QBE Insurance Corporation claims its condominium customers commit fraud virtually every time a lawsuit is filed against it for payment of a property insurance claim in Florida. Last week, a federal trial court judgment against QBE was upheld in Vantage View, Inc. v. QBE Ins. Corp., No. 09-12128, 2010 WL 3550030 (11th Cir. September 14, 2010). The Eleventh Circuit Court of Appeals found the following:

On appeal, QBE argues that it is entitled to a new trial because the district court abused its discretion in excluding the minutes of a condominium board meeting, which QBE claims were relevant to its defense that the policy had been voided by the submission of a fraudulent claim. QBE also argues that it is entitled to judgment as a matter of law because, under its policy, it is liable for damage to the windows and the doors only if Vantage View actually completed all repairs or replacements prior to submitting its claim, which Vantage View did not do.

We have considered the record, the briefs of the parties and the oral argument of counsel, and affirm the judgment. We find no merit in QBE’s contention that the district court erred in excluding the minutes of Vantage View’s special board meeting. The district court’s determinations that the minutes were protected by the attorney-client privilege, which had not been waived, and that the minutes did not suggest fraud to exempt them from the privilege did not amount to an abuse of discretion.

We also reject QBE’s argument that it is entitled to a judgment as a matter of law because Vantage View did not actually repair or replace the windows and doors at issue.

QBE has some of the best insurance defense attorneys in the business representing it in these cases. Otherwise, this business practice of claiming fraud as a defense would be much more problematic and costly. I am certain that next time QBE claims fraud following a drawn out investigation, it will be the subject of intense scrutiny during the subsequent bad faith case.

On Wednesday, I will write about another QBE opinion issued on the same date and from the same three-judge panel as Vantage View. Jeremy Tyler will also be writing on an aspect of that case tomorrow, in our Condominium Insurance Law Blog.