Prescott Mill Condo Ass’n v. Mid-Century Ins. Co.

The United States District Court of Northern Illinois, Prescott Mill Condo Ass’n v. Mid-Century Ins. Co., 2021 WL 3700742 (N.D. Ill. Aug. 4, 2021) recently determined that both (i) a general contractor’s overhead and profit and (ii) whether an insurer was required to pay for the complete replacement of siding because siding that matched the existing property was not found were both appropriate for appraisal.

The Court confirmed that as the insurer did not contest coverage for either of these items. Specifically, for over-head and profit, the Policy allowed for this if it was ‘reasonable’ which was an appropriate question for an appraisal panel.

With respect to matching, the Court confirmed the decision in Windbridge of Naperville Condo. Ass’n v. Philadelphia Indem. Ins. No., No. 16 C 3860, 2018 WL 1784140 (N.D. Ill. April 13, 2018) that a “dispute regarding whether there are matches available for the siding…, and thus whether [the insurer] must replace or pay to replace the siding on” undamaged sides “is a dispute regarding loss amount.” Rather than arguing coverage, the insurer argued that it had reached an agreement with the insured’s public adjuster for the scope of replacement of the damaged siding. Yet, under Illinois law, public adjusters are barred from “agree[ing] to any loss settlement without the insured’s knowledge and consent.” 215 Ill. Compt. Stat. 5/1590(k). 
Moreover, the Court did not accept the insurer’s argument that the insured had waived its ability to invoke appraisal by delaying its appraisal request. The Court noted that not only is waiver disfavored, but the insured demanded appraisal following a break down in settlement discussions early in litigation. Additionally, the fact that the roofs had been repaired did not prevent an appraisal panel from determining whether overhead and profit for the roofing work was reasonable.