85, 92 (D.Me.1999) (waiver clause did not restrict waiver of 

damages to Work but to proceeds of any insurance provided under the 

contract); Employers Mut. Cas. Co. v. A.C.C.T., Inc., 580 N.W.2d 490, 

493 (Minn.1998) (if owner relies on an existing policy broad enough to 

cover the Work and the non-Work property, it waives right to sue for all 

damages so long as that damage is covered by the policy); Lloyd's 

Underwriters v. Craig and Rush, Inc., 26 Cal.App.4th 1194, 32 

Cal.Rptr.2d 144, 146, 148 (1994) (waiver limited by the coverage 

afforded by the identified policy and not by the nature of the structure 

harmed); Haemonetics Corp. v. Brophy & Phillips Co., 23 Mass.App.Ct. 

254, 501 N.E.2d 524, 526 (1986) (waiver of rights extends to proceeds of 

any insurance provided under the contract). “The plain import of the 

emphasized language is that so long as a policy of insurance ‘applicable 

to the Work’ pays for the damage, the waiver applies.... The waived 
claims are not defined by what property is harmed ( i.e., ‘any injury to the 

Work’); instead, the scope of waived claims is delimited by the source of 

any insurance proceeds paying for the loss ( i.e., whether the loss was 

paid by a policy ‘applicable to the Work’).” Lloyd's Underwriters, 32 

Cal.Rptr.2d at 148; see also ASIC II Ltd., 63 F.Supp.2d at 92–93 

(explaining that waiver form used in S.S.D.W. contract was later revised 

to overcome the holding in this case); A.C.C.T., Inc., 580 N.W.2d at 493 

(adopting reasoning of Lloyd's Underwriters ); Haemonetics, 501 N.E.2d 

at 526.

Trinity Universal Ins. Co., 75 S.W.3d 6, 11-12.; Accord Lexington Ins. Co. v. Entrex 

Communication Servs., Inc., 275 Neb. 702, 749 N.W.2d 124 (Neb. 2008). 

Westfield Supports the First Approach

{¶36} Westfield urges this Court to adopt the first approach, which has been 

characterized as the minority view. In support of its argument, Westfield refers this 

Court to Copper Mountain, Inc. v. Industrial Systems, Inc., 208 P.3d 692 (Co. 2009). 

In that case, the owner hired the contractor to perform renovations and build an 

addition to a ski lodge. The parties used the AIA contract with substantially the same 

provisions as the Contract in the present case. Pursuant to the terms of the AIA 

contract, the owner added an endorsement to its existing insurance policy to cover the 

Work, so that the insurance policy insured the Work and the existing ski lodge 

property. While the contractor performed the Work, a fire broke out in the ski lodge 

and caused significant damage to the existing lodge and its contents. All real and 
personal property were covered under the owner’s insurance policy. The owner 

sought contribution from the contractor for the damage to the property. 

{¶37} Upon review, the Supreme Court of Colorado reversed the decision of 

the court of appeals that found the waiver of subrogation clause in the AIA contract 

precluded the owner’s claims against the contractor. The Supreme Court analyzed 

the AIA contract and waiver clauses as to the issue of whether the owner waived its 

right to sue the contractor for damages to its non-Work property, even though the 

owner insured the property under an existing policy covering Work property. Id. at 

698. The Supreme Court adopted the minority approach to find the language of the 

waiver of subrogation clause did not bar the owner’s claim for damages to its nonWork property. In making its decision, the Supreme Court cited the New York Court of 

Appeals in S.S.D.W. Co. v. Brisk Waterproofing Co., 76 N.Y.2d 228, 556 N.E.2d 1097 

(1990):

 The court held that the plain meaning of the phrase “to the extent 

covered by insurance obtained pursuant to this Article or any other 

property insurance applicable to the Work” was that the waiver only 

applies to damages to the Work. Id., 557 N.Y.S.2d 290, 556 N.E.2d at 

1099–1100. The court stated: 

 It makes no difference whether the policy under which subrogation 

is sought is one which the owner purchased specifically to insure the 

Work pursuant to [the article requiring the owner to procure property 

insurance] or some other policy covering the owner's property in which 

the owner has also provided coverage for the Work. In either event, the 
waiver clause, if given its plain meaning, bars subrogation only for those 

damages covered by insurance which the owner has provided to meet 

the requirement of protecting the contractor's limited interest in the 

building—i.e., damages to the Work itself. Id., 557 N.Y.S.2d 290, 556 

N.E.2d at 1100. The court found that this interpretation gives “full effect” 

to the contractual provision requiring the contractor to obtain liability 

insurance protecting it from claims for damages to non-Work property. 

