CA LLC CA JV LLC v. LLC LLC RHCI LLC (2026)

MEMORANDUM DECISION

[1] CA Student Living Bloomington Property Owner, LLC (“Owner”)¹ appeals the trial court's order granting summary judgment to Gilliatte General Contractors, Inc. (“General Contractor”) and eight subcontractors (“the Subcontractors”)  ² (collectively, “the Contractors”) on Owner's claims of negligence and breach of contract related to the construction of an apartment complex. We affirm.

Facts and Procedural History

[2] In June 2017, Owner and General Contractor entered into a Guaranteed Maximum Price Construction Agreement (“the Contract”) for the construction of an apartment complex in Bloomington, Indiana (“the Project”). Exhibit H to the Contract, titled “Insurance Requirements,” set forth each party's obligations to obtain insurance. Appellant's App. Vol. III p. 119; Appellant's App. Vol. IV pp. 5–11. Section C.1 of Exhibit H (“the Adequate Coverage Provision”)—which was titled “Insurance to Protect [the] Project”—required Owner to “obtain and maintain property insurance in a form reasonably acceptable to [General] Contractor upon the entire Project for the full cost of replacement at the time of any loss (known as ‘Builders Risk’).” Appellant's App. Vol. IV p. 10. The policy was required to “include as named insureds Owner, [General] Contractor, Architect[,] and [all] [s]ubcontractors.” Id. The policy was to cover specific causes of loss, with the Contract specifying:

This insurance shall insure against loss from the perils of fire and extended coverage, and shall include ‘all risk’ insurance for physical loss or damage including without duplication of coverage at least: theft, vandalism, malicious mischief, transit, collapse, falsework, temporary buildings, debris removal, flood, earthquake, testing, and damage resulting from defective design, workmanship[,] or material provided such defect causes a “covered cause of loss” as defined in the policy of insurance.

Id. (emphasis added). Owner was required to “increase limits of coverage, if necessary, to reflect estimated replacement cost.” Id. Moreover, the provision allocated the cost of “any co-insurance penalties or deductibles” to “[t]he [p]arty responsible for the loss covered by th[e] insurance ․” Id.

[3] In Exhibit H, the parties also waived certain rights to subrogation. Section E (“the Waiver of Subrogation provision”) stated in pertinent part: “Owner and [General] Contractor waive all rights against ․ each other and any of their subcontractors, sub-subcontractors, agents[,] and employees, each of the other ․ for damages caused by fire or other causes of loss to the extent covered by property insurance obtained pursuant to this Exhibit H ․” Id. at 11.

[4] A separate provision (“Section 2.3”) stated that “[a]ny insurance limits required by the contract documents are minimum limits only and not intended to restrict the liability imposed on any contractor for work performed under the [C]ontract.” Id. at 7. An additional provision (“Section 3.6”) also provided:

The insurance provisions set forth in the Contract shall not be construed as a limitation on [General] Contractor's responsibilities and liabilities pursuant to the terms and conditions of the Contract including, but not limited to, liability for claims in excess of the insurance limits and coverages set forth herein. This provision shall not be deemed to alter or otherwise modify any express damage limitation provision set forth in the Contract.

Id. at 9. Each subcontract incorporated the pertinent insurance provisions.

[5] Owner obtained from Hartford Fire Insurance Company (“Hartford”) a Builder's Risk policy (“the Policy”) with a limit of $72,569,240.00, covering June 8, 2017, through August 8, 2018. After the Hartford Policy expired, Owner obtained a policy from Travelers (“the Travelers Policy”) that covered August 11, 2018, through August 11, 2019, with a limit of $350,000,000.00.

[6] On August 17, 2018, residents began moving into the apartment building. Two days later, significant water damage was discovered inside. The damage included interior water intrusion from the improper installation of shower drains. There was also exterior water intrusion from gaps in the cladding and the improper or incomplete installation of roofing and coping materials.

