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Travelers unit prevails again in condo demolition case


A federal appeals court ruled in favor of a Travelers Cos. Inc. unit on Friday over its refusal to compensate a Waukesha, Wisconsin, condominium association over its building’s planned demolition.

The city of Waukesha ordered the residents of a high-rise condominium to evacuate the building in December 2021 after it determined it was at risk of imminent collapse because of substantial rusting, according to the ruling by the 7th U.S. Circuit Court of Appeals in Chicago in Horizon West Condominium Homes Association Inc. v. Travelers Indemnity Co. of Connecticut.

The association and 34 individual owners submitted a claim to Travelers seeking $17 million in coverage under its one-year commercial property policy.

After Travelers refused coverage on the basis that there was no direct physical loss or damage from a covered cause of loss that arose during the policy period, plaintiffs sued the insurer in U.S. District Court in Milwaukee.

The district court dismissed the complaint, concluding that any one of three exclusions applied: for losses caused by the enforcement of any ordinance or law; for damages caused by rust and corrosion; and for damages caused by loss of structural integrity. It also dismissed a bad faith claim.

A three-judge appeals court panel upheld the ruling.

The panel said that while it was sympathetic to the residents’ situation, “Our role, however, is limited to interpreting the terms and conditions of the policy between the Association and Travelers. In these circumstances, the policy’s plain and unambiguous terms and conditions leave us no choice” but to affirm the lower court.

Attorneys in the case did not respond to requests for comment.