The insured, Miller-Dawn Medical Center, needed asbestos removed and contracted with A.C.C.T. for the removal. As part of the contractual agreement between Miller-Dawn and A.C.C.T., Miller-Dawn was required to purchase a property insurance policy that would waive all rights of subrogation against and between the property owner and the contractor. Miller-Dawn did so through Employers Mutual Casualty Company.

A fire occurred. Employers Mutual paid the claim and attempted to subrogate against A.C.C.T., who argued that subrogation could not occur as it had been waived. Employers stated that the subrogation clause was ambiguous as the fire occurred in a non-work area. A trial ensued. In the initial decision, subrogation was not barred. An appeals court affirmed that decision.

However, upon review by the Minnesota Superior Court, the decisions of the lower courts were overturned. The subrogation waiver was broad and made no distinction between work and non-work areas. Therefore, it effectively barred the insurer from subrogation against the contractor for the fire that occurred in a non-work area.

(A.C.C.T., Incorporated, Petitioner v. Employers Mutual Casualty Company as Subrogee of Miller-Dawn Medical Center, Respondent. MinnSCt. No. C0-97-7, Filed June 25, 1998. CCH 1998 Fire and Casualty Cases, Paragraph 10502.)