The Subrogation Strategist

On its face, the power of a waiver of subrogation clause in a construction contract is profound. It bars otherwise actionable – and sometimes egregious – losses resulting from contractor carelessness before they can ever get started. One question courts have long battled with is the limits to the lasting effects of such a waiver. Whether the waiver power can be transferred amongst parties, applied to third parties or used with policies taken out after construction completion are among the few grey areas that have kept subrogation practitioners and the courts busy. Recently, a ... Continue Reading

While determining the value of property is important, it is equally critical to assess whether the financial costs and inconvenience of not having it should factor into compensation for not being able to use that property. In Lafayette City-Par. Consol Gov’t v. Triple T Enters, No. 25-26, 2025 La. App. LEXIS 2039 (Lafeyette City), the Court of Appeals of Louisiana, Third Circuit (Court of Appeals) considered whether the trial court properly awarded loss of use damages after an intoxicated driver destroyed the fire department’s custom-built fire pumper truck in a motor vehicle ... Continue Reading

In Ghaznavi v. Arby Constr., Inc., No. 14-24-00213-CV, 2025 Tex. App. LEXIS 839, the Court of Appeals of Texas (Court of Appeals) considered whether the trial court properly excluded the plaintiffs’, Kambiz Moavenzadeh Ghaznavi and Anahita Nokkonejad (collectively, the Ghaznavis), liability expert. The case arose from a fire at the Ghaznavis’ residence. The trial court held that because the Ghaznavis’ expert did not physically inspect certain fire damaged areas before they were repaired, the expert’s testimony was unreliable and thus inadmissible. The Court of ... Continue Reading

In Taylor Building Corp. of America v. Milton, No. 25A-PL-1290, 2025 Ind. App. LEXIS 367, homeowners Brett and Amanda Milton (collectively, the Miltons) contracted with Taylor Building Corp. (Taylor) to construct a home. The agreement required disputes to be resolved first through mediation using the American Arbitration Association (AAA) and, if unsuccessful, through mandatory arbitration. The issue centered on whether the trial court erred in denying Taylor’s motion to compel mediation and arbitration after the Miltons filed suit, under the construction agreement.Continue Reading

The economic loss doctrine is a concept in subrogation law that is often debated and rarely completely understood. Even when a subrogation practitioner may think they have it figured out, a new scenario presents itself that creates a brand-new gray area. The United States District Court for the Northern District of Illinois (District Court) recently addressed the effect a data breach – at a software provider - had on an insured’s software access and how the economic loss doctrine played into the resulting claims for damage.

In Travelers Excess & Surplus Lines Co. v. CDK Glob., LLC,Continue Reading

In Terra Mgmt. Grp., LLC v. Keaten, 572 P.3d 126 (CO 2025), the Supreme Court of Colorado (Supreme Court) considered whether the trial court properly imposed sanctions on the defendants for failing to preserve evidence before the commencement of litigation. The trial court noted that the defendants, who owned and managed an apartment building, began removing the evidence from an apartment after the plaintiffs complained of toxins originating from the apartment building. As a sanction, the trial court imposed a negative inference that the defendants’ destruction of evidence ... Continue Reading

Investigating construction related claims involves more than just figuring out who is at fault. Construction contracts are often full of liability limiting provisions meant to allocate risk among the parties. A prime example is the consequential damages waiver provision, a clause that limits or waives a party’s ability to recover certain losses that do not flow directly from a breach of contract. In the construction context, consequential damages can include lost profits, loss of use, and financing costs. In contrast, direct damages are the immediate costs incurred to correct ... Continue Reading

In Carroll v. Isle of Palms Pest Control, Inc., No. 28291, 2025 S.C. LEXIS 98, the Supreme Court of South Carolina (Supreme Court) clarified the scope of the economic loss rule and, in doing so, created new opportunities for subrogating carriers to pursue tort recovery in cases involving negligent service providers.

James E. Carroll, Jr. (Carroll) contracted with Isle of Palms Pest Control (IPPC) for termite protection using a bait station system. The contract capped liability at $250,000 and specified that treatment would consist solely of installing and monitoring bait ... Continue Reading

Often times, subrogation practitioners take the “kitchen sink” approach when pursuing claims: they name all potentially liable parties under all available legal theories and whittle down from there. With construction defect cases in particular, the difficulty of identifying exactly who did what and which contractual provisions have which effect can lead to the decision to throw everything against the wall and see what sticks. However, in some cases, dealing with the ensuing motion practice from that approach just is not worth it.

In Proe, et. al. v. Diamond Homes et. al., 2025 ... Continue Reading

In Morningside Ministries v. Koontz McCombs Construction, Ltd., No. 08:23-00332-cv, 2025 Tex. App. Lexis 3584 (Morningside), the Court of Appeals of Texas (Court of Appeals) considered whether the plaintiff’s construction defect claims were “inherently undiscoverable,” thereby tolling the applicable limitations period under the discovery rule. The lower court granted the defendants’ summary judgment motions, finding that the plaintiff’s breach of contract and breach of express warranty claims were brought outside of the four-year limitations period. On ... Continue Reading