Part 17 published on 01/02/07
No waiver of subrogation against developer unit owner (for steps taken in capacity as a contractor)
The condominium buildings were damaged by fire. The damage was covered by insurance. The insurer then sought to assert a subrogated claim against the developer, based upon the allegation that the cause of the fire was negligence associated with the use of a propane torch by an employee of a waterproofing company subcontracted by the developer to provide construction services.
The insurance policy included waivers of subrogation against various entities including the unit owners. The developer owned units and accordingly asserted that it was entitled to the benefit of the waivers of subrogation.
The Court said that the reference to condominium unit owners, in the waivers of subrogation, did not include the developer “in its capacity as a contractor”. Condominium corporations were capable of bringing actions against owners in the condominium. Therefore the insurer could assert a subrogated claim, unless this was prevented by a waiver of subrogation. In this case, the waiver of subrogation did not apply to the developer in its role as a contractor and the developer also was not an insured under the policy in relation to its construction activities.