A United States District Court ruled that a management agreement does not override the provisions of an insurance contract, finding that the insurer has a duty to defend a property manager facing a negligence lawsuit. The case is Harford Mut. Ins. Co. v. Millers Capital Ins. Co., 2026 U.S. Dist. LEXIS 117410 (D. Md. 2026).
Background & Underlying Suit
Tracy Daswell, a tenant residing in an apartment building in Maryland, alleged that she was sexually assaulted by Malick Sy, an individual dispatched by the property manager to conduct repairs in her unit. The property manager was Alvin L. Aubinoe, Inc, and the building owner was 3921 Kansas LLC.
Ms. Daswell filed a lawsuit in the Superior Court of the District of Columbia against Aubinoe, Mr. Sy, and 3921 Kansas LLC. Her claims alleged negligence, assault and battery, and negligent hiring, retention, and supervision.
Faced with the lawsuit, Aubinoe turned to its insurer, Harford Mutual, which began defending the property manager in court. However, Harford Mutual subsequently filed a lawsuit against the property owner's insurer, Miller Capital, seeking a declaratory judgment. Harford contended that it was Millers Capital's duty to defend Aubinoe.
Insurance Contract vs. Management Agreement
Harford pointed to the Millers Capital policy that was issued to 3921 Kansas LLC, which included as an additional insured "any organization while acting as your real estate manager." Harford argued that this gave Millers an obligation to defend Aubinoe.
In response, Millers Capital pointed to the private contract between the property owner and Aubinoe. In the contract, Aubinoe agreed to indemnify the property owner against liabilities arising from Aubinoe's own negligence or willful misconduct.
Millers Capital argued that the management agreement held Aubinoe responsible for its own negligence, such as failing to vet or supervise its workers, meaning Millers did not have a duty to defend.
Harford countered that the private management agreement does not negate the insurance contract and is thus irrelevant. Since Aubinoe was acting as a real estate manager, it is an additional insured under Millers Capital's policy, so the policy should respond.
US District Court
The court first looked at the Millers Capital policy and determined its ordinary, accepted meaning. The policy stated the insurer "will pay those sums that the insured becomes legally obligated to pay damages because of bodily injury...to which this insurance applies." and that the insurer "will have the right and duty to defend the insured against any suit seeking those damages."
The policy also included as an insured, "any organization while acting as [the insured's] real estate manager". The court found that Aubinoe was unambiguously acting as a real estate manager to 3921 Kansas, qualifying them as an insured.
Millers Capital asserted that "the unambiguous, enforceable terms of the Management Agreement preclude any duty to defend or indemnify Harford's insured." The court, however, disagreed.
The court found that an insurance company has an independent contractual obligation to its insureds regardless of other existing agreements. Aubinoe agreeing to indemnify the property owner in another agreement does not dissolve Millers Capital's obligation to insure Aubinoe under its own policy. The court stated, "Millers Capital fails to account for the fact that it has an independent obligation to insure Aubinoe through its Policy with 3921 Kansas, regardless of 3921 Kansas's liability."
The court continued that, "even if a jury were to find some provision in the Management Agreement that requires Aubinoe to indemnify 3921 Kansas for any harm, such a finding does not obviate Millers Capital's independent obligation to defend Aubinoe by way of its Policy with 3921 Kansas as a matter of law."
Finally, Millers Capital argued that Aubinoe's mishandling and poor vetting of Mr. Sy did not constitute acting in a real estate management capacity. The court disagreed, stating that vetting, hiring, training, and supervising employees to maintain a property is a part of a real estate manager's job.
The court granted summary judgment in favor of Harford Mutual, ruling that Millers Capital has a duty to defend Aubinoe.
Editor's Note
This case shows that courts will enforce the plain language of an insurance contract, regardless of the provisions of another agreement. The court determined that the management agreement between the property manager and the building owner was irrelevant to the contract between the insurer and the insured, so the insurer maintained a duty to defend.
Some insurance contracts may have a provision within the contract that says the policy may not respond if there is other insurance or another agreement available, but there was no such language found in this policy.