Mealey's California Insurance : Mealey's : Legal News & Analysis

Mealey's California Insurance

March 22, 2023
9th Circuit Will Not Rehear RESPA Class Decertification Denial Appeal

SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel declined to rehear its ruling reversing and remanding to federal district court a district court’s ruling denying a motion for class decertification in a long-running Real Estate Settlement Procedures Act (RESPA) class action involving captive reinsurance agreements to federal district court.
March 21, 2023
Judge Issues Final Order Dismissing Amber Heard’s Counterclaims In Coverage Suit

LOS ANGELES — Adopting a March 9 tentative ruling as a final ruling, a federal judge in California granted an insurer’s motion to dismiss Amber Heard’s breach of contract and bad faith counterclaims in the insurer’s declaratory judgment lawsuit alleging that it has no duty to defend or indemnify Heard for a defamation judgment awarded to Johnny Depp.
March 17, 2023
Judge Grants Judgment For Homeowners Insurer In Coverage Dispute Over Fire Loss

LOS ANGELES — A California federal judge granted a homeowners insurer’s motion for summary judgment in a suit filed against it by a homeowner alleging breach of contract after the insurer denied coverage for a fire loss, finding that the insurer is entitled to rescind the policy based upon the homeowner’s material misrepresentations.
March 16, 2023
9th Circuit Reverses Dismissal Of Insurer’s Complaint Against Law Firm, Partners

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 15 reversed a lower federal court’s dismissal of a professional liability insurer’s lawsuit seeking a declaration that it has no duty to indemnify its law firm insured against underlying malicious prosecution claims and reimbursement of amounts that it paid for the insured’s underlying defense, finding that the lower court erred in finding that California Insurance Code Section 533 did not apply to bar coverage.
March 16, 2023
Professional Liability Exclusion Does Not Bar Coverage, Panel Says In Reversal

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 15 held that a lower federal court erred in concluding that a management liability insurance policy’s professional liability exclusion barred coverage for underlying claims that an insured illegally stole a competitor’s clients and agents, further finding that the lower court erred in ruling that California Insurance Code Section 533 does not apply.
March 15, 2023
Positions Outlined In Insurance Coverage Row Over Jet Leased To Russian Operator

SAN FRANCISCO — In a joint filing in California state court, parties in an international aviation insurance coverage dispute involving Russia’s invasion of Ukraine outline their positions, including disagreements on the scope of expected discovery.
March 15, 2023
Magistrate Grants Dismissal In FCA Qui Tam Suit, Says Relator Not Original Source

SAN FRANCISCO — A California federal magistrate judge granted dismissal to pharmaceutical companies in a qui tam suit filed against them by a relator asserting that the companies misled the U.S. Patent Office into issuing invalid drug patents that allowed the companies to overcharge the federal government and states under certain programs, including Medicare and Medicaid, finding that the relator does not qualify as an original source under the federal False Claims Act (FCA) and that his claims “are therefore barred under the public disclosure bar.”
March 13, 2023
Panel: Contamination Exclusion Bars Burger Chain’s Coverage For Coronavirus Losses

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 10 affirmed dismissal of In-N-Out Burgers’ breach of contract lawsuit against its commercial property insurer, finding that a policy’s contamination exclusion barred coverage for the insured’s losses arising from the coronavirus pandemic.
March 13, 2023
Federal Judge Dismisses Amber Heard’s Counterclaims In Defamation Coverage Dispute

LOS ANGELES — A federal judge in California issued a tentative ruling granting an insurer’s motion to dismiss Amber Heard’s breach of contract and bad faith counterclaims in the insurer’s declaratory judgment lawsuit alleging that it has no duty to defend or indemnify Heard against an underlying defamation judgment awarded to Johnny Depp.
March 10, 2023
Damages Claim Remains In Coverage Suit Over Faulty Breaker Installation

SAN DIEGO — A federal judge in California ruled that an insured has sufficiently pleaded its claim for punitive damages in a coverage dispute over its insurer’s refusal to indemnify the insurer in an underlying property damage lawsuit stemming from the sale and installation of defective circuit breakers under California law because, at this stage of the litigation, the insured is not required to show “with ‘clear and convincing evidence’” that the insurer acted with “‘oppression, fraud, or malice.’”
March 09, 2023
Fact Issue Exists As To Allocation Of Wrongful Death Settlement Among Insureds

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on March 8 held that a federal court erred in finding that an insured is jointly and severally liable for reimbursement of the $1 million that his insurer paid to settle an underlying wrongful death lawsuit, vacating and remanding.
March 08, 2023
9th Circuit Affirms Dismissal Of Spa Owners’ Coverage Suit Arising From Pandemic

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s dismissal of spa owner insureds’ lawsuit seeking coverage for their losses arising from the coronavirus pandemic, finding that the insureds’ coverage argument is “squarely foreclosed” by its ruling in Mudpie, Inc. v. Travelers Casualty Insurance Co. of America and that the policies’ virus exclusion also bars coverage.
March 08, 2023
STD, LTD Benefits Claims Cannot Proceed Against Insurer, Judge Concludes

