Late last year, the Garden-Aire Village South Condominium Association filed a declaratory judgment action against its insurance company, QBE Insurance Corporation, seeking a declaration from the Court as to its rights on its Hurricane Wilma loss. The condominium association’s lawsuit included three counts:
- Seeking a declaration that glass windows and sliding glass doors were covered under the association’s master insurance policy;
- Seeking a declaration that the association was entitled to have its Hurricane Wilma loss appraised under the policy;
- Seeking a declaration that the windstorm deductible in the association’s master insurance policy was void because of deficiencies in font requirements of the deductible notice.
Last week, in Garden-Aire Village South Condo. Ass’n v. QBE Ins. Corp., No. 10-61985, 2011 WL 1184737 (S.D. Fla. Mar. 31, 2011), the U.S. District Court for the Southern District of Florida dismissed the first two counts and stayed the third pending the result of QBE Ins. Corp. v. Chalfonte Condo. Apartment Ass’n, Inc., No. SC09–441 (Fla.).
In the first count, the condominium association alleged that QBE had investigated Hurricane Wilma damage in 2005 and determined that the damage was below the association’s deductible. The association alleged that QBE ignored damage to windows and sliding glass doors in its conclusion that the damage was below the deductible. The Court dismissed this count on what appears to be a technicality, finding that the condominium association’s allegation was that QBE overlooked damage to windows and doors, rather than an allegation that QBE declared that the windows and doors were not covered under the policy. The association did allege that QBE has frequently decided that windows and doors were not covered under its other policies, but since the association did not expressly allege that QBE took the same coverage position in its case, the Court found that there was no immediate controversy for it to rule on, and dismissed this count.
As to the second count, the Court dismissed it as premature. The condominium association had asked the Court to decide if it was entitled to have its Hurricane Wilma loss appraised. The association believed it was entitled to appraisal since it disputed QBE’s finding that the amount of Hurricane Wilma damage was below the association’s deductible. The Court looked to the timeline of events and found that the condominium association had not notified QBE that it disagreed with the amount of loss before filing the lawsuit. The Court held that the condominium association needed to give that notice to QBE and allow for a meaningful exchange of information before it could determine if appraisal was warranted.
For the last count, the parties agreed to stay the issue of whether a separate windstorm deductible would apply to any claimed losses pending the outcome of QBE Ins. Corp. v. Chalfonte Condo. Apartment Ass’n, Inc., No. SC09–441 (Fla.). Chalfonte dealt with the same issue and was argued before the Florida Supreme Court over a year ago.
The best lesson that a condominium association can take away from this case is to prepare your case before filing suit. If the court thinks it will have to speculate about your injury or your remedy, it will likely dismiss your lawsuit. Your case will stand a better chance of not being dismissed if you have a clear coverage decision from your insurer and have given the insurer the opportunity to investigate your claim before filing suit.