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

Mealey's California Insurance

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.
December 12, 2023
California Judge Sustains Insurer’s Demurrer To Nonprofit’s COVID-19 Coverage Suit

LOS ANGELES — A California judge sustained an insurer’s demurrer to its nonprofit insured’s breach of contract, bad faith, negligent misrepresentation and declaratory relief complaint seeking coverage for its losses arising from the coronavirus pandemic, holding that the coronavirus and the subsequent governmental orders “are inextricably intertwined.”
December 11, 2023
Judge Overrules Demurrer To UCL Claim Against Tesla Insurance For Premium Hikes

ALAMEDA, Calif. — A California state court judge denied in part a demurrer filed by Tesla Insurance Services Inc., the insurance unit of electric car-maker Tesla Inc., to a driver’s putative class action accusing it of violating California’s unfair competition law (UCL) by charging drivers higher insurance premiums based on false “Collision Warning” alerts generated when the driver is driving safely.
December 08, 2023
Elder Abuse Suit Against LTC Insurer Tossed For Not Following Reimbursement Terms

SAN FRANCISCO — A California federal judge dismissed without leave to amend a bad faith, breach of contract, anticipatory breach of contract and elder abuse suit filed against a couple’s long-term care (LTC) insurer for its failure to cover the wife’s claim for benefits, finding that “[t]he fundamental problem with their claims is that the insurance policy in question is a reimbursement policy” and the couple failed to incur or submit covered expenses for reimbursement.
December 08, 2023
Limitation In Disability Income Policy Is Ambiguous, Claimant Tells 9th Circuit

SAN FRANCISCO — A district court erred in finding that a disability income insurer correctly reduced the claimant’s disability income benefits according to the terms of the disability income policy because the policy’s monthly benefit limitation is ambiguous and, therefore, must be construed in favor of the claimant, a disability claimant says in an appellant brief filed in the Ninth Circuit U.S. Court of Appeal.
December 08, 2023
Judge Dismisses Suit After Flight Attendant, Disability Insurer Settle LTD Claim

SAN FRANCISCO — A California federal judge dismissed a disability benefits suit after the parties settled the dispute over a flight attendant’s entitlement to long-term disability (LTD) benefits.
December 07, 2023
Majority: Insurance Code Does Not Bar Indemnification For Retaliation Settlement

LOS ANGELES — Addressing an “important” question of first impression “whose answer will influence enforcement of our employment laws,” a majority of a California appeals court held Dec. 6 that not all California Labor Code Section 1102.5 claims involve necessarily willful conduct and, therefore, a lower court erred in finding that California Insurance Code Section 533 barred indemnification for a $3 million underlying settlement of police officers’ retaliation lawsuit against a California city.
December 07, 2023
Judgment Entered For Disability Claimant; Own-Occupation Benefits Owed

SANTA ANA, Calif. — A California federal judge issued a judgment in favor of a disability claimant after determining that the claimant is owed long-term disability (LTD) benefits because the claimant met his burden that he remains disabled from performing the duties of his own occupation.
December 07, 2023
Texas Physicians, Hospital CFO Settle FCA Suit Over Illegal Kickbacks For $880,000

SHERMAN, Texas — The U.S. Department of Justice (DOJ) announced that a hospital’s former chief financial officer (CFO) and several physicians agreed to pay the U.S. government a total of $880,199 to settle a qui tam federal False Claims Act (FCA) suit alleging violations of the Anti-Kickback Statute (AKS) through payment of illegal kickbacks to doctors and medical practices and fraud against government insurers by billing them for medically unnecessary tests.
December 04, 2023
Insured Failed To Timely Report Employee’s Claims, California Panel Affirms

RIVERSIDE, Calif. — A California appeals panel concluded that a lower court properly sustained an insurer’s demurrer in an insured’s breach of contract and bad faith lawsuit seeking coverage for underlying claims brought by a former employee, determining that the insured failed to timely report any of the employee’s claims to trigger coverage.
December 04, 2023
Questions Of Fact Regarding Cause Of Water Damage Exist, Calif. Federal Judge Says

