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

Mealey's California Insurance

March 01, 2023
9th Circuit: No E&O Coverage Owed For Fraud Suit Against Real Estate Agent

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a summary judgment ruling in favor of a real estate errors and omissions insurer in an insured’s breach of contract and bad faith lawsuit seeking defense against an underlying fraud claim arising from a real estate transaction, finding that the insured failed to identify a claim that triggered its insurer’s duty to defend.
March 01, 2023
Panel: No Triable Issue That COVID-19 In Hotel Caused Insured’s Alleged Lost Income

SAN DIEGO — A California appeals court panel affirmed a summary judgment ruling in favor of a commercial insurer in a breach of contract and bad faith lawsuit brought by the owner and operator of a 126-room Holiday Inn Express franchise in San Diego, finding that “there is no evidence creating a triable issue that COVID-19 in the hotel caused the claimed lost income.”
February 27, 2023
9th Circuit Reverses Ruling In Class RESPA Suit For Abuse Of Discretion

SAN FRANCISCO — Saying in a Feb. 24 unpublished memorandum disposition that the appellants in a long-running Real Estate Settlement Procedures Act (RESPA) class action involving captive reinsurance agreements “could not have reasonably anticipated the need for their undisclosed evidence of economic injury,” a Ninth Circuit U.S. Court of Appeals panel reversed and remanded a ruling the appellants argued “was tantamount to case-ending sanctions.”
February 22, 2023
Insurer On The Hook For Defense Costs, Settlement In Underlying Defects Suit

LOS ANGELES — A California appellate panel found that a state trial court did not err in ruling that a property management company’s insurer owed a duty to defend and indemnify the company in an underlying construction defects lawsuit because the claims brought against the company fell within the coverage included in the policies issued.
February 21, 2023
Insured, Insurer Seek Judgment On Breach Of Contract Claim, Number Of Occurrences

RIVERSIDE, Calif. — An insured and its excess insurer filed competing motions for summary judgment in a groundwater contamination coverage dispute with each party asking a California federal court to enter judgment on the insured’s breach of contract claim arising out of the insurer’s termination of coverage based on the insurer’s position that coverage is owed for only one occurrence under the applicable policies.
February 17, 2023
Calif. Federal Judge Says Company Principal Was Not A Party To Auto Policy

LOS ANGELES — The principal of an insured tow truck company cannot allege breach of contract and bad faith claims against the tow truck company’s auto insurer because the principal was not individually named as an insured on the policy and failed to show that the parent company of the insurer was a party to the insurance contract.
February 16, 2023
Insurer Must Produce Financial Records As They Are Relevant To Bad Faith Claim

RIVERSIDE, Calif. — An insured seeking coverage for groundwater contamination at a county airport is entitled to discovery regarding the financial condition of an excess insurer’s parent and affiliate companies because the financial information is relevant to the insured’s allegation that the insurer had a financial motive for acting in bad faith when it stopped reimbursing the insured for remediation costs, a California federal magistrate judge said in denying the insurer’s motion for a protective order.
February 16, 2023
Virus Exclusion Bars Coverage For Retailers’ COVID-19 Losses, 9th Circuit Affirms

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Feb. 15 affirmed a lower federal court’s ruling in favor of a property insurer in retailers’ breach of contract and bad faith lawsuit seeking coverage for their losses arising from the coronavirus pandemic, finding that the virus exclusion bars coverage because the insureds have failed to assert “that the efficient cause of their losses was anything other than the spread of COVID-19.”
February 15, 2023
Insurer Moves To Dismiss Amber Heard’s Counterclaim In Defamation Coverage Suit

LOS ANGELES — An insurer moved for a California federal court to dismiss Amber Heard’s breach of contract and bad faith counterclaims in its declaratory judgment lawsuit alleging that it has no duty to defend or indemnify Heard against an underlying defamation judgment awarded to Johnny Depp, contending that the insured “admittedly ‘refused to fully accept’ the defense” that it “rightfully provided” “through appointed counsel.”
February 14, 2023
9th Circuit: Insurer Has No Duty To Indemnify California County For Retaliation Suit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Feb. 13 held that an insurer has no duty to indemnify its insured under public entity excess liability policies because California Insurance Code Section 533 barred indemnity of underlying retaliation claims, affirming a lower federal court’s summary judgment ruling in favor of the insurer.
February 13, 2023
Judge Allows Breach Of Contract, Bad Faith Claims To Proceed In Water Damage Suit

RIVERSIDE, Calif. — A California federal judge denied a homeowners insurer’s motion for summary judgment on breach of contract and bad faith claims after determining that questions of fact exist as to the cause of water damage in an insured home and as to whether the insurer acted in bad faith in handling the insureds’ coverage claim.
February 08, 2023
Insurers Say Third-Party Assignee Lacks Standing In ERISA Appeal

PASADENA, Calif. — A company that was assigned rights that a medical provider received on assignment from patients does not fall under the narrow exception for standing under the Employee Retirement Income Security Act and never identifies the specific plan terms that would entitle it to additional payment, insurers tell the Ninth Circuit U.S. Court of Appeals in an appellee brief.
February 08, 2023
Disability Claimant Failed To Show Bone Marrow Program Acted As Agent For Insurer

