eNotes: Liability – February 2024 – Maryland

SIGNIFICANT CASE SUMMARIES

Maryland Case Summary

Phila. Indem. Ins. Co. v. Council of Unit Owners of Partridge Cts. Condo., Inc.
United States District Court for the District of Maryland
2023 U.S. Dist. LEXIS 211883

Decided: November 29, 2023

Defendant’s Motion to dismiss was denied as there was a valid legal dispute as to whether Plaintiff insurer owed a duty to the Defendant under the insurance policy.

Background

Plaintiff, Philadelphia Indemnity Insurance Company (“PIIC”), filed this action seeking a declaratory judgment as to its rights and duties under a property coverage policy issued to the Council of Unit Owners of Partridge Courts Condominium Inc. (“Partridge”). On March 8, 2021, Patridge submitted a claim to PIIC regarding alleged storm damage to the roofs of twenty-two condominium buildings in Columbia, Maryland. PIIC investigated Patridge’s claim and determined that the storm damage was minimal and that the majority of the damage to the roofs was the result of the age of the roofs and general lack of maintenance. Patridge asserted that the replacement cost of the roofs was $1,158,464.64, while PPIC estimated the repair cost for the storm-related damage at $37,954.09.

PIIC’s Complaint asserted a single cause of action for declaratory judgment, seeking an order declaring that PIIC has no duty to pay for the replacement of Patridge’s twenty-two roofs. PIIC maintained that the majority of the damage to the roofs was actually caused by wear and tear, deterioration, faulty materials, faulty prior repairs, and lack of maintenance. As such, PIIC alleged that policy exclusions removed any duty requiring PIIC to pay for the replacement of any roofs not damaged by the storm. Patridge moved to dismiss the Complaint pursuant to Federal Rule 12(b)(6). Patridge asserted that the declaratory judgment claim was premature. Partridge argued that when an insurer admits causation, all remaining matters in controversy concerning the extent of the loss are subject to an appraisal. It sought to dismiss the declaratory judgment action as premature, arguing that the appraisal process had not yet been completed.

Holding

The Court was not persuaded by Patridge’s argument that this dispute related only to the appropriate method to repair the storm damage. The Court found that the instant matter presented a question of contract interpretation, that being whether PIIC’s policy exclusions applied and limited the scope of the relevant coverage. The Court held that there was a definite and concrete dispute between PIIC and Patridge that related to the parties’ legal rights and obligations arising from an insurance contract. Rejecting Patridge’s position, the Court further indicated that the appraisal process in this matter had already been completed. Patridge’s Motion to dismiss was therefore denied.

Questions about this case can be directed to Lucas Duty at (443) 641-0572 or lduty@tthlaw.com.