Condo residents in yearslong battle with QBE Insurance over hurricane repairs: Condo association residents continue to battle over millions in unresolved claims from the hurricanes of 2004 and 2005. |
|
|
by beatrice e. garcia, The Miami Herald |
|
 Comments
|
Jul. 17_For nearly four years, residents of an Aventura condominium who saw their balconies and hallways torn apart by Hurricane Wilma have been waiting for a check from their insurance company to make badly needed repairs.
Tired of waiting, the residents of the El Dorado condo association finally took out a $15 million loan to get the work done _ and have sued the insurer for the repair money.
The El Dorado residents aren't alone: QBE Insurance, the largest private insurer of condo associations in Florida when Wilma hit, has been sued 72 times in federal and state courts over claims that the company has either delayed or denied payment on claims. The lawsuits cover claims from the eight hurricanes that hit Florida in 2004 and 2005.
Another South Florida condo hit by Wilma, Buckley Towers in North Miami Beach, won a federal jury verdict against QBE for about $25 million in February _ but the company has yet to pay. The association desperately needs the money: It has been told by Miami-Dade County that its two buildings could be condemned if work isn't completed in 19 months.
"It's a Catch-22 situation. QBE doesn't pay the claims, yet condo associations are required to make repairs," said Daniel Rosenbaum, a West Palm Beach lawyer who has handled 30 cases involving QBE. "But they can't because they are so expensive."
William S. Berk, an attorney for QBE, says the company received 1,500 claims on hurricane damage from the eight hurricanes and that QBE has paid out $275 million so far on claims. Given that large number of claims, the insurance company doesn't see the lawsuits as an overwhelming number, he added.
Complaints from 124 different condo associations have also flooded the Department of Financial Services in Tallahassee.
QBE, part of a large Australian-based insurance group, says it has settled 46 of the 72 lawsuits, and another 26 remain open from 2004 and 2005 hurricanes, including Wilma.
These include four lawsuits claiming bad faith on QBE's part _ an allegation that, under state law, can result in the damages being tripled if a jury agrees.
Five of the lawsuits have gone to trial in the past year. In two cases, juries have sided with QBE, agreeing with the insurer that policyholders inflated their claims. One, the Monaco Beach Club Condominium Association in Naples, is appealing.
But the company, which insured 1,452 condo associations at the close of 2008, has faced setbacks in three other cases.
'A CONSTANT 'STRUGGLE'
The residents at Buckley Towers cheered when the jury in their case awarded them $18.9 million for repairs on the two buildings, plus interest on their claim. But QBE appealed last month, so the association won't collect anytime soon. The insurer believes it doesn't have to pay the award until all appeals are exhausted.
The condition of the buildings is so dire that the Miami Dade County Unsafe Structures Board is requiring that residents evacuate as soon as a hurricane warning is issued.
"It's been a constant struggle," said Elaine Gallo, who moved into Buckley Towers five years ago with her husband, Christopher. "Both roofs need repairs. We're scared of what might happen after a bad storm."
The association got a $1.5 million loan from the Small Business Administration to make the most-needed repairs, including some on the roofs and the air conditioning system.
"We tried to get a loan against our [court] award, but the banks aren't interested in lending because our receivables are so ugly," says Mickey Simon, Buckley 'Towers' treasurer.
Right now, 183 units aren't paying the monthly maintenance fees, which average about $400 per unit per month. Some owners just walked away from their units, Simon said. Others are trying to sell, but some units have been on the market for more than a year.
Last month, the association levied an emergency assessment to cover the building's electric bill and its monthly mortgage payments.
PROCEDURAL DELAYS
Damage claims from condo associations are large, complex and expensive. Attorneys who have faced QBE in court and across the settlement table say the company drags its feet to delay paying claims by playing down damage, challenging costs and using its own experts to dispute the need for repairs.