Lithko Contracting v. XL Insurance Amer.

Lithko Contracting, LLC, et al. v. XL Insurance America, Inc., No. 31, September Term, 2023. CONTRACT INTERPRETATION – OBJECTIVE THEORY OF CONTRACT INTERPRETATION Maryland adheres to the objective theory of contract interpretation. Under that approach, unless the language of the contract is ambiguous, we interpret it based on what a reasonable person in the position of the parties would have understood the language to mean rather than the subjective intent of the parties at the time of formation. We do not interpret contractual language in a vacuum.

Instead, we interpret that language in context, which includes not only the text of the entire contract but also the contract’s character, purpose, and the facts and circumstances of the parties at the time of execution. CONTRACT INTERPRETATION – WAIVER OF SUBROGATION A commercial tenant and landlord entered into a general contract for the construction and subsequent lease of a warehouse in which the landlord would also act as the general contractor for the warehouse. That contract contained a waiver of subrogation in which the tenant and landlord waived subrogation against one another regarding claims for certain losses, including losses caused by their respective subcontractors. After the warehouse sustained weather damage, the tenant’s insurer brought a subrogation action against the subcontractors to recoup insurance payments it made to the tenant.

The Supreme Court determined that the plain language of the general contract did not show that the waiver of subrogation between the landlord and tenant was intended to benefit the subcontractors. Thus, the Court held that the subcontractors, who were not bargaining parties to the contract, are not third-party intended beneficiaries of the contract and may not enforce it. The contract also required the landlord to include in its subcontracts a different waiver of subrogation, the language of which suggested that it applied among multiple parties but also that the tenant was not included as a party to the waiver. The Court therefore held that the waiver in the subcontracts was ambiguous as to whether the subcontracts included a waiver of subrogation by the tenant against the subcontractors, which would preclude the tenant’s insurer from bringing its action against the subcontractors.

The Court therefore held that extrinsic evidence was needed to show the subjective intent of the parties regarding the scope of the subrogation waiver. CONTRACT INTERPRETATION – WAIVER OF SUBROGATION – PUBLIC POLICY A requirement in a general contract to include a waiver of subrogation in all subcontracts does not automatically result in a project-wide waiver of subrogation. Circuit Court for Baltimore City Case No. 24-C-21-004794 Argued: May 6, 2024 IN THE SUPREME COURT OF MARYLAND No. 31 September Term, 2023 ______________________________________ LITHKO CONTRACTING, LLC, ET AL. v. XL INSURANCE AMERICA, INC. ______________________________________ Fader, C.J., Watts, Booth, Biran, Gould, Eaves, Hotten, Michele D. (Senior Justice, Specially Assigned), JJ. ______________________________________ Opinion by Fader, C.J. ______________________________________ Filed: July 15, 2024 Pursuant to the Maryland Uniform Electronic Legal Materials Act (§§ 10-1601 et seq. of the State Government Article) this document is authentic. 2024.07.15 14:58:13 -04'00' Gregory Hilton, Clerk Under the doctrine of subrogation, a party (the subrogee) who pays the debt or loss of another (the subrogor) may assert the subrogor’s rights against third parties with respect to the debt or loss.

As applied in the insurance context, an insurer who pays losses incurred by its insured can generally proceed by subrogation to assert its insured’s rights against any other party responsible for the losses. In doing so, the insurer stands in the shoes of the insured, with rights only as great as those of the insured. As a result, an insurer’s right to pursue subrogation against third parties can be contractually waived by an insured’s waiver of the right to pursue claims against those third parties. Maryland generally recognizes and enforces such waivers.

In this appeal, we explore whether a tenant who contracted for the construction and lease of a large warehouse facility waived its insurer’s right to seek subrogation from subcontractors who worked on the project. The answer will turn on the specific terms of the relevant contractual provisions. The players relevant to this appeal are: (1) non-party Amazon.com.dedc, LLC, a subsidiary of Amazon and the warehouse tenant (“Amazon”); (2) non-party Duke Baltimore LLC (“Duke”), which contracted with Amazon to construct a warehouse in Baltimore City, act as the general contractor for that project, and lease the warehouse to Amazon;1 (3) the petitioners, four subcontractors that contracted with Duke to help 1 The contracting party with the subcontractors was Duke Realty Limited Partnership, an affiliate of Duke Baltimore LLC. The parties to this case originally disputed the significance of the distinction between the two Duke entities, however, “XL ultimately conceded that it [was] not relevant to the present appeal.” XL Ins.

