The saying “when life gives you lemons, make lemonade” may not be applicable for a Chelsea condo board being sued by a high-flying insurance provider.
The tech-oriented insurer Lemonade and its policy holder Par-Jorgen Parson, a general partner at venture capital fund Northzone who owns a condo in the building, are suing Chelsea Flats Condominium at 126 West 22nd Street.
They allege that the condo board mismanaged a water tower that led to $400,000 in damage to Parson’s apartment and is responsible for covering the cost.
Lemonade insures Parson’s unit and paid him that amount to satisfy his claim for the water damage, but is seeking reimbursement from Chelsea Flats because the cause stemmed from a water tower on the roof. Condo buildings carry separate insurance for common property — typically everything beyond the paint on units’ walls and ceilings.
In August 2018, the tank failed and water leaked into Parson’s apartment, damaging his apartment, according to the suit.
The lawsuit alleges that Chelsea Flats was notified of a covered claim for the incident, but refused to file a claim with its own insurer. Instead, the condo board allegedly told Parson to file a claim with Lemonade, which went public with an IPO price of $29 per share in July 2020. It is trading about $111 now, giving the proptech firm a market cap of about $6.8 billion.
Lemonade is seeking the amount in actual damages plus interest, other costs, attorney’s fees and other relief.
“We have been in dialogue with the Chelsea Flats Condominium about this loss since no later than September 2018,” said a representative from Lemonade in a statement. “As an insurance company, we routinely seek subrogation recoveries from responsible parties.”
A representative from the Chelsea Flats board could not be reached.