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

Mealey's California Insurance

March 08, 2023
9th Circuit Affirms Dismissal Of Spa Owners’ Coverage Suit Arising From Pandemic

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s dismissal of spa owner insureds’ lawsuit seeking coverage for their losses arising from the coronavirus pandemic, finding that the insureds’ coverage argument is “squarely foreclosed” by its ruling in Mudpie, Inc. v. Travelers Casualty Insurance Co. of America and that the policies’ virus exclusion also bars coverage.
March 08, 2023
STD, LTD Benefits Claims Cannot Proceed Against Insurer, Judge Concludes

SANTA ANA, Calif. — Following a one-day bench trial in a disability benefits dispute, a California federal judge determined that claims for short-term disability (STD) and long-term disability (LTD) benefits cannot proceed because the disability insurer was not responsible for paying STD benefit claims under the employer’s self-insured plan and because the disability claimant failed to exhaust all administrative remedies in connection with the LTD benefits claim.
March 08, 2023
Federal Judge Dismisses COVID-19 Coverage Suit Between Real Estate Trust, Insurer

SANTA ANA, Calif. — One day after a real estate trust insured and its insurer filed a stipulation for voluntary dismissal of the insured’s breach of contract and bad faith lawsuit seeking coverage for its business interruption losses arising from the coronavirus pandemic, a federal judge in California on March 7 dismissed the case with prejudice.
March 07, 2023
Insured Asks 9th Circuit To Reconsider Ruling In E&O Coverage Dispute

SAN FRANCISCO — An insured filed a petition for a panel rehearing and rehearing en banc challenging the Ninth Circuit U.S. Court of Appeals’ affirmation of a federal court’s summary judgment ruling in favor of an insurer in a breach of contract lawsuit seeking errors and omissions coverage for the insured’s defense costs and damages stemming from a $5.7 million arbitration award.
March 07, 2023
Real Estate Trust, Insurer Voluntarily Dismiss Coronavirus Coverage Dispute

SANTA ANA, Calif. — A real estate trust insured and its insurer on March 6 filed a stipulation for voluntary dismissal with prejudice of the insured’s breach of contract and bad faith lawsuit seeking coverage for its business interruption losses arising from the coronavirus pandemic.
March 06, 2023
Pollution, Contamination Exclusion Must Be Construed In Favor Of Coverage

SANTA ANA, Calif. — A California federal judge denied an insurer’s motion to dismiss breach of contract, bad faith and declaratory judgment claims alleged by an insured seeking coverage for business losses sustained in the wake of the COVID-19 pandemic because the policy’s pollution and contamination exclusion is ambiguous and must be construed in favor of coverage.
March 06, 2023
U.S. High Court Denies Volunteer’s Stay Request In Libel, Slander Coverage Suit

WASHINGTON, D.C. — The U.S. Supreme Court on March 6 denied a church volunteer’s application for emergency stay or recall of the Ninth Circuit U.S. Court of Appeals’ mandate of its finding that a church’s general liability 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.
March 03, 2023
Calif. Federal Judge: Insurer Can Rescind Policy In Light Of Misrepresentations

SAN FRANCISCO — An insurer is entitled to rescind a policy covering an apartment building because the owner of the apartment building made misrepresentations about its recent litigation history in its application, a California federal judge found in entering judgment for the insurer on its counterclaims and third-party claims while also dismissing the claims against it by another insurer that sought declaratory and equitable relief for the defense and indemnity of the owner in four lawsuits.
March 03, 2023
California High Court Accepts Certified Question In Coronavirus Coverage Dispute

SAN FRANCISCO — The California Supreme Court accepted the Ninth Circuit U.S. Court of Appeals’ certified question to determine whether “the actual or potential presence of the COVID-19 virus on an insured's premises” constitutes “direct physical loss or damage to property” to trigger coverage under an insured’s commercial property insurance policy.
March 03, 2023
Insurer’s Bid To Place Other Insurer On The Hook For Damages Coverage Denied

SAN FRANCISCO — An excess liability insurer is not entitled to summary judgment on its claims for equitable indemnity and/or equitable subrogation against other insurers involved in a construction defects lawsuit against the builder in charge of the Millennium Tower project because the insurer has failed to show that coverage it paid should have been paid by another insurer based on the timeline for when the alleged damages were first discovered, a federal judge in California ruled.
March 03, 2023
Judgment Entered After Jury Awards Insurer $2.4M In Employee Status Fraud Suit

SANTA ANA, Calif. — A California federal judge issued a final judgment after a jury found that an employer and his California limited liability company committed fraud when the employer misrepresented his nonagenarian father as an employee insured under the company’s group health plan and awarded the insurer more than $2.4 million in damages.
March 02, 2023
Panel Reverses, Says Including Time Under Seal Wrong In Calif. False Claims Suit

LOS ANGELES — A California appellate court reversed and remanded a trial court’s dismissal of a qui tam medical insurance fraud suit filed against a chiropractor and related entities, finding that dismissal under a rule requiring a suit to go to trial within five years after filing was incorrect because the trial court failed to exclude from the five-year calculation the time under seal and stays due to alternate criminal proceedings against some of the defendants.
March 01, 2023
Warranty Exclusion Barred Contractor From Seeking Defense In Defects Suit

