Waiver of Subrogation • Builder’s Risk Policy Extinct • Breaches of Contract, not Tort
Selective Ins. Co. v. Horst Constr., PICS Case No. 16-1118 (C.P. Lancaster June 20, 2016) Cullen, J. (19 pages).
Plaintiff Selective Insurance Co. of America, as subrogee of Lancaster Bible College, brought claims against a construction company and its subcontractors for negligence, breach of warranty, negligent misrepresentation and breach of contract. The second amended complaint was filed in October 2015, with defendants raising preliminary objections concerning the waiver of subrogation, gist of the action doctrine, breach of warranty claims, and the insurer’s capacity to sue as third-party beneficiary. The court overruled two of their objections, and sustained the remaining two. It found that no commercial insurance agreement was in place that would allow the insurer to recover under subrogation, and the implied warranty of good workmanship was not excluded from commercial buildings. Plaintiff was not accommodated by the ruling that the breaches arose out of contract, not tort and that the explicit language denying third-party beneficiary status effectively prevented it from having standing to sue in that persona.
