Last week the United States District Court for the Southern District of Indiana granted Travelers Indemnity Company’s Motion for Summary Judgment allowing them to dodge hail damage claims made by policyholder Mapleton at Countryside Condominium Association Inc. (“Mapleton”).1 Mapleton brought suit against Travelers for breach of contract and bad faith following two hailstorms impacting their buildings in June 2016 and April 2017. The hailstorms caused damage to the condominium’s siding estimated at $2.58 million.
The Indiana federal judge found Mapleton made their claims with Travelers “unreasonably late” – making the first claim approximately six months after the first hailstorm, and approximately eleven months after the second hailstorm. Traveler’s denied both claims, declaring Mapleton did not sustain damage as a result of the hailstorms.
The Travelers’ policies stated they would cover direct physical loss of or damage to Mapleton’s property subject to certain conditions. The policies required Mapleton to give “prompt notice of the loss or damage” and “[a]s soon as possible, give…a description of how, when and where the loss or damage occurred.”
The court found that “no reasonable juror could find that Mapleton gave timely or reasonable notice” of its alleged damage in this case. Furthermore, the trial court stated “[t]he duty to notify is a condition precedent to the insurance company’s liability to its insured under Indiana law.”
Mapleton argued their claims were not unreasonably late and Travelers did not suffer any prejudice from the late notice. Mapleton indicated they attempted to file a claim earlier in the fall of 2016 for the first hailstorm but was told by the Travelers agent “it was a waste of time.” The court held an “intention” to file a claim is not sufficient, as the court record reflected a formal claim was not filed for the first hailstorm until January 2017.
Mapleton argued that despite the six-month gap, the buildings were properly persevered for inspection. Nevertheless, the trial court found Mapleton’s delay exposed the property “to wear and tear and potential damage from other weather events” and subsequent repairs by Mapleton’s contractor created challenges in determining what damage the June 2016 storm caused.
The trial court supported their position with Indiana case law holding the prompt notice requirement affords insurers the opportunity to investigate circumstances surrounding claimed losses in “a timely and adequate manner.”2 Judge Pratt articulated:
Indiana Courts view notice as a crucial component of an insurance claim, and consequently have created a rebuttable legal presumption that an insurer is prejudiced by failure to comply with a notice requirement.
As for the delay in filing their second claim, Mapleton argued they were discouraged from the reporting of their first claim and were awaiting the investigation of its other claims. The court held “a delay of eleven months is unreasonable.” Likewise, the court found the six-month and eleven-month claim reporting was improper under Indiana case law and did not meet the policy’s notice requirement.
1 Mapleton at Countryside Condominium Assoc., Inc. v. Travelers Indemnity Co., No. 1:18-cv-3574, 2020 WL 4448458 (S.D. Ind. Aug. 3,2020).
2 Sheehan Const. Co., Inc. v. Cont’l Cas. Co., 938 N.E.2d 685, 689 (Ind. 2010).