The Real Deal New York

Parc Vendome legal bills top $1M over water leak

Condo board sues imploring judge to force insurers to provide more coverage

October 10, 2012 06:00PM
By Adam Pincus

Parc Vendome (credit: PropertyShark)

Attorneys’ fees to defend the Parc Vendome against a lawsuit connected to a five-year-old water leak have topped $1 million and the board at the massive pre-war condo is now paying out of pocket to defend itself.

According to a lawsuit filed today by the condo board, the first $1 million in legal expenses related to the $10 million lawsuit was covered by one of the board’s insurers, but the coverage on that policy has maxxed out and the board’s other two insurers have denied coverage.

The ordeal traces back to 2007 when the board was sued by a health club, which was housed in a commercial condo in the building, over a water leak. In today’s suit, the condo board for the 576-unit building — which is located at 340-350 West 57th Street and 333-353 West 56th Street, between Eighth and Ninth avenues — asked a New York State Supreme Court judge to force its insurers to provide coverage.

“The condominium has been forced to pay for its own defense … and may be forced to pay monies in settlement or judgment of the underlying action,” the board’s complaint says.

The suit names the Greater New York Mutual Insurance Company, American Guarantee & Liability Insurance and Continental Casualty (known as CNA), as defendants.

The original water leak lawsuit was sent to arbitration in 2008, where it remains unresolved, according to court records. The Parc Vendome health club is now closed and the commercial condo was foreclosed on and is now owned by the lender, according to public records.

One resident, who asked to remain anonymous, described the original 2007 suit as “frivolous” and said he expected the insurers to ultimately provide the coverage.

CNA provided the $1 million of coverage, but hit its policy limit and is not providing additional funds, the suit said.

The insurers did not immediately respond to a request for comment. The attorney representing Parc Vendome, Judith Goodman, a partner at Goodman & Jacobs, declined to comment.

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