Lease Didn't Protect Third Party from Lawsuit

A shopping center's air-conditioning unit overflowed into a tenant's space. The tenant filed a claim with its insurer for the resulting damage and the insurer paid the claim. The insurer then sued a third party that it said was responsible for properly maintaining the air conditioning system but hadn't done so. The third party asked the court to dismiss the insurer's lawsuit, arguing that it was barred by the lease's waiver of subrogation clause (which stops the insurer from seeking reimbursement from the owner for insured claims paid to the tenant).

A Texas court of appeals ruled that the waiver of subrogation clause didn't protect the third party and refused to dismiss the insurer's lawsuit. To take advantage of the waiver of subrogation clause, the third party would have had to prove that it was a party to the lease or that the owner and the tenant both wanted the lease to directly benefit the third party. But the third party offered no evidence to prove either of those scenarios [Atlantic Mutual Insurance Co. v. Crow Design Centers].