Favorable Insurance Rulings Obtained by our Firm
Park Meridian Condominium Association v. State Farm (2019)
This 77 unit condominium was insured by State Farm from 1987 until 2006. In 1998, the Association submitted a claim to State Farm for coverage of damage in various decks of the complex. State Farm determined that some, but not all, of the damage was covered under its policy. State Farm paid the Association approximately $275,000 towards repair of the decks and denied the remainder of the Association’s claim.
In September 2017, the Association retained an expert to conduct an intrusive investigation of its buildings. This investigation revealed that there was hidden water damage to exterior wall sheathing and framing as well as hidden damage to decks throughout the complex.
In October 2017, Plaintiff submitted a claim to State Farm, which State Farm denied. In a motion for summary judgment filed with the Court, State Farm claimed that when it paid in part and denied in part the Association’s 1998 claim that its denial started the time period in which the Association could sue State Farm for refusing to pay for any damage at the complex and, therefore, the Court should dismiss the Association’s claim as not having been filed timely.
Working with the Association’s expert, our firm submitted detailed evidence to the Court that while there was some similarities between the 1998 and 2017 claims, there were also specific instances of damage raised in the 2017 claim that were not raised in the 1998 Claim. Based upon this evidence the Court ruled in our Association's favor that the 2017 claim was not barred by State Farm’s denial of the 1998 claim.
Sunwood Condominiums v. Travelers (2017)
The claim involved two stucco clad buildings that were built around 1980. Damage to gypsum sheathing and framing behind the stucco exterior was discovered during intrusive investigation in 2014. The damage was so extensive that a complete strip and reclad was required.
Our firm obtained favorable decisions from the Federal District Court which supported coverage for the Association’s multi-million dollar claim. Among the ruling made by the Court were that:
Even though the National Surety’s last policy expired in 2008, the lawsuit filed in 2016 was timely.
There was coverage if the damage was “caused by concurrent perils of rain and inadequate construction” even though inadequate construction was an excluded peril under the policies.
If the Association established coverage the insurers could be liable for all the damage at the project, even if the damage occurred before or after the insurers’ policies provided coverage.
In addition, National Surety’s policy had a provision that it only covered loss or damage that “commenced” during the policy period. Because the theory of these cases was that damage has been occurring because of exposure to rain each year since the condominiums was built in 1980, National Surety argued that there could be no recovery because the damage commenced or began before its policy started.
The Court found that the term commencing was ambiguous, that it must be construed in the Association’s favor, and would be satisfied if the Association could identify instances of new damage or loss during National Surety’s policy. The Court also found that testimony by the Association’s expert that instances of new damage occurred during each rain event meeting specific parameters during National Surety’s policy period was sufficient to defeat a motion for summary judgment brought by National Surety.
The Court’s ruling was a major victory for the Association that ultimately led to the Association recovering significant funds which will help fund a restoration of these buildings.
Holden Manor (2016)
In Holden Manor Safeco’s policy covered the Holden Manor Condominium until August of 1982. Safeco’s policy stated that only applied “to loss to property during the policy period" and that any suit against Safeco had to be filed “within one year after the loss occurs."
In October 2014 the Association’s expert, conducted "invasive" testing at Holden Manor and concluded that "wind driven rain began to have an impact on wall assemblies and cause damage from the time the building was completed."
Safeco claimed that based upon this evidence the Association’s action filed in September of 2015 was not timely because there was a “loss” during its policy and, therefore, any action should have been filed by August of 1983, which was one year after its policy expired.
The Court rejected Safeco’s argument and found that the Association’s action was timely filed. The Court held that the time to file suit on a claim for hidden damage only starts when the hidden damage is exposed to view by an intrusive investigation. Accordingly, because the Association’s action was filed within one year when the intrusive investigation exposed the damage at Holden Manor, the Association’s action was timely filed.
Eagle Harbour (2016)
There were two pro-Association decisions in the Eagle Harbour Case.
The first decision involved whether a lawsuit filed against Allstate in 2015 was timely. Allstate made three arguments: It had not insured the property since 1997; Allstate’s policy had a provision which provided that any action against Allstate had to be filed within one year after a loss occurs; and from 1996 through 2014 there was evidence that the Association encountered ongoing and continuous leaks, the Association made repairs and was aware of the damage in the building’s exterior walls, and therefore, the one year period from when the loss occurs for filing a lawsuit had expired many years ago
Our firm was able to convince the Court that the Association’s lawsuit was timely because the claim was for hidden damage in the exterior walls resulting from wind driven rain and under Washington law the damages remained hidden, and the time period within which a lawsuit must be filed did not start running, until systemic damage was discovered by an intrusive investigation that took place in 20014.
In the second decision, the Court rejected the insurers’ contention that damage from long term exposure to rain was excluded by their exclusions for “wear and tear” and “deterioration;” and if the Association established coverage the insurers could be liable for all the damage at the project, even if the damage occurred before or after the insurers’ policies provided coverage.
In addition, National Surety’s policy in Eagle Harbour had a provision that it only covered loss or damage that “commenced” during the policy period. Because the theory of these cases was that damage has been occurring because of exposure to rain each year since the condominiums were built, National Surety argued that there could be no recovery because the damage commenced or began before its policy started.
The Court found that the term commencing was ambiguous, that it must be construed in the Association’s favor, and would be satisfied if the Association could identify instances of new damage or loss during National Surety’s policy
The Court’s rulings in Eagle Harbour have helped other Associations to successfully bring claims against older expired insurance policies.
Greenlake v. Allstate (2015)
This 15 unit condominium was built in 1985. Allstate insured the property from 1988-1993. There was a history of water leakage repairs including a deck replacement project in 2011. Our firm obtained a recovery that was almost 100% of the cost of repairs on behalf of the Association which helped to fund a full building envelope restoration.
The Court issued a favorable ruling to the Association which held:
The Association's lawsuit which was brought on a 20 year-old policy was timely.
If, as testified to by the Association’s expert, the damage in the walls was caused by a combination of water (including from rain) and inadequate construction, then there is coverage for the Association’s claim, even though the policy excluded damages caused by inadequate construction.
If the Association established coverage, Allstate would be liable for damage that occurred over a 26 year period, even though Allstate’s policy expired in 1993.