honor because it involves a unique type of insurance policy in this case we ask the court to broadly construed the terms of this insurance policy in favor of members of the homeowners association sued when they act for the benefit of the association how do you stand over the problem with the definition where it talks about the fact that they have to be acting in a voluntary capacity well it is undisputed in this case that my with the employees of the developer or were understandably placed on the homeowners board when the project was first opened by necessity so isn't that part of their their pay duties as employees of the owner of the project and aren't they really carrying out those functions as a compensated  for their employer i just wonder question below we argued two theories as to why there was coverage or did pension for coverage on appeal we abandoned that theory we are only seeking coverage as an insured under the definition of it's a three part test a member of the homeowners association stipulated that we're a member of the home or socio to act link at the direction of its board on behalf of the homeowners association three in a voluntary capacity that is taken from the insuring language so number one we are a member of the homeowners association that's agree number two was my client sued for acting at the direction of the board public homeowners association we introduced and refuted evidence that the claim against my client association now under settled insurance law that should settle the issue right there you take the allegations in the complaint whether they are false whether they're silly whether they're fraudulent it doesn't matter if you get sued for something that is plant right greg it has restrictive covenants right correct and the homeowners association is is the guardian of these protected rights right but it's not the homeowner that evaporate the plat correct requirement around the fact that the neighbor says it's ok to move the setback it's obviously persuasive to the homeowners association board when it votes on the decision whether or not to allow any person to build within that setback technically that theory might be available yes but i don't i don't see where the homeowners association has any contractual or legal interest in enforcing th  then sold the property to the cooks the plaintiffs in the underlying lawsuit the cooks move then they discovered that the neighbor has been given permission to build in large house that will block their view the cook to the homeowners association for allowing this to happen they say in violation of the c c and bill that wasn't there when they moved them that's correct but the permission to build it the crooks alleged had already been given and  that is that remission of that record it was the letter was on file with the building department but there was not a recorded against the property amendment t that my client was sued for three theories essentially one was for failing to disclose this information to the buyer which we do not claim there was coverage for but the other claims in the complaint that this was a breach briefing that occurred several months prior to the official action of the committee approving the variance on the sat that it doesn't apply the evidence presented in the underlying motions to the district court here was that my client wrote this letter to the building department without that letter in hand the architectural committee would not have the ability to approve the variance to the building but i guess my question  think it was on mr jenson's argument from his brief that it seemed to me that the letter was written in the capacity of a representative of the owner of an affected adjoining lot essentially  on the date that letter was prepared and might therefore be outside the terms of the coverage contrasted with his conduct several months later when he was wearing his i don't know what it was called the committee had i guess i'll call it  i understand the question let me explain it this way you're a member of the association if you own property in you so see asian my client wrote a letter to the building department  in order for the architectural committee to approve that variance the architecture committee can only prove that it changes if there is a technical legal impediment to something that you want to build on your property  association but that would be true for every neighbor in the development so you're you're at the logical conclusion would be that the federal would be insuring every owner of a house and the entire subdivision if they were to sign such a letter approving a variance by somebody who wanted to build a bigger house that is technically true but remember we agree that the underlying lawsuit rais  interpretation of the coverage like members of the hall or so c n n can be asked to do many things in a voluntary capacity you can have a big sale you can have a if the building department approves the plans to the fact that your view is going to people are just having a hard time seeing how that is an action that is carried out to vent if it the homeowners association to put it a different way let me look at the f the facts sort of skewed against your client and that is your client wanted to sell as many of the locks as possible so of course it would write a letter of credit like the event that is the allegation in the complaint now what we're talking about third element of the definition of coverage because i don't see how that act if it's being done for peculiarity game in order to assist capital pacific and selling as many of the locks as a cannon in maximizing profits from the development how is that acting in a voluntary capacity for the benefit of the homeowners association because it was not acting under compulsion or under contract if i write a letter of reference for the son of agreed that we were not paid anything to do the act why does someone sponsor a bake sale for the association because they want to meet their neighbors they have a motivation why do so one agree to do any number of things for the h away because you want to get along with your neighbors you're asking about the motivation for something the policy i believe only speaks to whether or not you are being paid i e the property developer the architect the accountants who work for the association under a contract under which they receive compensation they are not covered and again we are talking about some fairly fine distinctions where we all know the insurance law is directly say that the developer is a member of the association is just right to c c ours on the second the anybody who owns property we pay real property taxes on these lots were just like any other homeowner and i think candidly i think that's what the district court had trouble getting its arms around in this case that it is unusual i know that people think well this policy is probably written for individuals because they don't think of the fact that corporate entities also own property is not a party to this litigation not to this litigation because the insurer defended the association in the underlying lawsuit which is exactly my point we are talking here about the nature of the underlying claim against my client it was a wrongful act as defined by the policy the sure defended the association all we're talking about is whether or not the allegations of the complaint and the evidence against my trial my client that was presented at trial bring my client within the definition of an insurer and i would ask just that this is an insurance policy must be probably construed in favor of the membership of the homeowners association it's an important issue for people who live in homes associations yes it's unusual that this comes up on the situation where the member for here was a non natural person