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Windridge of Naperville Condominium Association v. Philadelphia Indemnity Insurance Company

United States District Court, N.D. Illinois, Eastern Division

January 26, 2017

THE WINDRIDGE OF NAPERVILLE CONDOMINIUM ASSOCIATION, Plaintiff,
v.
PHILADELPHIA INDEMNITY INSURANCE CO., Defendant.

          MEMORANDUM OPINION AND ORDER

          Feinerman, Judge

         The Windridge of Naperville Condominium Association alleges in this diversity suit that its insurance policy with Philadelphia Indemnity Insurance Company (“PIIC”) entitles it to an independent appraisal to value certain storm damage sustained by one of its buildings. Doc. 19. Windridge has moved to compel an appraisal. Doc. 25. The motion is granted in part and denied in part.

         Background

         On May 20, 2014, a hail storm damaged one of Windridge's buildings. Doc. 19 at ¶ 5. Windridge holds an insurance policy issued by PIIC covering damage to the building. Id. at ¶ 6.

         The policy's “Appraisal” provision states:

If we and you disagree on the value of the property or the amount of “loss”, either may make written demand for an appraisal of the “loss”. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. If they cannot agree, either may request that selection be made by a judge of a court having jurisdiction. The appraisers will state separately the value of the property and amount of “loss”. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding.

Id. at ¶ 9.

         After Windridge submitted a claim, PIIC paid $2, 111, 717.96 for losses it conceded to be within the policy's scope. Doc. 34-2 at 2. Windridge believes that its losses are greater. First, although the storm directly damaged only the building's south and west sides, Windridge seeks payment to repair the north and east sides, so that all four sides will match. Doc. 34-1 at 3; Doc. 34-2 at 3. Second, Windridge seeks reimbursement for the overhead and profit component of the bills submitted by its contractor. Doc. 34-1 at 3-4. Third, Windridge seeks payment for repairs made to the building's roof. Doc. 35 at 5.

         Windridge demanded an appraisal to resolve those disputes. Doc. 34-1 at 3. PIIC refused to appoint an appraiser or to engage in the appraisal process. Doc. 34-1 at 3-4.

         Discussion

         I. Whether Appraisal is Appropriate on the Three Disputed Issues

         A. The Building's North and East Sides

         The storm physically damaged the building's south and west sides, requiring their repair. Windridge claims that although the north and east sides were not physically damaged, they should be repaired as well to ensure an aesthetic match with the newly repaired south and west sides. Windridge argues that this dispute presents a question for the appraisal panel, which can determine whether the aesthetic mismatch is so significant as to constitute “damage” and, if so, assess a loss amount. PIIC responds that this is a question of coverage, not loss amount, and thus inappropriate for appraisal. PIIC is correct.

         As noted, the policy states that if “[PIIC] and [Windridge] disagree on the value of the property or the amount of ‘loss', either may make written demand for an appraisal of the ‘loss'.” Doc. 28-1 at 17 (emphasis added). The policy defines “loss” as “accidental loss or damage.” Id. at 26. The parties dispute whether PIIC must pay to repair the two sides of the building that the storm did not physically damage. The sole question is one of coverage: whether the policy covers ...


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