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

Mealey's California Insurance

June 28, 2024
Beneficiary’s Claims Fail Based On Proper Rescission Of Policy, Judge Says

SACRAMENTO, Calif. — A beneficiary’s breach of contract and bad faith claims cannot proceed against a life insurer because the beneficiary’s wife made a material misrepresentation on the policy application that justified the insurer’s rescission of the policy, a California federal judge said in granting the insurer’s motion for summary judgment.
June 28, 2024
Judgment Entered In CGL Coverage Suit After Insurer, Contractor Seek Dismissal

OAKLAND, Calif. — A judgment was entered declaring that a commercial general liability insurer has no duty to defend or indemnify a contracting company insured and its owner against an underlying lawsuit alleging defective work on a home renovation project the same day a California federal judge signed the parties’ stipulation and proposed order for entry of final judgment.
June 24, 2024
High Court Again Extends Response Deadline In Review Of 9th Circuit FCA Reversal

WASHINGTON, D.C. — The U.S. Supreme Court on June 21 granted a district court qui tam plaintiff’s second request for additional time to respond to pharmaceutical companies’ petition that seeks review of the Ninth Circuit U.S. Court of Appeals’ ruling reversing the district court’s dismissal of a suit accusing the companies of violating the False Claims Act (FCA) by artificially inflating drug prices.
June 24, 2024
Panel: Professional Services Exclusion Bars D&O Coverage For Anti-Kickback Settlement

SAN FRANCISCO — A California appeals panel on June 21 held that an insured’s loss resulting from its settlement with the United States of claims that it violated the federal Anti-Kickback Statute is barred by its primary and excess directors and officers liability insurance policies’ professional services exclusion, affirming a lower court’s ruling in favor of the insurers in the insured’s breach of contract lawsuit.
June 21, 2024
Revised $195,000 Class Deal Gets Initial OK In Suit Alleging Fraudulent Policies

SANTA ANA, Calif. — Ruling various revisions sufficient, a California federal judge granted preliminary approval to a $195,000 settlement in a suit over alleged fraud involving captive reinsurance, also modifying the preliminarily certified settlement class.
June 19, 2024
California High Court Reverses, Says Vertical Exhaustion Applies To Policies

SAN FRANCISCO — The California Supreme Court reversed an appeals court’s ruling in a long-running asbestos insurance coverage dispute after determining that a vertical exhaustion method, rather than a horizontal exhaustion method, must be applied to excess policies that sit over an insured’s primary policies because the language of the excess policies and the insured’s reasonable expectations support a vertical exhaustion method.
June 19, 2024
Federal Judge: Employee’s Suit Alleges ‘Securities Claim’ Under D&O Policy

LOS ANGELES — A federal judge in California partly granted a biopharmaceutical company insured’s motion for judgment on the pleadings in a directors and officers liability coverage dispute, finding that a lawsuit brought by the insured’s former employee asserts a “securities claim” based on the policy’s clear language.
June 17, 2024
Lakers, Insurer Dismiss Coronavirus Coverage Dispute In California Federal Court

LOS ANGELES —The Los Angeles Lakers and its commercial property insurer filed a stipulation asking a California federal court to dismiss with prejudice the insured’s lawsuit arising from its property damage and business interruption claims for losses related to the COVID-19 pandemic.
June 13, 2024
Magistrate: Defendant CGL Insurer Owes Defense For Negligence Suit Against Insured

FRESNO, Calif. — A federal magistrate judge in California held that underlying allegations that an insured negligently conducted cyclic steaming operations constitute an “occurrence” under a defendant commercial general liability insurer’s policy, granting the plaintiff CGL insurer’s joint motion for summary judgment as to the defendant insurer’s duty to defend against an underlying lawsuit brought against their mutual insured.
June 13, 2024
Insurers’ Motion For Summary Judgment Denied In Row Over Jet Insurance Coverage

SAN DIEGO — A California federal judge denied summary judgment to insurers in their suit seeking rescission of a policy covering a private jet but granted in part the jet owners’ motion for partial summary judgment regarding their reliance “on a misrepresentation theory,” finding that the insurers failed to show that the insureds made misrepresentations about the identity of the jet’s pilots.
June 13, 2024
Judge Sustains Insurer’s Demurrer As To Bad Faith Claim In Suit Over Netflix Show

LOS ANGELES — A California judge sustained an insurer’s demurrer without leave to amend as to a breach of the implied covenant of good faith and fair dealing brought by the producers of the Netflix show “House of Cards” and overruled the insurer’s remaining demurrers in a coverage dispute arising from the insureds’ claims that the revised final season of House of Cards was not as successful as was anticipated before Kevin Spacey's departure from the show.
June 07, 2024
9th Circuit Gives Agencies Win In Crop Insurance ‘Farming Activity’ Fight

SAN FRANCISCO — Ruling that the challenged interpretation of “farming activity” survives scrutiny under Auer v. Robbins and the Administrative Procedure Act (APA), a Ninth Circuit U.S. Court of Appeals panel affirmed a decision for government agencies in a crop insurance dispute involving federal reinsurance and the structure of a farming operation.
June 07, 2024
Disability Claimant Says Any-Occupation Benefits Are Owed By Disability Insurer