[7] Owner filed claims under both policies. Neither fully covered Owner's losses. Hartford accepted the claim for exterior wall damage, determining $403,482.88 was due. However, Hartford denied the shower drain damage claim in its entirety on the basis that the damage occurred after the Hartford Policy expired. Owner also sought to recover $429,060.00 in Time Element Losses, which were expenses incurred to relocate students during remediation, including hotel costs, gift cards, and rent credits. Hartford denied that claim as well on the ground that coverage was conditioned on there being a delay in completing the Project, but there had been no such delay. As to the shower drain damage, the Travelers Policy covered the damage, but the parties disputed the amount. Whereas, Owner claimed the shower drain damage totaled $3,103,663.00, Travelers determined that the covered loss and damage was $1,057,212.15.

[8] In February 2019, General Contractor filed the instant action. In its amended complaint, General Contractor named Owner as a defendant, claiming Owner breached the contract by failing to pay an outstanding balance of $5,551,390.08 for work on the Project. General Contractor sought foreclosure of a mechanic's lien for that amount. General Contractor also named the Subcontractors and two additional subcontractors we refer to herein as PIPE/RG, asserting breach of contract, negligence, and breach of an implied warranty of workmanship arising due to the water damage.³ Owner brought counterclaims against General Contractor and cross-claims against certain subcontractors. Against General Contractor, Owner asserted breach of contract both for a lien issue and for the construction defects that caused the water damage. Owner also alleged negligence. Against certain subcontractors, Owner brought claims of breach of contract and negligence, alleging that defective workmanship caused the moisture damage.⁴ Owner sought to recover the difference between its expenses and the insurance coverage. Owner calculated its total damages from the water intrusion issues—subject to offset by the Hartford Policy and the Travelers Policy—to be approximately $2,700,987.00, claiming the damages consisted of $2,271,927.00 in property damages and $429,060.00 in Time Element Losses.

[9] In May 2022, PIPE/RG moved for summary judgment on Owner's and General Contractor's claims, asserting that Owner materially breached the Contract by failing to procure adequate all-risk insurance naming them as insureds, and that the Waiver of Subrogation Clause barred all the claims. In November 2022, the trial court granted PIPE/RG's motion for summary judgment. Owner appealed, and in August 2023, this court affirmed in CA Student Living Bloomington Property Owner LLC v. P.I.P.E. Inc., No. 22A-CT-2966 (Ind. Ct. App. Aug. 28, 2023) (mem.), trans. denied. The P.I.P.E. Court determined that the Contract required Owner to obtain and maintain, at least until substantial completion of the Project, all-risk Builders Risk coverage naming subcontractors as insureds. The Court found that Owner “breached its contractual obligation to maintain such insurance at least until the project was substantially completed, and thus it alone must suffer the consequences of that breach.” P.I.P.E., No. 22A-CT-2966, at *4. Having identified a dispositive breach of contract issue on which to affirm the summary judgment ruling, the P.I.P.E. Court declined to address arguments concerning the Waiver of Subrogation Clause. Id. at *5. The opinion was certified on March 11, 2024.

[10] On August 9, 2024, the Subcontractors and General Contractor separately moved for summary judgment on Owner's claims. In supporting briefing, the movants cited the P.I.P.E. decision and claimed that, under the law of the case doctrine, they were entitled to summary judgment. The movants also referred to the same contractual provisions at issue in the prior appeal, claiming Owner breached its obligation to maintain adequate insurance, and therefore, Owner's recovery for damages was limited to the proceeds from insurance. The trial court heard argument on December 12, 2024, and directed the parties to submit proposed orders. On April 30, 2025, the trial court granted both motions for summary judgment, resolving Owner's claims in favor of the Contractors.

[11] The trial court entered a final judgment granting the Subcontractors’ motion for summary judgment, concluding the issues were “governed by well-established principles of Indiana contract law and the binding precedent set by the Court of Appeals” in the P.I.P.E. decision. Appellant's App. Vol. II p. 214. The court also independently interpreted the Contract, agreeing with the P.I.P.E. Court's interpretation, and concluding that the Waiver of Subrogation Clause barred Owner's claims for losses that were or should have been covered by the required insurance; that Owner's failure to obtain adequate insurance naming the Subcontractors as insureds “constitute[d] a material breach,” id. at 214, of the Contract; and that the law of the case doctrine applied because the pertinent circumstances were “substantially identical” to those at issue in the prior appeal, id. at 215.

