Superior Court of New Jersey, Law Division, Middlesex
UNIVERSAL NORTH AMERICAN INSURANCE COMPANY AND UNIVERSAL NORTH AMERICAN as subrogee of THOMAS LASPADA, Plaintiffs,
BRIDGEPOINTE CONDOMINIUM ASSOCIATION, INC., Defendant.
Decided: March 13, 2018
E. Braun, attorney for plaintiffs (Law Offices of Jan Meyer
& Associates, P.C.).
Gregory Vinogradsky, attorney for defendant (Callahan &
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 (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
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,
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.
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.
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.
Association's Master Deed
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.
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.
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 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
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