SB Wins Ruling That Insurers Do Not Owe Property Management Firm $132 Million

April 20, 2016

Alan Yuter and Douglas Greer of our Los Angeles Office, and Peter Mintzer of our Seattle Office, obtained a ruling in the U.S. District Court for the Western District of Washington that Scottsdale Insurance Co did not have a duty to indemnify Management Services, a national property management firm, which was seeking reimbursement from its liability insurers, Scottsdale and Lexington Insurance Company.   Management Services sought $48 million in defense costs allegedly incurred in the extensive underlying litigation in Georgia and California brought by former business partners and the U. S. Army, as well as another $84 million that it paid to settle the lawsuits. The case also involved additional bad faith claims which were also dismissed.

In Scottsdale's motion, Alan Yuter and Doug Greer argued that there could be no duty to defend because the complaints in the underlying action did not allege property damage or bodily injury.  Further, because the underlying complaints alleged only intentional fraudulent conduct, there could be no "occurrence" giving rise to a potential for coverage.

The District Court, in a 19 page decision, agreed.

See the attached article from Law360.

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