Bd. of Comm’rs v. Teton Corp.

Jefferson County awarded the first phase of its courthouse remodeling plan to a contractor. Two subcontractors aided in the repairs. While the repairs were underway, a fire severely damaged the courthouse. Jefferson County’s contract with the contractor incorporated an American Institute of Architects (AIA) standard form. The AIA contract waives subrogation rights for damages caused by fire “to the extent covered by property insurance.” Jefferson County filed a subrogation claim against the Contractors to recover damages caused to its property unrelated to repairs. Defendants moved for summary judgment, arguing that Jefferson County had waived its claim under the AIA waiver because its insurance policy covered all the damages. The County responded that the subrogation waiver applied only to construction-related damages. The trial court granted summary judgment for Defendants, concluding that Jefferson County had waived subrogation rights for all claims. The Supreme Court affirmed, holding (1) the plain language of the AIA contract restricts the scope of the waiver based on the source and extent of property insurance coverage, not the nature of the damages; and (2) the County agreed to waive its rights to bring this subrogation claim by relying on its existing “all-risk” property insurance policy that covered the work and all other losses suffered in the fire. View "Bd. of Comm’rs v. Teton Corp." on Justia Law