SAN FRANCISCO — A California trial court correctly found that an insurer owed no duty to defend or indemnify its insured contractor in a construction defects lawsuit stemming from its building of a home because the claims brought against the contractor are barred by the policy’s contractors warranty exclusion, a California appellate court panel said Feb. 28 in affirming judgment in favor of the insurer.
March 01, 2023
Judge Grants GEICO’s Motion To Strike Jury Demand In COVID Premium Suit

SAN FRANCISCO — A California federal judge granted GEICO’s motion to strike a demand by a certified class of automotive policy holders for a jury trial on the claim that GEICO violated California’s unfair competition law (UCL) by profiting from a premium giveback program initiated during the COVID-19 pandemic, writing that the lead plaintiff “has no . . . right to a jury trial on her UCL claim.”
March 01, 2023
9th Circuit: No E&O Coverage Owed For Fraud Suit Against Real Estate Agent

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a summary judgment ruling in favor of a real estate errors and omissions insurer in an insured’s breach of contract and bad faith lawsuit seeking defense against an underlying fraud claim arising from a real estate transaction, finding that the insured failed to identify a claim that triggered its insurer’s duty to defend.
March 01, 2023
Panel: No Triable Issue That COVID-19 In Hotel Caused Insured’s Alleged Lost Income

SAN DIEGO — A California appeals court panel affirmed a summary judgment ruling in favor of a commercial insurer in a breach of contract and bad faith lawsuit brought by the owner and operator of a 126-room Holiday Inn Express franchise in San Diego, finding that “there is no evidence creating a triable issue that COVID-19 in the hotel caused the claimed lost income.”
February 27, 2023
9th Circuit Reverses Ruling In Class RESPA Suit For Abuse Of Discretion

SAN FRANCISCO — Saying in a Feb. 24 unpublished memorandum disposition that the appellants in a long-running Real Estate Settlement Procedures Act (RESPA) class action involving captive reinsurance agreements “could not have reasonably anticipated the need for their undisclosed evidence of economic injury,” a Ninth Circuit U.S. Court of Appeals panel reversed and remanded a ruling the appellants argued “was tantamount to case-ending sanctions.”
February 22, 2023
Insurer On The Hook For Defense Costs, Settlement In Underlying Defects Suit

LOS ANGELES — A California appellate panel found that a state trial court did not err in ruling that a property management company’s insurer owed a duty to defend and indemnify the company in an underlying construction defects lawsuit because the claims brought against the company fell within the coverage included in the policies issued.
February 21, 2023
Insured, Insurer Seek Judgment On Breach Of Contract Claim, Number Of Occurrences

RIVERSIDE, Calif. — An insured and its excess insurer filed competing motions for summary judgment in a groundwater contamination coverage dispute with each party asking a California federal court to enter judgment on the insured’s breach of contract claim arising out of the insurer’s termination of coverage based on the insurer’s position that coverage is owed for only one occurrence under the applicable policies.
February 17, 2023
Calif. Federal Judge Says Company Principal Was Not A Party To Auto Policy

LOS ANGELES — The principal of an insured tow truck company cannot allege breach of contract and bad faith claims against the tow truck company’s auto insurer because the principal was not individually named as an insured on the policy and failed to show that the parent company of the insurer was a party to the insurance contract.
February 16, 2023
Insurer Must Produce Financial Records As They Are Relevant To Bad Faith Claim

RIVERSIDE, Calif. — An insured seeking coverage for groundwater contamination at a county airport is entitled to discovery regarding the financial condition of an excess insurer’s parent and affiliate companies because the financial information is relevant to the insured’s allegation that the insurer had a financial motive for acting in bad faith when it stopped reimbursing the insured for remediation costs, a California federal magistrate judge said in denying the insurer’s motion for a protective order.
February 16, 2023
Virus Exclusion Bars Coverage For Retailers’ COVID-19 Losses, 9th Circuit Affirms

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on Feb. 15 affirmed a lower federal court’s ruling in favor of a property insurer in retailers’ breach of contract and bad faith lawsuit seeking coverage for their losses arising from the coronavirus pandemic, finding that the virus exclusion bars coverage because the insureds have failed to assert “that the efficient cause of their losses was anything other than the spread of COVID-19.”
February 15, 2023
Insurer Moves To Dismiss Amber Heard’s Counterclaim In Defamation Coverage Suit

LOS ANGELES — An insurer moved for a California federal court to dismiss Amber Heard’s breach of contract and bad faith counterclaims in its declaratory judgment lawsuit alleging that it has no duty to defend or indemnify Heard against an underlying defamation judgment awarded to Johnny Depp, contending that the insured “admittedly ‘refused to fully accept’ the defense” that it “rightfully provided” “through appointed counsel.”
February 14, 2023
9th Circuit: Insurer Has No Duty To Indemnify California County For Retaliation Suit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Feb. 13 held that an insurer has no duty to indemnify its insured under public entity excess liability policies because California Insurance Code Section 533 barred indemnity of underlying retaliation claims, affirming a lower federal court’s summary judgment ruling in favor of the insurer.
February 13, 2023
Judge Allows Breach Of Contract, Bad Faith Claims To Proceed In Water Damage Suit

RIVERSIDE, Calif. — A California federal judge denied a homeowners insurer’s motion for summary judgment on breach of contract and bad faith claims after determining that questions of fact exist as to the cause of water damage in an insured home and as to whether the insurer acted in bad faith in handling the insureds’ coverage claim.