INSURANCE-RELATED COURT CASES
Digested from case reports published online
No coverage for habitational claims
Northfield Insurance Company issued a comprehensive property and liability policy to cover a six-unit apartment complex owned by 24th & Hoffman Investors, LLC. The coverage excluded liability for violations of the insured’s duty to maintain habitable premises; this exclusion encompassed coverage for “any claim or ‘suit’” that also alleged habitability claims.
Two tenants of the complex sued the insured, alleging multiple habitability claims and other causes of action that arguably were not based on habitability. Northfield declined to defend the tenants’ lawsuit.
After settling the underlying action, 24th & Hoffman sued Northfield for breach of its duty to defend. The trial court concluded that the case presented a “mixed” action containing both potentially covered and uncovered claims, and that Northfield was obliged to provide a defense. Northfield appealed.
On appeal, the California court of appeal reversed, holding that the exclusion was plain and clear. The court rejected arguments that claims for retaliation, conversion, and trespass to chattels did not arise from the duty to provide habitable premises. The retaliation concerned complaints about habitable conditions, and the claims were alleged in a suit that also alleged habitability claims.
24th & Hoffman Investors, LLC v. Northfield Insurance Company—Court of Appeal of the State of California, First Appellate District—No. A163670—August 30, 2022.