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29 Apr 2014 Indiana Courts Wrestle with “Work” v. “No-Work” Distinction in Waiver of Subrogation Cases

When confronted with the argument that a party has waived its claims under an AIA standard waiver of subrogation provision, Indiana has traditionally applied a “Work” vs. ”No-Work” distinction when evaluating whether a project owner has waived its claims. Despite prior case law applying this distinction, on Feb. 14, 2014, the Indiana Court of Appeals, in Bd. of Comm’rs of the Cnty. of Jefferson v. Teton Corp., 3 N.E.3d 556 (Ind. Ct. App. 2014), held that a work vs. no-work distinction should not apply. Because the project owner failed to secure the insurance required under the contract, failed to give notice to the general contractor of the decision not to secure the insurance, and waived its subrogation claims, the court held the owner breached the…