Contractors and subcontractors moved for summary judgment seeking dismissal of a negligence and property damage claim arising from a water leak during mechanical system upgrades to a commercial building.
They argued that a builder’s risk insurance obligation contained in a long‑term land lease between the building owner and its landlord created a subrogation bar protecting them as third‑party beneficiaries.
The court held that the construction contract governing the work contained an “entire agreement” clause and expressly allocated responsibility for builder’s risk insurance to the contractor.
Because the defendants were strangers to the land lease and had neither relied upon nor bargained for its provisions, the lease could not override the later construction contract or confer a defence through the privity exception.
The insurance provision in the land lease therefore did not bar the plaintiff’s action.
