A federal appellate court upheld a lower court ruling in favor of a Beazley PLC unit in litigation filed by a property owner, and found that the policyholder’s request for additional insurance income was too late.
South Hamilton, Massachusetts-based Railroad Avenue Properties LLC owns properties in Millbury, Massachusetts, for which it received coverage from the Beazley unit Acadia Insurance Co., according to Tuesday’s ruling by the 1st U.S. Circuit Court of Appeals in Boston in Railroad Avenue Properties, LLC v. Acadia Insurance Co.
In November 2017, the building was seriously damaged by a fire caused by an unidentified arsonist, according to the verdict. In February 2019, Acadia Railroad paid an actual cash value of $ 575,928.46 for the loss.
Under the policy, Railroad could recover the “depreciation delay”, which is the difference between the building’s replacement value and the actual cash value of $ 197,539.67, and the $ 25,000 code upgrade protection if the completed building is rebuilt within two years of the building. loss of property, it was stated in the judgment.
In November 2019, Järnvägen requested a six-month extension of the two-year conversion requirement, which the insurer did not grant, and the reconstruction of the building began more than two years after the fire.
Railroad sued Acadia in the U.S. District Court in Worcester, Massachusetts, requesting additional payments under the policy. The district court ruled against Railroad and was upheld by an appellate court with three judges.
“Based on its ‘ordinary and ordinary’ meaning, the language of the policy is not ambiguous,” the panel said. “A reasonably intelligent person would understand that Railroad would not be entitled to depreciation restrictions or code upgrade protection unless the damaged building was actually rebuilt within two years of the fire damage,” it said.
“Yes, Railroad understood just as much when it asked the insurance company for a six-month extension of the two-year rebuilding requirement on November 5, 2019, less than two weeks before the rebuilding deadline,” the panel said, confirming the lower court’s decision.
Railroad attorney James E. Grumbach, an attorney at Boston Law Collaborative LLC, said in a statement, “We and our client are very disappointed. The court missed an opportunity to accept reasoning from many courts around the country, and from Massachusetts state and federal district judges. in other but similar contexts, and interpreted the artificial two-year limit for repair or replacement as inflexible and not subject to reasonableness, a standard where conditions beyond the control of the insured prevent the completion of repairs or replacement within that time.
“The court refused to take into account the reasonable expectations of the insured, which Massachusetts requires to interpret insurance provisions.”
The insurer’s lawyer did not respond to a request for comment.