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

Mealey's California Insurance

March 28, 2024
Bad Faith Claim Based On Insurer’s Denial Of Defense Not Time-Barred, Panel Says

SANTA ANA, Calif. — A trial court erred in granting a homeowners insurer’s motion for summary judgment on an insured’s bad faith claim related to the insurer’s denial of a defense for an arbitration proceeding arising out of the insured’s alleged failure to disclose a water and mold damage in a home sold by the insured because the bad faith claim based on the denial of a defense was not time-barred under the policy, the Fourth District California Court of Appeal said.
March 28, 2024
Trial Court Properly Awarded Sanctions To Disability Insurer, California Panel Says

SANTA ANA, Calif. — A trial court properly sustained a disability insurer’s demurrer of an insured’s breach of contract and bad faith suit and properly awarded sanctions to the disability insurer because the suit was the third suit filed against the insurer and the insured failed to meet his burden of showing that the third suit was not frivolous or without merit, the Fourth District California Court of Appeals said.
March 27, 2024
Judge Dismisses Construction Defects Insurance Suit After Parties Agree To Settle

OAKLAND, Calif. — After the parties notified the court that they had reached a global settlement, a federal judge in California on March 26 dismissed with prejudice the case between two excess insurers and a construction firm and related entities that sought a defense for a series of construction defect claims.
March 27, 2024
Federal Judge: Ambiguities Mean Insurer Owes Defense To Damaged Home’s Owners

SAN DIEGO — A California federal judge granted in part a couple’s motion for partial summary judgment, finding that a renovator’s insurer owes them a duty to defend and indemnify due to damages caused to the couple’s duplex home while the renovator was replacing the roof because an ambiguously worded policy exclusion regarding apartments does not bar coverage.
March 27, 2024
Dismissal Stipulated Before Jury Trial In Reinsurance Breach Of Contract Row

LOS ANGELES — Parties in a reinsurance billing suit over a variety of claims that had been progressing toward a jury trial in California federal court have filed a one-paragraph March 26 stipulation dismissing the case in its entirety “with prejudice and without costs.”
March 26, 2024
Companies Appeal Finding They Are Owed No Defense From Subcontractor’s Insurer

LOS ANGELES — A building owner and a general contractor have appealed a California judge’s decision dismissing their lawsuit seeking payment from a subcontractor’s insurer after the judge agreed with the insurer that coverage was barred by a policy exclusion related to damage caused by the subcontractor’s faulty work.
March 25, 2024
Judge Grants Summary Judgment On Driver’s UCL Claim For ‘Unfair’ COVID Premiums

SAN FRANCISCO — A California federal judge granted GEICO’s motion for summary judgment on an insured’s claim against it for violating California’s unfair competition law (UCL) by unfairly profiting from a premium giveback program initiated during the COVID-19 pandemic, in part citing evidence that state insurance regulators deemed GEICO’s givebacks sufficient.
March 25, 2024
Insurer Says Lower Court Erred In Placing Burden On Insurer In Pollution Dispute

SAN FRANCISCO — A district court erred in placing the burden on an insurer to prove that a pollution exclusion barred coverage for underlying environmental contamination lawsuits because the burden should have been placed on the insureds to prove that the exclusion did not apply as a bar to coverage, an insurer argues in its March 22 appellant brief filed in the Ninth Circuit U.S. Court of Appeals.
March 21, 2024
Panel Reverses ‘Rare’ Case Where Diner Has Alleged Direct Physical Loss, Damage

SAN DIEGO — A California appeals panel held that a diner insured’s lawsuit seeking coverage for its business losses arising from the COVID-19 pandemic is “one of those rare cases” where the insured has adequately asserted a direct physical loss or damage under its commercial property insurance policy “at least raising the specter of coverage,” reversing a lower court’s judgment in favor of the insurer and remanding.
March 21, 2024
9th Circuit Affirms Judgments For Insurers In Fire Loss Coverage Dispute

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on March 20 affirmed a district court’s grants of summary judgment for insurers in two coverage disputes consolidated on appeal, finding that the district court correctly granted summary judgment for the insurers because no issues of fact remain regarding whether the homeowner misrepresented in the insurance application that she used her property for commercial purposes or that she had prior losses.
March 21, 2024
California Panel Affirms Ruling In Coverage Suit Over Postponed Metallica Shows

LOS ANGELES — A California appeals court affirmed a lower court’s summary judgment ruling in favor of an insurer in the insured’s breach of contract and bad faith lawsuit seeking coverage under a “Cancellation, Abandonment and Non-Appearance Insurance” policy for the postponement of the last six shows of Metallica’s South American tour in 2020, finding that the policy’s “communicable disease” exclusion is not ambiguous and that its ordinary meaning includes the pathogen that underlies the disease.
March 21, 2024
Panel Affirms Ruling In Favor Of Insurer In Bad Faith Suit Over Woolsey Fire Damage

LOS ANGELES — A California appeals court held that a homeowners insurer did not breach the insurance contract or the implied covenant of good faith and fair dealing and did not commit financial elder abuse because it paid the proper insureds “all (if not more than)” it had a duty to pay under the policy coverages for dwelling repairs, personal property damage and temporary additional living expenses, affirming a lower court’s summary judgment ruling in favor of the insurer in a coverage dispute arising from property damage cause by the Woolsey Fire.
March 19, 2024
California Panel Affirms Rulings In Favor Of Excess D&O Insurer

LOS ANGELES — A California appeals panel affirmed a lower court’s rulings in favor of an excess directors and officers (D&O) liability insurer in its lawsuit disputing coverage for its investment management firm insured, rejecting the appellant’s argument that the lower court erred in interpreting a primary D&O policy provision as an indemnification contract.
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.