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

Mealey's California Insurance

February 01, 2024
Airline And Insurer Agree To Dismiss UCL, Bad Faith Suit Over Passenger’s Coma

SAN FRANCISCO — A California federal judge on Jan. 31 entered an order of dismissal after an airline and two insurers entered a joint stipulation requesting dismissal of the airline’s suit accusing one insurer of violating California’s unfair competition law (UCL) and bad faith based on an allegedly improper denial of coverage for a separate lawsuit brought against the airline by the family of a quadriplegic man who fell into a coma while traveling, which recently settled for $30 million.
January 31, 2024
Claimant Failed To Provide Objective Findings In Support Of Disability, Judge Says

LOS ANGELES — A disability claimant failed to prove by a preponderance of the evidence that she is entitled to short-term disability (STD) and long-term disability (LTD) benefits because she failed to provide any objective findings in support of her claimed disability, California federal judge said in granting judgment in favor of the disability insurer.
January 30, 2024
9th Circuit Stays Mandate Reversing Court’s Dismissal In FCA Drug Pricing Suit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals granted a 90-day stay of the mandate reversing and remanding a district court’s dismissal of a relator’s qui tam suit alleging violations of the False Claims Act (FCA) against pharmaceutical companies related to their alleged fraud by artificially inflating drug prices.
January 30, 2024
Judge Overrules Discovery Objections In FCA Suit, Says Scope Should Be Nationwide

SAN DIEGO — A California federal judge affirmed a magistrate judge’s discovery order and overruled Abbott Laboratories’ objections to the geographical scope of discovery in a suit alleging violations of the False Claims Act (FCA) and state false claims laws regarding an alleged kickback scheme to induce hospitals and physicians to use an Abbott cardiac medical device, finding that the complaint sufficiently alleges a “nationwide scheme.”
January 29, 2024
Panel: Opioid Suits Describe ‘Exclusively Deliberate’ Conduct, No Coverage Owed

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Jan. 26 held that underlying allegations brought against a prescription drug distributor insured “describe exclusively deliberate conduct” and, therefore, there is no coverage owed, affirming a lower federal court’s summary judgment ruling in favor of insurers in their lawsuit disputing coverage for the underlying lawsuits prompted by the opioid epidemic.
January 26, 2024
Construction Firm Ineligible For Defense From Excess Insurers, Federal Judge Rules

OAKLAND, Calif. — A federal judge in California on Jan. 25 granted two excess insurers’ motion for partial summary judgment, finding in part that a construction company and related entities were not entitled to a defense from the insurers because the primary $5 million policy had not been exhausted by judgments or settlements as required by the excess insurance policy.
January 25, 2024
Panel: LLC Was Sole Tenant, No Personal And Advertising Injury Coverage Owed

SAN FRANCISCO — A California appeals court affirmed a lower court’s ruling in favor of an insurer in a breach of contract and bad faith lawsuit seeking coverage for an underlying cross-complaint in response to the insureds’ unlawful detainer lawsuit, finding that the policy’s personal and advertising injury coverage was not triggered because a limited liability company and not an actual person was the sole tenant sued.
January 24, 2024
9th Circuit Panel Majority Reverses Ruling On Pollution Exclusion’s Applicability

SAN FRANCISCO — The majority of the Ninth Circuit U.S. Court of Appeals on Jan. 23 reversed a district court’s ruling that a pollution exclusion bars coverage for an underlying toxic exposure suit stemming from the cleanup of wildfire debris after determining that a potential for coverage exists because the mechanism of exposure does not clearly constitute an event that is commonly thought of as pollution event pursuant to California precedent.
January 24, 2024
Insurers Have No Duty To Defend Against Copyright Suit, California Panel Affirms

LOS ANGELES — A California appeals panel on Jan. 23 affirmed a lower court’s summary judgment ruling in favor of professional liability and excess insurers, finding that the insurers have no duty to defend or indemnify their investment adviser insured against an underlying copyright lawsuit.
January 24, 2024
Federal Judge: Construction Contract Did Not Require Continuing Coverage

SANTA ANA, Calif. — Finding that an insurer had no duty to defend a construction company as an additional insured in a dispute over damages to a Hard Rock Hotel location because the terms of the original contract included no requirements to maintain insurance beyond the final payment date for the project, a federal judge in California granted the insurer’s motion for summary judgment in a dispute brought by another insurer.
January 23, 2024
Disability Claimant’s 2nd Suit Not Barred By Res Judicata, Panel Majority Says

PASADENA, Calif. — A disability claimant’s suit seeking long-term disability (LTD) benefits is not barred by the doctrine of res judicata because the claim pertaining to the denial of the claimant’s LTD benefits had not accrued when the claimant filed her first suit, the majority of the Ninth Circuit U.S. Court of Appeals said Jan. 22 in reversing a district court’s ruling in favor of the disability insurer.
January 22, 2024
Bank, Insurer Stipulate To Dismissal Of Coverage Dispute Arising From Forgery

SANTA ANA, Calif. — A bank insured and its insurer on Jan. 19 filed a stipulation to dismiss with prejudice the insured’s lawsuit seeking coverage for its losses resulting from a forgery eight days after a federal judge in California issued an in-chambers order setting an order to show cause as to dismissal following a settlement announcement by the parties.
January 22, 2024
Punitive Damages Claim Cannot Proceed, California Federal Judge Determines