Id. 

Copper Mountain at 698 quoting S.S.D.W. Co. at 1099-1100. 

{¶38} The Supreme Court in Copper Mountain ultimately concluded the plain 

meaning of the AIA contract meant the subrogation clause applied solely to the 

insurance “applicable to the Work;” therefore, the contractor was liable to the owner 

for damage to non-Work property. 

Affinia and Gabrysch Support the Second Approach

{¶39} Affinia and Gabrysch argue this Court should adopt the majority view as 

held in Trinity Universal Ins. Co. v. Bill Cox Const., supra and Lexington Ins. Co. v. 

Entrex Communication Servs., Inc., 275 Neb. 702, 749 N.W.2d 124 (Neb. 2008). In 

those cases, the courts determined the waiver applied to all damages insured by the 

owner’s property insurance policy, regardless of whether they represented damages to 

the Work or non-Work property. 

{¶40} In Lexington Ins. Co., the owner contracted with the contractor to modify 

a television broadcast tower. The owner and contractor utilized the AIA contract with 

substantially similar waiver of subrogation provisions. The owner did not obtain a 
specific insurance policy to cover the Project, but instead relied upon its existing “allrisk” property insurance policies. The television broadcast tower collapsed, causing 

damages to Work and non-Work property. 

{¶41} The Supreme Court of Nebraska in Lexington Ins. Co., supra analyzed 

the question of whether the waiver of subrogation was limited to damages to the Work 

or whether it also applied to non-Work property. In finding the waiver applied to 

damages to both Work and non-Work property, the Supreme Court analyzed the 

majority approach as follows: 

 The California Court of Appeal adopted this approach in Lloyd's 

Underwriters v. Craig and Rush, 26 Cal.App.4th 1194, 32 Cal.Rptr.2d 

144 (1994). Like Hearst [the owner], the owner in Lloyd's Underwriters

elected not to purchase a separate “builder's risk” policy with coverage 

limited to the construction work. Instead, the owner chose to rely on its 

existing “all-risk” property insurance to satisfy its obligations under the 

contract to provide property insurance for the Work. Non–Work property 

was damaged while the contractor was repairing the roof of the owner's 

facility. The owner's insurers argued that these damages, although 

insured, fell outside the waiver of subrogation. 

 The Lloyd's Underwriters court read the waiver's language to 

mean that “so long as a policy of insurance ‘applicable to the Work’ pays 

for the damage, the waiver applies.” The court observed that the 

owner's insurers “[did] not dispute that their policies (1) were ‘applicable 

to the Work’ and (2) ‘covered’ or paid for the loss.” The court reasoned 
that satisfaction of these two criteria allowed the court to conclude the 

waiver applied. Stated another way, the Lloyd's Underwriters court 

essentially concluded that if a policy covering the Work paid for the 

losses, the parties waived subrogation for those losses, regardless of 

whether they were damages to the Work or non-Work property. 

 Another case often cited for the majority approach is Haemonetics 

Corp. v. Brophy & Phillips Co., 23 Mass.App. 254, 501 N.E.2d 524 

(1986). There, the owner also relied on an existing property insurance 

policy to meet its obligation to provide property insurance covering the 

Work. During construction, a fire damaged non-Work property, and the 

owner received insurance proceeds to cover the damage. The owner 

later argued that the parties' contract required only that it maintain 

property insurance on the Work, so the waiver applied only to damages 

to the Work property. The court disagreed, reasoning: 

 [“]The preexisting insurance policy ... was the insurance the owner 

chose to provide to comply with § 11.3 [here subparagraph 11.4.1] even 

though that policy may have been more extensive than what was 

required. By the terms of [the waiver of subrogation provision], the 

waiver of rights extends to the proceeds of any insurance provided under 

§ 11.3.[“] Haemonetics Corp., 23 Mass.App. at 257, 501 N.E.2d at 526. 