Am., Inc. v. Lithko Contracting, LLC, No. 0316, Sept. Term 2022, 2023 WL 6784245 , at ¹ n.4 (Md. App. Ct. Oct. 13, 2023). Before this Court, the parties have treated the two entities as one construct the warehouse (the “Subcontractors”); and (4) the respondent, XL Insurance America (“XL”), which, as Amazon’s insurer, indemnified Amazon for certain losses incurred at the warehouse. XL contends that Amazon’s losses were caused by the Subcontractors’ negligence, and it brought this subrogation action against the Subcontractors to recover the amount it paid Amazon. The issue before us is whether Amazon waived XL’s right to pursue subrogation claims against the Subcontractors through: (1) a waiver of subrogation in the contract that Amazon entered with Duke; (2) the requirement in that contract that the subcontracts include waivers of subrogation; and (3) the waiver of subrogation provision that was included in each of the subcontracts between Duke and the Subcontractors.

Applying the objective theory of contract interpretation, we hold that Amazon did not waive subrogation against the Subcontractors through the waiver provision in its contract with Duke. The Subcontractors are neither parties to nor intended third-party beneficiaries of the subrogation waiver in that contract. We also reject the Subcontractors’ invitation to hold that a project-wide waiver of subrogation arises whenever a general contract requires the inclusion of subrogation waivers in subcontracts, without regard to the terms of the required waivers. Parties are free to contract for project-wide waivers of subrogation, narrower waivers, or even for no waivers. and the same.

Accordingly, for purposes of this appeal, we will use “Duke” to refer to both entities without distinguishing between them. 2 However, we also hold that the waivers of subrogation that Amazon and Duke contracted to include in the subcontracts are ambiguous, and that it is therefore appropriate to permit the parties to this litigation to introduce extrinsic evidence concerning whether the parties to the relevant contractual documents intended that Amazon waive subrogation against the Subcontractors. We will therefore affirm the judgment of the Appellate Court of Maryland, which reversed the Circuit Court for Baltimore City’s award of summary judgment to the Subcontractors. See XL Ins. Am., Inc. v. Lithko Contracting, LLC, No. 0316, Sept. Term 2022, 2023 WL 6784245 , at ⁷-12 (Md. App. Ct. Oct. 13, 2023).

We will remand this case to the Circuit Court for Baltimore City for further proceedings consistent with this opinion. BACKGROUND A. Subrogation Under the doctrine of subrogation, “an obligation extinguished by a payment made by a third person is treated as still subsisting for the benefit of this third person.” Gables Constr., Inc. v. Red Coats, Inc., 468 Md. 632 , 654 n.16 (2020) (quoting Bachmann v. Glazer & Glazer, Inc., 316 Md. 405, 412 (1989)). Thus, an insurer (the subrogee) who compensates its insured (the subrogor) for a loss caused by a third party may step into the shoes of the insured to seek recovery from the third party. See Gables Constr., 468 Md. at 654 n.16.

In doing so, the insurer’s rights “are equal to, but no greater than, those of the insured.” John L. Mattingly Constr. Co. v. Hartford Underwriters Ins. Co., 415 Md. 313, 318 (2010) (quoting Robert E. Keeton & Alan I. Widiss, Insurance Law: A Guide to 3 Fundamental Principles, Legal Doctrines, and Commercial Practices § 3.10, at 219 (1988)). Subrogation may be contractually waived by the insured, which is common practice in construction projects.

Gables Constr. Inc., 468 Md. at 655 . B. Factual Background 1. The Development Agreement In March 2014, Amazon and Duke entered a general contract (the “Development Agreement”) under which Duke agreed to construct a warehouse on land that it owned, and Amazon agreed to lease that warehouse from Duke.

