Insurance Companies Must Identify Policy Defenses with Some Particularity

Apr 02, 2012 By Jeremy Tyler Condominium Associations

In first-party property insurance litigation between a condominium association and its insurance company, the parties are generally required to plead the facts of their allegations and defenses in such a way that the judge or jury could apply them to the law. If the party does not plead in such a way, the allegations or defenses may be stricken, dismissed, or the court may allow for amendment.

An insurance company’s defenses were recently challenged in Florida federal court on grounds that they were insufficient. The Court’s opinion in Oriole Gardens Condo. Ass’n I v. Aspen Specialty Ins. Co., No. 11-62281, 2012 WL 864629 (S.D. Fla. Mar. 13, 2012), first set out the standard to which defenses must be plead in order to avoid being stricken.

An affirmative defense must be stricken when the defense comprises no more than bare-bones, conclusory allegations. [Citations Omitted]. A defense that simply points out a defect or lack of evidence in the plaintiff’s case is not an affirmative defense. [Citation Omitted].

The Court went through each of the affirmative defenses that were pled by the insurance company. Many of the insurance company’s defenses related to the insurance policy itself. With regard to these policy defenses, the Court held that there must be some particularity that would give the condominium association notice of what the defense was about.

For example, one of the insurance company’s defenses was that its liability was limited “by the terms and conditions of the policy, including all exclusions, limitations, definitions and deductible provisions contained therein.” The Court held that this was so broad as to encompass the entire policy, and the association could not know which parts of the policy were being called into play. In two other defenses, the insurance company alleged that the association had not complied with the conditions of the policy. The Court held that the insurance company needed to identify which conditions in particular it was alleging non-compliance with so again, the association would know specifically what policy provisions to look at. Lastly, when the insurance company alleged “Concealment, Misrepresentation or Fraud,” the Court held that it must identify specifically how the concealment, misrepresentation, or fraud occurred.

The Court also held that the insurance company’s defenses that identified specific policy provisions were sufficient.

Petitioner also moves to strike the Sixth, Seventh, Eighth, Ninth, and Eleventh Affirmative Defenses. In each of these defenses, Aspen states that the insurance contract excludes some or all of the damages claimed by Petitioner. In each such defense, Aspen has included the particular policy language that pertains to that defense. For example, the Sixth Affirmative Defense lists the wear and tear exclusion, the Seventh Affirmative Defense lists the neglect exclusion, and so on. . . . . These defenses do give Petitioner sufficient notice, as particular contract provisions are identified in each defense. The “facts” that are alleged is the language of the particular insurance contract provision.

In summary, if the insurance company wants to use policy provisions as a defense, it needs to point out specific provisions so that the association can understand what the insurance company alleges.

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