A condominium owners’ association being sued by prominent Chicago personal bankruptcy lawyer Peter Francis Geraci may find no aid from its insurer in mounting a defense, as the insurance company has asked the court to declare it has no obligation to defend the association against Geraci’s allegations the association’s reluctance to repair a wall on the condo building’s roof has amounted to illegal occupation of Geraci's rooftop deck.
Atain Specialty Insurance Co., based in Farmington Hills, Mich., filed suit May 29 in Cook County Circuit Court against Union Square Condominium Association and its board members, saying the terms of the insurance policy held by the Union Square association do not extend to cover the alleged “intentional” and “deliberate” acts committed by the association, which Geraci has alleged is in violation of the association’s bylaws.
In response, that same day, Union Square Association and its board members filed a removal notice, seeking to transfer the case from Cook County Circuit Court to Chicago’s federal courts. The association board members said the case belongs in federal court because the board members are all residents of Illinois, while Atain is based in Michigan.
They further noted damages sought in the case approach $3.1 million, easily exceeding the $75,000 damages threshold needed to transfer the case to federal jurisdiction.
The actions come as the latest steps in litigation dating back to .
At that time, Geraci and his wife, Holly, filed suit in Cook County Circuit Court against the association, which governs the Chicago condo building on West Hubbard Street in River North, just north of Merchandise Mart, in which the Geracis live.
According to the complaint, the condo association replaced the roof on the building in 2013. However, during the roof repair work, a parapet wall on the roof was allegedly damaged, preventing the Geracis from regaining the use of a rooftop deck they claim adds more than $1 million in value to their condo unit.
The deck “was given the Mayor’s award for most beautiful deck; is one of the largest in the city with fantastic views, motorized awnings, a penthouse with a kitchen and workout facilities, sprinkling system, herb, vegetable and flower gardens, putting green, sitting areas and furniture,” according to the Geracis’ complaint.
A subsequent inspection of the wall and rooftop area ordered by the association allegedly revealed the parapet wall was unstable and defective, as its steel reinforcing bars were not properly connected to the deck when it was originally constructed.
The need to repair the parapet wall then prompted the association to bar the Geracis from accessing their deck.
Atain noted Geraci has alleged this decision essentially means the association has “occupied” the Geracis’ deck, causing the condo to lose more than $3 million in value “due to the financial and physical condition of the association.”
Geraci alleged the association’s actions were “intended to ruin the market value of the (Geracis’ condo.)”
In addition to the allegations asserting the association intentionally took the actions to harm the Geracis, the insurance company said the allegations surround “conduct that was known to the association or the board members” before the insurance policy took effect, and therefore should be excluded from coverage.
Atain is represented in the action by attorneys David T. Brown and Tara L. McTague, of the firm of Kaufman Dolowich & Voluck LLP, of Chicago.
Union Square Association is being represented by attorneys Stuart A. Fullett and Jeffrey Swanson, of the firm of Fullett Rosenlund Anderson PC, of Lake Zurich.
The association board members are represented by Sharon Doherty Sirott and John C. Martin, of MartinSirott LLC, of Chicago.
The case between Geraci and the condo association and its board members remains pending in Cook County Circuit Court.