Pension Fund Brings Mismanagement Claims Against Real Estate Advisory Fund
Scottsdale Insurance sought a declaratory judgment it did not owe a duty to its insured, a real estate investment fund, to defend or indemnify it under its business and management policy. The trial court awarded full policy limits to the insured plus post-judgment interest. On appeal the First Circuit affirmed, holding the allegations in the underlying complaint were ambiguous as to whether the insured provided “services” “as a real estate broker or agent” or “property manager” that was required to be encompassed by the professional services exclusion. The policy did not excuse the duty to defend because the allegations at issue were ambiguous regarding the insured’s alleged misconduct aside from investing in the properties at issue. Similarly the court found the policy’s ERISA exclusion did not apply because the complaint contained a count for negligence that did not reference ERISA-like fiduciary duties. Finally, the conduct exclusion did not relieve the insurer of its obligation to pay.