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Insurer prevails on late claim dispute against homeowners association

Posted On: Mar. 29, 2016 12:00 AM CST

QBE Insurance Corp. was justified in denying a homeowners association’s claim for hailstorm damage because it filed its claim nine months late, and failed to adequately explain the late notice, says a federal appeals court in upholding a lower court ruling.

The New York-based unit of Sydney-based QBE Insurance Group Ltd. had issued a property policy to the Longleaf In Vinings Homeowners Atlanta Association Inc. in Atlanta that covered the association from Aug. 15, 2009, through Aug. 15, 2012, according to court papers in Longleaf In Vinings Homeowners Association Inc. v. QBE Insurance Corp.

In May 2012, a hailstorm damaged property covered by the insurance policy. Longleaf notified QBE of the damage in February 2013. But QBE refused to indemnify Longleaf, stating it was because the association’s policy required Longleaf to promptly notify QBE of the storm-related damage, and Longleaf failed to do so, filing its claim nine months later.

The homeowners association filed suit against QBE in U.S. District Court in Atlanta in September 2013, charging the insurer with bad faith. The District Court granted QBE summary judgment dismissing the case in March 2015.

Longleaf appealed, and a three-judge appeals court panel of the 11th U.S. Circuit Court of Appeals in Atlanta affirmed the lower court’s ruling. Longleaf’s policy requires it to provide “prompt notice” of loss or damage, except if the insured offers a valid justification for delay, says the appeals court ruling.

That was not provided in this case, says the appeals court ruling. “Longleaf contends that the delay was justified because it did not become aware of the damage at issue until more than six months after the hailstorm,” says the ruling.

But the only evidence it offers in support of this assertion is an affidavit from its current president, which is insufficient because he was not president either when the loss purportedly occurred, or when it was reported to QBE, said the appeals court ruling, citing the District Court ruling.

“The affidavit is inadequate to satisfy Longleaf’s burden of establishing at triable issue as to whether the delayed notice was justified…and the district court properly granted summary judgment to QBE,” said the ruling.

The appeals court ruling does not reveal the size of the claim, but according to the complaint, the policy provided guarantee replacement cost coverage for the buildings, plus additional coverages.