Pacific Indemnity Co. v. Deming, No. 15-2386 (1st Cir. 2016)Annotate this Case
Defendant was a tenant of condominium unit (Unit 1801) when unit’s bathtub overflowed and leaked into the condominium units below, causing damage. Pacific Indemnity Company, which insured Unit 1601, brought an action seeking to recover the amount it had paid to the owners of Unit 1601. As the unit’s subrogee, Pacific sought to recover damages in the amount of $351,159 as well as pre-judgment interest and costs. The district court granted summary judgment in favor of Deming, determining that Pacific’s rights to subrogation were waived based on a clause in the bylaws of the condominium trust that unit owners “shall carry insurance,” and that “all such policies shall contain waivers of subrogation.” The First Circuit reversed, holding (1) the plain language of the condominium’s Bylaws, Master Deed, and Declaration of Trust is that the required waivers of subrogation do not apply to tenants; and (2) even if the Bylaws did require unit owners to purchase insurance that contains waivers of subrogation as to claims against tenants, because Defendant presented no evidence that Unit 1601’s owners actually waived their insurer’s subrogation rights against tenants, Pacific can pursue its claims.
The court issued a subsequent related opinion or order on July 11, 2016.