Before we chronicle the brief history of our insurance coverage, let’s first dispose of the contaminated concrete. Kicking off the 2019 Spring Real Estate Sales Season April 1, 111 will start a year-long $702,000 Facade Restoration Project (scaffolding, drilling, dust, etc.). Purportedly, the objective is to repair those known cracks that penetrate and leak from the outside to the interior, documented during our annual Unit inspection last May.
That freshly in mind, there is still some debate as to whether the replacement sign, “Lawsuits Wanted,” is actually more subtle in terms of marketing. In light of the facts, history and apparent trajectory, some say it screams “HOMEOWNER EXPOSURE!” While a few others fancy, “It’s kinda liberating.” Either way, it begs the question: So how did we get here?
1. In 2011, i.e. prior to Milazzo, Sudler and KSN/Silverberg commandeering the Association, our insurance policy with CNA had a yearly premium of $2,143 and a retention (i.e. deductible) of $5,000.
2. In April 2011, Milazzo became president of the 111 East Chestnut Condominium Association.
3. In June 2012, Sudler took over as our property management company (note: with their own preferred service-provider list).
4. On August 2, 2012, the Association canceled its policy with CNA. CNA’s coverage continued through to November 24, 2012. Following that, 111’s D&O policy was through Sudler’s insurance broker, Lockton. And the new policy with RSUI had a deductible of $7,500.
5. Then it jumped dramatically. At the Board Meeting 12-18-15, Milazzo motioned and the board approved a renewed D&O insurance policy with RSUI. It had a $50,000 deductible and premium of $14,000 per year.
6. And at the Board Meeting this last Thursday, Milazzo motioned and Board approved another policy renewal with RSUI. The yearly premium is now $37,880, and the deductible a whopping $200,000.
In summary: Since Milazzo/Sudler/KSN took over, our premium is near 18 times greater, and the deductible 40 times greater. No matter how you look at it, that level of failure is hardly achievable without strategy, hard work and persistence.
WHO TO BLAME
Before any blame can be assigned, one needs to recognize that a lot of factors go into assessing the risk-profile for a condo. Generally speaking, factors like building age, number of units, occupancy, reserve study and construction plans, etc. are considered. That said, the board emphatically (and ironically) blames our history of claims and our carrier loss-run. Let’s look at that:
Typically, the question of where does the buck stops, is answered by a president that says, “here.” Not so here. As board president Milazzo has doggedly sustained some of our lawsuits for 5 years or more. Unbeknownst to the ownership, the board under his leadership has spurned numerous settlement attempts. The Connolly suit, for instance, could have been settled at the outset for $1,000. But 5 years and a couple hundred thousand dollars later, the Milazzo board has made it clear that their entire initiative is, and has always been, about eviction. It’s a deceitful investment whose real purpose is, and has always been, personal vendetta.
And for broad public consumption, the board blames Connolly for the insurance situation. But they conveniently forget to mention, Connolly has not filed suit against the association for over 5 years. He’s been excluded from the policy, i.e. not factored in, since 2012.
And all the while 111’s law firm, Kovitz Shifrin Nesbit, whistles on its way to the bank. As to their protracted efforts with Boucher, Connolly, Gajderowicz, etc., they’ve gotten 111 bupkis. “Lawsuits Wanted” is really all about KSN , Diane Silverberg and a virtual blank check for attorney’s fees. Cha-Ching, Cha-Ching.
Bottom line: If you need to lay blame, follow who has the power; follow their motivation; and follow the money.
Our current insurance situation is like having no insurance at all. It is a professional indictment of our board. And it’s huge public invitation for future lawsuits the membership is on the hook for.
But be that as it may, the board needs at the very least to live up to their marketing tag line for 111’S shinny new website: “Vision transforms into reality when you choose the luxury, comfort, and security that beckon you at the Chicago condos at One Eleven East Chestnut.” Regrettably, the current billboards described above are far more authentic and compelling. And until they come down, the board’s tag line is at best silly and at the worst, abject fraud. Insult to injury: The ownership may be in denial but the real-estate market sure isn’t. Ironically, the tag line goes on to read “Choose wisely.” Indeed. And they have, and will continue to do so.
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EDITOR’S NOTE: The bids for the concrete repair project above ranged from $702K to $1.8M. As to confidence in the low-ball figure, last September the board approved a budget of $15-25K to make concrete repairs in a Unit here. One month later they revised that and approved an additional $140K, i.e. 6 times as much.
STORY UPDATE 4/13/19: Access to the 111 Litigation Summary is no longer freely available to homeowners. It is now only available for $205 per request.