At the same time, Amazon and Duke signed the lease for Amazon’s rental of the warehouse. The Development Agreement was incorporated into the lease. In both the Development Agreement and the lease, Duke is identified as the “Landlord” and Amazon is identified as the “Tenant.” The Development Agreement contemplates two categories of construction at the warehouse: (1) the “Landlord Improvements,” which encompassed the warehouse itself and other improvements to be made by Duke; and (2) the “Tenant Improvements,” which were to be made by Amazon to facilitate its use of the property as a warehouse and distribution center. Under the terms of the Development Agreement, Duke was to serve as the general contractor for the “Project,” which was defined to encompass only the real property on which the warehouse was to be built and the Landlord Improvements; and Amazon was to hire its own contractors for the Tenant Improvements.

The present dispute centers on two different contractual waivers of subrogation. The first is contained in § 12.4 of the Development Agreement and the second appears both 4 in § 4.3 of Exhibit I to the Development Agreement and in Attachment 1 to each of the subcontracts. 2. Article 12 of the Development Agreement Article 12 of the Development Agreement includes provisions related to insurance requirements, indemnities, and waiver of subrogation. Section 12.1 requires Duke to obtain and maintain various types of insurance including, among others, commercial general liability insurance, professional liability insurance, and builder’s risk insurance.2 It also requires Duke to name Amazon (but not any subcontractors) as an additional insured on most of those policies.

Section 12.2 contains additional provisions related to Duke’s obligation to procure insurance. Section 12.3 contains broad mutual indemnities under which Duke and Amazon agreed to indemnify one another, as well as each other’s “affiliates and their agents, servants, directors, officers and employees,” (but not contractors or subcontractors), for losses resulting from (1) third-party claims alleging injuries connected to the Project, and (2) acts or omissions of the other or the other’s “agents, contractors, subcontractors, servants, employees, licensees or invitees,” associated with their respective improvements 2 Builder’s risk insurance typically “provides first-party coverage for structures undergoing construction or major renovation,” and is usually designed to address the specific risks associated with buildings under construction, as opposed to completed buildings. Construction Insurance: A Guide for Attorneys and Other Professionals 243 (Stephen D. Palley et al., eds., 2011). 5 on the property. Those broad indemnity provisions are then made “subject to” the narrower waiver of subrogation in § 12.4, which we will discuss in detail below. 3.

Exhibit I to the Development Agreement The Development Agreement required Duke to hire subcontractors to help build the warehouse and, pursuant to § 3.2, to include “the provisions set out in Exhibit I, as applicable[,]”3 in its subcontracts. Exhibit I, titled “TERMS OF PROFESSIONAL SERVICE CONTRACT,” includes a variety of provisions on different subjects. Section 2, for example, provides Amazon, identified as “Tenant,” with a broad “right to participate in all material phases of the Project,” including the right, “in its sole discretion, [to] assume and perform all rights and obligations of [Duke] under the Contract Documents,” “the right to review and approve, in Tenant’s reasonable discretion, the Agreement,” and the right to “approve any changes to the Contract Documents[.]” As relevant here, in § 4 of Exhibit I, “the parties” agreed to indemnify, defend, and hold harmless Amazon and its officers, employees, agents, contractors and affiliates from claims arising from activities at the Project for which Amazon is not at fault.4 Paragraph 3 Section 3.2 expressly required Duke to include the provisions of Exhibit I only in its contracts with “the Architect, the Civil Engineer and the Geotechnical Consultant regarding this Project[.]” The parties agree that Duke was required to include those provisions in its subcontracts with each of the Subcontractors. For purposes of this opinion, we are accepting that premise.

We offer no opinion concerning that interpretation of the Development Agreement. 4 Paragraph 4.2 identifies a separate indemnification provision to be included in the subcontract with “the Architect.” 6 4.3 then provides a subrogation waiver, which is similar to, but, as we will discuss below, materially different from, the waiver in § 12.4 of the Development Agreement. 4. The Subcontracts Four Subcontractors remain in this case: Ira G. Steffy & Son, Inc; ECS Mid- Atlantic, LLC; LJB Inc.; and Lithko Contracting, LLC.5 Each entered into a subcontract with Duke.6 Each subcontract includes an Attachment 1 that contains the relevant provisions from Exhibit I to the Development Agreement. In each subcontract, Attachment 1 is labeled “STATE CHANGES TO THE CONTRACT DOCUMENTS (MARYLAND).” Each subcontract states that the provisions of Attachment 1 “modify, add to and delete from the language of this Agreement[,]” and that the provisions of Attachment 1 control in the case of any inconsistencies. Other than changes in labels, titles, and the numbering of some sections, the relevant provisions of Attachment 1 in each of the subcontracts are 5 According to the complaint, Ira G. Steffy performed “structural steel services” for the Project; ECS (sometimes referred to in the record as Engineering Consulting Svc Ltd) provided inspection services; LJB provided “structural engineering services”; and Lithko (sometimes referred to in the record as Lithko Contracting, Inc.) fabricated and installed the panels constituting the exterior walls of the warehouse to which the steel roof joists were to be welded.

