Janet R. Block owned two vacant lots within a city redevelopment area. In 1999, the city redevelopment agency offered her $46,000 for each lot.

The price offered was the redevelopment agency appraiser’s value of $159,000 for both lots, minus $67,250 estimated costs to remove the environmental contamination of the lots.

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Eventually, Block and the redevelopment agency resolved their dispute for a settlement of $475,000 total for both lots.

Block then filed claims with her current and previous homeowner’s insurance carriers whose policies include coverage for the vacant lots. The insurers replied there was no policy coverage for eminent domain condemnation so there was no duty to defend Block in the condemnation lawsuit against her.

If you were the judge would you rule Block’s insurers had a duty to defend her against the city’s condemnation lawsuit?

The judge said no!

Block’s homeowner insurance policies include many coverages, the judge began. But eminent domain condemnation is not included, he noted.

There was also no insurance policy coverage for remediation costs of removing the alleged contaminant, he continued. Because there was no personal injury nor any other possible insurance policy coverage, the insurers had no legal duty to defend Block under her homeowner’s insurance policy, the judge concluded.

Based on the 2004 California Court of Appeal decision in Block v. Golden Eagle Insurance Corp., 17 Cal.Rptr.3d 13.

(For more information on Bob Bruss publications, visit his
Real Estate Center


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