Metropolitan Business Management, Inc. v. Allstate Insurance

MEMORANDUM *

Metropolitan Business Management, Inc., and John Khaki (collectively, “MBM”) appeal the district court’s decision granting summary judgment in favor of defendant Allstate Insurance Co. (“Allstate”). We reverse and remand for further proceedings.

MBM had obtained a lien on a property in Malibu, California. Elliot and Cyndi Felman were interested in purchasing that property. They brought suit against MBM in an underlying action. They alleged that MBM had engaged in fraud by demanding payment on the lien in an effort to thwart the sale. Allstate claimed it had no duty under the policy to defend the underlying action. MBM subsequently brought suit against Allstate to recover expenses incurred in its successful defense. The district court assumed for purposes of Allstate’s motion for summary judgment that the policy at issue was policy “AU9700” and that MBM was insured under the policy. The district court found that Allstate did not have a duty to defend MBM because the landlord insurance policy’s coverage for “misrepresentation” did not include such claims.

We review the district court’s decision de novo. Assurance Co. of Am., v. Wall & Assocs. LLC, 379 F.3d 557, 560…