Circuit Court finds for condo association in $3 million suit against insurance company

A Circuit Court Judge in Hillsborough County, Fla., has ruled that "spalling," a term that describes the disintegration of stone or concrete, was a covered loss under a property insurance policy. The precedent setting ruling involved Castle Reef Condominium Association Inc. of New Smyrna Beach, Fla., represented by Tampa termite and property insurance attorney Peter M. Cardillo and Nationwide Mutual Insurance Co.

TAMPA, Fla. (Feb. 13, 2013) – A Circuit Court judge in Tampa has ruled (Case# 09 19268 Thirteenth Circuit Court of Hillsborough County, Fla.) in favor of a New Smyrna Beach condominium association which had sued Nationwide Mutual Insurance Co. for failure to pay a claim involving the disintegration of a seawall at the oceanfront condominium development.

The $3 million claim was filed against the insurance company by Tampa insurance attorney Peter M. Cardillo on behalf of the Castle Reef Condominium Association Inc.

Nationwide had refused to pay the claim because it said its policies did not cover "spalling," a term that describes the disintegration of stone or concrete. In this case, spalling may have occurred because of damage to steel re-bar within the concrete.

Florida’s many beachfront properties are especially vulnerable to spalling damage.

The court victory is believed to be the first case in which it was successfully argued that spalling should be covered under "all risk" insurance policies.

"All of the (Nationwide) policies (that covered the Castle Reef property) are all risk policies and spalling, per se, is not excluded in the policies," the court said in its summary judgment.

"Nationwide refused to pay this claim, arguing that damage due to spalling was excluded from its policies," Cardillo said. "We claimed that Nationwide’s policies were all-risk policies, and that there was no language that excluded spalling. The court agreed with us."

The court order means that at the May 2013 trial, Castle Reef will only have to prove that spalling damage occurred sometime during the 24 years of coverage from June 23, 1981, to June 23, 2006, which Nationwide has already admitted.

FAA is a federation of 11 local affiliates, representing over 490,000 apartment homes in Florida. Both community and associate members in good standing of a local affiliate are automatically memebers of FAA and NAA.