As the parties have not called our attention to any significance to the different names used in the litigation documents and in the record, we do not address those differences. 6 As discussed above in footnote 1, Duke Realty Limited Partnership is the entity that entered each of the subcontracts. The subcontracts identified Duke Baltimore LLC as “the Owner.” Consistent with footnote 1, both entities are referred to as “Duke” for purposes of this appeal. 7 identical to the provisions of Exhibit I to the Development Agreement discussed and quoted above. In addition to the subrogation waiver in Attachment 1, each subcontract also includes multiple other subrogation waivers, none of which mention Amazon. Each subcontract also requires the relevant subcontractor to purchase and maintain insurance for protection against claims arising from that subcontractor’s work and operations and to name Duke as an additional insured on certain policies. 5.

The Underlying Loss Amazon first occupied the warehouse in September of 2014. According to the complaint, in November 2018, winds from a weather event allegedly caused a large section of the warehouse roof to detach and fly away from the building, which in turn led to the collapse of one of the walls. Amazon turned to its all risk insurer, XL, to cover losses to its Tenant Improvements. Although the record does not identify the amount of the loss, XL has claimed in briefing before this Court that its payments to Amazon exceeded $50 million.

C. Procedural Background XL brought this subrogation action in the Circuit Court for Baltimore City alleging that the Subcontractors’ negligence was the cause of Amazon’s losses and seeking to recover from the Subcontractors the amounts it had paid Amazon.7 Two of the 7 XL initially sued eight subcontractors. It stipulated to the dismissal of the claims against three of those subcontractors, and the circuit court entered judgment in favor of a 8 Subcontractors filed motions for summary judgment arguing that the waivers of subrogation in the Development Agreement and their subcontracts barred XL’s claims against them. XL Ins. Am., Inc., 2023 WL 6784245 , at ²-3.

The circuit court agreed that the Subcontractors could enforce the subrogation waivers against Amazon, and thus against XL, based on its conclusion that “when reading the development agreement in concert with the lease agreement and the subcontracts . . . the [Subcontractors] are intended beneficiaries of the subrogation waiver.” The court therefore granted summary judgment in favor of the Subcontractors.8 In coming to that conclusion, the court did not consider, nor did any of the parties offer, any extrinsic evidence of the subjective intent of the parties to the Development Agreement or the subcontracts concerning the scope of the waivers of subrogation. In a well-reasoned unreported opinion, the Appellate Court reversed. XL Ins. Am., Inc., 2023 WL 6784245 , at ¹².

The court first concluded that the unambiguous language of the subrogation waiver in § 12.4 of the Development Agreement was limited to Amazon and Duke, the only parties to that agreement, and provided no rights to the Subcontractors. Id. at ⁸-9. The court also rejected the Subcontractors’ argument that they could enforce fourth on the ground that it was not a party to the contracts. The Appellate Court affirmed the judgment with respect to the fourth subcontractor, XL Ins.

Am., Inc., 2023 WL 6784245 , at ¹², and XL has not pursued that issue further in this Court. Accordingly, we limit our discussion to the four remaining Subcontractors. 8 Though only two of the Subcontractors initially moved for summary judgment, the parties agreed that the court’s ruling would apply equally to XL’s claims against the remaining Subcontractors. As a result, the parties agreed to the entry of an Agreed Order applying the court’s summary judgment ruling to the remaining Subcontractors. 9 the waivers of subrogation in their subcontracts against Amazon, concluding that Amazon was not a party to those agreements and that “a reasonable person in the position of the parties reading th[e] subcontract for its plain meaning would necessarily conclude that the only parties to it are Duke and [the subcontractor].” Id. at ¹⁰ (internal quotation marks omitted). The Appellate Court also rejected the Subcontractors’ contention that Amazon was a party to the subcontracts by virtue of the control it exercised over those agreements and the rights it reserved for itself.

