Tampa judge rules that insurance covers seawall damage

TAMPA—A Tampa circuit court judge has ruled in favor of a New Smyrna Beach condo association in a case that involves disintegration of an oceanfront seawall, according to an attorney representing the condo association. However, a related trial is still scheduled in May.

The Castle Reef Condominium Association Inc. filed a $3 million claim against Nationwide Mutual Insurance Co. for failure to pay a claim involving the disintegration of a seawall at the oceanfront condominium development.

Nationwide refused to pay because it said its policies did not cover “spalling,” a term for disintegration of stone or concrete. In this case, spalling may have occurred because of damage to steel re-bar within the concrete, according to a release from Tampa-based Cardillo law firm, which represents Castle Reef.

Florida's many beachfront properties are vulnerable to spalling damage. The ruling by the 13th Circuit Court of Hillsborough County is believed to be the first case in which it was successfully argued that spalling should be covered under “all risk” insurance policies, Cardillo says in a statement.

The court ruled that the Nationwide policies covering the condo property are all-risk policies, and spalling is not excluded from coverage, Cardillo notes.

“We claimed that Nationwide's policies were all-risk policies, and that there was no language that excluded spalling. The court agreed with us,” says attorney Peter M. Cardillo.

At the May 2013 trial, Castle Reef will only have to prove that spalling damage occurred sometime during the 24 years of coverage from June 23, 1981 to June 23, 2006, which Nationwide has already admitted, says Cardillo.