but was a member nonetheless and must be treated as any other member of the association there's no questions thank you thank you selected group of insured for certain for actions taken within certain capacities the pretext of directors and officers the directors and officers were not parties to the underlying  pretext the homeowners association itself the entity is not a corporation or an unincorporated association i believe it's a mutual benefit corporation which is its corporate status and it acts through  board on a majority vote of trustees or board member it acts on through the actions of the board of directors that are selected by the merits of an individual is not an act of a corporation correct however to the extent that the corporation the homeowners association is a party to the to a lawsuit it is an insured under the federal policy and the entity itself the homeowners what this policy does not cover are other entities it covers person and like to draw the court's attention to the ensuring agreements in the federal policy and specifically the definition named in item one of the declaration space that is the more holland park homeowners association and and this is where we get to whether or not capital the civic is a insured under the policy  person who has been now is or shall become a duly elected director or trustee that's not involved in this case a duly elected or appointed officer not involved in this case argument that person has none fine term federal could have used the term natural person and like to draw the court's attention to the fact that capital pacific has used the term person as being distinct and separate from corporate entities in particular the c c and r s which are part of this lawsuit is in the record at page one thirty article three section one membership and it's a member as an entity the c c and r s also used a similar dichotomy between human beings or persons and corporate entities subsequent section section seven subsection two which is a the record of page one thirty nine has to do with who can be on the board of directors the board of directors shall consist of seven person one entit voluntary capacity capital pacific was trying to unload these units it purchased this matter out of bankruptcy this whole development out of bankruptcy and at the beginning when it purchased it there are only two homeowners one was the next door neighbor to cook privately the tamaki they purchased from the original developer they have plans for a big house after capital pacific took over the development they were city of los angeles that letter which is at the record of page three zero four is on c p h or j m peters stationery signed by an individual as vice president just division back from ten feet to eight feet it's noted at the very following page which is a passed out letter which is the application to the city of los angeles but the developer request of the halves of the homeowners association i was not asked by the homeowners association for by the board or by any insurer one of the the neighbors have to agree and that's exactly what was done here g p h as the owner next door that we ran through the various how does that fit into the policy ensuring clause of the policy requires acts of the homeowners association we're talking about wrongful act of c p h that's a defined term ensuring saud's of the federal policy provides that the company sharply on behalf of the insured all loss which the insurers have become legally obligated to pay on account of any claims made against him for a wrongful act wrongful act is defined in the policy and there's a capacity element to wrongful act wrongful act means any act here or misstatement or misleading statement then i'll continue on skipping some words to the heart of the problem in the discharge of his duties to the association were any matter claimed against him soley by reason of his serving in such capacity here we have heard from capital pacific that capital pacific was acting as a member and therefore an insurer this letter written to the city of los angeles does not say it's being written not in the capacity of a member of the association raised in a number of insurance cases that have appeared before the ninth circuit one of them is bodhi vs the home insurance as pointed out by the ninth circuit in that matter you can be an insured but that doesn't mean you're insurance that would cover that director in his capacity as a director of that company there was no similar policy for their actors directors of the other company they were in their in uninsured capacity as directors of the other company as noted by the ninth circuit nine twenty three section seven await the phrase duty to defend presupposes the existence of a lawsuit against an insured requiring expense under the policy the insurers have not unqualifiedly covered bolian grigory the two directors involved in that case but rather only have covered them in their capacities as d m t officials that is the insurance company in the boy's lawsuit there was no coverage there was no duty to defend the directors will be being sued for the first amended complaint against c p h and the homeowner's association there's no reference to a nine hundred ninety five letter there's no reference to a whole motor or a member agreeing to the right to field mansion eyes size house on their lot that grant according to the complaint itself and there is nothing in the records who suggest that it was otherwise didn't take place in one thousand nine hundred five when that letter was written by the neighbor to the city of los angeles that letter was november fifteenth one nine hundred ninety five rather as the complaint points out the architectural committee of the homeowners was ever provided to federal until the opposition to the motion for summary judgment that we've lost in the case below that was not something that was argued by the insurer as part of their request for coverage in homeowners association requirement to architectural committees guidelines when in fact according to the complaint just several months earlier before the court crises purchased the property the homeowners association had approved through it board on behalf of the association everything person in just charge of his duties as a member to the association what the author of the letter gave a declaration of a libel and page three on one of the record in which he expressed the stated that he was on the board at the time and that the interest the fact of the matter is that every development that is built by developer in the state the board is necessarily composed of employees of the developer at first because there is no one else lives in the development so that as they sell off the lot but again construing the policy the way one must all we are talking about here are ambiguities the unrefuted evidence is we were sued for something that we did at the direction of the board it was alleged we beside the point what we're talking about here is insurance coverage but i guess the question that occurs to me mr burns is whether or not and insured can somehow wreak eric to rise the capacity of his act by executing a self serving declaration which indicates that his actions were taken at the direction of other interested directors who were his co employees the developer and the management company if the fact is not refuted the fact that my client me and acted with a conflict of interest is irrelevant it's an insurance coverage is irrelevant i guess the question i'm asking is i mean this is the we're probably run into sometimes when interested directors who have a financial interest in a transaction approved a transaction in the f c c is now looking with a fairly deep view towards the propriety of that sort of approval people get insurance coverage for doing bad things all the