Prudential-LMI Commercial Insurance v. Reliance Insurance

plaintiff Prudential-LMI Commercial Insurance Company has argued with defendants United Pacific Insurance Company and Reliance Insurance Company (collectively United Pacific) over the interpretation of this court’s decision in Maryland Casualty Co. v. Reeder (1990) 221 Cal.App.3d 961 [ 270 Cal.Rptr. 719 ]. Distinguishing Maryland Casualty, the trial court concluded that a “premises alienated” exclusion in the United Pacific commercial general liability (CGL) policy applied to preclude coverage, and summary judgment was entered in favor of United Pacific. We reject the proffered distinction of Maryland Casualty, as well as several other arguments made by United Pacific, and accordingly reverse the judgment.

Factual and Procedural Background

In April 1979, the insured in the underlying action, 7500 Parkway Associates (Associates), purchased a recently constructed six-building residential complex from Newport Dunes, Inc., the original developer of the complex. Although the units in the complex had been designed as apartments, Associates obtained government approval to market them as condominiums. The condominium owners’ association was formed in August 1980 and title to…