Insurance carrier claimed that the storm did not cause all of the damages.
The federal court in Maryland has denied the motion of a group of condo owners to dismiss an insurer’s action seeking a declaratory judgement regarding their duty and obligation to compensate a claim relating to damages caused to roofs at numerous condominiums.
Council of Unit Owners of Partridge Courts Condominium Inc. has filed a motion for dismissal of an action brought by Philadelphia Indemnity Insurance Co. seeking declaratory judgement pursuant to the 28 U.S.C. The Council of Unit Owners filed a motion to dismiss an action brought by Philadelphia Indemnity Insurance Co., seeking declaratory judgment pursuant to 28 U.S.C.
Partridge submitted a claim with Philadelphia Indemnity claiming that a storm had damaged roofs on 22 condo buildings and they needed to be replaced. The roof replacement cost was estimated at more than $1 million. Philadelphia Indemnity, meanwhile, estimated storm damage and repair costs at around $38,000.
The U.S. District Court for the District of Maryland, in an opinion dated Nov. 29, 20,23, denied Partridge’s motion for dismissal, concluding that there had been a concrete and definite dispute between the two parties, and the appraisal process already was completed.
Philadelphia Indemnity claimed that the coverage of its policy did not extend to damage/conditions of roofs caused by storms. It then filed a lawsuit seeking relief and declaratory judgement via an order that it does not have to pay to replace the 22 roofs. The company claimed that roof damage was caused by wear, tear, degradation, defective materials, improper prior repairs and/or lack and faulty maintenance.
Partridge, however, claimed that Philadelphia Indemnity acted “prematurely until the entire appraisal process had been completed.” He maintained that “the disputed facts” about the correct roof repair methods from the storm of Nov. 15, 2021 should “be subsumed into the decision made by the appraisers determining the loss amount attributed to this storm event,” according to his opinion.
Rubin rejected Partridge’s argument that the disagreement was only about the best way to fix the damage caused by the storm.
It looked at its Wausau Insurance decision from 1987. Co. v. Herbert Halperin Distribution Corp. in which it refused the defendant’s request to dismiss or stay the plaintiff’s claim for declaratory judgement regarding questions that arose under the policy.
Rubin stated that “[t]his is a question of contract interpretation, which falls within the court’s jurisdiction.”
Partridge stated that while Philadelphia Indemnity requested a declaration of judgment regarding the rights, entitlements, and obligations of the parties pursuant to their policy, the appraisal panel was not charged to include in its award any damages to structures attributable to other potential excluded causes.
Rubin concluded that there is “a clear and specific dispute between the parties relating to the legal rights and obligations which arise from insurance contracts” by citing Aetna’s Life Insurance Company v. Haworth, a 1937 decision of the U.S. Supreme Court.
According to the court, Philadelphia Indemnity and Partridge both maintain that the appraisement process was completed in the past.
Margaret Fonshell Ward, of Downs Ward Bender Herzog & Kintigh, in Hunt Valley did not respond immediately to a comment request.
Catherine A Potthast, Partridge’s Lutherville attorney, refused to make any comment.
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