UNIVERSAL NORTH AMERICAN INSURANCE CO. and UNIVERSAL NORTH AMERICAN as subrogee of THOMAS LASPADA v. BRIDGEPOINTE CONDOMINIUM ASSOCATION, INC. - Published

The issue before the Law Division, was 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. The facts are straightforward. A unit owner at a condominium association obtained homeowner’s insurance. The unit owner’s unit sustained damages as the result of a fire. The carrier paid $222,172.84 to the unit owner. Thereafter, the carrier, as the unit owner’s subrogee, filed suit against various entities, including the condominium association, alleging that the condominium association failed to properly maintain the premises, which contributed to the fire. The carrier sought to recover the insurance monies it paid to the unit owner.

The association’s by-laws prohibited such subrogation claims. Based on the reasoning adopted by the Appellate Division in Skulskie v. Ceponis, 404 N.J. Super. 501, 514 (App. Div. 2009), which upheld a waiver scheme in a condominium community, the Law Division held that the carrier’s claim was barred and granted the association’s motion for summary judgment. The Law Division held that a contrary result would penalize all of the unit owners regardless of fault and pit unit owner against unit owner, and unit owners against the association--a result contrary to the concept of a condominium.