Hartford Fire Ins. Co. v. DeBra-Kuempel Inc.

2024 Ohio 5830
Ohio Court of Appeals·Decided December 13, 2024·No. C-240100·Published·Cited by 2 cases

Opinion

IN THE COURT OF APPEALS

FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO

THE HARTFORD FIRE INSURANCE : APPEAL NO. C-240100 COMPANY, AS SUBROGEE OF BLUE TRIAL NO. A-2203885 ASH FUNDING COMPANY, LLC, :

Plaintiff-Appellant, :

OPINION

vs. :

DEBRA-KUEMPEL, INC., :

Defendant-Appellee/Third- :

Party Plaintiff,

:

vs.

:

IMEG CONSULTANTS CORP., f.k.a PEDCO E&A SERVICES, INC., :

Third-Party Defendant-

Appellee. :

Civil Appeal From: Hamilton County Court of Common Pleas Judgment Appealed From Is: Affirmed in Part and Appeal Dismissed in Part Date of Judgment Entry on Appeal: December 13, 2024

Rendigs, Fry, Kiely & Dennis LLP, Jonathan P. Saxton, James J. Englert, Whelan Ransel, LLC, and C. Zachary Ransel, for Plaintiff-Appellant,

Reminger Co., LPA, and Michael J. Caligaris, for Defendant-Appellee/Third-Party Plaintiff,

McNeal Schick Archibald & Biro Co., LPA, and Brian T. Winchester, for Third-Party Defendant-Appellee.

BOCK, Presiding Judge.

{¶1} After a heating coil malfunctioned in Blue Ash Funding Company, LLC’s, newly-renovated office building (“the Property”), causing extensive damage, Blue Ash made a claim with its insurer, plaintiff-appellant The Hartford Fire Insurance Company. Hartford paid Blue Ash’s claim.

{¶2} Attempting to recoup those funds, Hartford filed a subrogation claim against defendant-appellee/third-party-plaintiff DeBra-Kuempel, Inc., asserting that the company had negligently engineered, designed, and/or installed the heating coil. DeBra-Kuempel then sued third-party defendant-appellee IMEG Consultants Corp., f.k.a. PEDCO E&A Services, Inc., (“PEDCO”) seeking indemnification and contribution. The trial court granted summary judgment in DeBra-Kuempel’s and PEDCO’s favor. Hartford appeals.

{¶3} We hold that a contract provision in which Blue Ash and the renovation project’s architect waived all rights to damages against the project’s subcontractors bars Hartford’s claim against DeBra-Kuempel. And we further hold that Hartford lacks standing to appeal the trial court’s summary judgment in PEDCO’s favor.

I. Facts and Procedure A. Facts

{¶4} A malfunctioning HVAC unit caused extensive water damage to the Property. Although factual disputes existed, because the trial court granted summary judgment on a legal issue—the interpretation of the contracts’ subrogation-waiver provisions—many facts underlying this case are not relevant.

i. The parties’ contracts contained waiver provisions

{¶5} In 2018, Symphony Development Partners, LLC, Blue Ash’s predecessor-in-interest, retained BHDP Architecture to renovate the Property. BHDP and Symphony signed two separate documents comprising the agreement between them (collectively “the Contract”): an AIA Document B101-2017, “Standard Form of Agreement Between Owner and Architect Agreement” (“B101”) and an AIA Document A201-2017, “General Conditions of the Contract for Construction” (“A201”). Symphony assigned its rights under the Contract to Blue Ash in April 2020. The Contract contained three subrogation-waiver provisions.

{¶6} Section 8.1.2 of the B101 (“Section 8.1.2”) provides:

To the extent damages are covered by property insurance, the Owner and Architect waive all rights against each other and against the contractors, consultants, agents, and employees of the other for damages, except such rights as they may have to the proceeds of such insurance as set forth in AIA Document A201-2017, General Conditions of the Contract for Construction.

