Gordon & Rees Wins Summary Judgment in $1M Negligent Construction Case
On October 27, 2011, Judge Robert Dry of the 199th District Court of Collin County, Texas granted summary judgment in the case of Enclare, LLC d/b/a Mignon v. Allied Property & Casualty Ins. Co
. Dallas Co-Managing Partner Bob Bragalone
and Associate Ryan Fellman
represented defendant Edward Don & Company, one of the nation's largest distributors of foodservice equipment and supplies.
The case involved a French restaurant in Plano, Texas named Mignon. Mignon submitted a claim for water and mold damage to its insurer. The insurer denied the claim due to a "Leakage and Seepage" exclusion in Mignon's insurance policy, on the purported basis that the damage was caused by a leaking dishwasher at Red's Patio Grill, which shared a common wall with Mignon.
Mignon sued Allied for bad faith. Allied ultimately settled the bad faith claim for $1,030,000, but then brought a subrogation suit against Edward Don in an attempt to recoup its settlement payment. Allied alleged that Edward Don's negligent installation of a stainless steel back splash behind the dishwasher allowed the water to seep through the common wall to Mignon.
Edward Don filed a summary judgment motion on multiple grounds, including a novel contractual subrogation argument based on the fact that Mignon's insurance policy limited the insurer's subrogation rights to payments made "under the policy." Edward Don argued that because the insurer denied the claim and then denied liability in its settlement agreement with Mignon, the insurer was barred from pursuing a subrogation claim against Edward Don. The court granted the summary judgment motion.