Petitioners, an insurer and a broker, sought mandate relief from orders of respondent Superior Court of Los Angeles County (California), which denied their motions for summary judgment on claims for breach of contract and professional negligence asserted by real party in interest investor.
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Overview
The insured obtained a construction loan for a condominium project. The lender required a builder's risk policy. When the project was near completion, the insured allowed the builder's risk policy to lapse and instead obtained a condominium policy for the homeowners association. The condominium policy contained a vacancy exclusion. The investor purchased the loan and eventually foreclosed. No units were ever occupied. Because of the vacancy exclusion, the insurer denied the investor's claim for losses from theft and vandalism. The court held that the vacancy exclusion unambiguously applied to bar coverage. Because the vacancy period was defined in terms of days before the loss, it did not commence upon policy issuance but was triggered by vacancy prior to the issuance of the policy. Moreover, the policy contained no exception for buildings under construction. Absent any evidence that the insured had asked the broker to obtain the insurance required by the lender, the broker owed no duty to the investor as the lender's assignee to obtain builder's risk insurance. The broker owed duties only to the insured and satisfied those duties by procuring a condominium policy as requested.
Outcome
The court issued a writ of mandate directing the trial court to vacate its orders denying the motions for summary judgment and to issue a new and different order granting the motions.