SAN DIEGO — A disability insurer abused its discretion in determining that a disability claimant is not disabled from performing the duties of any occupation based on symptoms related to the claimant’s diagnoses of fibromyalgia and ankylosing spondylosis because the medical evidence submitted by the claimant supports a finding that the claimant is disabled from performing the duties of any occupation, the claimant maintains in a June 6 complaint filed in California federal court.
June 05, 2024
U.S. High Court Extends Response Deadline In Review Of 9th Circuit FCA Suit Ruling

WASHINGTON, D.C. — The U.S. Supreme Court on June 3 granted a 30-day extension for the qui tam plaintiff in a district court decision to respond to pharmaceutical companies’ petition seeking review of the Ninth Circuit U.S. Court of Appeals’ reversal of a district court’s dismissal of a suit accusing them violating the False Claims Act (FCA) by artificially inflating drug prices, arguing in part that the Ninth Circuit “created a circuit split by holding that a relator can avoid the public disclosure bar by ‘stitching together’ public disclosures.”
June 05, 2024
Federal Judge: Insurance Dispute Still Stayed As Underlying State Claims Continue

OAKLAND, Calif. — A California federal judge denied a request from two insurers to lift a stay of proceedings in a coverage dispute over the insurers’ duty to defend and indemnify a contractor and subcontractor for claims that they caused cracks to a California hospital’s floor, finding that the hospital’s settlement with the construction companies in an underlying state action did not bring about the full resolution of that case.
June 04, 2024
No Cybersecurity Coverage Owed For Phishing Scam Losses, California Panel Affirms

SANTA ANA, Calif. — A California appeals panel on June 3 affirmed a lower court’s ruling that an insurer owes no coverage for an insured’s losses arising from a phishing scam, determining that the insured failed to assert a “direct financial loss” to trigger coverage under the cybersecurity insurance policy.
May 31, 2024
Judge Dismisses Coverage Dispute Between Contractor, Insurer After Settlement

LOS ANGELES — A federal judge in California granted a contractor and a commercial general liability insurer’s joint stipulation of dismissal filed after the parties agreed to a settlement, dismissing with prejudice allegations stemming from claims that the contractor failed to secure a building before a hurricane.
May 30, 2024
Federal Judge Dismisses Construction Damage Coverage Dispute After Parties Settle

SAN DIEGO — A federal judge in California on May 29 granted a California couple and a renovator’s insurer’s joint motion to dismiss the couple’s suit stemming from claims that the insurer owed them a defense and indemnification as a result of roofing damages caused by the renovator after the parties agreed to a settlement.
May 30, 2024
Insurers Owe No Coverage For Underlying Judgments In Asbestos Exposure Suits

SAN FRANCISCO — A trial court properly found that two insurers owe no coverage for underlying judgments totaling $41 million entered against their insured in underlying lawsuits arising out of a claimant’s exposure to asbestos in the insured’s products because the policies’ auto exclusions apply as a bar to coverage based on the fact that the claimant was exposed to the asbestos while unloading the insured’s product from the insured’s delivery van, the First District California Court of Appeal said.
May 28, 2024
Contractor, Insurer Seek Dismissal Of Coverage Claims After Settlement

LOS ANGELES — A contractor and an insurer filed a joint stipulation of dismissal on May 24, seeking to bring an end to their dispute in a California federal court stemming from the contractor’s alleged failure to properly secure a building under construction in advance of a hurricane after they agreed to a settlement.
May 24, 2024
California High Court: Presence Of COVID-19 Does Not Constitute Direct Physical Loss

SAN FRANCISCO — Answering “no” to a certified question from the Ninth Circuit U.S. Court of Appeals, the California Supreme Court held May 23 that the “actual or potential presence of the COVID-19 virus on an insured's premises generally does not constitute ‘direct physical loss or damage to property’ for purposes of coverage under a commercial property insurance policy.”
May 24, 2024
California Jury Awards Sisters $18M In Bad Faith Suit Over Flood Damage

SAN BERNARDINO, Calif. — A California jury awarded two sisters $6 million in past noneconomic losses and $12 million in punitive damages after finding that insurers committed breach of contract and acted in bad faith in their handling of the insureds’ property damage claim arising from a 2019 flood.
May 22, 2024
Insured’s Suit Remanded For Failure To Show Adjuster Was Fraudulently Joined

OAKLAND, Calif. — Remand of an insured’s breach of contract and bad faith suit is warranted because the homeowners insurer and its adjuster failed to meet their burden of showing that the insured’s negligent misrepresentation claim against the adjuster is frivolous, a California federal judge said in granting the insured’s motion to remand.
May 17, 2024
Burden Of Proof In Gas Leak Coverage Suit Will Not Be Shifted To Insurer

LOS ANGELES — A California federal judge rejected an attempt by insureds to shift the burden of proof to an insurer in a dispute over coverage for underlying personal injury claims stemming from a gas leak at an insured facility because the insurer did not breach its duty to defend and because California public policy does not support insureds’ proposed burden-shifting principle.
May 16, 2024
California Says Insurers, Valuation Companies Conspire To ‘Lowball’ Vehicle Claims

OAKLAND, Calif. — A California district attorney on behalf of the state filed an amended complaint in state court against a group of insurance and valuation companies for allegedly violating California’s unfair competition law (UCL) and other laws for engaging in a criminal and civil conspiracy to “systematically and pervasively underpay claims” for totaled cars.