Ousted Residents Of Wisconsin Condo Inder Raze Order Sue Insurer For $17M
Waukesha County Now (WI)
WAUKESHA – A group of Horizon West condo owners have sued their property insurer for failing to act on their claims and provide them needed funds in the face of financial ruin.
From the perspective of more than two dozen owners displaced from the structurally compromised condominiums on West Avenue, Travelers Insurance has only added to their plight.
Struggling, and in some cases nearing bankruptcy, the owners, along with the building's home association, are seeking at least $17 million as part of their lawsuit, alleging the company has unfairly ignored or indefinitely delayed payment claims for accidental physical loss and damage of their condo homes.
The lawsuit, filed April 18 in Waukesha County Circuit Court, alleges that Connecticut-based Travelers breached its contract and offered insurance in bad faith, leaving residents to fend for themselves financially – despite policy limits of more than $17 million, the replacement cost of the condo building.
In the meantime, a city-issued raze order remains in effect, an edict that suggests few believe the West Avenue condo structure itself can feasibly be repaired.
Lawsuit questions Travelers' motives
In the lawsuit, the owners of 27 units contend Travelers has failed to provide payments that they feel should have been tied to their forced abandonment of the condo in December, when the city ordered an evacuation over fears the building was in "imminent" danger of collapse, forcing them to seek housing elsewhere.
"The plaintiffs were essentially refugees having suffered great financial loss as well as the loss of numerous personal property and other damages," the lawsuit said.
Among other issues, the condo owners say Travelers has gone so far as to suggest the building itself, at 315 N. West Ave., is salvageable, despite experts who suggest otherwise.
"Travelers has opined that the building can be repaired so as to make it habitable, yet, fails and refuses to pay for said repairs," the lawsuit contends in an 18-page summons and complaint. "Travelers' engineering report is the only engineering opinion that suggests the building is repairable. Every other engineer who has rendered an opinion unequivocally called for razing of the building."
They contend the insurance company hopes to avoid payouts by insisting the building can be repaired, and that the raze order itself, issued by the city of Waukesha in January, offsets any insurance coverage responsibility.
"In its latest coverage letter, Travelers goes as far as to say that since the raze order was issued, there is no coverage, but if the building had collapsed, Travelers could cover," the lawsuit said. "Basically, Travelers believes reasonable safety precautions are insufficient to trigger coverage. If that is Travelers position, it is unlawful and contrary to public policy thereby entitling these plaintiffs to coverage."
Situation has further stressed owners
For the residents of the now-empty Horizon West building, the battle to get payments from Travelers adds to their emotional baggage dating back to when the condo building first revealed structural problems in 2020 and peaked with their rushed move in December.
"It's tough," said Alicia Halvensleben. "We've got anger, especially in terms of the insurance company not helping us. We're not sure if they're covering us or not, while we are the ones incurring all these additional expenses.
"There's sadness because, obviously, some of us have lived there a long time. ... I had neighbors who lived there for 30 years, and this was their forever home," said Halvensleben, who lived at Horizon West for six years, adding that the circumstances residents faced in the past five months "have been emotionally taxing."
Both Halvensleben – who in April was elected as alderman to the district that includes the condo building – and the lawsuit note that Travelers has not definitively denied coverage, nor has it acknowledged any financial responsibility to date.
"They haven't said 'yes,' they will pay, or 'no,' they won't pay," she said. "They're just sort of jerking us around. We're not getting any answers. So that's what the lawsuit is trying to accomplish."
While she acknowledges she is no law expert, leaving that to lawyers representing the condo owners named in the lawsuit, Halvensleben said the general goal is to secure some payment from the insurer, whether through judgment, settlement or a lawsuit-induced conciliatory action from Travelers.
Travelers Insurance did not immediately respond to a request for comment. The lawsuit itself gives the company 45 days to respond.
Condo's struggles have mounted
Horizon West, which started as a rental apartment building when it was built in 1966, had some construction issues from the start. But it wasn't until a few years ago that officials noticed problems that raised serious questions.
A windstorm that swept through the area in June 2019 sheered off exterior pieces of the building, uncovering some structural concerns tied to rusted support elements of the balconies.
In June 2020, the city became aware of complaints about the condition of a number of balconies, resulting in a city order to remedy the problem and requiring the owners to conduct an engineering analysis.
Engineering reports only grew worse, prompting the removal of the building's balconies in 2021. That's when officials noticed even more deficiencies in the structural frame and columns of the building itself.
A third-party independent structural engineer hired by the city conducted inspections. In a Nov. 30 preliminary report, the engineers noted "deficiencies in the load-bearing structure of the building," according to the city. Additional data on Dec. 2 ultimately determined the building was unsafe to occupy. That resulted in the emergency evacuation.
Though the structure was reinforced enough to allow residents back inside in small numbers to move their belongings throughout December, the city followed through on a raze order, with officials openly suggesting that a costly repair effort was infeasible.
Residents appealed the city's raze order, though acknowledging that the move was intended to buy more time to firm up their financial situation than to try to save the building from demolition.
In comments since the raze order, building officials have likewise acknowledged there is little hope of saving that the 56-year-old building.