LOS ANGELES — An insured’s claims for breach of contract and bad faith can proceed against a homeowners insurer because questions of fact exist as to whether water damage in the insured’s home was caused by wear and tear, an excluded cause of loss, and whether the insurer’s investigation of the claim was reasonable, a California federal judge said in denying the insurer’s motion for summary judgment.
November 30, 2023
Gym Fee Dispute Stemming From COVID-19 Lockdowns Dismissed Without Prejudice

SAN DIEGO — A California federal judge on Nov. 29 granted the motions of a fitness and health company and its wholly owned subsidiary gym network and a health insurer to dismiss a putative class complaint brought by a gym member alleging breach of the implied duty of good faith and fair dealing, negligent representation and violations of California law in continuing to charge fees for gym memberships during COVID-19 lockdowns when the gyms could not be accessed.
November 30, 2023
Judge Refuses To Reconsider Ruling Allowing Law Firm To Intervene In D&O Dispute

SAN JOSE, Calif. — A federal judge in California refused to reconsider its Nov. 3 ruling that granted a law firm’s motion to intervene in an insurer’s lawsuit seeking a declaration that a directors and officers employment practices liability and fiduciary liability policy is rescinded because of the insureds’ material misrepresentations, standing by its decision to permit the firm to enforce a charging lien against the proceeds of the policy.
November 30, 2023
Panel Says Request For Examination Under Oath Was Not Made In Bad Faith

SAN FRANCISCO — The First District California Court of Appeal affirmed a trial court’s ruling in favor of an insurer on an insured’s breach of contract and bad faith claims in a water damage coverage suit after determining that the insurer’s request for an examination under oath (EUO) from the insured is not evidence of bad faith conduct.
November 29, 2023
On Remand, Parties Dispute Expert Exclusion Bids In RESPA Class Lawsuit

FRESNO, Calif. — Parties in a long-running Real Estate Settlement Procedures Act (RESPA) class action involving captive reinsurance agreements are sparring in California federal court over expert testimony regarding whether the plaintiffs have standing under an economic harm theory.
November 27, 2023
Lloyd’s And U.S. Subsidiary File Trademark Infringement, Defamation Lawsuit

HOUSTON — Two entities connected with “an insurance and reinsurance market that is the most famous brand in the insurance underwriting field” have filed a suit in Texas federal court asserting claims including defamation and trademark infringement against an individual and a corporation and LLC they say he registered in Texas and California.
November 21, 2023
Suit Claiming Skilled Nursing Facilities Violated FCA Tossed After Parties Settle

LOS ANGELES — A California federal judge dismissed the government’s claims against six skilled nursing facilities (SNFs), their owner and their management company two days after the U.S. Department of Justice announced that it entered into a $45.6 million consent judgment with the SNFs and related parties in a suit alleging that they violated the federal False Claims Act (FCA) and California False Claims Act in submitting false claims to Medicare by paying kickbacks to physicians in exchange for the physicians referring patients to the SNFs.
November 20, 2023
9th Circuit Finds No Error In Judgment Entered In Favor Of Disability Insurer

SAN JOSE, Calif. — The Ninth Circuit U.S. Court of Appeals affirmed a district court’s judgment in favor of a disability insurer, rejecting the disability claimant’s argument that the lower court adopted new rationales that were not included in the administrative record in finding that the insurer’s termination of benefits was reasonable based on the evidence.
November 20, 2023
Insurer’s Environmental Coverage Suit Stayed Until Underlying Suit Is Resolved

SANTA ANA, Calif. — A California state judge denied a demurrer to an insurer’s complaint but granted a motion to stay the insurer’s declaratory judgment suit until after an underlying environmental contamination suit against the successor company to an insured is resolved because resolution of the underlying suit will aid the court in determining whether the insurer’s pollution exclusion applies as a bar to coverage for the underlying suit.
November 17, 2023
No Coverage Owed For Foundation Damage; Bad Faith, Breach Of Contract Claims Fail

LOS ANGELES — An insured’s claims for breach of contract, bad faith and unfair business practices alleged in a complaint seeking coverage for foundation damage arising out of a burst water pipe cannot proceed because the insurer properly denied coverage under the policy’s foundation damage exclusion, the Second District California Court of Appeal said in affirming a trial court’s decision.