Frank Ban and Paul Sculley recently convinced a Jefferson County judge to dismiss all claims against their client, Lee Company. The lawsuit against Lee was filed by Zurich American Insurance Company in an attempt to recover amounts paid to its insured, Baptist Hospital of Southeast Texas, under a builder’s risk insurance policy for damage to medical equipment caused by a release of steam during construction. Lee, a subcontractor on the job, asked the Court to enforce a provision in the contract between the hospital and the general contractor in which the hospital agreed to waive its right of subrogation against the general contractor and all subcontractors in connection with its purchase of the builder’s risk policy from Zurich. Mr. Ban and Mr. Sculley argued that as a matter of law, Zurich could not sue Lee because its insured, the hospital, had waived all rights of subrogation on claims paid under the policy during construction. The court agreed and dismissed all of Zurich’s claims against Lee.
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