Northern District of Mississippi Finds That Non-Work Property Damages Are Not Subject to AIA’s Waiver of Subrogation Clause

Illustration of crack running through house

The distinction between work and non-work property has been commonly litigated and remains a hotly debated topic when handling subrogation claims involving construction defects.

July 11, 2018
Shannon M. Warren - The Subrogation Strategist

In recent months, the Northern District of Mississippi has grappled with how to interpret waivers of subrogation in American Institute of Architects (AIA) construction industry contracts and, specifically, how they apply to work versus non-work property. The distinction between work and non-work property has been commonly litigated and remains a hotly debated topic when handling subrogation claims involving construction defects.

In Liberty Mutual Fire Ins. Co. v. Fowlkes Plumbing, 2018 U.S. Dist. LEXIS 23515 (February 12, 2018), a fire consumed the entire insured risk when one of the defendants was performing window restoration services. Subsequently, the insured’s subrogated insurer filed suit against several defendants involved in the construction project at issue. In response to the defendants’ motion for summary judgment, the District Court for the Northern District of Mississippi considered whether the waiver of subrogation clause in AIA contract form A201-2007 precluded the subrogated insurer from recovering damages from the defendants. The court held that the waiver of subrogation provision contained in AIA document A201-2007 barred the insurer from recovering for damages to the work itself, but did not apply to non-work property.

Ms. Warren may be contacted at warrens@whiteandwilliams.com



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