A federal appellate court on Monday tripled the contract damages against Tokyo Marine HCC units related to their handling of a claim involving the partial collapse of a student apartment near a University of North Carolina.
The ruling of the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, also upheld the U.S. District Court in Greensboro, North Carolina, by ruling that the Tokyo entities Philadelphia Indemnity Insurance Co. and Tokyo Marine North America Inc. were required to indemnify the apartment. the owner of the building before the collapse, according to the judgment in DENC LLC v. Philadelphia Indemnity Insurance Co. and Tokyo Marine North America, Inc., d / b / a Philadelphia Insurance Cos., Inc.
In January 201
8, Elgin University students in Elgin, North Carolina, who gathered for a party on an attic on the second floor of The Crest apartment building, began jumping up and down and the structure collapsed by more than a foot, according to the verdict. The Crest is owned by Monterey Park, California-based DENC.Shortly afterwards, the Philadelphia Insurance DENC announced that it would investigate the claim under a reservation of rights. Two days later, it said that they had issued, or would issue, a payment to DENC. But a few weeks later, it contested the claim in a letter due to water damage.
A policy approval excluded “continuous or repeated leakage or leakage of water” that occurs over a period of 14 days or more.
DENC filed a lawsuit against Tokyo Marine in the district court, alleging contract claims and violations of North Carolina’s law on unfair and fraudulent trading practices.
The district court found that the insurer had incorrectly denied coverage and failed to reasonably explain the basis for the refusal.
It considered that the insurer had violated the policy and violated UPDTA. It awarded contractual damages but denied triple damages, and instead awarded DENC nominal damages and attorneys’ fees.
On appeal, a panel of three judges in a 2-1 judgment essentially upheld the lower court, but held that DENC was entitled to triple contract damages due to the way the insurer handled the claim.
The rejection letter “conveyed Philadelphia’s discovery of water damage and then recited in a rooted manner alleged political terms,” the verdict said.
“But none of the policy provisions listed by Philadelphia in the denial later use the phrase ‘water intrusion.’ Nor did the letter explain which of the many enumerated provisions blocked the coverage. clear link to Philadelphia’s fact-finding, ”the judgment stated that DENC was entitled to triple damages and remanded the case for further proceedings.
The dissenting opinion stated: “Philadelphia’s denial letter was not a model for clarity.… But it provided an immediate and reasonable explanation of Philadelphia’s alleged factual and contractual grounds for refusing coverage.”
Lawyers in the case did not respond to a request for comment.
Source link
