Mandato & Assocs. v. Sepulveda Masonry

A general contactor's insurer had no subrogation rights against subcontractors, because the insurer's failure to secure the general contractor's written consent to a $325K settlement created an independent contractor relationship between the insurer and the general contractor.

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In this negligent construction action, Builders Insurance Group in the name of its insured a general contractor appeals the partial summary judgment granted to four subcontractors of the general contractor, which subcontractors Builders1 had sued to recover the $325,000 it had paid in settlement of a prior claim brought against the general contractor. Builders had alleged that the four subcontractors Sepulveda Masonry, K&K Installers, Inc., Steve Crain, and Jasper Lumber Company had negligently performed their subcontracts in constructing a residence for a homeowner, with which homeowner Builders had settled a prior claim asserted against the general contractor for faulty construction. The trial court granted partial summary judgment against Builders and in favor of the four subcontractors,2 concluding that Builders had failed to obtain the written consent of its insured to the prior settlement, and that therefore, under OCGA § 33-7-12 a, Builders had no right of subrogation against the subcontractors. We agree and affirm. Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 c. A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant. Matjoulis v. Integon Gen. Ins. Corp .3

So viewed, the evidence shows that on October 31, 2003, the general contractor executed a contract to build a residence for a homeowner. The general contractor hired numerous subcontractors, including the four subcontractors here, to perform various portions of the work. Dissatisfied with the quality of the construction, the homeowner brought a claim against the general contractor, which claim was defended by Builders. The general contractor also asserted a counterclaim for monies remaining due on the construction of the home.

Mandato & Assocs. v. Sepulveda Masonry

A general contactor's insurer had no subrogation rights against subcontractors, because the insurer's failure to secure the general contractor's written consent to a $325K settlement created an independent contractor relationship between the insurer and the general contractor.

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