A trial court judge has ruled that the condo in the historic district is not excluded from the insurance coverage provided by Aspen Specialty Insurance. However, an appeal is likely.
Insurance Claim After Bombing
Downtown Nashville experienced a suicide car bomb on Christmas Day in 2020. Around 60 properties were damaged due to the lone-wolf incident. The insurance fallout from that incident is ongoing, and a federal court has decided that Aspen Specialty Insurance must cover millions to replace a heavily damaged condo in the historic district.
The Quarters, the 134-year-old four-story brick condominium in question, filed an insurance claim with Aspen Specialty Insurance. In 2021, Aspen agreed to pay the $4.3 million policy limits for the repairs. However, condo owners thought at least $10.7 million was due because of a guaranteed replacement-cost endorsement in the policy. The owners had purchased this policy from Aspen in 2019.
Exclusion of Condo in Historic District
According to the endorsement, if the endorsement is attached to the policy, the insurer will pay the actual repair and replacement amount without regard to the Declaration’s Limit of Insurance. However, as part of Aspen America Insurance Co., Aspen argued that the endorsement had an exclusion. It specifically excluded buildings designated by any local, state, or national government agency as historic structures or landmarks.
The Quarters was originally a warehouse built in 1890. In the 1980s, it was renovated into a condominium building. The court explains that The Quarters are a “contributing property” in the Second Avenue Commercial Historic District. This historic district is listed on the National Register of Historic Places.
According to Aspen attorneys, the condo is considered a historic structure, which is excluded by the endorsement. However, U.S. District Judge Aleta Trauger disagreed. On June 18, the judge wrote that the condo in historic district is not, by location, a designated historic landmark. In plain language, a government agency must have designated the property.
The exclusion refers to buildings designated as “an historic structure,” connoting it refers to individual structures instead of multiple buildings within a historic district. Aspen did not include language in the policy, excluding any property within a historic district.
The insurer further argued that the property is more than 50 years old, so it had to be historic. However, Trauger says being old does not make a building historically significant. The wording was unambiguous, and even if it were ambiguous, years of court decisions would dictate that the policy favors the insured.
The Court Ruling
The court’s conclusion will grant The Quarters’ Motion for Judgment on the Pleadings (Doc. No. 23), construed as a motion for partial judgment for the pleadings. They will declare that the GRC Endorsement covers the claim and that the exclusion does not apply to them.
However, the ruling was made only at the trial court level. There will likely be an appeal from Apsen.