Mealey's California Insurance
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October 30, 2023
California Appeals Panel Affirms Ruling For Insurer In Water Damage Suit
LOS ANGELES — The Second District California Court of Appeal affirmed a trial court’s summary judgment ruling in favor of an insurer in a bad faith coverage dispute over water damage caused by a sewer line backup after determining that the insured forfeited its argument that coverage is provided for the water damage by not raising the issue in the trial court.
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October 30, 2023
9th Circuit Affirms Judgment In Insurance Fraud Dispute Over Employee’s Status
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals issued a corrected opinion, affirming a district court’s summary judgment for an insurance broker acting as a licensed agent for a health insurer awarded $2.4 million in damages when its insured company was found liable for fraud regarding classifying an employee incorrectly as full time, finding, in part, that the district court correctly determined that the broker did not act outside its agency authority for the health insurer.
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October 30, 2023
Force Majeure Provision Does Not Excuse Rent Payment, Panel Says In Coronavirus Suit
SANTA ANA, Calif. — A California appeals panel affirmed a lower court’s ruling that an appellant cannot recoup rent payments for periods during which it was prevented from operating its indoor health and fitness facility due to the government orders in response to the coronavirus pandemic, rejecting the appellant’s argument that the commercial lease's force majeure provision excused it from paying rent.
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October 27, 2023
Contractor Did Not Timely Report Claim; No Professional Liability Coverage Owed
LOS ANGELES — A California appeals panel affirmed a lower court’s summary judgment ruling in favor of a professional liability insurer in a contractor insured’s breach of contract and bad faith lawsuit, finding that the insured failed to timely report underlying counterclaims for negligence, delay, breach of contract, construction defects and failure to complete construction.
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October 26, 2023
Policy’s Business Income Coverage Language Is Ambiguous, Federal Judge Rules
LOS ANGELES — A California federal judge partly denied a commercial property insurer’s motion for summary judgment in a breach of contract lawsuit arising from a now defunct restaurant’s suspension of operations, finding that the policy’s business income coverage language is ambiguous.
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October 26, 2023
Panel Affirms Ruling For Insurer In Coverage Dispute Arising From Battery Fire
SAN DIEGO — A California appeals panel concluded that insureds failed to present a triable issue of material fact as to their breach of contract claim against their insurer, affirming a lower court’s grant of summary judgment in favor of the insurer in a coverage dispute arising from damage caused by a lithium battery that caught on fire.
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October 24, 2023
Verdict On Bad Faith, Unfair Practices Claims Supported By Substantial Evidence
PASADENA, Calif. — Substantial evidence supports a jury verdict on claims for bad faith and unfair insurance practices, the Ninth Circuit U.S. Court of Appeals said Oct. 23 in affirming a more than $5.7 million judgment entered in favor of an insured and against an auto insurer.
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October 23, 2023
Reinsurer Gets Arbitration Order Over Liquidator’s Opposition In California Court
LOS ANGELES — Saying in part that the dispute is “precisely the type . . . that must be resolved through an independent action, not the summary claims process,” a California judge granted a reinsurer’s motion to compel arbitration with an insurer in liquidation over a disagreement regarding the calculation of sliding scale commissions.
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October 23, 2023
Federal Judge Dismisses Claims That Insurer Has Duty To Defend Battery Suit
SANTA ANA, Calif. — A federal judge in California dismissed without prejudice breach of contract and other claims against an insurer that denied liability for two insurance policy holders accused of battery in a lawsuit following an altercation.
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October 17, 2023
Judge Dismisses Insurer’s Complaint Against Amber Heard In Defamation Coverage Suit
LOS ANGELES — A federal judge in California adopted a tentative ruling dismissing without leave to amend an insurer’s second amended complaint seeking a declaratory judgment that it has no duty to defend or indemnify Amber Heard for a defamation judgment awarded to Johnny Depp.
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October 17, 2023
Settlement Agreement Bars Insured From Reopening D&O Coverage Suit, Panel Affirms
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals held that the plain language of a settlement agreement between an insured and its directors and officers liability insurer bars the insured from reopening its coverage dispute against the insurer, affirming a lower federal court’s dismissal of the insured’s breach of contract and declaratory relief lawsuit without leave to amend.
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October 16, 2023
Late Exclusion Bid Follows Final OK Of Life Insurance COI Increase Settlement
PHILADELPHIA — Following final approval of a class settlement of two similar cases over universal life insurance policy cost of insurance (COI) increases, two groups on Oct. 13 asked a Pennsylvania federal court to let them request that 52 policies be excluded from the settlement class even though the opt-out deadline has passed.
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October 12, 2023
Judge Rules For Insurer In Hotel’s Coverage Suit Over Theft, Vandalism Claims
LOS ANGELES — A California judge granted a businessowners insurer’s motion for summary judgment in a hotel owner insured’s breach of contract and bad faith lawsuit seeking coverage for its losses arising from alleged theft and vandalism that occurred following its shutdown of operations in response to the coronavirus pandemic, finding that the policy’s vacancy provision bars coverage and estoppel does not apply.
