Court Opinion

ID: 9783373
Source: CourtListenerOpinion
Date Created: 2023-08-30 19:44:49.99551+00
Date Added: 2024-06-11T07:35:22.868691
License: Public Domain

Justice MARTINEZ,
dissenting.
In contrast to the majority, I would find the contractual provisions in question bar Copper Mountain, Inc. ("Copper") from recovering for damages to both the contractual Work and non-Work property.1
The waiver provisions at issue here-paragraphs 114.7 and 114.5 of the standard American Institute of Architects ("AIA") contract-have been interpreted by a majority of jurisdictions as barring an owner's claims for damage to non-Work property to the extent the owner's insurance policy covering the Work also covers the non-Work property. See, eg., Rahr Malting Co. v. Climatic Control Co., Inc., 150 F.3d 835 (8th Cir.1998); American Ins. Co. v. L.H. Sowles Co., 628 F.2d 967, 968-69 (6th Cir.1980); ASIC II Ltd. v. Stonhard, Inc., 63 F.Supp.2d 85 (D.Me.1999); Employers Mut. Cas. Co. v. A.C.C.T., 580 N.W.2d 490 (Minn.1998); Trinity Universal Ins. Co. v. Bill Cox Constr., Inc., 75 S.W.3d 6, 14 (Tex.App.2001). Similarly, a majority of the courts examining such provisions have held that the waived claims are defined by the source of the insurance proceeds paying for the damage, not by whether Work or non-Work property was damaged. See, eg., Commercial Union Ins. Co. v. Bituminous Casualty Corp., 851 F.2d 98 (3d Cir.1988); Tokio Marine & Fire Ins. Co. Ltd. v. Employers Ins. of Wausau, 786 F.2d 101, 105 (2d Cir1986), ASIC II, 63 F.Supp.2d 85; Stop and Shop Supermarket Co. v. ABCO Refrigeration Supply Corp., 48 Conn.Supp. 301, 842 A.2d 1194, 1198-99 (2003) (holding the intent of similar waiver clauses was to create a "universal waiver" of all claims for damages which are covered by insurance); Lexington Ins. Co. v. Entrex Comme'n Servs., Inc., 725 Neb. 702, 749 N.W.2d 124, 133 (2008) (stating the majority of jurisdictions have concluded that provisions identical to paragraphs 11.4.5 and 11.4.7 apply to all damages insured by the owner's property insurance policy, regardless of whether they represent damages to Work or non-Work property).
Paragraph 114.1 gave Copper the option to purchase and maintain "property insurance written on a builder's risk 'all-risk' or equivalent policy form" in an amount comprising the "total value for the entire Project at the site on a replacement cost basis." If Copper did not purchase a new all-risk policy to cover the Work under paragraph 11.4.1, it could rely on its all-purpose Ski Area Property Coverage ("SAPC") insurance policy. The SAPC policy covered claims by Intrawest, Copper's parent company, and its resorts for damage to properties that were already constructed at the time the policy was issued. In addition, a "Newly Acquired Property and Property Under Construction" endorsement to the SAPC policy allowed Intrawest and its resorts to obtain coverage for construction projects if the construction work to be performed was valued at less than $1 million. Instead of purchasing a new all-risk policy to cover the Work, Copper relied on its existing SAPC policy. This policy, plus the endorsement, insured all of Intrawest's property, including the Work and Union Creek Lodge-the structure at which the Work was performed.
Paragraph 11.4.7 states Copper and Ama-ko Resort Construction, Inc. ("Amako") agree to "waive all rights against each other and any of their subcontractors ... for damages caused by fire or other causes of loss to the extent covered by property insurance obtained pursuant to this Paragraph 11.4 or other property insurance applicable to the Work. ..." Paragraph 11.4.5 states if, during the Project construction period, Copper insures property, "real or personal or both, at or adjacent to the site by property insurance under policies separate from those insuring the Project," Copper "shall waive all rights in accordance with the terms of Subparagraph 11.4.7 for damages caused by fire or other *702causes of loss covered by the separate property insurance."
Copper had the option of purchasing a new policy specifically covering the Work or relying on existing property insurance to cover the Work. The waiver clauses contained in paragraphs 11.4.5 and 11.4.7 create the Work/non-Work distinction based upon the owner's decision to purchase a new policy or to rely upon an existing one. Paragraph 114.7 states Copper "waive[d] all rights against [contractors] ... for damages caused by fire ... to the extent covered by insurance obtained pursuant to this Paragraph 11.4 or other property insurance applicable to the Work." (Emphasis added.) This language does not define waived claims by what property is harmed, but rather by the policy of insurance applicable to the Work that pays for the damage. Under the waiver provisions, Copper agreed to waive the right to sue for damages to the Work if it purchased a separate policy specifically covering the Work. However, if Copper instead relied on an existing policy covering both Work and non-Work property, it waived the right to sue for any damages to property covered by the policy.
Instead of purchasing a new all-risk policy, Copper chose to rely on its existing SAPC policy. As such, Copper "waive[d| all rights against [Amako and Industrial Services, Inc.] ... for damages caused by fire." Therefore, Copper cannot recover against Amako and Industrial Services Inc. for damages caused by the fire to either Work or non-Work property. - However, if Copper had purchased a new all-risk policy to cover the Work instead of relying on its existing SAPC policy, Copper would be able to recover for damages caused to non-Work property. I believe this interpretation of the waiver provisions is more consistent with the plain language of the contract than the majority's interpretation.
Accordingly, I respectfully dissent.
I am authorized to state Justice COATS joins in this dissent.

. The contract between Copper Mountain and Amako Resort Construction, Inc. defined the work to be performed as:
The term "Work" means the construction and services required by the Contract Documents, whether completed or partially completed, and includes all labor, materials, equipment and services provided or to be provided by [Amako] to fulfill [Amako's] obligations. The Work may constitute the whole or a part of the Project.