Insureds Prevail on Summary Judgment Addressing Responsibility for Water Leak
The court granted summary judgment to the insureds, finding they were not responsible for a water leak from a drain valve on the tenth floor of the building. Charter Oak Fire Ins. Co. v. Bremermann Mech., Inc., et al., 2025 U.S. Dist. LEXIS 59871 (E.D. La. March 31, 2025).
The General Services Administration (GSA), the building owner, contracted with Wright Brothers, LLC (WB) to serve as the general contractor to create office space on the tenth floor of the building. Under the general contract, WB was responsible for providing all materials, services and labor to both design and construct the office space. WB subcontracted with Bremermann Mechanical, Inc. (BMI) to provide HVAC installation. BMI, in turn, subcontracted with Siemens to provide products and services to facilitate the installation.
A water leak from a drain valve on the tenth floor caused damage to the building. Charter Oak and Travelers were Plaintiffs as subrogees of WB and BMI. Siemens and its insurer, HDI Global Insurance Company, and BMI and its insurer, Kinsale Insurance Company, were defendants.
At the beginning of the project, Siemens provided mechanical submittals to BMI. Five Valve Systems were to be installed in the tenth-floor ceiling. All systems used composite caps. Plaintiffs introduced evidence from the Valve System's manufacturer that the installed composite caps or any caps on the Valve System were not designed to contain water flow. BMI provided a submittal to WB for approval. WB obtained approval from GSA. WB then directed BMI to purchase all necessary equipment – including the Subject Valve that was incorporated into the system.
BMI began the installation of the Valve System, including the Subject Valve with a composite cap. WB's site superintendent, Donny Phillips, testified that he evaluated all valves and ensured the work was in conformity with the project's specifications. He did not identify any leaks.
From June 10, 2020 to August 7, 2020, multiple other entities performed work within inches to feet of the Subject Valve. On August 16, 2020, WB received a call from building security about water coming from the tenth floor. Phillips responded and found pressured water jetting from the Subject Valve. The building sustained water damage over nine floors. Investigation showed that the Subject Cap suffered no damage, including no thread damage. WB reported the incident to Plaintiffs, its insurers
Plaintiffs paid $2,300,000 to GSA in damages, and then sought to recoup their expenses from Defendants. BMI and Siemens moved for summary judgment. They argued there was insufficient evidence for a jury to conclude that either BMI or Siemens were liable because there was no evidence their acts or omissions caused the incident. Plaintiffs conceded they did not know who opened the Subject Valve or removed the Subject Cap.
HDI, BMI's insurer, and Kinsale, Siemens's insurer, also moved for summary judgment, arguing they were not liable to Plaintiffs because the subcontractors were not liable.
The Plaintiffs' best argument was that because BMI had a responsibility to install a functioning valve system and did install the Valve System, that they could have been the party to open the valve and were thus responsible for the leak. Plaintiffs had to support their claim with affirmative evidence for a jury to conclude that BMI was responsible for the Subject Valve being open. BMI's presence in the general area was not enough. The same was true for Siemens. The Plaintiffs contended that a Siemens employee could have touched the Subject Valve when working on the HVAC. But the employee testified that he did not touch the Subject Valve or the Subject Cap because he had no reason to do so. There was no evidence beyond mere speculation that BMI or Siemens opened the Subject Valve. Consequently, the subcontractors were entitled to summary judgment.
Further, Kinsale and HDI were entitled to summary judgment because Plaintiffs cold not recover either as an additional insureds or under the indemnity provisions in the Siemens or BMI policies. Because Plaintiffs failed to prove that Defendant Subcontractors were negligent or liable to Plaintiffs, they could not recoup under the indemnity provisions in the Siemens or BMI policies. Plaintiffs also could not collect as additional insureds under the BMI or Siemens policy. Both policies limited coverage to the named insured's acts or omissions.