Id. The Subcontractors then petitioned this Court for a writ of certiorari, which we granted. Lithko Contracting, LLC v. XL Ins. Am., Inc., 486 Md. 342 (2024).

DISCUSSION I. STANDARD OF REVIEW Summary judgment is proper when there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Md. Rule 2-501(a). A fact is material if it “will somehow affect the outcome of the case.” Impac Mortg. Holdings, Inc. v. Timm, 474 Md. 495, 533 (2021) (quoting Taylor v. NationsBank, N.A., 365 Md. 166, 173 (2001)).

This Court reviews a circuit court’s grant of summary judgment without deference. Bd. of County Comm’rs of St. Mary’s County v. Aiken, 483 Md. 590, 616 (2023). In doing so, we come to an independent determination of whether, reviewing the record in the light most favorable to the nonmoving party and construing all reasonable inferences against the moving party, a genuine dispute of material fact exists and whether the moving party is entitled to judgment as a matter of law. Id.; Gambrill v. Bd. of Educ. 10 of Dorchester County, 481 Md. 274, 297 (2022).

Our role in that undertaking is the same as the circuit court’s, which is not to resolve factual disputes but merely to determine whether those disputes “exist and are sufficiently material to be tried.” Gambrill, 481 Md. at 297 . “The interpretation of a contract, including the determination of whether a contract is ambiguous, is a question of law” reviewed without deference. Spacesaver Sys., Inc. v. Adam, 440 Md. 1, 7 (2014) (quoting Towson Univ. v. Conte, 384 Md. 68, 78 (2004)).

II

LEGAL BACKGROUND A. Principles of Contract Interpretation Maryland courts follow the objective theory of contract interpretation. Tapestry, Inc. v. Factory Mut. Ins. Co., 482 Md. 223, 239 (2022). “Under that approach, unless the language of the contract is ambiguous, we interpret it based on what a reasonable person in the position of the parties would have understood the language to mean and not the subjective intent of the parties at the time of formation.” Id.

(quoting Credible Behav. Health, Inc. v. Johnson, 466 Md. 380, 393 (2019) (internal quotation marks omitted)); see also JMP Assocs., Inc. v. St. Paul Fire & Marine Ins. Co., 345 Md. 630, 635 (1997) (“The test is what meaning a reasonably prudent layperson would attach to the term.” (quoting Bailer v. Erie Ins. Exch., 344 Md. 515, 521-22 (1997))).

Therefore, it is “the written language embodying the terms of an agreement [that] will govern the rights and liabilities of the parties, irrespective of the intent of the parties at the time they entered into the contract.” Tapestry, 482 Md. at 239 (quoting Md. Cas. Co. v. Blackstone Int’l Ltd., 442 Md. 685, 695 (2015)). 11 We do not interpret contractual language in a vacuum. Instead, we interpret that language “in context, which includes not only the text of the entire contract but also the contract’s character, purpose, and the facts and circumstances of the parties at the time of execution.” Credible Behav. Health, 466 Md. at 394 (internal quotation marks omitted) (quoting Ocean Petroleum, Co. v. Yanek, 416 Md. 74, 88 (2010)).

Although providing relevant context may necessarily require consultation of evidence beyond the “four corners” of the contract itself,9 it does not extend to extrinsic or parol evidence of the 9 This Court has, in the past, sometimes stated that in the absence of ambiguity, its review of a contract is limited to the “‘four corners’ of the agreement.” Impac Mortg. Holdings, Inc., 474 Md. at 506 (quoting Cochran v. Norkunas, 398 Md. 1, 17 (2007)); see also, e.g., Smith v. Johns E. Co., 269 Md. 267, 276 (1973) (stating that the objective test “limits the Court to the ‘four corners’ of the contract” (quoting Ruppert v. Cumberland Brewing Co., 269 Md. 56, 61 (1973)); Walton v. Mariner Health of Maryland, Inc., 391 Md. 643, 660 (2006) (stating that “when seeking to interpret the meaning of a contract our search is limited to the four corners of the agreement”). In context, those statements were addressed to extrinsic evidence of the parties’ subjective intent, such as documentation of their course of dealings in negotiating the contract at issue or other agreements, not to information about the context in which the contract at issue was entered. See, e.g., Ocean Petroleum, Co., 416 Md. at 86, 88 (noting both that a court looks to the “four corners” of an agreement and that contract provisions must be considered in context, which includes the facts and circumstances of the parties at the time of execution); John L. Mattingly Const.

