Bresky Law Secures Win for Condominium Association on Insurance Claim for Substantial Hurricane Wilma Damage

The Firm’s client, a condominium association for a community with eight buildings, over 400 residential units, a clubhouse and two pools, recently prevailed in an appeal from a Final Judgment based on the interpretation of insurance policy language concerning application of the policy deductible.

The action arose from extensive hurricane/windstorm damage suffered by the condo community in October 2005 during Hurricane Wilma.  At the time, the Association was insured under a commercial property insurance policy.  The policy provided “Additional Coverage” of $10,000 per building, or a total of $80,000, for increased costs to comply with any ordinance or law (“O/L”) when repairing, rebuilding or replacing property damaged by a covered cause of loss.  The policy also contained an O/L exclusion.

The Association made a claim with its insurer for its Hurricane Wilma losses, and later filed suit. One issue the parties hotly contested over years of litigation was whether the Association’s O/L losses above the $80,000 payable under the policy for O/L losses applied toward the policy’s deductible.  The Association took the position that the total cost of repairs required by the Florida Building Code and covered under the policy’s Additional Coverage provision for O/L losses far exceeded policy limits, and thus absorbed the deductible. The Defendant, however, claimed that O/L losses were excluded under the policy, that the $80,000 limit for those losses was merely an “exception to the exclusion” which did not create coverage, and that non-covered losses could not be used to absorb the deductible.

The trial court ultimately entered two orders on the issue in the Association’s favor. The first order found that because the policy initially excluded O/L losses, but also provided additional O/L coverage not subject to the O/L exclusion, the policy was ambiguous.  The court construed the ambiguity in favor of the Association, and concluded that all O/L losses could be used to absorb the deductible.  A successor trial court judge later entered an order granting the Association’s motion for entry of Final Judgment and denying the Defendant’s renewed motion for partial summary judgment.  Final Judgment was then entered in the Association’s favor.

The Defendant filed an appeal to the Fourth District Court of Appeal, and the Association retained the Firm to defend the Final Judgment in its favor.  The Firm’s co-counsel for the appeal was Beth Lindie, Esq., of Esler & Lindie, P.A., which represented the Association in the trial court.

The issue on appeal, as in the trial court, was whether O/L losses in excess of the policy limit of $80,000 for those losses applied toward the deductible.  The Firm’s Of Counsel attorney, drafted and filed the Association’s Answer Brief, which argued:  (1) that the plain language of the policy provided “coverage” for O/L losses under the “Additional Coverage” provision, so all O/L losses were “covered” and part of the total covered loss that applied toward the deductible (subject to a payment limit of $80,000), and that the deductible provision required application of the deductible to the total loss, including all O/L losses; or alternatively, (2) that the policy was ambiguous as to whether O/L losses in excess of the $80,000 payment limit for those losses applied toward the deductible, and since the Association’s interpretation was reasonable, the policy had to be construed in its favor.  The Association’s Answer Brief also rebutted all of the Defendant’s arguments, including its reliance on out-of-state case law.

Although the Defendant requested oral argument, the Fourth District Court of Appeal rejected that request and dispensed with oral argument soon after the Firm filed the Association’s Answer Brief.  The Fourth District later issued a per curiam affirmance (PCA), affirming the trial court’s construction of the policy in the Association’s favor.  The Defendant filed a motion seeking rehearing (based on recent case law involving the application of PIP deductibles), and/or for a written opinion, but that motion was denied.

With the Final Judgment having been affirmed, our client’s claim for Hurricane Wilma losses will be successfully concluded.

**Not final until issuance of the Mandate.**