A consequence of the highly publicized naval aviators' convention held by the Tailhook Association, was a lawsuit against the entities comprising the hotel organization ("hotel" for the sake of brevity). The claimants alleged that the hotel did not take reasonable measures to prevent the alleged assaults from occurring.

The hotel claimed coverage under the association's general liability policy by virtue of the policy's definition of "insured," which included "....Any person (other than your employee) or any organization while acting as your real estate manager...." The hotel argued that the insurer was, at least, obligated to provide defense for the actions brought against it.

The insurer sought and was granted summary judgment in federal district court on its contention that the hotel did not qualify for coverage under the definition of "insured." The hotel appealed.

On appeal, the federal circuit court found no basis for coverage of the hotel under the subject policy. The hotel was not the association's "real estate manager" within the intent of the parties and the scope of the policy's terminology. Furthermore, there was no evidence that the hotel provided real estate management services for the association, as such functions are commonly understood.

The judgment of the district court was affirmed in favor of the insurer and against the hotel. (INSURANCE COMPANY OF NORTH AMERICA, Plaintiff/Appellants v. HILTON HOTELS, U.S.A. ET AL., Defendants/Appellants. United States Circuit Court for the Ninth Circuit. No. 96 16314. April 4, 1997. CCH 1997 Fire and Casualty Cases, Paragraph 6071.)