Mealey's California Insurance
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February 14, 2024
Federal Judge: Potential For D&O Coverage Exists For SEC Subpoenas, Defense Costs
SAN JOSE, Calif. — A federal judge in California held that on the limited record before the court, there is a potential for directors and officers liability coverage for subpoenas issued by the Securities and Exchange Commission to former directors and officers of a biotech company insured and, therefore, the insured is entitled to advancement of the defense costs consistent with its policies’ “Advancement” clause.
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February 13, 2024
9th Circuit Panel Says No Coverage Due For $1M Judgment Entered Against Insured
PASADENA, Calif. — A district court correctly found that no coverage is owed to an insured for a $1 million arbitration judgment because the employment practices liability insurance policy excluded coverage for deliberate fraudulent acts when any final adjudication establishes that a deliberate fraudulent act was committed by the insured, the Ninth Circuit U.S. Court of Appeals said in also finding that the insured’s claims for breach of contract and bad faith fail.
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February 12, 2024
Insureds File Suit, Seek Coverage For Costs Incurred To Remediate Riverbank
SAN FRANCISCO — Insureds filed suit against their umbrella liability insurer in California federal court, alleging that the insurer breached its contract and acted in bad faith by relying on the policy’s pollution exclusion to deny coverage for costs incurred in remediating a riverbank.
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February 12, 2024
Insured Seeks Rehearing, Certification Of Questions In Opioid Coverage Dispute
SAN FRANCISCO — A prescription drug distributor insured on Feb. 9 asked the Ninth Circuit U.S. Court of Appeals to reconsider its ruling that there is no coverage owed for underlying lawsuits prompted by the opioid epidemic because the underlying claims “describe exclusively deliberate conduct,” arguing that a panel rehearing or rehearing en banc is warranted so the panel can certify two “undecided, critical questions of California law” to the California Supreme Court.
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February 12, 2024
Injunction Is Part Of Agreement To Resolve Lloyd’s Trademark Infringement Case
HOUSTON — Lloyd’s America Inc. and Corporation of Lloyd’s and the individual they sued in Texas federal court over alleged defamation and trademark infringement have reported reaching an agreement to resolve the suit, with terms including entry of a permanent injunction.
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February 09, 2024
Bad Faith, Breach Of Contract Claims Against Auto Insurer Fail, 9th Circuit Affirms
PASADENA, Calif. — A district court correctly determined that bad faith and breach of contract claims against a business auto insurer could not proceed because a genuine dispute over coverage existed and the insurer paid the amount owed under the policy shortly after an arbitration award in favor of the insured was confirmed, the Ninth Circuit U.S. Court of Appeals concluded in a Feb. 8 unpublished opinion.
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February 09, 2024
Insurer Petitions 9th Circuit For Panel Rehearing Of Pollution Exclusion Ruling
SAN FRANCISCO — A district court’s ruling that a pollution exclusion bars coverage for an underlying toxic exposure suit stemming from the cleanup of wildfire debris should be affirmed because a panel majority of the Ninth Circuit U.S. Court of Appeals failed to consider two applicable California appellate decisions before concluding that the insurer’s pollution exclusion does not apply to toxic dust, an insurer argues in its petition for panel rehearing.
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February 08, 2024
Insured Fails To Establish Coverage ‘Occurrence’ Under Policy, 9th Circuit Affirms
PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s dismissal of an advertising company insured’s breach of contract lawsuit against its commercial general liability insurer, finding that the insured failed to demonstrate facts establishing a covered “occurrence” under its policy.
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February 07, 2024
Disability Claimant Says Insurer Fails To Show Policy Rider Is Clear, Unambiguous
SAN FRANCISCO — A disability insurer fails to show that a rider included in its disability income policy is not ambiguous and should be enforced, a disability claimant says, maintaining in his appellant reply brief filed in the Ninth Circuit U.S. Court of Appeals that a district court incorrectly interpreted the policy’s monthly benefit rider.
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February 05, 2024
Judge: No Coverage Owed For Unfair Competition Suit Brought Against Insured
SAN DIEGO — A federal judge in California concluded that an insurer has no duty to defend its furniture delivery company insured against an underlying misappropriation of trade secrets and unfair competition lawsuit brought by a competitor, granting the insurer’s motion for summary judgment in the insured’s breach of contract and bad faith lawsuit.
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February 02, 2024
Judgment Granted For Insurer In Row Over Misrepresentation Of Harassment Suit
SANTA ANA, Calif. — A California federal judge granted summary judgment to an employment practices liability insurer in a declaratory judgment suit against its insured, finding that the insurer is entitled to rescind the policies because it would not have issued the policies had it known of the insured’s false affirmation in the policy application that no harassment suits were made against it in the last five years.
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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.
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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.
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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.
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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.”
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.