Windridge of Naperville Condo v. Philadelphia Indemnity Insuran
932 F.3d 1035
| 7th Cir. | 2019Background
- On May 20, 2014, a hail/wind storm damaged the south and west elevations of Windridge condominium buildings; Philadelphia Indemnity insured the buildings and paid $2.1 million for conceded damage.
- Windridge sought additional payment to replace siding on the undamaged north and east elevations because an exact matching siding is no longer available.
- Policy is a replacement-cost policy covering "direct physical loss" to "Covered Property," defined to include the insured "buildings;" valuation and loss-payment clauses require replacement with property "of comparable material and quality."
- District court ordered appraisal on the discrete issue of market availability of matching siding but reserved the coverage question; later assumed no match existed and granted summary judgment to Windridge, holding insurer must replace all siding to restore pre-loss matching.
- Philadelphia Indemnity appealed, arguing the insurer need only replace the physically damaged panels/sides (not whole buildings); the Seventh Circuit affirmed, interpreting the policy in favor of coverage where ambiguous.
Issues
| Issue | Plaintiff's Argument (Windridge) | Defendant's Argument (Philadelphia Indemnity) | Held |
|---|---|---|---|
| Whether insurer must pay to replace undamaged elevations to achieve matching when matching product is unavailable | Policy requires making insured "whole"; replacement-cost coverage obliges insurer to restore buildings to pre-loss condition (matching siding) | Policy covers only the property actually "directly" physically damaged—insurer need pay only to replace the damaged panels/sides | Where policy language is ambiguous as applied, interpret in favor of insured: insurer must pay to replace siding on all elevations to restore matching building appearance (affirmed) |
Key Cases Cited
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (evidentiary standard for summary judgment)
- Advance Cable Co., LLC v. Cincinnati Insurance Co., 788 F.3d 743 (interpretation of "direct physical loss")
- Hobbs v. Hartford Insurance Co. of the Midwest, 823 N.E.2d 561 (Ill.) (insurance-contract interpretation principles)
- Travelers Insurance Co. v. Eljer Mfg., Inc., 757 N.E.2d 481 (Ill.) (construe policy as whole; replacement-cost purpose)
- Eljer Mfg., Inc. v. Liberty Mut. Ins. Co., 972 F.2d 805 (tangible alteration in appearance is physical injury)
- West American Ins. Co. v. Yorkville Nat. Bank, 939 N.E.2d 288 (Ill.) (ambiguities construed for coverage)