Auto-Owners is going after Nationwide in Alabama federal court, accusing it of bad faith for denying a condo storm claim with no good reason.
A storm rolled through Mountain Brook, Alabama, on May 27, 2024, and a large tree came down on a condominium building - tearing into the roof, beam supports, and exterior walls, and damaging the apartment of unit owner Suzanne M. Wilson. Nearly two years later, on May 7, 2026, Wilson's insurer went to court to get its money back.
In a subrogation suit filed in the US District Court for the Northern District of Alabama, Auto-Owners Insurance Company says it paid Wilson up to her policy limits, less any applicable deductible, after the tree collapse and a lengthy stretch of unrepaired exposure to the elements. Now it wants Nationwide Mutual Insurance Company - the condo association's carrier - to pick up the tab, and it is asking the court to add punitive damages.
The case is built around a coverage-priority fight that any condo program underwriter will recognize. Auto-Owners points to an Alabama statute providing that when a unit owner has separate insurance covering the same risk, the association's policy is the primary one. The condo association's own bylaws echo the point, stating that "all insurance policies purchased by the Association shall be for the benefit of … the Unit Owners." On that basis, Auto-Owners alleges Wilson was an insured under Nationwide's policy and that Nationwide should have paid first.
According to the filing, Nationwide denied the claim "without reasonably legitimate or arguable reason." That phrase is doing a lot of work here. Auto-Owners leans on Alabama's well-known bad faith framework from Poarch v. Alfa Mut. Ins. Co., alleging Nationwide knew there was no debatable reason to refuse payment and refused payment all the same. The filing goes further, claiming Nationwide "deliberately engaged in oppression, fraud, wantonness, or malice" - language used to support a request for punitive damages.
There is also a mitigation angle that claims professionals will find familiar. Auto-Owners says the condo association sat on the repairs for months and never properly tarped the damaged exterior, letting rainwater pour in and pushing the loss "well above and beyond" what the tree itself caused. The association's bylaws required damaged common elements to be "reconstructed replaced or repaired," and an Alabama condo statute makes associations "liable for the prompt repair" of common elements. Auto-Owners alleges both were ignored.
Auto-Owners is asking for indemnification of everything it paid, plus interest, costs, attorney fees, and punitive damages. For insurers writing condo business in Alabama and beyond, the dispute is a reminder of how quickly a fallen tree, a slow-moving association, and a denied claim can turn into a carrier-versus-carrier fight.
The allegations have not been tested in court. Neither Nationwide nor the Mountain Brook Condominium Association has filed a response, and no court has ruled on the claims.
