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

Mealey's California Insurance

March 18, 2024
Panel Refuses To Disturb No Coverage Ruling In Suit Arising From Opioid Epidemic

SAN FRANCISCO — A panel of the Ninth Circuit U.S. Court of Appeals unanimously voted to deny a prescription drug distributor insured’s petition seeking rehearing of the panel’s Jan. 26 ruling that there is no coverage owed for lawsuits prompted by the opioid epidemic because the underlying claims “describe exclusively deliberate conduct.”
March 14, 2024
Pollution Exclusions Bar Coverage For Judgment Against Insured, 9th Circuit Says

PASADENA, Calif. — A federal judge did not err in finding that the city of Los Angeles is not entitled to indemnity from two insurers for an underlying judgment obtained against a now-defunct insured because the judge properly found that the policies’ pollution exclusions bar coverage for the insured boatyard operator’s discharges of paint and other toxic materials into the city’s harbor, the Ninth Circuit U.S. Court of Appeals said March 13.
March 13, 2024
Oral Surgeon’s Breach Of Contract, Bad Faith Claims Against Disability Insurer Fail

FRESNO, Calif. — An insured’s breach of contract and bad faith claims against a disability insurer cannot proceed because there is no evidence that any doctor advised the insured to stop working as an oral surgeon to reduce the risk of contracting COVID-19 and suffering complications from the virus based on his comorbid conditions of asthma and hypertension.
March 13, 2024
Judge Certifies Settlement Class Over Alleged Fraud, Won’t Approve $195,000 Deal

SANTA ANA, Calif. — Citing reasons including “serious concerns about the scope of recovery,” a California federal judge granted preliminary certification of a settlement class in a suit over alleged fraud involving captive reinsurance but denied preliminary approval of the proposed $195,000 settlement.
March 12, 2024
9th Circuit Partly Reverses Ruling In $40M Commercial Crime Coverage Dispute

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on March 11 reversed a lower federal court’s dismissal of a financial services company insured’s claim for loss under its commercial crime insurance policy’s “Computer And Funds Transfer Fraud Insuring Agreement” and its claim for tortious breach of the implied covenant of good faith and fair dealing, finding that the authorized submission of fraudulent electronic data into the insured’s computer system can arguably be described as “fraudulent entry” to trigger coverage.
March 11, 2024
Judge Amends Consent Decree Order In Case Over Alleged Counterfeit Policies

LOUISVILLE, Ky. — In a March 8 amended ruling entering a consent decree in a sprawling suit over allegations of fraud, trademark counterfeiting and trademark infringement involving captive reinsurance programs, a Kentucky federal judge said he “inadvertently omitted the names of two parties.”
March 06, 2024
Amicus Curiae Argues In Support Of Drug Distributor In Opioid Coverage Dispute

SAN FRANCISCO — United Policyholders (UP) filed an amicus curiae brief in support of a prescription drug distributor insured asking the Ninth Circuit U.S. Court of Appeals to reconsider its ruling that there is no coverage owed for lawsuits prompted by the opioid epidemic because the underlying claims “describe exclusively deliberate conduct,” arguing that the ruling “deviates from every other court in the United States that has considered whether the allegations against opioid distributors constitute an ‘occurrence’ or ‘accident’ under the terms of insurance policies like those at issue here.”
March 05, 2024
DOL Files Amicus Brief In 9th Circuit ERISA Case Involving Tobacco Surcharge

SAN FRANCISCO — For the third time in recent months — this time in a Ninth Circuit U.S. Court of Appeals case concerning a health plan’s tobacco surcharge — the U.S. Department of Labor (DOL) has filed an amicus curiae brief supporting application of the effective vindication doctrine in an Employee Retirement Income Security Act dispute involving what the DOL calls a representative action waiver.
March 05, 2024
All Sums Allocation Method Applies In Asbestos Coverage Row, Calif. Panel Affirms

LOS ANGELES — A California appellate panel affirmed a trial court’s ruling that an all sums method of allocation applies in an asbestos coverage dispute to an excess insurer’s policy based on the plain language of the insurer’s excess policy.
March 04, 2024
Complaint Alleges Sufficient Facts To Support Bad Faith Claim Against Auto Insurer

LOS ANGELES — A trial court erred in sustaining an auto insurer’s demurrer on an insured’s bad faith claim because the insured’s complaint alleges sufficient facts in support of a claim for bad faith against the insurer, a California appellate court said in reversing the trial court’s ruling.
March 01, 2024
California Panel: Insurer Owed No Reimbursement; Contractor Not Additional Insured

SAN FRANCISCO — A California appellate panel ruled in an unpublished opinion that a subcontractor’s insurer owes no reimbursement to another of the subcontractor’s insurers in a dispute over upgrades performed on San Francisco condominiums because the contractor was not an additional insured under the subcontractor’s insurance policy.
February 29, 2024
Travelers Appeals Finding It Wasn’t Owed Contribution In Construction Coverage

SANTA ANA, Calif. — A contractor’s insurer that sought equitable contribution and equitable indemnification from a subcontractor’s insurer filed a notice of appeal on Feb. 28 in a California federal court, appealing the ruling of a federal judge who found that the subcontractor’s insurer owed no defense to the contractor as an additional insured.
February 29, 2024
California Judge Finds Insurer Need Not Cover Damages Caused By Subcontractor

