Insurer denies coverage to Chicago condo association, owners to pay $500K in legal expenses

By Deborah Goonan, Independent American Communities

It has been a while since my last article on the long-running legal battle between State Parkway Condominium Association and condo owner Michael J. Novak.

Well, the legal battle rages on, as reported in Loop North News. (See below)

Novak, a Certified Public Accountant, continues his fight for access to financial records that he says the condo association still refuses to produce. Novak says that, according to his financial analysis, his condo association has misrepresented its financial status, and he also believes the association has engaged in fraud and negligence.

State Parkway Condominium Association is also the defendant in a fair housing lawsuit filed on behalf of the Novak family. That lawsuit began several years ago as a result of condo association denying accommodation for an assistance dog for Novak and his wife, both of whom are deaf.

As you might imagine, the condo association has spent a great deal of money on legal expenses. In fact, according to Loop North News, State Parkway legal expenses have far exceeded $1 million, well over and above the limitation on its insurance policy from Travelers Indemnity Company.

Recognizing that the association’s primary insurance coverage was nearly maxed out, the board decided to purchase an excess coverage policy from General American Insurance Company (GAIC) to pick up its ongoing legal expenses.

However, GAIC is now suing State Parkway Condominium Association, Lieberman Management Services, Inc., and manager Donna Weber, denying coverage under its umbrella policy. GAIC claims that its policy specifically excludes coverage for claims that have been filed prior to the effective date of coverage. The insurance giant also points out that its policy includes a specific exclusion of coverage for any and all legal claims involving the Novaks.

As a result, State Parkway has been forced to approve a half million dollars special assessment to cover its ongoing legal expenses. Now condo owners face month assessment increases for the next two years.

Loop North News


By Steven Dahlman

26-Jul-17 – Half a million dollars for legal expenses will be paid by unit owners at a Gold Coast condominium over the next two years.

State Parkway Condominium Association approved the special assessment on Monday. The amount each owner pays will depend on percentage of ownership. Payments can be spread over 24 months interest-free.

The expenses cannot be claimed on the 160-unit condo association’s insurance policy because one policy is maxed out and the carrier that sold them the second policy is refusing to pay.

Much of the legal expenses were incurred responding to complaints and lawsuits filed by one unit owner who is deaf. Michael Novak has filed complaints with the City of Chicago and battled his condo association in Cook County Circuit Court, Illinois Circuit Court, and United States District Court.

Read more:


Read GAIC’s legal suit and State Parkway’s response here: (Note: according to Michael Novak, he and his family have been dismissed from this lawsuit)

Previous blogs:

IL condo association threatens fines for distributing board election letters

Illinois condo legislation would increase transparency

3 thoughts on “Insurer denies coverage to Chicago condo association, owners to pay $500K in legal expenses

  1. Wow, that is appalling! Agree with the above, these directors should have been recalled ages ago.

  2. I am not sorry to say, this is when each and everyone of those homeowners should have fired that management company and replace their current board of directors for allow this to gone on as long as it has, these homeowner still have that option they can put a stop to this by ousting ever single board of director when these so called board of directors could have come to some type of settlement in a mediation or arbitration case that is far less than a lawsuit so this is on those board of directors and this management company who should have had some type of insurance to also cover their neglect to allow such a lawsuit to continue this far. But I will add, Good for Mr. Michael Novak and absolutely great for GAIC insurance company these HOA Industry companies think they have a constant bottomless ATM so they take no risk, but the homeowners do.

  3. Shouldn’t there be an auto accomodation for handicapped people?

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