Copper Mountain, Inc. v. Industrial Systems, Inc. (Colo. App. 2007)
Creating a split in the Colorado Court of Appeals, a division of the Court held that the subrogation waiver in AIA A201 covers any damage to the building, not just loss to the work being performed.
On June 9, 2008, the Supreme Court of Colorado granted cert. on the following issue: Whether the court of appeals erred in ruling a waiver of subrogation provision in an American Institute of Architects ("AIA") form contract barred all of owner-plaintiff’s claims, thereby creating a conflict with another decision of the court of appeals, Town of Silverton v. Phoenix Heat Source System, Inc., 948 P.2d 9 (Colo. App. 1997), which held the waiver provision barred only claims for damages to the "Work" required to be insured by the owner under the contract.
In this case, the project was for renovations to a ski lodge. During performance of the work, a fire occurred, damaging portions of the existing lodge. According to the Court of Appeals, the owner, who entered into a standard AIA A201 contract, waived all claims for damages against the contractor and subcontractor to the extent those damages were covered by insurance. Therefore the waiver is not limited to just the "Work" as defined by the contract, but also covered damage to the existing ski lodge.
The Court of Appeals acknowledged that another division of the Court of Appeals, in Town of Silverton v. Phoenix Heat Source System, Inc., 948 P.2d 9 (Colo. App. 1997), held that the subrogation waiver was limited to claims for damages to the work only. As noted above, the Supreme Court of Colorado granted cert.
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