LOS ANGELES — A California judge has dismissed with prejudice a building owner and general contractor’s lawsuit seeking payment from a subcontractor’s insurer for an underlying $1.1 million default judgment entered against the subcontractor, agreeing with the insurer that coverage is barred by a policy exclusion precluding coverage for damage caused by the subcontractor’s faulty work.
February 28, 2024
9th Circuit Sets Argument In Dispute Involving What Are ‘Farming Activities’

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals has set oral argument for April 5 in a crop insurance dispute involving federal reinsurance, the term “farming activities” and the structure of a farming operation.
February 26, 2024
9th Circuit Affirms Judgment For Insurer In Fraud Suit, Deems Appeal ‘Frivolous’

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a district court’s default judgment entered against a man and his daughter accused of defrauding a long-term care insurer by claiming that the man qualified as a “chronically ill individual,” finding that the appeal is “frivolous” and that the lower court did not abuse its discretion in entering a default judgment in response to the defendants violating court orders.
February 21, 2024
Magistrate Judge Grants Motion To Strike Bad Faith Claim In Water Damage Suit

SAN FRANCISCO — A California federal magistrate judge denied a business insurer’s motion to dismiss claims for promissory estoppel and unfair competition but granted the insurer’s motion to strike a bad faith claim in the insured’s complaint, which seeks coverage for water damages at the insured’s business, after determining that the bad faith claim is duplicative of the insured’s claim for breach of the implied covenant of good faith and fair dealing.
February 21, 2024
Tortfeasor’s Vehicle Is Not Underinsured Vehicle As Required By Umbrella Policy

SAN FRANCISCO — A California federal judge dismissed a breach of contract and bad faith suit filed against a personal umbrella liability insurer after determining that the insureds’ claims fail because the tortfeasor’s vehicle is not an underinsured vehicle as defined by the insureds’ primary auto policy and as required by the insureds’ personal umbrella liability policy.
February 21, 2024
9th Circuit Denies Insurer’s Petition For Rehearing Of Pollution Exclusion Ruling

SAN FRANCISCO — A panel of the Ninth Circuit U.S. Court of Appeals on Feb. 20 denied an insurer’s petition for panel rehearing, refusing to reconsider the panel majority’s finding that a pollution exclusion does not bar coverage for an underlying toxic exposure suit stemming from the cleanup of wildfire debris.
February 20, 2024
Insured Cannot Present Evidence On Request For Future Policy Benefits

RIVERSIDE, Calif. — An insured is not permitted to present evidence in an environmental contamination coverage suit concerning its request for future insurance policy benefits that the insured seeks as damages for an insurer’s alleged bad faith conduct because the request for future policy benefits was not timely filed, a California federal judge said in granting the insurer’s motion in limine.
February 16, 2024
Dispute Over Applicability Of Pollution Exclusion Transferred To D.C. Federal Court

SANTA ANA, Calif. — A suit filed by insurers seeking a declaration that their policies’ pollution exclusion bars coverage for an underlying class action alleging that an insured restaurant’s grain and salad bowls contain harmful levels of fluorine and biocides will be transferred to District of Columbia federal court because the insurance contracts were signed in the District of Columbia and the majority of the witnesses are located in the District of Columbia, a California federal judge said in granting the insured’s motion to transfer the suit.
February 16, 2024
Class Certification Affirmed In Dispute Over Insurer’s Square Footage Calculation

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s ruling that granted an insured’s motion for class certification in a lawsuit alleging that a homeowners insurer improperly calculated the square footage of California homes, finding that the lower court did not abuse its discretion in redefining the certified class.
February 16, 2024
California Panel Affirms Judgment, $264,440 Attorney Fee Award Against Surety

SAN DIEGO — A California appeals panel affirmed a lower court’s judgment and $264,440 attorney fee award in favor of a plaintiff in her lawsuit seeking to collect under a surety bond for a fraud judgment entered against an automobile dealer, finding that because the plaintiff prevailed on her claim that the dealer violated the California Consumers Legal Remedies Act, she was statutorily entitled to recover her attorney fees from the dealer as an item of costs and the insurer is also liable for these costs because its liability as surety is commensurate with that of its principal.
February 14, 2024
Consent Decree Entered Under 1 Dismissal In Case Over Alleged Counterfeit Policies

LOUISVILLE, Ky. — A variety of claims and parties have been dismissed under agreements in a sprawling suit over allegations of fraud, trademark counterfeiting and trademark infringement involving captive reinsurance programs, with a Kentucky federal court permanently enjoining two defendants “from future infringement of Plaintiffs’ trademarks.”
February 14, 2024
Insured’s Damages Covered Under Power Interruption Provision, Judge Says

SAN JOSE, Calif. — A homeowner is entitled to coverage under a policy’s power interruption provision for damages caused to her home because it is clear from the provision’s terms that it provides coverage for the damages caused to the insured’s home by the loss of power to the home’s thermostat, a California federal judge said in granting the insured’s motion for summary judgment and in denying the insurer’s motion for summary judgment on the insured’s bad faith and unfair competition law claims.
February 14, 2024
Injunction Entered Under Agreement To Resolve Lloyd’s Trademark Infringement Case

HOUSTON — After Lloyd’s America Inc. and Corporation of Lloyd’s and the individual they sued over alleged defamation and trademark infringement reported reaching an agreement to resolve the suit, a Texas federal court entered a permanent injunction according to the terms of their agreement.