 The Haemonetics Corp. and Lloyd's Underwriters courts reached 

the same conclusion, but with different rationales. Again, for clarification, 

the waiver applies to the extent losses are covered by (1) insurance 
obtained to meet the owner's obligation to acquire property insurance 

covering the Project or (2) “other property insurance applicable to the 

Work.” The Haemonetics Corp. court reasoned that the owner's 

preexisting policy fell within the first alternative as the policy the owner 

chose to provide to comply with the contract. In contrast, the Lloyd's 

Underwriters court reasoned that the owner's preexisting policy came 

within the second alternative as “other property insurance applicable to 

the Work.” Despite their different classifications of the policies, both 

courts decided the owner's preexisting policy fell within the waiver of 

subrogation clause. The courts concluded that the scope of the waiver 

clause was not defined by the property damaged, but, rather, by the 

extent the damages were covered by those policies described in the 

clause: All losses covered by those policies were subject to the waiver, 

whether those losses related to the Work or non-Work property. 

(Footnotes omitted.) Lexington Ins. Co., 275 Neb. 702, 715-717, 749 N.W.2d 124, 

132-134. 

The Majority Approach Applies to the Present Case

{¶42} We find the reasoning adopted by the majority of jurisdictions addressing 

this issue to be persuasive and adopt it in resolution of this case. The second 

approach is consistent with the plain and unambiguous language of the Contract and 

furthers the purpose of the waiver clause as a risk-shifting provision. The Contract 

defined the waived claims by the source of the insurance proceeds, not by the 
property damaged. It is not relevant to the analysis as to whether the damage was to 

Work or non-Work property. §11.3.5 of the Contract states in relevant part: 

If during the Project construction period the Owner insures properties, 

real or personal or both, at or adjacent to the site by property insurance 

under policies separate from those insuring the Project, * * * the Owner 

shall waive all rights in accordance with the terms of Section 11.3.7 for 

damages caused by fire or other causes of loss covered by this separate 

property insurance. * * * 

{¶43} In Lexington Ins. Co. and Lloyd’s Underwriters both interpreted this 

provision to mean “if the owner acquires a separate property insurance policy to cover 

non-Project property -- a policy that did not cover the Project or Work property -- and 

the non-Project property is damaged, the owner waives subrogation rights for the 

insurer as to those damages. So even though the damage occurred to non-Work 

property, the owner waived subrogation rights because the damages were insured. 

This provision shows that the contracting parties were not opposed to waiving 

damages to non-Work property.” Lexington Ins. Co., 275 Neb. 702, 717-718, 749 

N.W.2d 124, 135 citing Lloyd’s Underwriters, supra. 

{¶44} Further, this approach comports with the Contract’s allocation of 

insurance responsibilities and the language defining the scope of claims falling within 

the waiver clause. Lexington Ins. Co., 275 Neb. 702, 719, 749 N.W.2d 124. Under 

§11.1, Affinia was required to obtain liability insurance covering claims for damages to 

non-Work property, while §11.3.1 required MEROC to obtain property insurance 

covering the Project (Work). The Contract does not define waived claims by the 
characterization of the property harmed (i.e. “any injury to the Work”); but rather, 

claims are limited by the source of the insurance proceeds paying for the loss (i.e., 

whether the loss was paid by a policy “applicable to the Work”). 

{¶45} Finally, our decision to adopt the majority approach is supported by 

policy considerations. Waiver of subrogation is useful in construction contracts 

because it avoids disrupting the project and eliminates the need for lawsuits because 

it offers certainty as to the liability of the parties. As demonstrated in the present case, 

by applying the waiver to all losses covered by the owner’s property insurance, the 

parties avoid the predictable litigation over liability issues and whether the claimed 

loss was damage to Work or non-Work property. Lexington Ins. Co., supra; Accord 

Haemonetics Corp., supra. The Contract stated, “[the] scope of proposed construction 

includes renovations and improvements to existing-building located at 1 Avalon Rd., 

Mount Vernon, Ohio. Work includes, but may not be limited to, roof replacement, 

storm water improvements to the site, building ADA accessibility including access to 

building and restrooms, floor plan modifications for new layout including necessary 

alterations to plumbing, h.v.a.c. and electrical.” There would most likely be lengthy 

litigation to discern Work from non-Work as stated in the general language of the 

Contract from the factual evidence. 

