Federal Appeals Court Finds Luxury Condo Owner’s Suit Filed too Late Against Insurer

A luxury high rise condominium located in Las Vegas, Nevada, was found to have been barred from recovery of its $5 million window damage claim, according to a ruling by the Ninth Circuit of the U.S. Court of Appeals.

The December 2016 appeals court ruling affirms a Nevada judge’s decision to dismiss the case based on an insurance limitation clause that barred the plaintiff from recovery of a claim unless an action was filed within 12 months of discovery of the loss or damage that gave rise to the claim.

Queensridge Towers LLC, the developer of the luxury high rise condominium, filed a lawsuit against Allianz Global Risks US Insurance Company, the project’s builders risk insurer.

According to facts outlined in the appeal, on April 29, 2008, Perini Building Company, the general contractor, gave notice to Queenridge of damage to 62 panes of glass. Nearly three years later, Queensridge submitted a sworn proof of loss that identified 5,364 damaged panes of glass. The developer claimed $5 million in repair and replacement costs as a result of the damaged glass panes.

Allianz denied the claim on January 9, 2012. A year later, Queensridge filed suit in state court against Allianz and alleged breach of the insurance contract. The insurer had the case moved to federal court on diversity grounds, according to the appeal. The federal district court ruled in favor of Allianz based on the insurer’s limitation clause. According to the appellate court’s decision, “Nevada law equitably tolls such insurance limitation clauses during the period between the date the insured first gave notice of the loss until the date the insurer formally denies liability.”

The court noted that evidence produced by the parties revealed that the developer discovered the glass damage prior to April 27, 2008.

According to the appeals court decision, “Because Queensbridge discovered the glass damage more than twelve months before filing this action – even taking into account equitable tolling – the limitation provision bars its claim for breach of contract.”