Knob Noster R-Viii School v. Dankenbring
| Decision Date | 13 February 2007 |
| Docket Number | No. WD 66923.,WD 66923. |
| Citation | 220 S.W.3d 809 |
| Parties | KNOB NOSTER R-VIII SCHOOL DISTRICT, Respondent, v. Ron DANKENBRING d/b/a Ron Dankenbring Masonry, Appellant. |
| Court | Missouri Court of Appeals |
Michael B. White, Kansas City, MO, for appellant.
Bruce M. Easley, St. Louis, MO, for respondent.
Before ROBERT G. ULRICH, P.J., HAROLD L. LOWENSTEIN, and JAMES M. SMART, JJ.
Ron Dankenbring, d/b/a Ron Dankenbring Masonry, (Masonry) appeals the judgment against him and in favor of Knob Noster R-VIII School District (School District) for roof damages to School District's property incurred when Masonry was performing modifications to the property in accordance with a contract between the parties. In his sole point on appeal, Masonry claims the trial court erred in finding that contractual clauses do not preclude recovery against Masonry in a subrogation action for the sum expended by an insurer for roof repairs. The judgment is affirmed.
The parties stipulated to the facts submitted to the trial court. The issue presented for determination was:
Should judgment enter in favor of [School District] and against [Masonry] in the amount of $115,353.00 because the AIA1 clauses at issue do not preclude [School District] from recovering the $115,353.00 roof repair reimbursement payment [School District] received from MUSIC?
Should judgment enter in favor of [Masonry] and against [School District] because the AIA clauses at issue do preclude [School District] from recovering the $115,353.00 roof repair reimbursement payment [School District] received from MUSIC?
School District entered into a contract with Lico Construction Company for window replacement and air conditioning work at Whiteman Elementary School and Knob Noster High School at a price of $2,447,000.00. The contract provided that Lico "shall furnish all labor and materials and perform all work . . . in strict accordance with the Project Manual dated February 9, 2000." The Project Manual included "General Conditions of the Contract for Construction, AIA Document A201-1997" and "Supplementary General Conditions." The Supplementary General Conditions modified and superceded some of the content of the General Conditions.
Lico hired Masonry as a subcontractor to brick up various window openings. In its petition, School District alleged that during the course of its work Masonry negligently applied an acid wash solution, thereby destroying several layers of protective galvanizing on an existing portion of the roof at Knob Noster High School, causing damage totaling $116,353.00. At the time of the damage, School District had property insurance, including "Automatic Builder's Risk," through Missouri United School Insurance Council (MUSIC). After the damage to the roof, School District submitted a claim to MUSIC. The third party administrator for MUSIC investigated the claim and paid for the repairs, less School District's $1,000.00 deductible. Masonry subsequently repaid School District its $1,000.00 deductible. MUSIC's 2001 Plan Document contains a subrogation provision as follows:
19. MUSIC'S RIGHT TO RECOVER FROM OTHERS:
In the event of any payment under this program, the Member shall execute and deliver instruments and papers and do whatever else is necessary to secure the rights of MUSIC to recover from others. The Member shall do nothing after loss to prejudice such rights. Any release from liability entered into prior to loss, however, shall not affect this coverage or the right of the Member to recover from it. Upon payment of any loss, the Member will, at MUSIC's request and expense, make claim against any party which MUSIC believes to be liable for such loss, and will use all proper and reasonable means to recover that loss, under the exclusive direction and control of MUSIC.
School District subsequently filed this subrogation action.
MUSIC is a non-profit self-insurance program comprised of member school districts. School District, and the other school districts that participate in MUSIC, maintain a self-insured retention of $250,000. MUSIC administers the "loss fund," which consists of money provided by School District and the other school districts that participate in the program. The money in the "loss fund" belongs to MUSIC's members, including School District. The money provided to School District to repair the roof was withdrawn from the "loss fund." Any money obtained from Masonry will be placed back into the "loss fund." School District's coverage under MUSIC is in excess of any insurance covering the same loss or damage.