{¶46} As expressed by the Judge Alexander in his S.S.D.W. Co., dissent: 

 The majority holds today that the subrogation waiver clause in this 

standard American Institute of Architects (AIA) form contract does not 

bar the owner's insurer from seeking recovery from the contractor for 

property damage to the owner's building so long as the damage is not to 
the actual work to be performed under the contract. This limited 

construction of the subrogation waiver clause ... undermines the very 

purpose of the clause. Rather than promoting certainty as to the liability 

of the parties to these standard contracts, the majority's construction of 

this standard waiver clause invites litigation as to whether the damages 

in any particular case fall within the scope of the work to be performed 

under the contract. In my view, a construction of the clause to bar the 

owner from seeking all damages as to which it has obtained insurance 

under the contract, thereby barring any subrogation action by the 

owner's insurer, best effectuates the intent of the parties to the contract. 

* * * 

 * * * 

 * * * [T]hese subrogation waiver clauses are intended to avoid 

litigation over claims for damages while also protecting the parties by “in 

effect simply requir[ing] one of the parties to the contract to provide 

insurance for all of the parties.” Here, it is the owner who was required 

to insure against damage to the building and to waive all claims against 

the contractor for losses covered by that insurance. I agree with those 

courts holding that in these circumstances the parties have agreed that 

the owner's recovery for these losses is limited to its insurance proceeds 

and neither the owner, nor its insurer (as subrogee) has any cause of 

action against the contractor. * * * 

 * * * 
 * * * The limited construction of the subrogation waiver clause 

adopted by the majority today requires further litigation, and perhaps a 

trial, to determine the extent to which the damages suffered by plaintiff 

was related to that Work. In my view, this construction leaves the 

contractor's liability uncertain in every case and thus completely 

undermines the purpose of the subrogation waiver clause. * * * 

557 N.Y.S.2d at 295–97, 556 N.E.2d 1097 (Alexander, J., dissenting); See also Trinity 

Universal Ins. Co., 75 S.W.3d 6, 13. 

{¶47} For all these reasons, this Court adopts the majority approach to find the 

plain language of the waiver of subrogation clause within the AIA Contract bars 

Westfield’s claim for damages against Affinia and Gabrysch because the damages to 

the building were covered by an insurance policy issued to MEROC by Westfield. The 

trial court did not err in granting summary judgment in favor of Affinia and Gabrysch on 

this issue. 

{¶48} Westfield’s two Assignments of Error are overruled. 
CONCLUSION 

{¶49} Based on the above analysis, we hold MEROC, and therefore PlaintiffAppellant Westfield Insurance Group as subrogree, is barred from making a claim for 

damages against Defendant-Appellee Affinia Development, LLC as contractor and 

Defendant-Appellee Jan Gabrysch d/b/a Intex as subcontractor by the terms of the 

AIA Contract to the extent those damages were covered by an insurance policy issued 

by Westfield. 

{¶50} We affirm the judgment of the Knox County Court of Common Pleas to 

grant summary judgment in favor of Affinia and Gabrysch based on the waiver of 

subrogation clauses within the AIA Contract. 

By: Delaney, P.J. 

Gwin, J. and 

Farmer, J. concur. 

HON. PATRICIA A. DELANEY 

HON. W. SCOTT GWIN 

HON. SHEILA G. FARMER 
PAD:kgb 

 IN THE COURT OF APPEALS FOR KNOX COUNTY, OHIO 

FIFTH APPELLATE DISTRICT 

WESTFIELD INSURANCE GROUP 

 

 Plaintiff - Appellant 

 

-vsAFFINIA DEVELOPMENT, LLC, et al.

 Defendants-Appellees 

 

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 JUDGMENT ENTRY 

 Case No. 12-CA-2 

 For the reasons stated in our accompanying Opinion on file, the judgment of the 

Knox County Court of Common Pleas is affirmed. Costs assessed to Appellant. 

HON. PATRICIA A. DELANEY 

HON. W. SCOTT GWIN 

HON. SHEILA G. FARMER