SAN FRANCISCO — A California federal judge granted a disability insurer’s motion to dismiss a breach of contract and bad faith lawsuit and ordered that the claimant’s suit be closed after determining that the claimant, who sought disability benefits under a policy issued to a bone marrow donor program, failed to show in a second amended complaint that the program was acting as an agent for the disability insurer when his claim for benefits was denied.
February 08, 2023
Insurance Row Over Tribe’s COVID-19 Losses Stays In Tribal Court, Judge Rules

RIVERSIDE, Calif. — A tribal court has subject matter jurisdiction over an insurance company in a dispute over the tribe’s claims for business interruption losses at its casino caused by the coronavirus pandemic, a federal judge in California held in awarding summary judgment to two tribal judges in the insurer’s federal declaratory judgment suit.
February 08, 2023
Judge: Insurer Required To ‘Immediately’ Defend Against Bobcat Wildfire Suits

LOS ANGELES — A federal judge in California held that the potential for coverage for underlying lawsuits arising from the Bobcat Wildfire “is clear” and requires the insurer to defend the plaintiffs “immediately” and start reimbursing their underlying defense fees and costs, granting the plaintiffs’ motion for judgment on the pleadings in their breach of contract lawsuit against the insurer.
February 08, 2023
Judge: Church Did Not Stop All Operations; Civil Authority Coverage Not Triggered

SANTA ANA, Calif. — A California judge held that a church insured did not stop all operations and, therefore, is not owed coverage under its insurance policy’s civil authority provision for its lost donations and income arising from the coronavirus pandemic and subsequent civil authority orders, granting the insurer’s motion for summary judgment in the insured’s breach of contract and bad faith lawsuit.
February 07, 2023
9th Circuit Certifies Virus Exclusion Question To California Supreme Court

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Feb. 6 certified to the California Supreme Court the question of 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.
February 06, 2023
E&O Policy’s $3M Per Claim Limit Applies, 9th Circuit Affirms In Coverage Dispute

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Feb. 3 affirmed 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, further affirming the court’s finding that the insurer is entitled to summary judgment on its restitution counterclaim.
February 06, 2023
Insured’s Breach Of Contract, Bad Faith Suit To Remain In California Federal Court

RIVERSIDE, Calif. — A California federal judge denied an insured’s motion to remand a breach of contract and bad faith suit arising out of the insured’s damages claim under an auto policy after determining that the auto insurer met its burden of proving by a preponderance of the evidence that the amount in controversy exceeds the federal jurisdictional minimum amount of $75,000.
February 03, 2023
Calif. Panel Majority Says Personal Jurisdiction Does Not Exist Over Auto Insurer

LOS ANGELES —The majority of the Second District California Court of Appeal agreed with a trial court that personal jurisdiction does not exist over an auto insurer named as a defendant in a breach of contract and bad faith suit because the plaintiff, who was involved in a car accident in California and was named as a covered driver on her parents’ Indiana auto policy, failed to show that the auto insurer engaged in any significant activities in California that would allow a California court to exercise jurisdiction over the insurer.
February 01, 2023
9th Circuit Sets Submission On Briefs In Appeal Of Class RESPA Suit Ruling

SAN FRANCISCO — In a Jan. 31 order reporting the court’s “unanimous opinion that the facts and legal arguments are adequately presented in the briefs and record,” the Ninth Circuit U.S. Court of Appeals called off oral argument in an appeal of a ruling in a long-running Real Estate Settlement Procedures Act (RESPA) class action involving captive reinsurance agreements.
January 31, 2023
District Court Properly Found LTD Benefits, Attorney Fees Owed, 9th Circuit Says

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a district court’s rulings that a disability claimant is owed long-term disability (LTD) benefits as an eligible employee under the disability plan and is entitled to an award of attorney fees based on her success on the merits.
January 30, 2023
Pollution Exclusion Does Not Apply Because There Was No Release, Insured Argues

SAN FRANCISCO — A district court erred in entering judgment for an insurer in a dispute over coverage for an underlying toxic exposure lawsuit filed against an insured arising from the cleanup of a fire that destroyed a city in California because there was no release of a pollutant, as required by the policy’s pollution exclusion, and because the policy’s pollution exclusion is ambiguous, the insured maintains in its appellant brief filed in the Ninth Circuit U.S. Court of Appeals.
January 30, 2023
Judge Dismisses Man’s UCL Claim Against Insurer For Handling Of Water Damage Claim

LOS ANGELES — A California federal judge granted an insurer’s motion to dismiss a rental property owner’s claim against it for violating California’s unfair competition law (UCL) through its handling of his water damage claim, which has not yet been granted or denied, finding that the plaintiff has not pleaded a violation of the UCL with requisite specificity.
January 30, 2023
Provider Derides Insurer’s ‘Hide The Ball Scheme’ As Breach Of Contract

SAN DIEGO — A substance abuse treatment provider tells a California appeals court it provided life-saving treatments on an insurer’s promise of compensation, only to be told after the treatments that the insurer believed that it had no contractual obligation to make payments, a “hide the ball scheme” that would be unacceptable in any other setting and permits breach of contract and California unfair competition law (UCL) claims.