The case was tried to the trial court upon the following stipulated facts:
1. On or about March 21, 2000, [School District] entered into a general contract with Lico Construction Company under which contract Lico Construction was to furnish all labor and materials and perform all work for the window replacement and air conditioning work at Whiteman Elementary School and Knob Noster High School.
2. [School District] complied with the terms of that general contract.
3. The terms of that general contract incorporated the Project Manual for the Knobnoster R-VIII School District dated February 9, 2000.
4. The parties agree that the foregoing Project Manual has previously been submitted to this Court and shall be part of the record on appeal.
5. As part of its terms, the Project Manual reprinted AIA Document A201-1997, General Conditions of the Contract for Construction (Document A201).
6. Article 11 of the construction contract standards promulgated by the AIA in Document A201 is labeled Insurance and Bonds, and Article 11.4 is labeled Property Insurance.
7. Article 11.4 of Document A201 contains that following three provisions:
11.4.1 The Owner shall purchase and maintain, during the life of this contract, Builder's "All Risk" Insurance with Fire, Theft, Extended Coverage, Vandalism, and Malicious Mischief protection. Such insurance shall be written in the names of the Owner, the Architect, and his Consultants, and Contractors and Sub-Contractors as their interest may appear. Such insurance shall be to the full insurable value of the total construction covered under the general, mechanical and electrical contracts, plus value of subsequent contract modifications and cost of materials supplied or installed by others, comprising total value for the entire project at the site on a replacement basis without optional deductibles. Including items of labor and materials connected therewith, whether in or adjacent to the structure insured, materials in place or to be used as part of the permanent construction, including surplus materials, protective fences, temporary structures, miscellaneous materials and supplies incidental to the work, the cost of which is included in the cost of the work. Such insurance policy or policies shall not cover any tools owned by mechanics, any tools, equipment, scaffolding, staging, towers, and forms owned or rented by the Contractor, the capital value of which is not included in the cost of the work, or any structure erected for housing the workmen. The insurance company or companies shall have no right to subrogation against the Owner, the Contractors, and Sub-Contractors, or other parties employed on the premises, for any work of any nature whatsoever. The Contractors should separately furnish and maintain insurance covering loss or damage from all insurable causes to any tools owned by the mechanics and tools, machinery, equipment or motor vehicles owned or rented by the Contractor, his agents, sub-contractors, material men or their employees.
And,
11.4.5 If during the Project construction period the Owner insures properties, real or personal or both, at or adjacent to the site by property insurance under policies separate from those insuring the Project, or if after final payment property insurance is to be provided on the completed Project through a policy or policies other than those insuring the Project during the construction period, the Owner shall waive all rights in accordance with the terms of Subparagraph 11.4.7 for damages caused by fire or other causes of loss covered by this separate property insurance. All separate policies shall provide this waiver of subrogation by endorsement or otherwise.
And,
11.4.7 Waivers of Subrogation. The Owner and Contractor waive all rights against (1) each other and any of the their subcontractors, sub-subcontractors, agents and employees, each of the other, and (2) the Architect, the Architect's, consultants, separate contractors described in Article 6, if any, and any of their subcontractors, sub-subcontractors, agents and employees, for damages caused by fire or other causes of loss to the extent covered by property insurance obtained pursuant to this paragraph 11.4 or other property insurance applicable to the Work, except such rights as they have to proceeds of such insurance held by the Owner as fiduciary. The Owner or Contractor, as appropriate, shall require of the Architect, Architect's consultants, separate contractors described in Article 6, if any, and the subcontractors, sub-subcontractors, agents and employees of any of them, by appropriate agreements, written where legally required for validity, similar waivers each in favor of other parties enumerated herein. The policies shall provide such waivers of subrogation by endorsement or otherwise. A waiver of subrogation shall be effective as to a personal entity, even though that person or entity would otherwise have a duty of indemnification, contractual or otherwise, did not pay the insurance premium directly or indirectly, and whether or not the person or entity had an insurable interest in the property damaged.
8. Before, during and after the foregoing construction project, [School...
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