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ARTICLE · 22 OCTOBER 2024

Contract Exclusion Not Applicable Based On Asset Management Services Carveout

Wiley Rein
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The United States District Court for the Eastern District of Pennsylvania, applying Pennsylvania law, has held that a contract exclusion did not bar defense cost...

United StatesWealth Management
Emily S. Hart
Emily S. Hart

Augusta Nau, a Law Clerk at Wiley Rein LLP, authored this post. Edited by Emily Hart.

The United States District Court for the Eastern District of Pennsylvania, applying Pennsylvania law, has held that a contract exclusion did not bar defense cost coverage for a lawsuit against a private equity firm alleging, among other causes of action, enforcement of guaranty and breach of contract, because the exclusion's carveout for loss resulting from the insured's provision of "Asset Management Services" applied. Domus BWW Funding, LLC v. Arch Ins. Co., 2024 WL 4136424 (E.D. Pa., Sept. 10, 2024).

The insured, a private equity group, acquired a holding company that guaranteed a lease on behalf of one of its real estate companies. A property management company sued the holding company and the real estate company for indemnification, after a government investigation led to the property management company paying abated taxes on the leased property and investigation costs. The

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