Audubon Hill South Condominium Ass'n v. Community Ass'n Underwriters of America, Inc.
975 N.E.2d 458
Mass. App. Ct.2012Background
- Audubon insured by CAU for 2006–2007; coverage includes buildings and grounds for loss or damage.
- Barstow noticed floor depressions beginning 2005; issues escalated to engineering inspection in 2007.
- CAU investigation attributed slab subsidence to a long‑standing underground water leak; concluded loss not covered.
- Audubon and CAU used G. L. c. 175, § 99 Twelfth to submit loss value to three referees; referees awarded $63,909.
- Superior Court granted summary judgment for CAU; Audubon and CAU cross‑appealed on related issues, including reconsideration and amendments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of reference on coverage vs amount | Audubon alleges referees decide coverage as part of loss. | CAU contends referees only determine amount, not liability or coverage. | Reference resolves amount only; coverage remains for court. |
| Policy coverage interpretation | Audubon argues policy is all‑risk; collapse falls within coverage. | CAU argues exclusion for earth movement removes coverage. | Loss excluded under earth movement, not a covered collapse. |
| Collapse vs earth movement definitions | Audubon asserts abrupt collapse; evidence shows sudden failure. | CAU argues no abrupt collapse; gradual movement due to soil changes. | No abrupt collapse; earth movement excludes coverage. |
| Motion for reconsideration | Audubon contends denial was erroneous or incomplete analysis. | CAU argues not meritorious; arguments repetitive and untimely. | Court did not abuse discretion; reconsideration denied. |
| Motion to amend (counterclaims) | CAU sought breach of contract, bad faith, and related claims. | Amendment would chill proceedings due to lateness and scope. | Denial of amendment affirmed; prejudice curable and delay unjustified. |
Key Cases Cited
- Augenstein v. Insurance Co. of N. Am., 372 Mass. 30 (Mass. 1977) (referee determination not binding on coverage when defense raised)
- Augenstein, Id. at 36, 372 Mass. 30 (Mass. 1977) (referees may find amount; coverage remains for courts)
- Augenstein v. Insurance Co. of N. Am., 372 Mass. 30 (Mass. 1977) (referees’ views on liability tentative; subject to reexamination)
- Augenstein v. Insurance Co. of N. Am., 372 Mass. 30 (Mass. 1977) (difficult, exceptional treatment of reference vs coverage issue)
- Augenstein v. Insurance Co. of N. Am., 372 Mass. 30 (Mass. 1977) (policy reference as pragmatic settlement tool; not a substitute for coverage dispute)