Category Archives: AIA Contracts

Gavel

No Signature, No Problem: Texas Court Holds Contractual Subrogation Waiver Still Enforceable


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In Chubb Lloyds Inc. Co. of Tex. v. Buster & Cogdell Builders, LLC, No. 01-21-00503-CV, 2023 Tex. App. LEXIS 676, the Court of Appeals of Texas, First District (Court of Appeals) considered whether the lower court properly dismissed the plaintiff’s subrogation case by enforcing a subrogation waiver in a construction contract which was not fully executed.  The contract was signed by only one of the two subrogors and was not signed by the defendant general contractor.  The Court of Appeals affirmed the trial court’s decision, holding that despite the lack of signatures, the evidence established mutual assent to the contractual terms by all parties.

The plaintiff’s subrogors, Jeffrey and Mary Meyer (collectively, the Meyers), retained defendant Buster & Codgell Builders (BCB) to expand their residence.  BCB drafted a contract using the American Institute of Architects (AIA) standard form contract for residential construction.  The AIA contract included, by reference, a subrogation waiver that applied to BCB and its subcontractors.  Prior to beginning the work, BCB emailed Jeffrey Meyer a version of the contract that only had one signature block for both Jeffrey and Mary Meyer.  Minutes later, BCB sent a second version of the contract which had a signature line for each of the Meyers.  However, Jeffrey Meyer signed the first version of the contract and emailed it back to BCB.  In the subject line of his email, Mr. Meyers asked that BCB countersign and return the contract.  BCB did not sign and return the contract.

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This entry was posted in AIA Contracts, Contracts, Subrogation, Texas, Waiver of Subrogation and tagged , , , , , .
Gavel

Waive Your Claim Goodbye: Louisiana Court Holds That AIA Subrogation Waiver Did Not Violate Anti-Indemnification Statute and Applied to Subcontractors


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In 2700 Bohn Motor, LLC v. F.H. Myers Constr. Corp., No. 2021-CA-0671, 2022 La. App. LEXIS 651 (Bohn Motor), the Court of Appeals of Louisiana for the Fourth Circuit (Court of Appeals) considered whether a subrogation waiver in an AIA construction contract was enforceable and, if so, whether the waiver also protected subcontractors that were not signatories to the contract. The lower court granted the defendants’ motion for summary judgment based on the subrogation waiver in the construction contract. The plaintiffs appealed the decision, arguing that the subrogation waiver violated Louisiana’s anti-indemnification statute. The plaintiffs also argued that even if enforceable, the subrogation waiver did not apply to the defendant subcontractors since they were not parties to the contract. The Court of Appeals ultimately held that the subrogation waiver did not violate the anti-indemnification statute because the waiver did not shift liability, which the statute was intended to prevent. In addition, the Court of Appeals found that the contract sufficiently satisfied the required elements for the defendant subcontractors to qualify as third-party beneficiaries of the contract.

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Fire

Mississippi Supreme Court Applies AIA Subrogation Waiver to Non-Work Property Damage


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In Liberty Mutual Fire Ins. Co. v. Fowlkes Plumbing., L.L.C., No. 2019-FC-10285-SCT, 2020 Miss. LEXIS 44, the Supreme Court of Mississippi considered whether the subrogation waiver in the General Conditions of the Construction Contract, American Institute of Architects (AIA) form A201-2007, applied to claims for damages to property unrelated to the construction work. Siding with the majority of jurisdictions that have addressed this issue, the court interpreted the AIA subrogation waiver to apply to any property damage, whether or not related to the construction work (i.e. the Work), if the property insurance covering the non-Work property also insured the construction work. Continue reading →

This entry was posted in AIA Contracts, Construction Defects, Contracts, Mississippi, Subrogation, Waiver of Subrogation and tagged , , , , , .
Supreme Court

Courts Favor Arbitration in Two Recent Construction Dispute Cases


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Recent court decisions have signaled the courts’ proclivity to prefer arbitration over full-fledged litigation when provisions in construction contracts are called into question. While the courts recognize a party’s constitutional right to a jury trial, the courts also lean strongly towards resolving disputes via arbitration as a matter of public policy, especially if a construction contract carves out arbitration as an alternative to litigation. Continue reading →

This entry was posted in AIA Contracts, Arbitration, Construction Defects, Maryland, North Carolina and tagged , , , .

Indiana’s Supreme Court, In a Matter of First Impression, Finds That an AIA Waiver of Subrogation Clause Extends the Waiver to Damage to Non-Work Property


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In Board of Commissioners of County of Jefferson v. Teton Corp., 30 N.E.3d 711 (Ind. 2015), Jefferson County hired Teton Corporation to perform renovation work on the Jefferson County courthouse. Teton hired subcontractors to perform the roofing work.

Jefferson County’s contract with Teton incorporated American Institute of Architects (“AIA”) General Conditions form A201-1987. The AIA contract required Jefferson County to obtain property insurance and included a waiver of subrogation clause that stated, in pertinent part:  “The Owner and Contractor waive all rights . . . for damage caused by fire or other perils to the extent covered by property insurance obtained pursuant to this Paragraph 11.3 or other property insurance applicable to the Work.” (Emphasis added). Instead of procuring a separate builder’s risk policy for the renovation work, Jefferson County relied on its existing “all risk” property insurance policy to cover the entire courthouse, including the renovation work.

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