Condominium Insurance Law : Condo Insurance Lawyers & Attorneys : Merlin Law Group Law Firm : Tampa, Houston, Coral Gables & West Palm Beach

Following Judge Scola’s December 22, 2010, opinion, the insurance company asked the Court to reconsider. On New Year’s Day, in Ocean View Towers Ass'n, Inc. v. QBE Ins. Corp., 11-60447-CIV, 2012 WL 8569 (S.D. Fla. Jan. 1, 2012), Judge Scola denied that motion. Below are some of the highlights of Judge Scola’s denial.

In support of its Motion for Reconsideration, QBE cites numerous opinions from the Southern District of Florida in cases involving this very same Defendant-none of which were cited by QBE in its Response to the Corrected Motion for Summary Judgment. It boggles the mind to consider how QBE could not be aware of opinions in its own cases from the same federal district court and yet not cite those cases until after receiving an adverse ruling from the court.
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QBE cites no decision holding that the insured must submit a supplemental claim before bringing suit where, as here, the insured alleges breach of contract and has not sought an appraisal or declaratory relief as to coverage under the policy.
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QBE also cannot demonstrate any “manifest error” because, in this case, the Court simply followed the plain language of the policy. The Court reached the conclusion that Ocean View complied with its post-loss duties, despite the fact that Ocean View never submitted a supplemental claim before filing suit, because nothing in the policy's plain language required Ocean View to do anything more than provide the initial notification of the “loss,” which it unquestionably did in the days after Hurricane Wilma. That QBE failed to fully exercise its investigatory rights cannot be blamed on Ocean View or this Court. Although QBE argues that “the Court's order essentially abolishes the concept of a supplemental claim,” see Mot. at 7, this is hyperbole. The Court followed the law and interpreted the unambiguous policy terms according to their plain meaning. If QBE is unsatisfied with this result, it can only blame itself. If QBE wanted to ensure a contrary result, it should have included a provision in its policies expressly requiring insureds to submit supplemental claims as a prerequisite to bringing suit. It failed to do so, and this Court will not rewrite the policy for QBE after the fact.

As I stated last week, Judge Scola’s reading of the insurance policy sends a strong message to insurance companies to get their investigations right the first time. If they don’t, they can’t blame it on the insured, the court, or anyone else for that matter. The blame lies squarely on an insurance company that fails to fully exercise its investigatory rights.

Later, after the damages become more evident, the association finds that the damages from Hurricane Wilma were much more severe than originally thought. Roof leaks begin to appear, sliding glass doors and windows appear fogged or do not work properly, and residents begin to complain. At that point, the association hires its own consultant to do a full investigation, asks the insurance carrier to re-assess the previous denial and pay what is owed under the policy.

The scenario above was common to a large number of condominium associations over the past few years. This has led insurance carriers and their attorneys to come up with ways to attempt to avoid payment, many of which have relied on so called “late notice” defenses to fight coverage.

Recently, in Ocean View Towers Association, Inc. v. QBE Insurance Corporation, a federal trial court in the Southern District of Florida heard argument on competing motions for summary judgment. One of the main issues was whether the association was barred from recovery because it had not notified QBE of the additional damages and instead filed suit for breach of contract.

The court rejected QBE’s “late notice” arguments, finding that the clear and unambiguous language of the policy controlled the obligations of the policyholder. The policy, like most policies, required Ocean View to “[g]ive [QBE] prompt notice of the loss or damage” and “[i]nclude a description of the property involved.” Based on this requirement, the court determined that since Ocean View undisputedly provided prompt notice that Hurricane Wilma had damaged the property and had included a description of the damages known at that time, Ocean View had fulfilled its requirements under the policy and was not required to do more. As the court noted, QBE had ample opportunity to inspect and adjust the loss after the Hurricane and simply chose not to utilize all the means at its discretion.

This is an important case that all adjusters, attorneys, and insurance professionals should read carefully. Numerous other issues are addressed in the opinion, aside from the notice issue, however, those are highly technical and do not lend themselves to a single post. This decision will undoubtedly be cited by both sides in legal briefs for a long time.

The recent case, King Cole Condo. Assoc., Inc. v. USPlate Glass Ins. Co., 2010 WL 3239179 (Fla. 3d DCA August 18, 2010), involved a condominium association’s claim from Hurricane Wilma. The insurer provided coverage for the association’s plate glass windows and sliding glass doors, as well as coverage for boarding up openings after a covered loss. The association timely reported the Hurricane Wilma claim to the insurer, which authorized the association to retain a glazier of its choice to complete any necessary glass replacements or repairs. The glazier provided the insured with an estimate in the amount of $104,928.48. The insurer paid that estimate in full, but did not inspect the property or the damages claimed.

By letter with the payment, the insurer stated that it had fulfilled its policy obligations related to the damage caused by Hurricane Wilma and invited the association to notify the insurer of any other damages, offering to reopen the claim should the need arise. The letter stated:

This claim is now closed. If you should find any additional damage as a direct result of Hurricane Wilma we will reopen the claim as necessary.

The association had no contact with the insurer for more than two years after the payment. Counsel for the association broke the silence by sending the insurer a letter informing the insurer that it did not adequately compensate the association for the Wilma damages. The additional damages claimed included additional damages to the glass windows and doors and several thousand dollars of board-up costs. When the claim was initially reported to the insurer, the association stated that it had suffered damage and would require reimbursement for board-up repairs and glass replacement.

The association filed the lawsuit before informing the insurer of the amount it was claiming and also without providing the insurer with any information related to the parties’ disagreement over the loss. The insurer argued that the association never presented its “supplemental” claim to the insurer and that it was required to do so before filing the lawsuit. The trial court awarded summary judgment in favor of the insurer on its late notice defense. The association appealed and argued in its brief that it gave appropriate notice to the insurer of its claim for damages and that the claim was re-opened and not a “supplemental” claim. The association asserted that the initial reporting of the claim included all hurricane damages, and further noted that the policy did not define or even mention “supplemental” claims.

The appellate court reversed the trial court’s ruling and held that there were factual questions related to the defenses involving the notice provisions of the insurance policy. Thus, the distinction between a “supplemental” claim and re-opened claim, as it relates to the insurer’s late notice defense, has seemingly been recognized by the Third District Court of Appeals in Florida.