Jon Baker, an Individual v. Centennial Insurance Company, a Member of the Atlantic Mutual Companies

The district court granted summary judgment in favor of Centennial Insurance Company (“Centennial”) on an indemnity claim filed by Jon Baker (“Baker”). Centennial had issued Baker a professional liability insurance policy but had limited coverage to mistakes and errors made during appraisals of residential property only. The district court concluded that the erroneous appraisal made by Baker was of commercial property, and that Centennial therefore had no duty to defend or indemnify Baker. We reverse.

I.

Baker is a professional real estate appraiser who took out a professional liability policy from Centennial. The relevant clause in the policy reads as follows:

Extension of Coverage

Professional Liability Coverage

This language is the only language in the policy relevant to this appeal.

Baker provided a mortgage broker with a written appraisal of property located at 535 Mira Vista Avenue in Oakland, California. The property was zoned as a strictly residential parcel, and was located in a residential neighborhood. However, the property was being put to a limited commercial use under a conditional use permit at the time Baker was asked to appraise it. The mortgage broker had…