Gables Construction
v. Red Coats (Ct. of Special Appeals)
Filed: February
27, 2019
Opinion by: Judge
Alexander Wright.
Holding:
Contractual waivers of subrogation do not shield a
contracting party from third-party contribution and direct liability under the Maryland’s
Uniform Contribution Among Joint Tort-Feasors Act (“UCATA”)
Facts:
Upper Rock was the owner of a residential building project
and hired Plaintiff Gables Construction (“GCI”) as the General Contractor, wholly owned by Gables Residential Services, Inc. (“GRSI”), to build the building. GSRI hired Defendant Red Coats, Inc./Admiral (“Red Coats”) to provide security and fire watch services monitoring
during the construction period from approximately 5 pm to 6 am pursuant to a vendor services agreement (the “VSA”). In the GSRI-Red Coats VSA, Red Coats waived
subrogation; also, GCI is named as an additional insured in the VSA.
A fire damaged a building as it was almost completed. The fire may have been caused by space heaters. Upper Rock sued Defendant, and they
settled. Defendant then sued Plaintiff,
claiming it was liable because it provided no training on the operation of the
space heaters to Defendant.
Analysis:
The Court of Special Appeals agreed with the Montgomery County
Circuit Court that Red Coats’ settlement with Upper Rock does not preclude Red
Coats from seeking contribution from GCI under Maryland’s UCATA.
Citing Homeseekers’ Realty v. Silent Automatic Sales, 163 Md. 541, 545 (1933), a “contract is binding only upon the parties to the contract
and their privies.”
Before Maryland enacted its UCATA in 1941, “a statutory right
of contribution among joint tortfeasors….did not exist.” See Central GMC v. Helms, 303 Md. 266, 276(1985). Thus, injured parties cherry-picked
which tortfeasor to sue.
UCATA provides that a release of one joint tortfeasor does
not relieve the liability of other joint tortfeasors. If it did, it could create a chilling effect
on business relationships.
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