The United States District Court for the District of Montana, applying Montana law, has held that two class-action lawsuits regarding rental management agreements filed during different policy periods were "Related Claims" and subject to a single limit of liability. Boyne USA, Inc. v. Federal Insurance Co., 2025 WL 2438708 (D. Mont. Aug. 25, 2025).
The insured developed condominium-hotels in several states. The insured faced a class-action lawsuit in Montana alleging that individual owners at its Big Sky Montana property who wished to rent out their units were required to sign an exclusive, non-negotiable rental management agreement with the insured that imposed unreasonable expenses and could be unilaterally modified by the insured. The Montana lawsuit alleged that the rental agreements constituted investment contracts and asserted causes of action against the insured under state securities law. Nearly three years later, the insured faced another class-action lawsuit in Michigan regarding its rental management program at properties in that state. The insured had consecutive claims-made directors and officers liability policies, which provided that all "Related Claims" would be treated as a single "Claim" first made during the policy period when the first such "Claim" was made. The policies defined "Related Claims" as "all Claims based upon, arising out of, or in consequence of the same or related facts, circumstances, situations, transactions or events." The insurer treated both the Montana and Michigan lawsuits as "Related Claims," first made when the Montana lawsuit was filed and subject to a single limit of liability.
The court granted the insurer's motion for judgment on the pleadings and denied the insured's motion for summary judgment. The court concluded that the "Related Claim" definition was unambiguous and applied to the Montana and Michigan lawsuits because they were both based on the same alleged course of conduct by the insured—its mandatory rental management program. Moreover, the Montana and Michigan lawsuits asserted the same causes of action against the insured, and, in places, the complaints were nearly verbatim. The court found it irrelevant that the properties themselves were in different states and had different master deeds, management agreements, and HOA agreements.
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