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October 10, 2023
California Federal Judge Finds Contractor Cannot Bring Bad Faith Claim
LOS ANGELES — Because there has been no excess judgment in underlying arbitration proceedings stemming from a general contractor’s alleged failure to properly secure a building under construction in advance of a hurricane, the contractor cannot state a claim against a commercial general liability insurer for bad faith, a federal judge in California ruled in granting the insurer’s motion for partial summary judgment on the claim.
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October 10, 2023
Citing Mudpie, 9th Circuit Affirms Virus Exclusion Bars Coverage For COVID-19 Losses
PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s dismissal of insureds’ lawsuit seeking coverage for their losses arising from the coronavirus pandemic and subsequent governmental orders, finding that, as in Mudpie, Inc. v. Travelers Cas. Ins. Co. of Am., the insureds failed to plausibly assert that “the efficient cause” of their losses was anything other than the spread of the COVID-19 virus throughout California.
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October 10, 2023
Insured Claims Property Insurer Owes Additional Coverage For Water Damage
LOS ANGELES — An insured filed suit in California state court against its property insurer, seeking a declaration that the insurer owes additional coverage to repair a property damaged when water pipes burst in the building and alleging that the insurer breached its contract and acted in bad faith by refusing to release additional fund for repairs.
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October 10, 2023
9th Circuit Panel Won’t Revive $75M ERISA Suit Against Insurers Under Bristol
PASADENA, Calif. — In an unpublished memorandum disposition rejecting the appellant’s reliance on Bristol SL Holdings, Inc. v. Cigna Health & Life Ins. Co., a Ninth Circuit U.S. Court of Appeals panel ruled in part that a debt collector “lacks derivative authority to bring [Employee Retirement Income Security Act] claims as a second assignee.”
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October 06, 2023
IP Exclusion Bars Coverage For Misappropriation Of Likeness Claim, Panel Affirms
LOS ANGELES — A California appeals panel on Oct. 5 affirmed a lower court’s summary judgment ruling in favor of a commercial general liability insurer in its declaratory judgment lawsuit disputing coverage for a lawsuit brought against its insured, finding that the policy’s intellectual property exclusion bars coverage for the underlying misappropriation of likeness claim.
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October 05, 2023
Waiver Provision Bars Insurer’s Equitable Subrogation Claim, California Panel Says
LOS ANGELES — A California appeals panel affirmed a lower court’s summary judgment ruling in favor of Southern California Edison Co. (SCE) in an insurer’s equitable subrogation lawsuit alleging that a wildfire that resulted in $25 million in paid claims was the sole result of SCE’s negligence, finding that the subcontract’s waiver provision barred the insurer’s claims.
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October 04, 2023
Disability Claimant’s Suit Dismissed Following Settlement Reached During Mediation
SAN FRANCISCO — A California federal judge dismissed a disability claimant’s suit seeking a declaration that she is entitled to long-term disability (LTD) benefits after the claimant and the disability insurer agreed to a settlement during a mediation proceeding.
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October 03, 2023
California Panel Reverses Ruling In Insurers’ Favor In Coronavirus Coverage Suit
LOS ANGELES — A California appeals panel on Oct. 2 reversed and remanded a lower court’s order granting a group of insurers’ motion for judgment on the pleadings in a real estate investment firm’s coronavirus coverage dispute, rejecting the insurers’ argument that the pollution exclusion barred coverage.
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October 02, 2023
Panel: Evidence Supports Jury Verdict That Insured Not Owed Additional Benefits
SACRAMENTO, Calif. — A California appeals panel held that “substantial evidence” supports a jury verdict that an insured is not entitled to additional compensation for her loss of personal property, affirming a lower court’s denial of the insured’s four post-verdict motions in a homeowners coverage dispute arising from alleged theft and property damage.
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September 26, 2023
Panel Affirms Demurrer In Entertainment Conglomerate’s Coronavirus Coverage Suit
LOS ANGELES — A California appeals panel affirmed a lower court’s ruling that sustained commercial property insurers’ demurer to an entertainment conglomerate insured’s complaint seeking coverage for its economic losses arising from the coronavirus, finding that, until the U.S. Supreme Court provides guidance in pending cases, it sides with the vast majority of courts that have ruled that direct physical loss or damage to property is a prerequisite for coverage.
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September 25, 2023
Questions Of Fact Exist Regarding When Insureds Knew Of Water Leak Problems
SANTA ANA, Calif. — A California federal judge denied a property insurer’s motion for summary judgment on breach of contract and bad faith claims after determining that questions of fact exist regarding when the insureds became aware of a water leak problem within a hotel they purchased and whether the insurer acted reasonably in handling the insureds’ claim for coverage.
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September 21, 2023
Disability Claimant Met Burden Of Showing She Remains Disabled, Judge Says
OAKLAND, Calif. — A disability claimant met her burden of proving by a preponderance of the evidence that she remains disabled from performing the duties of any occupation, a California federal judge said in granting the claimant’s motion for judgment and in denying the disability insurer’s motion for judgment.