ACE AMERICAN INSURANCE COMPANY VS. AMERICAN MEDICAL PLUMBING, INC. (L-0299-17, UNION COUNTY AND STATEWIDE) (A-5395-16T4)
Affirming the grant of summary judgment dismissing the plaintiff-insurer's subrogation action, the court broadly interprets the waiver-of-subrogation provisions of a widely used American Institute of Architects (AIA) form construction contract. The court relies on the contract's plain language, the majority view of other states' courts, and the evident goal to transfer the risk of construction-related losses to insurers and preclude lawsuits among contracting parties. In particular, the court rejects the insurer's argument that the subrogation waiver was limited to damages to the "Work" incurred during construction. Rather, the subrogation waiver extended to claims related to damages to property outside the Work, incurred after completion, because the insurance the owner obtained to comply with the contract also provided coverage for those damages.