Co. v. Hartford Underwriters Ins. Co., 415 Md. 313, 326, 334 (2010) (stating that contract interpretation is limited to the “four corners” of an agreement and explaining that “extrinsic evidence” for consideration after finding of ambiguity could involve facts about party negotiations, such as which party proposed the form contract used and the other form contracts that were available); Impac Mortg. Holdings, Inc., 474 Md. at 506 , 534 & n.32 (stating that contract interpretation is limited to the four corners of the agreement and later explaining that “information on the context as to the type of contract or transaction can be informative,” though the “particular subjective intent of the parties” is not part of that context absent a finding of ambiguity); see also Calomiris v. Woods, 353 Md. 425, 436 (1999) (“[W]hile evidence of prior intentions and negotiations of the parties is inadmissible, the parol evidence rule would not bar a court from considering the context of the transaction or the custom of the trade in a determination of ambiguity.”). 12 parties’ subjective intent, such as evidence of the parties’ negotiations. Impac Mortg.

Holdings, Inc., 474 Md. at 534 n.32. Such evidence may be considered only after a court first determines that the relevant contract language is ambiguous, which occurs when, viewing the plain language in its full context, “a reasonably prudent person could ascribe more than one reasonable meaning to it.” Credible Behav. Health, 466 Md. at 394 . In interpreting the plain language of a contract in context, we attempt to construe the contract as a whole, interpreting “separate provisions harmoniously, so that, if possible, all of them may be given effect.” Id. at 396 (quoting Walker v. Dep’t of Human Res., 379 Md. 407, 421 (2004)).

Construing the contract as a whole requires that effect “‘be given to each clause’ to avoid ‘an interpretation which casts out or disregards a meaningful part of the language of the writing unless no other course can be sensibly and reasonably followed.’” Id. at 397 (quoting Clancy v. King, 405 Md. 541, 557 (2008)). We conduct our inquiry always in adherence to the “bedrock principle of contract interpretation” in Maryland that our courts “consistently ‘strive to interpret contracts in accordance with common sense.’” Id. (quoting Brethren Mut. Ins.

Co. v. Buckley, 437 Md. 332, 348 (2014)). If, after conducting this plain language inquiry, the court finds that “a reasonably prudent person could ascribe more than one reasonable meaning to it,” the contract is ambiguous. Id. at 394 . The determination of ambiguity is context-dependent, as contract language that “is clear in one context may be ambiguous in another.” Id.

(quoting Sullins v. Allstate Ins. Co., 340 Md. 503, 508 (1995)). If a court finds ambiguity, it “must consider 13 any extrinsic evidence [that] sheds light on the intentions of the parties at the time of the execution of the contract.” John L. Mattingly Constr. Co. v. Harford Underwriters Ins.

Co., 415 Md. 313, 327 (2010) (quoting Sy-Lene of Washington, Inc. v. Starwood Urb. Retail II, LLC, 376 Md. 157, 167-68 (2003)). To be considered, extrinsic evidence must be admissible and “must demonstrate ‘an intent made manifest, not a secret intent’ at the time of contract formation.” Impac Mortg. Holdings, Inc., 474 Md. at 508 (quoting Gov’t Emps.

Ins. Co. v. Coppage, 240 Md. 17, 25-26 (1965)). “As a general rule, parties are free to contract as they wish.” Stickley v. State Farm Fire & Cas. Co., 431 Md. 347, 366 (2013) (quoting Nesbit v. Gov’t Emps. Ins.

Co., 382 Md. 65, 76 (2004)). A court will invalidate a contractual provision that violates public policy, but “only to the extent of the conflict between the stated public policy and the contractual provision.” Id. at 367 (quoting State Farm Mut. Auto. Ins.

