As discussed in my previous blog post, Should an insurance company pay adjustable claims amounts that are not controversial while another amount is still in dispute? The payment of undisputed amounts is an issue often discussed in Puerto Rico courts for Hurricane Maria claims. As recently as this week (May 12, 2021), the Court of First Instance of Carolina, Puerto Rico, granted a partial summary judgment ordering the carrier to pay the non-controversial adjustable amounts.
The plaintiff in the Consejo de Titulares Del Conominio Montecillo Court v. Chubb Insurance Company in Puerto Rico 1 filed a request for a partial summary judgment on April 1
- The defendant issued a property insurance to the Consejo de Titulares Del Condominio Montecillo Court, which covered property damage to two residential buildings consisting of 185 units, a two-story parking lot, electric poles, pool, clubhouse, mailbox station, mechanical arm (entrance), gaming area equipment, generator, water reserve , lake wall and other property.
- On October 2, 2018, an engineer prepared a report with images of the damage observed in common buildings and units. The estimated damage to the common areas was $ 285,960.25, and the estimated damage to the building units was $ 787,21.53. These were liquid and enforceable liabilities.
- On October 24, 2017, Chubb confirmed receipt of the insurance claim and sent an expert to inspect the property on November 20, 2017. Chubb then assigned claim number # 804-16667698 to the Consejo de Titulares. Del Condominio Montecillo Court.
- Chubb provided a "proof of loss", which acknowledged that after deductible debt the 287,458.00 dollars to the insured. Therefore, it was a liquid and enforceable debt.
- Chubb only paid the plaintiff $ 143,729.00 dollars.
The Court held that the Puerto Rico Insurance Code regulates unfair practices and fraudulent actions related to claims made by insurance companies, and when an insurance company chooses to fulfill its obligation through a reasonable offer to the insured, that offer becomes the estimate of the damages incurred. an insurance company is not authorized to withdraw the offer from this adjustment unless fraud or other extraordinary circumstances occurred that were not possible to detect during the insurer's investigation. Therefore, a final offer is not the same as a transaction offer or negotiation, which is not covered by the same intensive and specific rules in the insurance code. 3 When a debt has a settled and outstanding amount, the insured can request that the debtor be allowed to pay the settled amount from the insurer without having to wait for the draw amount to be determined. The plaintiff owed the amount of $ 143,729.00 plus the sum of $ 643,482.53, which was also already recognized as owed by the plaintiff.
1 Consejo de Titulares Del Condominio Montecillo Court vs. Chubb Ins. Co. of Puerto Rico Civil Case No. sec. 2716a.
3 Carpets & Rugs v. Tropical Reps 175 D.P.R.614, 635 (2009).
4 Art. 1123 Puerto Rico Civil Code, 31 L.P.R.A sec. 3173.