A federal appeals court said an insurer must defend a putative class action claiming an apartment management company systematically withholds some or all of tenants’ security deposits when they move out and fails to timely provide a list of claimed damages as required by Georgia law so that tenants cannot contest them. 

The underlying complaint was filed in 2017 against ECI Management, which oversees multiple apartment complexes in the metro area and beyond, in DeKalb County State Court. It claimed that ECI has a “company-wide policy of withholding all or some of the security deposits of its departing tenants in violation of Georgia law” governing security deposits.