SANTA ANA, Calif. — An insured cannot seek punitive damages in a coverage suit arising out of a claim for collapse at his business because the insured failed to show that the insurer acted with oppression, malice or fraud in handling his claim, a California federal judge said in granting the insurer’s motion to dismiss.
January 17, 2024
Federal Judge Sets Order To Show Cause For Dismissal Of Forgery Coverage Suit

SANTA ANA, Calif. — A federal judge in California issued an in-chambers order setting an order to show cause as to dismissal of a bank insured’s lawsuit seeking coverage for its losses resulting from a forgery one day after the parties filed a joint notice of settlement.
January 17, 2024
California Panel Affirms Dismissal Of Untimely Fraud Suit Against Insurance Agent

LOS ANGELES — A California appeals panel affirmed a lower court’s dismissal with prejudice of a real estate brokerage company’s fraud and breach of fiduciary duty lawsuit against an insurance agent, finding that the complaint was untimely.
January 16, 2024
In Reversal, 9th Circuit Says Assignments Give Surgery Center ERISA Standing To Sue

PASADENA, Calif. — Reversing and remanding dismissal of a suit, a Ninth Circuit U.S. Court of Appeals panel ruled that patient assignments give a surgery center derivative standing under the Employee Retirement Income Security Act to sue for nonpayment of approximately $5.4 million in services rendered.
January 16, 2024
City’s Cross-Complaints Are Not Prohibited, California Panel Rules In Reversal

SAN DIEGO — A California appeals panel held that a lower court erred in ruling that the city of Riverside’s cross-complaints in a dispute arising from a fire were prohibited as a matter of law, remanding with directions for the lower court to vacate its orders sustaining an insurer’s demurrers to the city's cross-complaints without leave to amend and enter new orders sustaining the demurrers with leave to amend.
January 12, 2024
Citing Supplemental Notice Filing, Movants Press Opt-Out Issue Again In COI Hike Row

PHILADELPHIA — Citing a motion pending in Pennsylvania federal court, the Third Circuit U.S. Court of Appeals stayed consolidated appeals challenging denial of a request to extend the opt-out deadline in the class settlement of two similar cases over universal life insurance policy cost of insurance (COI) increases.
January 12, 2024
Disability Claimant Awarded $312,000 For Attorney Fees In Benefits Calculation Dispute

SANTA ANA, Calif. — Following a disability claimant’s successful appeal on a breach of fiduciary duty claim and subsequent settlement with the disability insurer, a California federal judge entered final judgment in the suit and awarded the claimant more than $312,000 in attorney fees after applying a reduction to the number of hours billed by the claimant’s counsel.
January 11, 2024
District Court Erred In Limiting Award Of LTD Benefits, 9th Circuit Says

PASADENA, Calif. — A district court erred in finding that a claimant was not disabled beyond a certain date because the medical evidence does not show that there was any improvement in the claimant’s heart-related condition, the Ninth Circuit U.S. Court of Appeals said in reversing the lower court’s ruling.
January 11, 2024
California Panel Denies NHL Insureds’ Petition For Review In COVID-19 Coverage Suit

SAN JOSE, Calif. — A California appeals panel denied a petition by the National Hockey League (NHL) and 19 league clubs seeking review of a lower court’s ruling in a coverage dispute for their losses resulting from the coronavirus pandemic, finding that the contamination exclusion barred coverage.
January 09, 2024
Insurer Breached Duty To Defend Subcontractor By Withdrawing, Federal Judge Says

SAN DIEGO — An insurer had a duty to defend a subcontractor in a dispute alleging that the subcontractor installed faulty concrete in a parking garage and breached this duty by withdrawing its defense before the resolution of the case, a federal judge in California found Jan. 8, granting a motion for partial summary judgment from another insurer that sought equitable contribution after it was left to defend the subcontractor on its own.
January 09, 2024
Claimant Failed To Show He Was Disabled For Entirety Of Elimination Period

PASADENA, Calif. — A disability insurer properly denied a claim for long-term disability (LTD) benefits because the claimant failed to meet his burden of showing that he was disabled throughout the entire 90-day elimination period as required by the policy and because the record contains no medical evidence contradicting the date for the onset of disability, the Ninth Circuit U.S. Court of Appeals said in affirming a district court’s judgment in favor of the disability insurer.
January 08, 2024
9th Circuit Denies Rehearing, Files Amended Opinion In FCA Drug Pricing Suit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Jan. 5 denied a petition for a panel rehearing and a rehearing en banc, issuing an amended opinion of its decision reversing a district court’s dismissal of a relator’s qui tam suit alleging violations of the federal False Claims Act (FCA) against pharmaceutical companies related to their alleged fraud by artificially inflating drug prices, finding “that the qualifying public disclosures here do not collectively disclose a combination of facts sufficient to permit a reasonable inference of fraud.”
January 04, 2024
Judge: Breach Of Contract Exclusion Applies; Insurer Owes No Duty To Contractor

OAKLAND, Calif. — A breach of contract exclusion in consecutive commercial general liability policies applies to an underlying suit alleging defective work on a home renovation project; therefore, the insurer owes no duty to defend or indemnify the insured contracting company and its owner, a federal judge in California found in granting partial summary judgment to the insurer.