Opinion ID: 2536625
Heading Depth: 2
Heading Rank: 2

Heading: Persuasive Precedent

Text: The court of appeals has previously addressed the scope of the waiver clause at issue in Silverton, which concerned a similar set of facts. 948 P.2d at 10-11. In that case, the Town of Silverton hired a general contractor to replace the roof of the town hall. Id. at 10. The parties executed an AIA contract with clauses paralleling the language of paragraphs 11.4.5 and 11.4.7 in Copper and Amako's contract. [11] See id. at 11. The general contractor in Silverton hired a subcontractor to install an electric snow melting system in the roof. Id. at 10. A year and half after completion of the Work, the roof caught fire, damaging the town hall. Id. at 11. The town's insurer assigned its rights of subrogation to the town. Id. The town then sued the contractor and subcontractor, alleging negligence, breach of warranty, and products liability in connection with the installation of the snow melting system. Id. at 10-11. The trial court agreed with the defendants that the town had waived its rights of subrogation, and dismissed the town's complaint. Id. at 11. The court of appeals reversed with respect to the town's claims for damages to non-Work portions of the town hall. Id. at 12. The court observed that the Work of the contract was limited to the reroofing of the town hall, and that [t]he waiver of subrogation provisions placed defendants essentially in the position of co-insureds on the town's property insurance policy only with respect to damages to the work. Id. The court held that the parties agreed to exculpate each other from liability for damages to the Work, but not from liability for damages to non-Work. Id. The Silverton court apparently did not view that contract's analogue to paragraph 11.4.5 as manifesting an intent to restrict claims for damages to non-Work, since the court held that nothing in the agreement shows an intent to extend this mutual exculpation to parts of the building other than the work. Id. The Silverton opinion reached the same result as a number of other jurisdictions. See Midwestern Indem. Co. v. Sys. Builders, Inc., 801 N.E.2d 661, 672-73 (Ind.App.2004) (claim for damages to non-Work property not barred because contractual waiver only applied to claims for damages to Work); Fid. & 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) (same); Butler v. Mitchell-Hugeback, Inc., 895 S.W.2d 15, 22 (Mo.1995) (waiver provision only extended to the value of the Work); Pub. Employees Mut. Ins. Co. v. Sellen Constr. Co., Inc., 48 Wash.App. 792, 740 P.2d 913, 916 (1987) (same); see also Travelers Ins. Cos. v. Dickey, 799 P.2d 625, 631 (Ok.1990) (waiver clause did not exonerate roofing contractor who allegedly damaged owner's interior property). The analysis of New York's highest court in S.S.D.W. Co. v. Brisk Waterproofing Co., Inc., 76 N.Y.2d 228, 557 N.Y.S.2d 290, 556 N.E.2d 1097 (1990), is particularly persuasive. 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. As Amako and Industrial note, a number of other jurisdictions have reached a different conclusion: that paragraph 11.4.7 in the AIA contract bars an owner's claims for damages to non-Work property to the extent the owner's insurance policy covering Work also covers the non-Work property. See, e.g., Lexington Ins. Co. v. Entrex Commc'n Servs., Inc., 275 Neb. 702, 749 N.W.2d 124, 134 (2008); Trinity Universal Ins. Co. v. Bill Cox Constr., Inc., 75 S.W.3d 6, 13 (Tex.App. 2001); Employers Mut. Cas. Co. v. A.C.C.T., Inc., 580 N.W.2d 490, 493 (Minn.1998).