waiver of subrogation clause in New York

2001The claims for breach of contract are based on certain lease provisions and alleged related Building Code violations and are asserted, in our view, to circumvent the waiver of subrogation clause, whose provisions apply, if at all, only to tort-based claims, not claims premised on contractual liability (Viacom Intl. v Midtown Realty Co., 193 AD2d 45, 51-52 ; St.

2001The claims for breach of contract are based on certain lease provisions and alleged related Building Code violations and are asserted, in our view, to circumvent the waiver of subrogation clause, whose provisions apply, if at all, only to tort-based claims, not claims premised on contractual liability (Viacom Intl. v Midtown Realty Co., 193 AD2d 45, 51-52 ; St.

1999Co v Honeywell, Inc., 243 AD2d 605 ).

1999Co v Honeywell, Inc., 243 AD2d 605 ).

1996Corp. 106 AD2d 242, 245 , affd 66 NY2d 779 .) Thus, the second cause of action presents a viable claim based on defendants’ failure to obtain a waiver of subrogation clause, thereby allowing defendants’ insurer to pursue a subrogation action for defendants’ fire loss and subjecting plaintiffs and their insurer to the expense of defending such action.

1989Corp. ( 106 AD2d 242 [1st Dept], affd, 66 NY2d 779 [1985]), wherein it was held that the waiver of subrogation clause, identical to the one herein, was a complete bar to the insurer’s action as subrogee.

1996Leave to amend will be freely granted absent a showing of prejudice or surprise (see, CPLR 3025 [b]; Quiros v Polow, 135 AD2d 697, 699 ).

1996It is well settled that leave to amend will be freely granted absent a showing of prejudice or surprise (see, CPLR 3025 [b]; Quiros v Polow, 135 AD2d 697, 699 ).

1996Corp. 106 AD2d 242, 245 , affd 66 NY2d 779 .) Thus, the second cause of action presents a viable claim based on defendants’ failure to obtain a waiver of subrogation clause, thereby allowing defendants’ insurer to pursue a subrogation action for defendants’ fire loss and subjecting plaintiffs and their insurer to the expense of defending such action.

1989Corp. ( 106 AD2d 242 [1st Dept], affd, 66 NY2d 779 [1985]), wherein it was held that the waiver of subrogation clause, identical to the one herein, was a complete bar to the insurer’s action as subrogee.

2006Co. v Morris Goldman Real Estate Corp., 277 F Supp 2d 304 , 308 n 3 [SD NY 2003] [applying New York law].) From the foregoing, it follows that a waiver of subrogation clause in an agreement does not bar one party from suing the other to recover for a loss to the extent that such loss is not required by the parties’ agreement to be covered—and, in fact, is not covered—by insurance.

2006In arguing that article 47 (i) (J) bars this action, defendants rely heavily on this Court’s recent decision in Duane Reade v 405 Lexington, L.L.C. ( 22 AD3d 108 [2005]), in which we held that a waiver of subrogation clause barred the tenant’s claim against the landlord for business interruption damages. 405 Lexington, however, does not support defendants’ contention that a lease’s insurance requirements are irrelevant to the scope of its waiver of subrogation clause.

2006Similarly, in Gap v Red Apple Cos. ( 282 AD2d 119 [2001]), this Court held that each of two commercial tenants was entitled, notwithstanding the waiver of subrogation clause in its lease, to sue the landlord to recover the portion of its fire loss within the deductible under its insurance, since “the leases did not require the tenant to obtain fire contents coverage in any specified amount or, at all, for that matter” (id. at 124).

2006Similarly, in Gap v Red Apple Cos. ( 282 AD2d 119 [2001]), this Court held that each of two commercial tenants was entitled, notwithstanding the waiver of subrogation clause in its lease, to sue the landlord to recover the portion of its fire loss within the deductible under its insurance, since “the leases did not require the tenant to obtain fire contents coverage in any specified amount or, at all, for that matter” (id. at 124).

1997Assocs., 201 AD2d 548 ; Federal Ins.

1996In upholding the waiver of subrogation clause attacked in Valden (supra) as an illegal exemption from liability under General Obligations Law § 5-323, the Second Department held, "It is not a contracting away of liability, but only of subrogation rights.” (Board of Educ. v Valden Assocs., 60 AD2d 617, 618 , affd 46 NY2d 653 , supra; see also, Trump-Equitable Fifth Ave.

1994The IAS Court correctly framed the issue to be "whether the damage is to tenant’s property or to fixtures”, and correctly found such to be an issue of fact (Matter of Dormitory Auth. [Milo Press] 172 AD2d 401 ) that precludes a summary determination of whether the waiver of subrogation clause is applicable (see, Continental Ins.

1994Co. v Faron Engraving Co., 179 AD2d 360 ; Viacom Intl. v Midtown Realty Co., 193 AD2d 45, 54 ).

1993Co. ( 644 F Supp 38 ), which, with respect to a similar issue, held that a waiver of subrogation clause identical to the one in question, paragraph 9 (e) of the standard form of office lease of the Real Estate Board of New York, Inc., applies only to tort-based liability and does not include within its compass contractual liability.