Marquez Knolls Property Owners Ass'n v. Executive Risk Indemnity, Inc.

SUMMARY

An endorsement in a liability insurance policy issued to a nonprofit property owners association excluded coverage of claims for wrongful acts based on the design or construction of any structure. We conclude the exclusion did not preclude coverage of a lawsuit brought by a member against the association asserting claims of fraud and breach of duty. The member’s claims were not based on the association’s involvement in the design or construction of a structure, but instead were based on the association’s conduct in opining on a dispute that arose between the member and another homeowner after the member constructed a structure blocking the view of the other homeowner. Accordingly, the exclusion from coverage did not apply, and the trial court erred in ordering summary judgment for the insurer.

FACTUAL AND PROCEDURAL BACKGROUND

Marquez Knolls Property Owners Association, Inc. (Association), is a nonprofit corporation whose members own or reside in homes in the Marquez Knolls area of Pacific Palisades. Membership is voluntary, and all owners and residents are entitled to be members, subject to an annual dues payment. The purpose of the Association is “to promote…