The United States District Court for the Southern District of California, applying California law, has held that an email issued to an insured homeowners association ("HOA") before the inception of the relevant claims-made policy did not constitute a "Claim" because it failed to identify a specific process that the insured could implement to afford relief and did not insist on compensation or a specific form of non-monetary relief. Del Mar Woods v. Philadelphia Indem. Ins. Co., 2025 WL 1798300 (S.D. Cal. June 27, 2025).
The HOA purchased a claims-made policy for the period from March 25, 2022 to March 25, 2023. "Claim" was defined as "a written demand for monetary or non-monetary relief against an Insured." The terms "demand" and "non-monetary relief" were not defined in the policy.
On February 20, 2022, homeowners emailed the HOA Board regarding unauthorized hardwood floors that had been installed in the condo above them. The email stated that the homeowners "expect[ed] the HOA [B]oard to enforce [their] rights as an owner under the [Covenants & Restrictions] and [Rules & Regulations] and promptly resolve the . . . hardwood flooring issue, installed without HOA or our approval." The February email did not identify specific regulations that entitled the homeowners to relief or expressly indicate an intent to sue if the issue was not resolved. The HOA did not provide the email to the insurer.
On June 8, 2022, after additional back and forth between the homeowners and the HOA, the homeowners' counsel issued a letter to the HOA with the subject line "Demand to Enforce [Covenants & Restrictions] and Rules/Regulations," insisting upon the HOA's immediate action to enforce the HOA regulations against the offending residents. The HOA tendered the June 8 letter to the insurer, which denied coverage. The insurer asserted that the Claim was first made via the February 20 email, before the policy incepted.
The court rejected the insurer's argument that the February 20 email constituted a Claim. Citing California law, the court noted that the undefined term "demand" means "a request for something under an assertion of right or an insistence on some course of action." The court held that the February 20 email was not a "demand" because it was not written by an attorney, failed to identify a specific process that could afford relief, and did not insist on compensation or a specific form of non-monetary relief. The court emphasized that the insurer had not pointed to any California cases in which a court had determined that a "demand" was made in the absence of a threat of litigation or notice of intent to sue. The court further concluded that the letter did not seek "non-monetary relief," which, under California law, means a "court-ordered benefit," because it did not identify any duty the HOA owed under the governing documents to enforce the homeowners' rights or address their grievance. Accordingly, the court determined that the Claim was first made in June, during the policy period.
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