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Mealey's California Insurance

  • September 26, 2024

    Insurer Has Duty To Defend Sex Trafficking MDL, 9th Circuit Affirms

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Sept. 25 affirmed a lower federal court’s dismissal of a commercial insurer’s declaratory judgment arising from an underlying multidistrict litigation alleging that the insured is liable under Texas’ sex trafficking statutes, finding that the insurer’s duty to defend has not been extinguished because the underlying claims may impose liability on the insured that triggers coverage.

  • September 23, 2024

    California High Court Tosses Certified Question Following COVID-19 Coverage Ruling

    SAN FRANCISCO — In light of the recent ruling in John's Grill, Inc. v. The Hartford Financial Services Group, Inc., the California Supreme Court dismissed its consideration of a certified question from the Ninth Circuit U.S. Court of Appeals asking whether an insurance policy’s virus exclusion is unenforceable in a coverage lawsuit brought by owners, operators and managers of two Napa Valley, Calif., restaurants in the wake of the coronavirus pandemic.

  • September 23, 2024

    9th Circuit Orders More Briefing In ERISA Tobacco Surcharge Arbitration Dispute

    SAN FRANCISCO — Following oral argument in which the U.S. Department of Labor (DOL) participated as amicus curiae supporting application of the effective vindication doctrine in a putative class case, a Ninth Circuit U.S. Court of Appeals panel ordered supplemental briefing in the Employee Retirement Income Security Act case over a tobacco surcharge.

  • September 19, 2024

    Judge Denies Summary Judgment On Issue Of Contamination Exclusion’s Applicability

    SANTA ANA, Calif. — A California federal judge refused to grant summary judgment in favor of an insured on the applicability of a policy’s contamination exclusion to losses sustained by the insured in the wake of the COVID-19 pandemic because the evidence could support a jury finding that the insured believed that the contamination exclusion would apply as a bar to coverage for the losses caused by the coronavirus.

  • September 13, 2024

    Judge Denies Motion To Reconsider Rehab Plan For Workers’ Comp Insurer

    REDWOOD CITY, Calif. — Denying a motion that sought coverage of certain litigation costs for policyholders and a higher interest rate, a California state judge declined to reconsider her ruling approving a rehabilitation plan for California Insurance Co. (CIC), saying she “previously heard and considered these grounds.”

  • September 11, 2024

    Judge Dismisses FCA Case Against Sanofi In Insulin Drug Medicaid Rebate Dispute

    LOS ANGELES — A California federal judge granted dismissal to pharmaceutical company Sanofi in a qui tam suit filed against it by a former Medicaid provider alleging that Sanofi committed fraud in violation of the federal False Claims Act (FCA) and similar state laws by reporting false pricing information to the Centers for Medicare and Medicaid Services (CMS) regarding insulin marketed under the brand name “Admelog,” finding that the provider failed to plead the complaint with the appropriate scienter.

  • September 11, 2024

    Insurer Dismisses Suit To Void Policy, Deny Coverage For Code Violation Fraud

    LOS ANGELES — A commercial insurer, without explanation, dismissed without prejudice its suit against its insured limited liability company in a California federal court seeking rescission of the insured’s policy and a declaration that the insurer is not obligated to pay for fire damage to the property due to the insured’s alleged material misrepresentations in the policy application regarding the absence of safety code violations and liens on the property when an investigation revealed otherwise.

  • September 10, 2024

    Magistrate Grants In Part Motions To Exclude Expert Testimony In FCA Kickback Suit

    OAKLAND, Calif.  — A California federal magistrate judge on Sept. 9 granted in part a health system’s motions to exclude expert testimony of relator’s witnesses in a qui tam suit alleging that the defendants violated the federal False Claims Act (FCA) and similar California law by paying kickbacks to certain physician groups, finding that certain portions of testimony should be excluded, including one witness’s opinion that a medical group was double billing.

  • September 10, 2024

    Judge Conditionally Dismisses Insureds’ Remediation Suit Following Settlement

    SAN FRANCISCO — A California federal judge entered an order of conditional dismissal in a coverage dispute over costs for remediating a riverbank after the insureds notified the judge that they had reached a settlement with their umbrella liability insurer.

  • September 09, 2024

    After Reconsideration, Judge Says Court Erred When It Ruled In Insurer’s Favor

    LOS ANGELES — Granting insureds’ motion for reconsideration, a federal judge in California said the court erred when it granted an insurer’s motion for summary judgment as to insureds’ breach of contract claim, finding that the court cannot conclude as a matter of law that the insureds’ water damage loss is not covered by their policy.

  • September 06, 2024

    Panel: ‘Sound Reasons’ Exist Why Excess Insurers Should ‘Stay On The Sidelines’

    SAN FRANCISCO — A California appellate panel on Sept. 5 affirmed a lower court’s ruling in favor of two excess insurers in a private equity management firm insured’s breach of contract and bad faith lawsuit, finding that “there are sound policy reasons why the excess insurers should stay on the sidelines” of the professional liability coverage dispute.

  • September 03, 2024

    California Federal Judge Continues Jury Trial In Contamination Suit

    RIVERSIDE, Calif. — A California federal judge continued a jury trial in an environmental contamination coverage suit filed by an insured seeking coverage for groundwater contamination discovered at a local airport.

  • September 03, 2024

    No Reasonable Juror Could Find Water Damage Was Sudden, Accidental, Panel Says

    SAN FRANCISCO — The First District California Court of Appeal affirmed a trial court’s judgment in favor of a homeowners insurer after determining that the trial court did not err in instructing the jury regarding the cause of the loss because no reasonable jury could have found that the cause of a burst water pipe was sudden and accidental and, therefore, covered under the policy.