{¶7} Section 11.3.1 of the A201 (“Section 11.3.1”) provides:

The Owner and Contractor waive all rights against (1) each other and any of their subcontractors, sub-subcontractors, agents, and employees, each of the other; (2) the Architect and Architect’s consultants; and (3) Separate Contractors, 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 those losses are covered by property insurance required by the Agreement or other

property insurance applicable to the Project, except such rights as they have to proceeds of such insurance. However, the scope of this waiver shall be limited to damages to the Work itself, and this waiver shall not apply to property insurance purchased by the Owner after completion of the Work or final payment, whichever comes first.

{¶8} Finally, Section 11.3.2 of the A201 (“Section 11.3.2”) provides:

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, to the extent permissible by such policies, the Owner waives all rights in accordance with the terms of Section 11.3.1 for damages caused by fire or other causes of loss covered by this separate property insurance.

ii. DeBra-Kuempel and PEDCO completed work on the Project

{¶9} Renovations to the Property started in 2019. BDHP retained PEDCO as the mechanical, electrical, and plumbing engineering consultant for the Project. Symphony retained Danis Building Construction Company as the general contractor for the Project. Danis, in turn, subcontracted with DeBra-Kuempel to perform HVAC installation work at the Project.

iii. The HVAC system failed and Hartford paid Blue Ash’s claim

{¶10} In December 2020, shortly after construction was completed, an HVAC unit failed, resulting in substantial water damage to the Property. The property

manager stated that the leak caused flooding in “a new section that had just been renovated.”

{¶11} After Blue Ash filed an insurance claim, Hartford paid Blue Ash, its insured, $1,905,222.21 to cover the loss. In opposing summary judgment below, Hartford asserted that the policy under which Hartford paid Blue Ash (“the Policy”) was neither a “builder’s risk policy” nor a policy insuring the work on the Project or the Project itself. Rather, Hartford argued, the Policy was separate from any policies insuring the Project. The Policy covered the cost to return the Property to “pre-loss condition,” but covered damages for “direct physical loss” only. There were no other insurance policies in place that might have covered the loss.

{¶12} The policy permitted Blue Ash to waive its rights to collect damages against another “prior to a covered loss or damage.” But it included an exception: “For their interest in building repair or construction, you may not waive your rights to recover damages from architects or engineers except as agreed to in writing by us.”

B. Procedural history

{¶13} Hartford, as subrogee of Blue Ash, sued DeBra-Kuempel, alleging a single count of negligence. DeBra-Kuempel filed a third-party complaint against PEDCO, seeking indemnification and contribution from PEDCO if DeBra-Kuempel were found liable to Hartford.

{¶14} PEDCO moved for summary judgment on DeBra-Kuempel’s claims, asserting that the Contract’s subrogation-waiver provisions barred the claims. DeBra- Kuempel’s memorandum in opposition limitedly joined PEDCO’s argument regarding the subrogation waivers. Hartford filed a memorandum in opposition to PEDCO’s motion for summary judgment.

{¶15} DeBra-Kuempel moved for summary judgment, arguing that Hartford’s negligence claim was barred by the same subrogation waivers and that the claims failed on the merits. Hartford opposed the motion.

{¶16} Hartford moved for leave to file a second amended complaint, seeking to add PEDCO as a direct defendant. PEDCO opposed the motion.

{¶17} After a hearing on the pending summary-judgment motions, the trial court denied Hartford’s motion for leave to amend and granted summary judgment in favor of DeBra-Kuempel and PEDCO. Hartford appeals the summary-judgment decisions but does not appeal the trial court’s denial of its motion for leave to amend its complaint.

II. Law and Analysis

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Hartford Fire Ins. Co. v. DeBra-Kuempel Inc., 2024 Ohio 5830 (Ohio Ct. App. 2024).

2024 Ohio 5830 (Hartford Fire Ins. Co. v. DeBra-Kuempel Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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