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Holiday Village East Home Owners Association, Inc v. Qbe Ins Corp.

December 19, 2011

HOLIDAY VILLAGE EAST HOME OWNERS ASSOCIATION, INC., PLAINTIFF,
v.
QBE INS CORP., QBE INS. GROUP, LTD., AND COMMUNITY ASSOCIATION UNDERWRITERS OF AMERICA, INC., DEFENDANTS.



The opinion of the court was delivered by: Honorable Joseph E. Irenas

OPINION

IRENAS, Senior District Judge:

Plaintiff Holiday Village East Home Owners Association, Inc. initiated this action for a declaratory judgment and damages following Defendants' denial of coverage under a property insurance policy for damage to the Clubhouse roof.*fn1 Pending before the Court is Defendants' Motion to Dismiss the First Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(6).*fn2

I.

Plaintiff is a not-for-profit corporation formed to own, maintain, and administer the community properties and facilities of a planned retirement community known as Holiday Village East. (Compl. ¶ 1.) Plaintiff is the owner of a Clubhouse, which has a roof structure consisting of wooden trusses. (Id. ¶¶ 5-6.)

Defendant QBE INS Corp. issued a Homeowners Association Policy, number CAU303953-1 ("the Policy"), to named insured "Holiday Village East Community Services Association, Inc."*fn3

Coverage under the Policy is provided for the Clubhouse.

On February 7, 2011, an independent contractor inspected the Clubhouse roof for the purpose of making a sprinkler repair. (Id. ¶ 9.) During the inspection, the contractor discovered "dramatic symptoms of roof truss system failure." (Id.) Plaintiff immediately reported the condition to its insurance broker, Hardenbergh Insurance Group. (Id.) On February 9, 2011, a structural engineer inspected the roof on behalf of Defendants and recommended that the Clubhouse be closed and shoring walls be immediately installed. (Id. ¶ 12.) On February 10, 2011, Plaintiff closed the Clubhouse. (Id. ¶ 13.) Following the recommendations of both Defendants' structural engineer and an independent structural engineer, shoring walls to prevent the continuing collapse of the roof trusses were installed. (Id. ¶ 16.)

In a letter dated February 17, 2011, Defendants denied coverage under the Policy, citing the absence of a "collapse." (Id. ¶ 17.) On August 17, 2011, Plaintiff commenced the instant action in the Superior Court of New Jersey, Burlington County, seeking a declaration that the replacement costs of the Clubhouse roof structure are payable to Plaintiff under the terms of the Policy and seeking damages in the amount of $600,000 to $750,000.

On October 4, 2011, Defendants removed the Complaint to this Court. On October 28, 2011, Defendants filed a Motion to Dismiss the Complaint. On November 4, 2011, Plaintiff filed an Amended Complaint. On November 18, 2011, Defendants filed a Motion to Dismiss the Amended Complaint.

II.

Federal Rule of Civil Procedure 12(b)(6) provides that a court may dismiss a complaint "for failure to state a claim upon which relief can be granted." In order to survive a motion to dismiss, a complaint must allege facts that raise a right to relief above the speculative level. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007); see also Fed. R. Civ. P. 8(a)(2).

While a court must accept as true all allegations in the plaintiff's complaint, and view them in the light most favorable to the plaintiff, Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008), a court is not required to accept sweeping legal conclusions cast in the form of factual allegations, unwarranted inferences, or unsupported conclusions. Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997). The complaint must state sufficient facts to show that the legal allegations are not simply possible, but plausible. Phillips, 515 F.3d at 234. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).

When evaluating a Rule 12(b)(6) motion to dismiss, the Court considers "only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim." Lum v. Bank of America, 361 F.3d 217, 221 n.3 (3d Cir. 2004). A document that forms the basis of a claim is one that is "integral to or explicitly relied upon in the ...


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