[12] The trial court entered a separate final order resolving General Contractor's motion for summary judgment. In that order, the trial court applied the law of the case doctrine and determined that Owner “is precluded from re-litigating the insurance and contract interpretation issues” addressed in the November 2022 summary judgment order as to PIPE/RG that was affirmed in the prior appeal. Id. at 222. The trial court concluded that Owner had waived all claims against General Contractor pursuant to the Waiver of Subrogation provision, that Owner's damages resulted from its own breach, and that Owner's counterclaim against General Contractor therefore failed as a matter of law.

[13] Following an unsuccessful motion to correct error, Owner separately appealed both summary judgment orders. This court consolidated the two appeals.

Discussion and Decision

[14] Owner challenges the trial court's order granting summary judgment to the Contractors on Owner's claims of negligence and breach of contract. We begin by noting that Owner disputes whether this court's prior decision in P.I.P.E. controls the outcome of this appeal by operation of the law of the case doctrine. Mindful that the law of the case doctrine is “a discretionary tool” we are not obligated to use, here, we elect to address the issues on the merits and engage in contract interpretation to assess the rulings on summary judgment. Dutchmen Mfg., Inc. v. Reynolds, 891 N.E.2d 1074, 1082 (Ind. Ct. App. 2008), trans. denied.

[15] We review summary judgment decisions de novo. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). Summary judgment is proper if, drawing all reasonable inferences in favor of the non-movant, the designated evidence “shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Ind. Trial Rule 56(C); Hughley, 15 N.E.3d at 1003. “A fact is ‘material’ if its resolution would affect the outcome of the case, and an issue is ‘genuine’ if a trier of fact is required to resolve the parties’ differing accounts of the truth, or if the undisputed material facts support conflicting reasonable inferences.” Hughley, 15 N.E.3d at 1003 (quoting Williams v. Tharp, 914 N.E.2d 756, 761 (Ind. 2009)).

[16] Contract interpretation presents a question of law that we review de novo. Thomas v. Valpo Motors, Inc., 258 N.E.3d 236, 239 (Ind. 2025). Our goal is to “ascertain the intent of the parties at the time the contract was made, as disclosed by the language used to express the parties’ rights and duties.” Ryan v. TCI Architects/Eng'rs/Contractors, Inc., 72 N.E.3d 908, 914 (Ind. 2017). If the terms are clear and unambiguous, “courts must give those terms their clear and ordinary meaning.” Dunn v. Meridian Mut. Ins. Co., 836 N.E.2d 249, 251 (Ind. 2005). Moreover, “[c]ourts should interpret a contract so as to harmonize its provisions, rather than place them in conflict.” Id. at 252. When examining a contract, “we look at the ‘contract as a whole’ and ‘accept an interpretation of the contract that harmonizes all its provisions.’ ” Berg v. Berg, 170 N.E.3d 224, 231 (Ind. 2021) (quoting Ryan, 72 N.E.3d at 914)). We construe the contract “so as to not render any words, phrases, or terms ineffective or meaningless.” Ryan, 72 N.E.3d at 914. So long as the contract language is unambiguous, “the parties’ intent is to be determined by reviewing the language contained within the ‘four corners’ of th[e] written instrument.” Id. at 917 (quoting Carlson v. Sweeney, Dabagia, Donoghue, Thorne, Janes & Pagos, 895 N.E.2d 1191, 1197 (Ind. 2008)).

[17] Owner claims the trial court misinterpreted the Waiver of Subrogation Provision, under which “Owner and Contractor waive[d] all rights against ․ each other and any of their subcontractors, sub-subcontractors, agents[,] and employees, each of the other ․ for damages caused by fire or other causes of loss to the extent covered by property insurance obtained pursuant to [the Adequate Coverage Provision] ․” Appellant's App. Vol. IV p. 11 (emphasis added). Owner contends that “to the extent covered by” operates as a dollar cap—limiting the Waiver of Subrogation provision to what the insurer paid. Owner claims that “[t]o conclude otherwise would render the qualifying language ‘to the extent’ meaningless.” Appellant's Br. p. 28.

[18] Owner also asserts that the Hartford Policy satisfied the Adequate Coverage provision as a compliant Builders Risk policy covering the Project. On that premise, Owner contends that the insurance payout represents the full reach of the Waiver of Subrogation provision, thereby allowing Owner to recover the shortfall in insurance proceeds as permissible direct claims against the Contractors. As to the Time Element Losses, Owner argues that because Hartford denied its claim for those losses—on the ground that the Project was complete when the damages were discovered—the losses were never “covered” within the meaning of the Waiver of Subrogation provision. Id. at 49.

