Following a flood at a condominium project which caused over $2 million in damages, developer Paragon and its insurer, North American Specialty Insurance Company sued defendant Weber-Madgwick for contractual indemnity and subrogation, claiming that the defendant's grading operations on the project created an artificial dam which flooded after being filled with rain water.

Weber-Madgwick contended that Paragon had failed to take the necessary protections against rain and erosion control and also contended that a release signed by the parties after the flood provided Weber-Madgwick with a complete defense to all claims.

The affirmative defense of the release was bifurcated and tried as a court trial.