Truck Insurance Exchange v. Ulman

In an underlying matter a group of condominium unit owners sued their condominium association and its directors after their building was destroyed by a fire, alleging that the association and its directors breached their fiduciary duty when they failed to purchase enough insurance to cover replacement costs and mismanaged the reconstruction process. The plaintiff, the insurance company of the association and its directors, filed a declaratory judgment action seeking a declaration that it had no duty to defend in the underlying matter. The trial court entered judgment in favor of the insurance company and the insured appealed. The appellate court reversed and remanded, finding that the trial court erred in holding that a provision of the insurance contract that barred covered for an insured’s failure to “establish or maintain adequate reserves,” barred coverage. (JOHNSON and TAILOR, concurring)