[19] For the sake of argument only, we accept Owner's premise that the Hartford Policy satisfied the Adequate Coverage provision. We proceed to interpret the Waiver of Subrogation provision. Contract language, we have said, should be given its “clear and ordinary meaning.” Dunn, 836 N.E.2d at 251. Moreover, in determining how modifying language applies, courts should consider the “grammatical arrangement” of the sentence and consider the position of words relative to one another. FLM, LLC v. Cincinnati Ins. Co., 973 N.E.2d 1167, 1176 (Ind. Ct. App. 2012) (quoting Lake Cnty. v. Rollins,130 U.S. 662, 670 (1889)); cf. Alexander v. Linkmeyer Dev. II, LLC, 119 N.E.3d 603, 616 n.8 (Ind. Ct. App. 2019) (noting that qualifying language “carr[ied] forward to apply to each of the two clauses of the series” that immediately followed the qualifying language).

[20] Here, the Waiver of Subrogation provision applied to claims “for damages caused by fire or other causes of loss to the extent covered by property insurance obtained pursuant to this Exhibit H․” Appellant's App. Vol. IV p. 11 (emphasis added). The qualifying phrase “to the extent covered by property insurance obtained pursuant to this Exhibit H” immediately follows two items in a list—“fire or other causes of loss”—without intervening punctuation. Id. Read naturally, this qualifying phrase modifies the adjacent language preceding it, i.e., “fire or other causes of loss,” rather than the word “damages” that appears earlier in the sentence. Id. That is the natural reading based on the structure of the sentence.

[21] Owner claims that reading “to the extent covered by” to modify “fire or other causes of loss” produces a surplusage, contrary to our principles of contract interpretation. Appellant's App. Vol. IV p. 11. Specifically, Owner argues that the Waiver of Subrogation provision would mean the same thing if the phrase “to the extent covered by” were omitted. Id. In other words, Owner contends that a waiver applicable to “damages caused by fire or other causes of loss to the extent covered by property insurance” is equivalent to a waiver applicable to “damages caused by fire or other causes of loss covered by property insurance.” Id. We disagree that our reading produces a surplusage.

[22] Under our reading, the phrase “to the extent covered by” limits the waiver to losses contemplated by the Adequate Coverage Provision; without this qualifying language, Owner would appear to waive subrogation rights even for losses it was not obligated to insure against. Thus, reading “to the extent covered by” to modify the preceding series—“fire or other causes of loss”— ensures waiver is confined to the insurance framework the parties expressly agreed to, meaning Owner did not waive the right to subrogation for causes of loss outside that framework—such as criminal conduct that no Exhibit H-compliant policy was designed to cover. Id. The Adequate Coverage provision reinforces our reading that the waiver concerns covered causes of losses, as it uses similar language to describe the scope of the insurance requirement; that is, Owner was required to maintain insurance for “damage resulting from defective design, workmanship[,] or material provided such defect causes a ‘covered cause of loss’ as defined in the policy of insurance.” Id. at 10 (emphasis added).

[23] Our reading also comports with caselaw. In general, “a subrogation waiver signifies the contracting parties’ intent to recover damages ‘through insurance claims, not lawsuits’ ․” U.S. Automatic Sprinkler Corp. v. Erie Ins. Exch., 204 N.E.3d 215, 222 (Ind. 2023) (quoting Board of Commissioners of County of Jefferson v. Teton Corp., 30 N.E.3d 711, 715 (Ind. 2015)). In Teton, the Indiana Supreme Court interpreted a substantially similar subrogation waiver provision that limited waiver to “damages caused by fire or other perils to the extent covered by property insurance obtained pursuant to” a provision in the contract. Teton, 30 N.E.3d at 715 (substituting italicization for bold text). The Court explained that to properly interpret the provision, it “must look at everything that follows the phrase ‘to the extent.’ ” Id. at 716. The Court focused its analysis on the word “covered,” explaining that “[t]he positioning and plain meaning of the word ‘covered’ restrict[ed] the scope of the subrogation waiver based on the source and extent of the property insurance coverage, not the nature of the damages or of the damaged property.” Id.; cf. Bryan Builders, LLC v. Cincinnati Cas. Co., 272 N.E.3d 515, 518 (Ind. Ct. App. 2025) (interpreting similar provisions and determining the parties waived all subrogation rights where there was a duty to maintain insurance, even though there was no insurance payout).

