Universal N. Am. Ins. Co. v. Bridgepointe Condo. Ass'n, Inc.

• Decision Date: 13 March 2018
• Docket Number: DOCKET NO. L-000771-18
• Citation: 195 A.3d 543,456 N.J.Super. 480
• Parties: UNIVERSAL NORTH AMERICAN INSURANCE COMPANY and Universal North American as Subrogee of Thomas Laspada, Plaintiffs, v. BRIDGEPOINTE CONDOMINIUM ASSOCIATION, INC., Defendant.
• Court: New Jersey Superior Court

456 N.J.Super. 480

195 A.3d 543

UNIVERSAL NORTH AMERICAN INSURANCE COMPANY and Universal North American as Subrogee of Thomas Laspada, Plaintiffs,

v.BRIDGEPOINTE CONDOMINIUM ASSOCIATION, INC., Defendant.

DOCKET NO. L-000771-18

Superior Court of New Jersey, Law Division, Middlesex County.

Decided: March 13, 2018

Elliot E. Braun, attorney for plaintiffs (Law Offices of Jan Meyer & Associates, P.C.).

Gregory Vinogradsky, attorney for defendant (Callahan & Fusco, LLC).

WOLINETZ, J.S.C.

The issue before the court is whether an insurance carrier is barred from maintaining a subrogation claim on behalf of a unit owner against a condominium association if the association's by-laws compel a waiver of such claims. This issue has not been addressed in any published New Jersey opinion. Based largely on the reasoning adopted by the Appellate Division in Skulskie v. Ceponis, 404 N.J. Super. 510, 514, 962 A.2d 589 (App. Div. 2009), which upheld a waiver scheme in a condominium community, the court holds that the action is barred and grants the Association's motion for summary judgment.

The facts are straightforward. Thomas Laspada ("Laspada") was a unit owner and member of defendant Bridgepointe Condominium Association, Inc. (the "Association"). Laspada obtained homeowner's insurance through plaintiffs Universal North American Insurance Company and Universal North American (collectively, "Universal").

On December 12, 2014, a fire began at a unit next door to Laspada's unit. As a result of the fire, Laspada's unit sustained damages. Thereafter, Universal paid $222,173.84 to Laspada based on his policy.

On December 12, 2016, Universal, as Laspada's subrogee, filed this action against various entities, including the Association, alleging that the Association failed to properly maintain the premises which contributed to the fire. Universal primarily seeks to recover the insurance monies it paid to Laspada.

On February 1, 2018, the Association moved for summary judgment. Relying on the language of its By-Laws that bar subrogation claims, which Laspada agreed to when he became a unit owner, the Association argues that it is entitled to summary judgment on Universal's claims. Universal, however, asserts that the Association's Master Deed contradicts the By-Laws and that the Master Deed governs this subrogation action. Accordingly, before the court can turn to the law governing this dispute, it must first set out the relevant provisions that the parties rely upon.

The Association's Master Deed

The Master Deed provides an overview of the Association's and unit owners' responsibilities. Relevant to this dispute is Section 8.00, Restoration and Replacement of Condominium in Event of Fire, Casualty, Obsolescence or Eminent Domain, which explains how funds are to be allocated in the event of a fire that causes damages:

c. ... those parts of a Unit for which the responsibility for maintenance and repair is that of the Unit Owner, then that Unit Owner shall be responsible for reconstruction and repair, but the proceeds of any insurance that may have been obtained by the Association shall be made available for such purposes. Subject to the provisions of this Master Deed, in all other instances the responsibility of reconstruction and repair after casualty shall be that of the Association.

d. If the proceeds of insurance are not sufficient to defray the estimated costs of reconstruction and repair, ... assessments shall be made against all Owners whose Units were damaged or destroyed, in sufficient amount provide funds for the payment of such costs.... The foregoing provisions of this subparagraph ... do not cover damages to those portions of the Unit for which the responsibility of maintenance and repair is that of the Unit Owner for which the costs and expenses must be borne by each Owner; provided, however, any portion of the insurance proceeds representing damage for which the responsibility of reconstruction and repair lies with an individual Unit Owner shall be paid to said Unit Owner, or if there is a mortgage endorsement as to such Unit, then the Unit Owner and mortgage, jointly.

