Compton v. Houston Casualty Co., 2017 UT 17

Prudential (a real estate brokerage) bought a Professional Liability E&O policy from Houston Casualty covering wrongful acts committed while acting “solely in the performance of services as a Real Estate Agent/Broker of non‑owned properties, for others for a fee.”
Agent Robert Seegmiller introduced Investors (Compton, Simcox, Saltair) to a developer (Valley View) and drafted a purchase contract requiring a $705,000 reservation deposit; Prudential was not named and no contract term provided for commission payments to Prudential.
Valley View took the escrowed deposit, paid $165,000 directly to Seegmiller, and failed to develop/record lots; Investors obtained judgment against Seegmiller for negligence related to his undisclosed personal interest.
Investors settled with Seegmiller and assigned to themselves any claims he had against Houston Casualty, then sued Houston Casualty for breach of the Policy (failure to defend/indemnify Seegmiller).
District court granted summary judgment for Houston Casualty, reasoning Seegmiller had a personal interest and thus could not have acted “solely” as the brokerage’s agent; the Supreme Court affirmed on an alternative ground: Seegmiller was not acting “for a fee” within the Policy’s meaning.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Policy covers Seegmiller’s conduct because he acted “for a fee”	“For a fee” means any payment of money (so the $165,000 to Seegmiller is covered)	“For a fee” means expectation of a traditional real‑estate commission paid through the broker at closing	Held for Houston Casualty: “for a fee” means expectation of a traditional commission, and Seegmiller had no such expectation; no coverage
Whether the description in Endorsement #1 limits coverage	Investors: Endorsement merely names profession; limitation unnecessary	Houston: Endorsement’s full text limits scope; the phrase must be read as part of the definition	Held for Houston Casualty: Endorsement’s language limits coverage to agents acting “for a fee” as defined
Whether an ambiguity requires construing policy in favor of coverage	Investors: phrase ambiguous and should be construed for coverage	Houston: context (statute, employment contracts, policies) removes ambiguity	Held for Houston Casualty: context removes ambiguity; interpretation favoring broker‑handled commissions is reasonable
Whether the duty to defend was breached	Investors: Houston Casualty failed to defend Seegmiller	Houston: coverage defense fails so no duty; alternative defenses argued	Not reached substantively by Court (Investors’ briefing inadequate); Court disposed on coverage ground

Ohio Cas. Ins. Co. v. Unigard Ins. Co., 268 P.3d 180 (Utah 2012) (principles for interpreting insurance contracts)
Doctors’ Co. v. Drezga, 218 P.3d 598 (Utah 2009) (contract interpretation; resolve ambiguities in favor of coverage)
Watkins v. Henry Day Ford, 304 P.3d 841 (Utah 2013) (consider surrounding circumstances when determining ambiguity)
Olsen v. Eagle Mountain City, 248 P.3d 465 (Utah 2011) (context can eliminate apparent multiple meanings)