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

Mealey's California Insurance

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.
January 04, 2024
P.F. Chang’s Coverage For COVID-19 Losses Limited To $1M, California Panel Affirms

LOS ANGELES — A California appeals court on Jan. 3 concluded that P.F. Chang's China Bistro Inc.’s insurance policy language “clearly and unambiguously” provided only $1 million in coverage for its losses arising from the coronavirus pandemic, affirming a lower court’s ruling granting summary adjudication in favor of the insurer.
January 04, 2024
Federal Ruling Bars Church Volunteer From Compelling Arbitration In California Court

SAN FRANCISCO — A California judge denied a church volunteer’s motion to compel arbitration under the church’s general liability insurance policy, finding that the volunteer is barred from seeking arbitration by a federal court’s finding that the insurer has no duty to defend or indemnify the volunteer against an underlying libel and slander lawsuit arising from his negative review of a solar company on social media.
January 03, 2024
Federal Judge Denies Insureds’ Request For Immediate Appeal Of Bad Faith Ruling

LOS ANGELES — A California federal judge denied a motion to certify a summary judgment ruling on a bad faith claim to allow the insureds to pursue an immediate appeal of the ruling after determining that judicial economy would not be served by allowing an interlocutory appeal.
January 03, 2024
Exclusion Bids Regarding Claims, Outside Counsel Disputed In Reinsurance Row

LOS ANGELES — In California federal court filings, parties in a reinsurance billings suit over a variety of claims are disputing attempts by one defendant to exclude evidence regarding claims submitted to other reinsurers and opinions of outside counsel.
January 03, 2024
Insured Entitled To 2 Policy Limits Based On Policies’ Ambiguity, Panel Says

SAN FRANCISCO — A trial court erred in finding that an insured automotive products retailer, seeking coverage for underlying asbestos bodily injury lawsuits, is only entitled to payment of one policy limit under policies issued by two insurers because the policies, which were extended to provide coverage for more than a year, are ambiguous as to whether a new policy limit applied for the extended coverage and must be construed in the insured’s favor, the First District California Court of Appeal said in reversing a portion of the trial court’s ruling.
January 02, 2024
Insurer Says Silica Exclusion Bars Coverage For Underlying Bodily Injury Suits

SANTA ANA, Calif. — No coverage is owed for underlying silica exposure bodily injury suits filed against an insured countertop manufacturer, supplier and distributor because the insured’s policies contain a silica exclusion that bars coverage for the underlying suit, an insurer says in a complaint filed in California federal court.
December 19, 2023
Coverage Suit Over Faulty Breaker Installation Dismissed After Parties Settle

SAN DIEGO — A federal judge in California has dismissed with prejudice an insured’s breach of contract and bad faith suit against its insurer arising from the insurer’s refusal to indemnify the insured in an underlying property damage lawsuit stemming from the sale and installation of defective circuit breakers, granting the parties’ jointly filed motion for dismissal.
December 15, 2023
Virus Exclusion Unambiguously Bars Coverage, Panel Affirms In COVID-19 Coverage Suit

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s dismissal of an insured’s breach of contract and bad faith lawsuit seeking coverage for its business losses incurred as a result of the coronavirus and subsequent government shutdown orders, finding that the commercial insurance policy's virus exclusion unambiguously precludes coverage for the insured’s claims for loss and damage.
December 15, 2023
No Coverage Owed For $20M Wrongful Death Default Judgment, California Panel Affirms

SAN DIEGO — A California appeals panel held that an insured would not reasonably expect that his son’s conduct that resulted in a fatal shooting would fall under a homeowners insurance policy’s scope of coverage for an “accident” and outside the intentional acts exclusion, affirming a lower court’s ruling in favor of insurers in a breach of contract and bad faith lawsuit seeking coverage for an underlying $20 million wrongful death default judgment.
December 15, 2023
Panel: Appellants Failed To Establish Defendants Had Duty To Provide E&O Coverage

SAN DIEGO — A California appeals panel held Dec. 14 that appellants have not presented evidence to demonstrate a triable issue or material fact as to whether a business office liability insurer and an insurance agent had a duty to provide or suggest errors and omissions coverage, affirming a lower court’s summary judgment ruling in favor of the insurer and agent in a negligence lawsuit.
December 15, 2023
Insureds Breached Terms Of Policy By Failing To Provide Proof Of Loss, Judge Says

SACRAMENTO, Calif. — Insureds’ claims for breach of contract and bad faith against their homeowners insurers in a dispute over damages and losses caused by a California wildfire cannot proceed because the insureds breached the terms of the insurance policy by failing to file a proof of loss for their personal property losses, a California federal judge said in granting the insurers’ motion for summary judgment.
December 14, 2023
Bifurcation Of Bad Faith Claim In Wildfire Coverage Suit Not Warranted, Judge Says

SAN FRANCISCO — Bifurcation of a bad faith claim from a breach of contract claim in a dispute over coverage for property damages sustained by an insured’s wineries during four California wildfires is not warranted, a California federal judge said after determining that judicial efficiency would not be served through bifurcation and that any potential prejudice to the insurer incurred by trying both claims together could be avoided by issuing clear and limited jury instructions.
December 13, 2023
Stay Granted In Elder Abuse Suit Over Failure To Follow California Insurance Code

FRESNO, Calif. — A California federal magistrate judge on Dec. 12 issued a stay in putative class action asserting claims for elder abuse and breach of contract related to a life insurer’s violations of provisions of the California Insurance Code by failing to provide notice of policies lapse or termination, finding that “good cause exists” to grant the stay pending the outcome of two Ninth Circuit U.S. Court of Appeals cases with “dispositive issues germane to this case.”
December 12, 2023
Insured Failed To Show Coronavirus Is A Pollution Condition, Panel Says

PORTLAND, Ore. — The Ninth Circuit U.S. Court of Appeal on Dec. 11 affirmed a district court’s ruling that no coverage is owed to an insured for business interruption losses sustained as a result of the COVID-19 pandemic because the insured failed to show that the coronavirus qualifies as a pollution condition as required by the policy at issue.