[24] Owner argues that Teton does not apply because the case resolved a different question—whether the waiver covers only damage to the contracted work or also damage to other property—and says nothing about claims to recover damages beyond what an insurer paid. But we do not rely on Teton to resolve this case; the contract language compels our reading for the reasons already stated. Owner also relies on Trinity Universal Insurance Co. v. Bill Cox Construction, Inc., 75 S.W.3d 6 (Tex. Ct. App. 2001), a Texas decision, for the proposition that the Waiver of Subrogation provision extended only to amounts an insurer paid. But that case involved an insurer's subrogation claim, not a property owner's deficiency claim, and in any event, the Texas case does not speak to the proper application of Indiana principles of contract interpretation.

[25] For the foregoing reasons, we conclude that the Waiver of Subrogation provision barred Owner's claims for losses arising from a covered cause of loss under the Adequate Coverage provision. Applying the provision to the undisputed facts on summary judgment, the cause of loss here is defective construction—defective roofing, coping, exterior cladding, and shower drain installations that caused water intrusion in a newly occupied housing complex. The Adequate Coverage provision expressly required Owner to obtain coverage for damage resulting from defective design, workmanship, or material. See Appellant's App. Vol. IV p. 10. Defective construction causing water intrusion is squarely within that coverage obligation, so the Waiver of Subrogation provision barred claims for losses arising from the defective construction.

[26] Owner contends that because Hartford denied the claim for Time Element Losses outright, those losses were never “covered” and fell outside the waiver entirely. Id. We disagree. The Time Element Losses were consequences of the defective workmanship for which Owner was obligated to maintain insurance. As earlier discussed, whether waiver applies is determined by the cause of loss, not by whether the insurer made a payment on a particular sub-coverage. In this case, the Hartford Policy included coverage for Time Element Losses stemming from damage prior to completion. Hartford denied the claim because the apartment complex had already been completed when the damage was discovered—a condition built into the policy that Owner chose to procure. This policy limitation does not alter the category of the cause of loss in this case, which remains defective workmanship, i.e., the precise risk Owner was obligated to insure against. We, therefore, conclude that the Waiver of Subrogation provision barred Owner's claims for the Time Element Losses.

[27] Owner alternatively argues that, independent of the Waiver of Subrogation provision, Sections 2.3 and 3.6 of Exhibit H preserved the right to recover the damages. See Appellant's Br. p. 30. Section 2.3 states that “[a]ny insurance limits required by the contract documents are minimum limits only and not intended to restrict the liability imposed on any contractor for work performed under the [C]ontract.” Appellant's App. Vol. IV p. 7. Section 3.6 states that “[t]he insurance provisions set forth in the Contract shall not be construed as a limitation on Contractor's responsibilities and liabilities pursuant to the terms and conditions of the Contract including, but not limited to, liability for claims in excess of the insurance limits and coverages set forth herein.” Id. at 9. Section 3.6 adds that the provision “shall not be deemed to alter or otherwise modify any express damage limitation provision set forth in the Contract.” Id.

[28] Owner reads Sections 2.3 and 3.6 as preserving direct claims against the Contractors for damages in excess of what the Hartford Policy and the Travelers Policy actually pay out. However, Owner's reading produces an illogical result, rendering the Waiver of Subrogation provision ineffective whenever insurance fell short of covering a contemplated type of loss—which is precisely the circumstance the provision seems designed to address. In any case, we note that Section 3.6 expressly forecloses Owner's proffered reading. Section 3.6 states: “This provision shall not be deemed to alter or otherwise modify any express damage limitation provision set forth in the Contract.” Id. The Waiver of Subrogation provision is an express damage limitation provision. Thus, by its own terms, Section 3.6 does not touch it. Furthermore, when a conflict exists between a specific and a general provision in a contract, the specific provision controls. E.g., Charter Oak Fire Ins. Co. v. Dougherty, 255 N.E.3d 1165, 1168 (Ind. Ct. App. 2024), trans. denied. Sections 2.3 and 3.6 address insurance limits and contractor liability in general terms across the contract's insurance terms. In contrast, the Waiver of Subrogation provision addresses a specific subject—the parties’ rights to recover for a defined category of losses—and it does so with precision. That specificity controls. Id.⁵

