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National Surety Justifies Its Disregard Of The Waivers

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National Surety justifies its disregard of the Waivers because—it contends—WCS forfeited its right to enforce the Waivers upon the execution of the 2007 settlement agreement. This position, however, is couched on the mistaken premise that the Waivers are “rights, claims, debts, liens, demands, [or] actions of any nature whatsoever.” (Appellant’s Brief at p. 9). To the contrary, the Waivers bargained for in the AIA Contract operate as immediate discharges of Metropolitan’s right to pursue claims that are covered by insurance. Accordingly, the Waivers are units of consideration that Metropolitan tendered when the AIA Contract was executed. Therefore, irrespective of whether the 2007 settlement is a substitute contract—it is not—the …show more content…

If, however, the release is merely a discharge given by and from the perspective of the releasing party, then it affords no affirmative rights to the released party and it can only operate as a defensive “shield”—that is, a negative defense to a breach of contract claim. Id. In Kaye, this Court relied on comment a to § 295 of the Restatement (Second) of Contracts for the proposition that “[d]ischarge by release . . . has long been regarded as an executed transaction rather than an executory promise.” Kaye, 227 Md. App. at 682. Therefore, any right to maintain an action on the released obligation ceased at the time Lawrence Kaye gave the release. Likewise, in this case, “a lawsuit predicated on claims that have been [waived] cannot be actionable as a breach of contract, because a [waiver] is a unit of consideration that is tendered . . . immediately at the time of contracting.” Kaye, 227 Md. App. at 682. Like the release at issue in Kaye, the Waivers at issue here are not affirmative rights possessed by WCS, but the voluntary forfeiture of rights previously possessed by Metropolitan. Indeed, the analytical constructs governing waiver of subrogation clauses generally mandate a construction consistent with Kaye: Because an essential element of subrogation is that the insured [here, Metropolitan] have a

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