KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Why waiver of subrogation if you have exculpatory clause in contract
July 3, 2019
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Why waiver of subrogation if you have exculpatory clause in contract   
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            We employ many “protective provisions” in the Standard Form Agreements.  Is it over kill or do these provisions serve different purposes?
            Insurance Company brought several claims in subrogation against a Roofing Company. The Roofing Company moved for summary judgment, arguing that the subrogation waiver in its contract with the property owner barred the insurer’s claims. The district court agreed. On appeal, the Insurance company argued that the subrogation waiver does not apply, since its claims, though brought in subrogation, involve recovery for property damage allegedly caused by the Roofing Company’s breach of contract; that as a matter of Maryland law, the subrogation waiver is unenforceable—at least to the extent that it bars claims against the Roofing Company for its gross negligence or sole negligence. Appeals Court disagreed and held the waiver is both applicable and enforceable.  I am not going to review the entire case, united national insurance company a/s/o council of unit owners pelican beach condominium, plaintiff - appellant, v. peninsula roofing company, inc.  United States Court of Appeals, Fourth Circuit.  Decided: June 19, 2019  2019 WL 2524253
            The case is interesting because while the Court recognized that an exculpatory clause would not be enforced against gross negligence, a waiver of subrogation clause is effective against a claim of gross negligence.
            We use all of the protective provisions in the All in One Agreements.  These provisions are clearly written and up to date.  I suggest you update your contracts now.  Better safe than sorry.  Tomorrow would be a good day to take your old contracts, put them in a container, and use fireworks to dispatch them quickly.  Happy fourth.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com