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LEXINGTON INSURANCE COMPANY, a/s/o Sanborn, Inc., v. TIRES INTO RECYCLED ENERGY AND SUPPLIES, INC. No. COA99-206 (Filed 21 December 1999) Insurance--subrogation rights--landlord and tenant--lease governs liabilities The trial court did not err in granting summary judgment in favor of defendant-tenant in a subrogation action to recover damages for a fire allegedly caused by defendant because: (1) the terms of the lease govern the liabilities of the parties where the insured is a landlord and the third party is a tenant; (2) the plain and unambiguous language of the lease between defendant and plaintiff's insured evidences the intent of each of the parties to relieve the other from all liability for damages otherwise covered by insurance, including liability for negligence; and (3) plaintiffinsurer could have no greater rights against defendant through subrogation than its insured. Appeal by plaintiff from judgment entered 3 November 1998 by Judge Lester Martin in Forsyth County Superior Court. Heard in the Court of Appeals 25 October 1999. Cozen and O'Connor, by T. David Higgins, Jr., for plaintiffappellant. Kilpatrick Stockton, LLP, by James H. Kelly, Christopher C. Fox, for defendant-appellee. MARTIN, Judge. Lexington Insurance Company ("Lexington") brought this Jr., and

subrogation action against Tires Into Recycled Energy and Supplies, Inc., ("TIRES") to recover damages for a fire allegedly caused by TIRES, which damaged property leased to TIRES by Lexington's insured, Sanborn, Inc. ("Sanborn"). The lease from Sanborn to

TIRES covered a commercial building located on Waughtown Street in Winston-Salem, provision: 18. Waiver of Subrogation. Each party, notwithstanding any provision of this Lease otherwise permitting such recovery, hereby waives any rights of recovery against the North Carolina, and contained the following

other for loss or injury against which such party is protected by insurance, to the extent of the coverage provided by such insurance. Each insurance policy carried by either party with respect to the Leased Premises or the property of which they are a part which insures the interest of one party only, shall include provisions denying to the insurer acquisition by subrogation of any rights of recovery against the other party. The other party agrees to pay any additional resulting premium. Lexington's policy issued to Sanborn, effective on the date of the loss, contained the following clause: I. Transfer of Rights of recovery against others to us If any person or organization to or for whom we make payment under this Coverage Part has rights to recover damages from another, those rights are transferred to use to the extent of our payment. That person or organization must do everything necessary to secure our rights and must do nothing after loss to imperil them. But you may waive your rights against another party in writing: 1. Prior to a loss to your Covered Property or Covered Income. . . . (emphasis added). Lexington reimbursed Sanborn for the damages occasioned by the fire and filed this action against TIRES, asserting a right of subrogation against TIRES for negligently causing the fire. denied liability, and moved for summary judgment. TIRES

The trial court

granted summary judgment in favor of TIRES and Lexington appeals. _____________________ Lexington assigns error to the trial court's grant of summary judgment in favor of TIRES, arguing that the provisions of the

lease agreement between Sanborn and TIRES were not sufficient to extinguish affirm. Summary judgment is appropriate when "the pleadings, Lexington's subrogation rights against TIRES. We

depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law." N.C. Gen. Stat.

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South Carolina Law