Co. v. Nationwide Mut. Ins. Co., 307 Md. 631, 643 (1986)). “It is a fundamental principle of contract law that it is ‘improper for the court to rewrite the terms of a contract, or draw a new contract for the parties, when the terms thereof are clear and unambiguous, simply to avoid hardships.’” Calomiris v. Woods, 353 Md. 425, 445 (1999) (quoting Canaras v. Lift Truck Servs., 272 Md. 337, 350 (1974)). Thus, absent “fraud, duress, mistake, or some countervailing public policy, courts should enforce the terms of unambiguous written contracts without regard to the consequences of that enforcement.” Weichert Co. of Md. v. Faust, 419 Md. 306, 325 (2011) (quoting Calomiris, 353 Md. at 445 ). 14 B. Intended Third-Party Beneficiaries At common law, only a bargaining party to a contract could bring an action to enforce its terms.

CX Reinsurance Co. Ltd. v. Johnson, 481 Md. 472, 486 (2022). The law has since expanded to recognize the right of a third-party contract beneficiary to bring such an action “if the contract was intended for [the third party’s] benefit and it . . . clearly appear[s] that the parties intended to recognize [the third party] as the primary party in interest and as privy to the promise.” Id. at 486-87 (quoting 120 W. Fayette St., LLLP v. Mayor & City Council of Baltimore, 426 Md. 14, 36 (2012)) (omission and second alteration in 120 W. Fayette St.). To be entitled to bring an action to enforce a contract as a third-party beneficiary, the third party must therefore be an intended, rather than an incidental, beneficiary of the contract. Id. at 486, 487-88.

The “crucial fact” in assessing whether a third party is an intended beneficiary is “whether the pertinent provisions in the contract were ‘inserted . . . to benefit’ the third party.” Id. at 487 (quoting CR-RSC Tower I, LLC v. RSC Tower I, LLC, 429 Md. 387, 457 (2012)) (omission in CR-RSC Tower I); see also Shillman v. Hobstetter, 249 Md. 678, 688 (1968) (“In determining whether one is a[n intended third- party] beneficiary . . . the intention of the contract, revealed by its terms, in the light of the surrounding circumstances is the controlling determinative.” (quoting Hamilton & Spiegel, Inc. v. Bd. of Educ. of Montgomery County, 233 Md. 196, 199 (1963))). 15 III. THE AGREEMENTS With those principles in mind, we turn to the contractual provisions on which the Subcontractors base their claim that Amazon waived subrogation against them: (1) § 12.4 of the Development Agreement; and (2) what we will refer to as the “Subcontract Waiver Clause” (or sometimes “the Clause”), which is both § 4.3 of Exhibit I to the Development Agreement and § 4.2 of Attachment 1 to each of the subcontracts. As we will discuss, the Subcontractors rely on the Subcontract Waiver Clause to make three separate waiver arguments. First, they contend that the Clause, as it appears in Exhibit I to the Development Agreement, replaces § 12.4 of that agreement and serves as the operative waiver of subrogation in the Development Agreement.

Second, they contend that even if the Clause is not incorporated into the Development Agreement as an operative provision, its plain language as it appears in the subcontracts waives subrogation on behalf of Amazon. Third, the Subcontractors contend that, regardless of the specific terms of § 12.4 and the Subcontract Waiver Clause, we should hold that a project-wide waiver of subrogation is created whenever the parties to a general contract require that subrogation waivers be included in all subcontracts. We will address each of those contentions at different points in our analysis. A. Section 12.4 of the Development Agreement Section 12.4, titled “Waiver of Subrogation,” provides: Notwithstanding any other provision of this Agreement, neither party shall be liable to the other party or to any insurance company (by way of subrogation or otherwise) for any loss of, or damage to, any of its property located within the Project or upon, or constituting a part of, the Project, which 16 loss or damage arises from the perils that could be insured against under the ISO Causes of Loss-Special Form Coverage, including deductibles (whether or not the party suffering the loss or damage actually carries such insurance, recovers under such insurance, or self-insures the loss or damage).

Said mutual waivers shall be in addition to, and not in limitation or