November 2018 – NJ court holds that unit owner’s insurance company could not subrogate against condominium association where by-laws contained waiver of subrogation provision

March 9th, 2019 | Community Association Law Blog

March 16, 2019
By Eric F. Frizzell, Esq.

On November 5, 2018, a New Jersey court held that an insurance company that paid $222,173.84 to its insured, an individual condominium unit owner whose unit was damaged by a fire in a neighboring unit, could not pursue a subrogation claim against the Association seeking to recoup that payment.

In the case, Universal North American Insurance Company v. Bridgepointe Condominium Association, decided in the Superior Court of New Jersey, Law Division, Middlesex County, the insurer alleged that the Association’s failure to properly maintain the premises contributed to the fire. However, the Associations’ by-laws provided that “Unit Owners shall not be prohibited from carrying insurance for their own benefit provided that all such policies contain waivers of subrogation… .” The court held that this waiver of subrogation provision was binding on the unit owner’s insurer and granted the Association’s motion for summary judgment, dismissing the claim.

Although the decision was rendered by the Law Division, and therefore is not binding precedent on courts in other counties, it is a published decision that other New Jersey courts may consider persuasive authority.

Please contact any of our attorneys if you would like more information about the court’s decision and how it may impact your association.