Court sides with contractor over subrogation for damages from burst pipe
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A federal district judge in Miami has sided with a heating, ventilation and air conditioning contractor against an insurer seeking subrogation for damages paid related to a burst pipe during Hurricane Katrina at a luxury condominium building in Miami.
Judge Alan S. Gold of the U.S. District Court for the Southern District of Florida granted summary judgment last week for the HVAC contractor, Jorda Enterprises Inc., in QBE Insurance Corp.'s subrogation suit. Jorda Enterprises was insured by the Hartford Insurance Co.
The burst pipe at a condominium at the Club at Brickell Bay occurred in August 2005 when the hurricane affected Miami before heading northwest to New Orleans. The condominium was operated and managed by the Club at Brickell Bay Plaza Condominium Association Inc., which was insured by QBE. The association made a claim on its policy and QBE ultimately paid more than $3 million in three payments between September 2005 and May 2009.
In June 2007, the condominium association filed suit in Florida Circuit Court claiming that the water damage from the burst pipe was caused by Jorda's negligent and deficient construction. That claim later was settled and QBE filed its subrogation suit against Jorda in 2010 seeking damages related to the burst pipe.
In issuing summary judgment for the contractor in the subrogation case, the judge ruled that there was no sufficient release from the condominium association allowing QBE to bring its subrogation claim as required by Florida law, that the condominium association had released Jorda in the construction litigation and the contractor did not have notice of a subrogation claim before that release, and that the subrogation claim was barred by the principle of res judicata as a matter that had already been judged.