[29] Owner argues that Sections 2.3 and 3.6 should take priority because they were custom-drafted provisions, whereas the Waiver of Subrogation provision was boilerplate from a template. Reply Br. p. 17. We are not persuaded. When contract language is unambiguous, we discern the parties’ intent from the language contained within the four corners of the document. Ryan, 72 N.E.3d at 917. We give that language its “clear and ordinary meaning.” Dunn, 836 N.E.2d at 251. Applying the language used in the Contract, we conclude that Sections 2.3 and 3.6 do not preserve the claims for damages presented here.

[30] This case resolves the same way if we assume that the Hartford Policy did not satisfy the Adequate Coverage provision. If Owner's policy fell short of what the provision required—whether by failing to name the Contractors as insureds, by excluding certain categories of loss, or otherwise—Owner materially breached the Adequate Coverage provision. The consequences of that breach fall on Owner. Cf., e.g., U.S. Automatic Sprinkler Corp., 204 N.E.3d at 222 (explaining that “ ‘where one party agrees to purchase insurance for the benefit of both parties,’ this party ‘has no cause of action’ against the other regardless of [the other's] fault in contributing to or inducing the loss” (quoting Ind. Erectors, Inc. v. Trs. of Ind. Univ., 686 N.E.2d 878, 880 (Ind. Ct. App. 1997)). The Contract reinforced that allocation of risk to Owner, stating as follows: “If Contractor is damaged by failure of Owner to purchase or maintain property insurance[,] ․ Owner shall bear all reasonable direct costs incurred by Contractor arising from the damage.” Appellant's App. Vol. IV p. 11.

[31] In sum, if we assume that the Hartford Policy satisfied the Adequate Coverage provision, the Waiver of Subrogation provision barred Owner's claims for the difference between its actual damages and the amount that Hartford paid out to cover damages. If we instead assume that the Hartford Policy did not satisfy the Adequate Coverage provision, Owner's breach of the Adequate Coverage provision independently barred recovery. Thus, for the foregoing reasons, we conclude that the trial court did not err in granting the Contractors’ motions for summary judgment on Owner's claims of negligence and breach of contract.⁶

[32] Affirmed.

FOOTNOTES

1.   Owner was formerly known as CA/Regency Dunnhill JV, LLC.

2.   The Subcontractors are Huston Electric, Inc.; Wagler Custom Homes, LLC; All Seasons Heating and Air Conditioning Company, Inc.; Architectural Concepts, LLC; Cain Corporation; RHCI, LLC d/b/a Robert Haines; Light-Crete Products & Services, Inc.; and Skyline Roofing & Sheet Metal Company, Inc. As explained herein, there were two additional subcontractors that previously obtained summary judgment.

3.   The amended complaint named other defendants, including Hartford, which do not participate on appeal.

4.   Owner brought a cross-claim against Hartford, which is not at issue on appeal.

5.   Even assuming for the sake of argument that Sections 2.3 and 3.6 applied, we do not read these provisions to be in conflict with the Waiver of Subrogation provision, but rather as referring to liability outside of covered losses (i.e., in “excess of the insurance ․ coverages”) and exceeding the replacement costs (i.e., in excess of “insurance limits”) in a Builders Risk policy that complies with the Adequate Coverage provision. Appellant's App. Vol. IV pp. 7, 9. This case involves defective workmanship, which is identified as a covered loss under the Adequate Coverage provision. See id. at 10. Furthermore, this case involves a claim in excess of the insurance proceeds, not a claim in excess of the insurance limits, which are established as the replacement costs under a compliant Builders Risk policy. Therefore, even under this alternative approach, we would conclude that the Waiver of Subrogation provision is unaffected such that Owner waived the instant claims against the Contractors.

6.   Owner raises additional arguments that we do not address separately, as each is resolved by the analysis set out above.

Foley, Judge.

Tavitas, C.J., and Weissmann, J., concur.