A San Diego home flip has turned into a coverage fight, with an insurer asking a federal judge to claw back more than $922,000 it paid to settle the case.
According to a filing lodged in the US District Court for the Southern District of California on May 18, 2026, Trisura Specialty Insurance Company is going after its own insureds - Turner Real Estate, Inc. and one of its agents, Shirley Slee - in an effort to recover the $922,545.36 it put up to resolve a lawsuit brought by the buyers of a La Jolla home. Trisura says the underlying claims never belonged inside its real estate professionals errors and omissions policy in the first place.
The dispute traces back to the February 2020 sale of a property on Germaine Lane in La Jolla. The buyers, according to the filing, said they discovered undisclosed defects and damage tied to a renovation after the purchase, and they sued the seller along with the listing agents in San Diego Superior Court. The complaint they filed included claims for negligent misrepresentation, negligent construction, breach of fiduciary duty, and a violation of California's seller-disclosure statute. Trisura defended Turner and Slee under a reservation of rights, then paid the balance of its available policy limits to settle.
Now the carrier wants that money back, and it is leaning on three pieces of the policy to make its case.
The first is the property damage exclusion. The policy says the company is not obligated to pay damages or defense costs for any claim "arising directly or indirectly out of, or in any way alleging… Bodily Injury or Property Damage." Trisura argues the buyers were really suing over physical damage to the house, which is exactly what the exclusion is designed to keep out.
The second is exclusion (y), which the filing quotes as barring coverage for "any representations, warranties, promises or guarantees as to the past, present or future status, use, profitability or valuation of any property." That language, the carrier says, captures the heart of the buyers' theory - that they were misled about what the home was and what it was worth.
The third is the policy's coverage grant itself. The policy only responds to "Insured Services," which on the residential side is limited to sales activity. Trisura notes that in the application, Turner represented that no member was engaged in property construction, development, or renovation. Because the underlying suit alleged a joint venture to flip and renovate the home, the carrier says those construction-related damages sit outside the policy entirely.
For E&O underwriters, claims handlers, and coverage counsel, the case is a reminder of how much weight a careful reservation-of-rights letter and a well-drafted application question can carry once a flip-gone-wrong lands on the desk.
The allegations have not been tested in court. Turner Real Estate and Slee have not yet filed a response, and no court has ruled on the coverage questions Trisura is asking the judge to decide.
