In a recent New Jersey case, an insurance company appealed a trial court’s order of summary judgment that dismissed its subrogation claim against the defendant, the installer of the fire sprinkler at the premises. A pipe burst in the plaintiff’s insured facility and caused roughly $1.5 million in property damages. The plaintiff paid the claim in full, obtained an assignment of the insured facility’s rights and brought the subrogation claim against the defendant to recoup the indemnity payments.
The trial court granted summary judgment to the defendant based on a waiver-of-subrogation clause in the contract for services between the plaintiff’s insured facility and the defendant. The trial court also found that a limitation-of-liability provision in the contract, which limited recovery against the defendant to $1,000, was enforceable; and although the contract was adhesive in nature, it was not substantially unconscionable.