{"id":900982,"date":"2023-03-22T11:12:12","date_gmt":"2023-03-22T17:12:12","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=900982"},"modified":"2023-03-22T11:12:25","modified_gmt":"2023-03-22T17:12:25","slug":"subrogation-construction-litigation","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/subrogation-construction-litigation\/","title":{"rendered":"Construction Litigation Roundup: \u201cA Sub(ro) Above?\u201d"},"content":{"rendered":"\n

Daniel Lund III | Phelps Dunbar<\/a><\/p>\n\n\n\n

A sub(ro) above?  <\/p>\n\n\n\n

An insurer seeking to be subrogated<\/a> to the rights of its insureds against a general contractor was rebuffed by Texas courts based upon a waiver of subrogation in an arguably unsigned contract.<\/p>\n\n\n\n

The construction project was undertaken pursuant to a written agreement which contained a facially-valid subrogation waiver, but which was never completely signed by the husband and wife owner parties. An initial version of the contract provided by the contractor was signed first by the husband and returned electronically, apparently shortly after a subsequent version of the contract \u2013 which provided for both husband and wife to sign \u2013 was emailed to the owners. The latter version was never signed by any party. <\/p>\n\n\n\n

In fact, the initial version signed by the husband was never signed by the GC. <\/p>\n\n\n\n

A fire at the project ensued, and the insurer paid out in excess of $4 million to the owners. <\/p>\n\n\n\n

The foregoing led to the insurer\u2019s efforts to deny the effectiveness of the subrogation waiver in the contract signed by the husband and which the GC urged was the agreement under which the parties were operating. <\/p>\n\n\n\n

Key to the courts\u2019 analysis in ruling against the insurer and finding that the subrogation waiver was in place was the fact that in the contract signing process, no hard and fast additional requirements were stated. For example, there were no conditions precedent of the owner parties that the contract would not be valid and effective unless and until the GC signed it.<\/p>\n\n\n\n

Ultimately, the courts found that the initial signature by the husband constituted his assent to the terms of the contract, treating that as a \u201ccounteroffer\u201d by the husband based upon the fact that the husband had received the second version of the contract by email shortly before signing the first version. The fact that the contractor then proceeded with the work according to that contract \u2013 even though the contractor never signed the contract \u2013 constituted the contractor\u2019s acceptance of the deal.<\/p>\n\n\n\n

The insurer further argued it had the ability to subrogate to the rights of the wife because the wife never signed any of the contracts. However, the courts traced the involvement of the wife in the transaction \u2013 including being involved in email chains and otherwise signing checks in payment to the contractor \u2013 finding that those acts entailed that the wife \u201cknew or had reason to know that [the general contractor] would infer she assented based on her performance.\u201d <\/p>\n\n\n\n

The takeaway here: years of litigation might have been avoided if the parties had simply completely followed through on the contract signing process. <\/p>\n\n\n\n

Chubb Lloyds Ins. Co. of Tex. v. Buster & Cogdell Builders, LLC,<\/a>\u00a02023 Tex. App. LEXIS 676 (Tex. App.\u2014Houston Feb. 2, 2023)\u00a0<\/p>\n\n\n\n

\n\n\n\n

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Daniel Lund III | Phelps Dunbar A sub(ro) above?   An insurer seeking to be subrogated to the rights of its insureds against a general contractor was rebuffed by Texas courts based upon a waiver of subrogation in an arguably unsigned contract. The construction project was undertaken pursuant to a written agreement which contained a facially-valid… Continue reading Construction Litigation Roundup: \u201cA Sub(ro) Above?\u201d<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9],"tags":[9895,224,10843],"class_list":["post-900982","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","tag-advise-consult","tag-construction-contract","tag-subrogation-waiver","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nConstruction Litigation Roundup: \u201cA Sub(ro) Above?\u201d - 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