SANTA ANA, Calif. — Following a one-day bench trial in a disability benefits dispute, a California federal judge determined that claims for short-term disability (STD) and long-term disability (LTD) benefits cannot proceed because the disability insurer was not responsible for paying STD benefit claims under the employer’s self-insured plan and because the disability claimant failed to exhaust all administrative remedies in connection with the LTD benefits claim.
March 08, 2023
Federal Judge Dismisses COVID-19 Coverage Suit Between Real Estate Trust, Insurer

SANTA ANA, Calif. — One day after a real estate trust insured and its insurer filed a stipulation for voluntary dismissal of the insured’s breach of contract and bad faith lawsuit seeking coverage for its business interruption losses arising from the coronavirus pandemic, a federal judge in California on March 7 dismissed the case with prejudice.
March 07, 2023
Insured Asks 9th Circuit To Reconsider Ruling In E&O Coverage Dispute

SAN FRANCISCO — An insured filed a petition for a panel rehearing and rehearing en banc challenging the Ninth Circuit U.S. Court of Appeals’ affirmation of a federal court’s summary judgment ruling in favor of an insurer in a breach of contract lawsuit seeking errors and omissions coverage for the insured’s defense costs and damages stemming from a $5.7 million arbitration award.
March 07, 2023
Real Estate Trust, Insurer Voluntarily Dismiss Coronavirus Coverage Dispute

SANTA ANA, Calif. — A real estate trust insured and its insurer on March 6 filed a stipulation for voluntary dismissal with prejudice of the insured’s breach of contract and bad faith lawsuit seeking coverage for its business interruption losses arising from the coronavirus pandemic.
March 06, 2023
Pollution, Contamination Exclusion Must Be Construed In Favor Of Coverage

SANTA ANA, Calif. — A California federal judge denied an insurer’s motion to dismiss breach of contract, bad faith and declaratory judgment claims alleged by an insured seeking coverage for business losses sustained in the wake of the COVID-19 pandemic because the policy’s pollution and contamination exclusion is ambiguous and must be construed in favor of coverage.
March 06, 2023
U.S. High Court Denies Volunteer’s Stay Request In Libel, Slander Coverage Suit

WASHINGTON, D.C. — The U.S. Supreme Court on March 6 denied a church volunteer’s application for emergency stay or recall of the Ninth Circuit U.S. Court of Appeals’ mandate of its finding that a church’s general liability insurer has no duty to defend or indemnify the volunteer against an underlying libel and slander lawsuit arising from his negative review of a solar company on social media.
March 03, 2023
Calif. Federal Judge: Insurer Can Rescind Policy In Light Of Misrepresentations

SAN FRANCISCO — An insurer is entitled to rescind a policy covering an apartment building because the owner of the apartment building made misrepresentations about its recent litigation history in its application, a California federal judge found in entering judgment for the insurer on its counterclaims and third-party claims while also dismissing the claims against it by another insurer that sought declaratory and equitable relief for the defense and indemnity of the owner in four lawsuits.
March 03, 2023
California High Court Accepts Certified Question In Coronavirus Coverage Dispute

SAN FRANCISCO — The California Supreme Court accepted the Ninth Circuit U.S. Court of Appeals’ certified question to determine whether “the actual or potential presence of the COVID-19 virus on an insured's premises” constitutes “direct physical loss or damage to property” to trigger coverage under an insured’s commercial property insurance policy.
March 03, 2023
Insurer’s Bid To Place Other Insurer On The Hook For Damages Coverage Denied

SAN FRANCISCO — An excess liability insurer is not entitled to summary judgment on its claims for equitable indemnity and/or equitable subrogation against other insurers involved in a construction defects lawsuit against the builder in charge of the Millennium Tower project because the insurer has failed to show that coverage it paid should have been paid by another insurer based on the timeline for when the alleged damages were first discovered, a federal judge in California ruled.
March 03, 2023
Judgment Entered After Jury Awards Insurer $2.4M In Employee Status Fraud Suit

SANTA ANA, Calif. — A California federal judge issued a final judgment after a jury found that an employer and his California limited liability company committed fraud when the employer misrepresented his nonagenarian father as an employee insured under the company’s group health plan and awarded the insurer more than $2.4 million in damages.
March 02, 2023
Panel Reverses, Says Including Time Under Seal Wrong In Calif. False Claims Suit

LOS ANGELES — A California appellate court reversed and remanded a trial court’s dismissal of a qui tam medical insurance fraud suit filed against a chiropractor and related entities, finding that dismissal under a rule requiring a suit to go to trial within five years after filing was incorrect because the trial court failed to exclude from the five-year calculation the time under seal and stays due to alternate criminal proceedings against some of the defendants.
March 01, 2023
Warranty Exclusion Barred Contractor From Seeking Defense In Defects Suit

SAN FRANCISCO — A California trial court correctly found that an insurer owed no duty to defend or indemnify its insured contractor in a construction defects lawsuit stemming from its building of a home because the claims brought against the contractor are barred by the policy’s contractors warranty exclusion, a California appellate court panel said Feb. 28 in affirming judgment in favor of the insurer.
March 01, 2023
Judge Grants GEICO’s Motion To Strike Jury Demand In COVID Premium Suit

SAN FRANCISCO — A California federal judge granted GEICO’s motion to strike a demand by a certified class of automotive policy holders for a jury trial on the claim that GEICO violated California’s unfair competition law (UCL) by profiting from a premium giveback program initiated during the COVID-19 pandemic, writing that the lead plaintiff “has no . . . right to a jury trial on her UCL claim.”