A real-estate E&O defense duty survived two asserted exclusions

The public record

General Star National Insurance Co. v. MDLV, LLC is an Eleventh Circuit opinion affirming a federal district court’s declaration that an insurer owed a real-estate brokerage a defense. The official appellate opinion is the record for this page. It applies Florida law to the particular complaint and policy before the court.

What was alleged

The underlying lawsuit alleged misconduct connected to a condominium sale by a brokerage and one of its agents. The opinion describes claims including negligent misrepresentation and negligent employee training, alongside other allegations. The insurer initially denied coverage and later defended under a reservation of rights while seeking a declaration that two exclusions eliminated the defense duty.

These were allegations and coverage positions described by the court. The Eleventh Circuit did not decide the truth of the underlying allegations in this coverage appeal.

The court’s holding

The policy covered certain claims first made and reported during the policy period or an applicable extended reporting period when they arose from professional services. The insurer relied on exclusions involving conversion and future status, performance, or valuation.

The court affirmed the district court. It concluded that the relevant negligent-misrepresentation and training allegations could fairly be read as partially within the policy’s coverage and outside the two exclusions. Under the Florida defense standard described in the opinion, that was sufficient to require a defense of the suit.

What this does and does not show

The judgment establishes a defense duty for the policy and allegations in this record. It does not establish that the insurer owed indemnity for every alleged loss, that the brokerage or agent was liable, or that the underlying claim produced a payout. It is useful because it shows how a professional- services allegation can remain relevant even when an insurer invokes broader exclusions.

For the underlying exposure, read what triggers a real-estate E&O claim and whether realtors need E&O.