Condominium’s Agent Owes No Duty to Injured Apartment Owner
The court granted the agent’s motion to dismiss claims asserted by a condominium owner’s claim for injuries due to a fire in his unit. Great Am. Allliance Ins. Co. v. Village Gardens Homeowners Association, 2023 U.S. Dist. LEXIS 102900 (C.D. Calif. June 12, 2023).
Village Gardens’ agent, Roy Palacios Insurance Company, obtained umbrella and excess policies from Great American for apartment buildings located on the property. In obtaining the policies, Village Gardens represented to Great American through Palacios that the property’s roof, HVAC, plumbing and electrical systems had been updated.
On Febaruary 16, 2019, the apartment in which Vicencio Flores resided caught fire, causing him to suffer severe burns. Flores alleged that the fire was caused by Village Gardens’ “improper construction, use of poor construction materials and negligent maintenance of the property.”
Flores filed suit against Village Gardens. The damages sought exceeded Great Americna’s primary policy limit, thus implicating the umbrella and excess policies. Great American brought suit against Village Gardens, Palacios and Flores, seeking, among other things, recission of the umbrella and excess policies. Flores filed a cross-claim against Great American, Village Gardens and Palacios. Flores sought relief from Palacios for negligence. Flores alleged that Palacios owed him a duty of reasonable care that was breached by failing to procure effective insurance for Village Gardens. Palacios moved to dismiss Flores’ cross-claims agaisnt it.
Flores asked the court to recognize a broker’s duty to a tenant of the building for which the broker procured insurance on behalf of the tenant’s landlord. The court refused to recognize such a duty. Although Flores sought to recover from Village Gardens, which could implicate the umbrella and excess policies, there was no allegation that Palacios intended its procurement of insurance to affect tenants of the insured property. Further, Flores had not yet suffered an injury due to Palacios’ alleged negligence. The injury Flores alleged was not personal injuries, but rather the speculative inability to collect from Village Gardens should Flores prevail and should the umbrella and excess policies be rescinded.
Flores could only be characterized as an incidental beneficiary, rather than an intended beneficiary of the umbrella and excess policies. Accordingly, the court declined to find that Palacios owed Flores a duty of care. Flores could not bring a claim of negligence against Palacios. The motion to dismiss was granted.