As to the Association's required insurance, Section 8.00, Restoration and Replacement of Condominium in Event of Fire, Casualty, Obsolescence or Eminent Domain, subsection f.(c) provides as follows:

The Association acting by and on behalf of the Unit Owners of this Condominium shall insure the buildings against risk of loss by fire and other casualties covered by a broad form fire and extended coverage policy, including vandalism and malicious mischief and such other risks as the Board of Directors for the Association shall from time to time require, all in accordance with the provisions of the By-Laws of the Association. Nothing contained in this Covenant and no provisions of the By-Laws shall be deemed to prohibit any Owner or co-Owner from obtaining insurance for his own account and for his own benefit. No Unit Owner or co-Owner shall, however, insure any part of the Common Elements whereby, in the event of loss thereto, the right of the Association to recover the insurance proceeds for such loss in full, shall be diminished or impaired in any way.

These provisions, taken together, show that while it is the Association's primary duty to maintain fire and casualty insurance for the Condominium, nothing prohibits a unit owner from obtaining insurance for his own benefit. Laspada is responsible to repair the damages within his unit, but if the Association receives insurance proceeds for Laspada's unit's damages, then the Association must pay those monies to Laspada.

The Association's By-Laws

Next, the By-Laws set forth provisions that proscribe subrogation. Under Article III (Board of Directors), Section 9 (Duties of Directors), subsection II, the By-Laws delegate a host of responsibilities to the Board, including the obligation to maintain insurance. But, at the same time, the By-Laws address the ability of unit owners to obtain their own insurance, provided that such insurance waives any rights of subrogation:

II. It shall be the affirmative and perpetual obligation and duty of the Board to perform the following:

f. Place and keep in force all insurance coverages required to be maintained by the Association, applicable to its property and Members ...

1) All policies shall ... (c) to the extent obtainable contain waivers of subrogation and waivers of any defense based on co-insurance or of invalidity arising from any acts of the insured ....

....

3) Unit Owners shall not be prohibited from carrying insurance for their own benefit provided that all such policies shall contain waivers of subrogation; and further provided that the liability of the carriers issuing insurance obtained by the Board shall not be affected or diminished by reason of any such additional insurance carried by any Unit Owners.

The By-Laws explain that "if any provision of these By-Laws is in conflict with or contradiction of the Master Deed, the Articles of Incorporation or with the requirements of any law, then the requirements of law, the Master Deed and Articles of Incorporation, the By-Laws, in that order, shall be deemed controlling."

LEGAL STANDARD

On a summary judgment motion, the court must consider "whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party in the consideration of the applicable evidentiary standard, are sufficient to permit a rational fact finder to resolve the alleged dispute in favor of the non-moving party." Brill v. Guardian Life Ins., 142 N.J. 520, 541, 666 A.2d 146 (1995) ; R. 4:46-2. Summary judgment must be granted if "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c).

To be clear, "[i]t is critical that a trial court ruling on a summary judgment motion not shut a deserving litigant from his or her trial. At the same time, ... it is just as important that the court not allow harassment of an equally deserving suitor for immediate relief by a long and worthless trial." Brill, 142 N.J. at 540-41, 666 A.2d 146 (internal citations, quotations, and alterations omitted).

The mere fact that a motion for summary judgment is made while discovery is ongoing, does not necessarily render the motion premature. See Badiali v. N.J. Mfrs. Ins. Grp., 220 N.J. 544, 555, 107 A.3d 1281 (2015) ("A motion for summary judgment is not premature merely because discovery has not been completed.") (internal quotations omitted) (citing Wellington v. Estate of Wellington, 359 N.J. Super. 484, 496, 820 A.2d 669 (App. Div. 2003) ); Auster v. Kinoian, 153 N.J. Super. 52, 56, 378 A.2d 1171 (App. Div. 1977) ) ). "[I]f the summary judgment turns on a question of law, or if further factual development is unnecessary in light of the issues presented, then summary judgment need not be delayed." United Sav. Bank v. N.J. Dep't of Envtl. Prot., 360 N.J. Super. 520, 525, 823 A.2d 873 (App. Div. 2003) (citations omitted). Indeed, "[w]hen the incompleteness of discovery is raised as a defense to a motion for summary judgment, that party must establish that there is a likelihood that further discovery would supply the necessary information." J. Josephson, Inc. v. Crum & Forster Ins. Co., 293 N.J. Super. 170, 204, 679 A.2d 1206 (App. Div. 1996) (citing Auster, 153 N.J. Super. at 56, 378 A.2d 1171 ). See also Badiali, 220 N.J. at 555, 107 A.3d 1281 ("[P]laintiff [must be] able to demonstrate with some degree of particularity the likelihood that further discovery will supply the missing elements of the cause of action.") (internal quotations and citations omitted).

Lastly, in addressing a dispute involving a contract, "[p]urely legal questions, such as the interpretation of [the] contract[ ], are questions of law particularly suited...