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Indiana Ins. Co. v. Carnegie Constr.5/31/1995
FREDERICK N. YOUNG, Judge.
Carnegie Construction Company ("Carnegie") appeals from an order entered on a counterclaim for declaratory judgment it brought against the Indiana Insurance Company ("Indiana"). Indiana initiated this action by bringing subrogated claims against Carnegie alleging negligence and breach of contract in the construction of a school building for the West Liberty-Salem Board of Education ("the Board"). Carnegie responded by seeking a declaration that Indiana could not bring a subrogated claim against it because it was an insured of Indiana, or alternatively, because the Board and Carnegie agreed to make Carnegie an insured of Indiana. The trial court denied Carnegie the declaration it sought, holding that neither the insurance policy the Board purchased from Indiana, nor the construction contract between the Board and Carnegie, operated to bar Indiana from bringing its subrogated claims, because "Indiana Insurance Company is not an insurer of Defendant, Carnegie Construction Co., Inc."
In May 1987, Carnegie and the Board contracted for the construction of a new school building on State Route 68, in Urbana, Ohio. Under the General Conditions of the construction contract, Carnegie was "responsible for * * * he safety and good condition of all work and materials embraced in or affected by contract, until the completion of contract as an entirety." Instructions to Bidders and General Conditions, Article 18(a)(2). To this end, Carnegie agreed to "be responsible for all precautions as may be necessary to fully protecs work both during its execution and until its final acceptance, in default of which [Carnegie would] be held responsible for all damage incurred." Id., Article 18(b).
Following this language is an additional provision requiring both Carnegie and the Board to obtain insurance for the project. Carnegie agreed to "maintain insurance to protect and the Owner from claims for personal injury , direct or derivative, including death, or claims for property damage, resulting from operations under this contract, by self, subcontractor, or anyone directly or indirectly employed by them." Id., Article 180)(a)(1). The Board agreed to procure a builder's risk policy to protect "the State of Ohio, the Contractor, and the West Liberty-Salem Local School District Board of Education from loss incurred by theft, fire, lightning, extended coverage, vandalism, and malicious mischief in the full amount of the contract." Id., Article 180)(b)(1). Indiana provided a builder's risk policy for the Board; Westfield Insurance Company provided Carnegie with liability insurance. The Board presented Carnegie with a certificate of insurance to evidence builder's risk coverage, as the construction contract required, and work commenced.
By December 1987, the erection of masonry walls was underway. On December 15, they were toppled by gale force winds. The Board promptly made a claim for the loss under the Indiana builder's risk policy. After conducting some investigation, Indiana agreed that the cause of the loss was the December 15 windstorm, and because the project was property insured, and windstorm a peril insured against in the builder's risk policy, Indiana paid the Board $279,668.36.
Indiana subsequently continued its investigation into the cause of the loss, and concluded that Carnegie's failure to properly protect its work by bracing the walls while they were under construction left the walls vulnerable to damage from high winds. Indiana then filed suit against Carnegie, asserting that it was subrogated to the Board's potential claims against Carnegie for negligence and breach of contract.
In its answ
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