  • August 30, 2024

    Oral Argument Including DOL Set In 9th Circuit ERISA Tobacco Surcharge Case

    SAN FRANCISCO — With oral argument set for Sept. 12 in the Ninth Circuit U.S. Court of Appeals case involving the effective vindication doctrine, a health plan participant who filed the Employee Retirement Income Security Act case over a tobacco surcharge has filed a notice of supplemental authorities including a recent Sixth Circuit ruling.

  • August 30, 2024

    Disability Insurer’s Alleged Conduct Does Not Support Request For Punitive Damages

    RIVERSIDE, Calif. — An insured’s request for punitive damages against a disability insurer must be dismissed because the insured’s complaint does not allege conduct that supports punitive damages, a California federal judge said in granting the insurer’s motion to dismiss the request without prejudice.

  • August 28, 2024

    Dispute Over FCA Public Disclosure Bar Distributed For Conference In Supreme Court

    WASHINGTON, D.C. — The U.S. Supreme Court on Aug. 28 distributed for conference a petition for certiorari filed by pharmaceutical companies seeking review of the Ninth Circuit U.S. Court of Appeals’ ruling that the public disclosure bar was not triggered in a case where it reversed a district court’s dismissal of a suit accusing the companies of violating the False Claims Act (FCA) by artificially inflating drug prices.

  • August 28, 2024

    California Judge Enters Judgment In Hotel Insureds’ Coronavirus Coverage Dispute

    LOS ANGELES — A California judge entered an amended judgment on a jury’s special verdict in favor of a commercial property insurer in hotel insureds’ breach of contract lawsuit arising from the COVID-19 pandemic after the parties signed a confidential settlement agreement and successfully requested dismissal of the insureds’ appeal.

  • August 26, 2024

    Judge: Fact Issues As To When Water Damage Occurred Preclude Summary Judgment

    SAN DIEGO — A federal judge in California denied an insurer’s motion for partial summary judgment in another insurer’s lawsuit seeking equitable contribution after it was left to defend a subcontractor against underlying claims that it installed faulty concrete in a parking garage, finding that fact issues preclude summary judgment.

  • August 21, 2024

    High Risk Of Developing Complications From COVID-19 Rendered Doctor Disabled

    SAN FRANCISCO — A disability insurer’s denial of a pediatrician’s long-term disability (LTD) benefits claim was de novo wrong because the pediatrician’s high risk of exposure to COVID-19 and high risk of developing complications from the virus based on her underlying medical issues rendered her disabled from performing the duties of her own occupation, a California federal judge said in granting the pediatrician’s motion for judgment on the administrative record.

  • August 16, 2024

    9th Circuit Denies Rehearing Bid Based On Loper Bright In Crop Insurance Row

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals has denied a petition in which a farm sought panel and en banc rehearing of a crop insurance dispute by arguing that Loper Bright Enterprises v. Raimondo “effectively rejected the Panel’s deference to agency interpretations of legal questions.”

  • August 15, 2024

    Insurer Says Pollution Exclusion Bars Coverage, Exception Does Not Apply

    SAN FRANCISCO — An insurer reiterates in an appellant reply brief filed in the Ninth Circuit U.S. Court of Appeals that a district court erred in finding that a pollution exclusion does not bar coverage for an underlying environmental contamination lawsuit because the underlying lawsuit fails to allege that there was any sudden and accidental pollution.

  • August 15, 2024

    Insureds Appeal Ruling That Their Damage Was Caused By Defect, Deterioration

    LOS ANGELES — Insureds are asking the Ninth Circuit U.S. Court of Appeals to review a California federal judge’s holding that damages to their property “were caused by a defect, weakness, inadequacy, fault, or unsoundness in design, repair, construction, or materials — which in turn caused wear, tear, . . .   deterioration, and wet or dry rot” and that, as a result, their loss is excluded from coverage under their homeowners insurance policy.

  • August 14, 2024

    Patent Attorney Urges High Court To Decline Review Of 9th Circuit FCA Reversal

    WASHINGTON, D.C. — A patent attorney who was a district court’s qui tam plaintiff in a suit accusing pharmaceutical companies of violating the False Claims Act (FCA) by artificially inflating drug prices urges the U.S. Supreme Court to decline review of the Ninth Circuit U.S. Court of Appeals’ ruling reversing the district court’s dismissal, arguing that the Ninth Circuit correctly “held that the public disclosures did not collectively disclose the fraud.”

  • August 12, 2024

    Insureds Drop Appeal In Coronavirus Coverage Suit In California

    LOS ANGELES — One day after the insureds filed a request to dismiss their appeal of a Los Angeles County Superior Court’s judgment on a jury’s special verdict in favor of a commercial property insurer in a breach of contract coverage lawsuit arising from the coronavirus pandemic, Presiding Justice Gonzalo C. Martinez on Aug. 9 signed the order dismissing the appeal.

  • August 12, 2024

    Judge Rules Against Insurers In Suit Over Aircraft Leased To Russia Airlines

    SAN FRANCISCO — A California judge denied insurers’ motion for summary judgment in insureds’ lawsuit seeking coverage for its $127,810,258.48 in losses arising from aircraft that was leased to Russian airlines and not returned following Russia’s invasion of Ukraine, concluding that the insurers have failed to demonstrate that the insureds did not suffer a physical loss under the policy’s aircraft hull coverage.