INSURANCE LAW: Superior Court holds casualty insurer not obligated to provide coverage for repair costs for structural defects not discovered until after parties had reached agreement following damage claims arising from snow and ice overload on roof

The plaintiffs’ building was damaged by snow and ice on the roof.  The defendant provided a casualty policy on the building.  After negotiation, the defendant paid out an agreed-upon amount for actual cash value of the loss.

After the payout and prior to the commencement of repair work, the plaintiffs discovered structural issues with the walls supporting the roof which were more severe than was known during settlement discussions and would require more expensive repairs.  The plaintiffs demanded that the defendant provide coverage for these additional costs and the defendant refused.  Plaintiffs sued for breach of the terms of the insurance policy.

The court found that the deterioration of the walls was caused by age, not snow and ice, but even if the plaintiffs had established that it was caused by the snow and ice, the parties had already reached an agreement resulting from a fair negotiation and thus the plaintiffs’ claim was barred by the doctrine of accord and satisfaction.  The court also noted that if the plaintiffs wanted an adjustment to the claim, it had to provide reasonable notice to the defendant.  In this case, six years later, the plaintiff still had failed to make any permanent repair to the roof structure.

R&P Realty Co. v. Peerless Indem. Ins. Co., CV13-6037086 (3/20/2015)