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Mealey's California Insurance

  • August 15, 2019

    Calif. Federal Judge Remands Bad Faith Suit, Says Complete Diversity Does Not Exist

    LOS ANGELES — A California federal judge on Aug. 13 remanded an insured’s breach of contract and bad faith suit against its insurer and its insurance broker after determining that the insured sufficiently stated a claim of negligence against the insurance broker and, therefore, proved that complete diversity among the parties does not exist (Rabbit Ridge Wine Sales v. Unigard Insurance Co., No. 19-5440, C.D. Calif., 2019 U.S. Dist. LEXIS 136774). 

  • August 15, 2019

    Federal Judge Approves Parties’ Settlement On Behalf Of Minor In Bad Faith Suit

    SAN DIEGO — A California federal judge on Aug. 12 adopted a magistrate judge’s recommendation to approve a settlement between a minor child and an auto insurer, agreeing with the magistrate judge that the proposed settlement in the breach of contract and bad faith suit is fair and in the best interests of the child (Tera Lisicky, et al. v. USAA Casualty Insurance Co., et al., No. 18-1642, S.D. Calif., 2019 U.S. Dist. LEXIS 135837).

  • August 14, 2019

    Insurance Agency’s Principal: Reinsurer’s Request For Attorney Fees Must Be Reduced

    SAN DIEGO — A principal for an insolvent insurance agency argues in an Aug. 9 opposition in a California federal court that it should reduce a reinsurer’s requested attorney fees of $213,771 to $116,600 and the $23,355 requested costs for experts to $4,006.20 in their dispute over the alleged fraudulent transfer of assets belonging to the agency to avoid payment of a $3.2 million judgment (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif.).

  • August 14, 2019

    Judge Orders New Deadlines In Reimbursement Case Against Insolvent Insurer’s Liquidator

    LOS ANGELES — A federal judge in California July 29 granted new deadlines for discovery and summary judgment motions in a bank’s lawsuit against the liquidator of an insolvent medical professional liability insurer seeking reimbursement under a letter of credit issued to the insurer to stay enforcement of a $2.5 million medical malpractice judgment (MUFG Union Bank, N.A. v. Steven C. Taylor, No. 18-02772, C.D. Calif.).

  • August 14, 2019

    Magistrate Judge:  Reinsurer, Affiliates Settle With Insureds In Breach Of Contract Dispute

    OMAHA, Neb. — A Nebraska federal magistrate judge on Aug. 9 announced that insureds, a reinsurer and its affiliates have reached an agreement to settle their claims, counterclaims and third-party claims in a breach of contract dispute over a workers’ compensation program involving a reinsurance participation agreement (RPA) (Applied Underwriters Captive Risk Assurance Company Inc. v. Ramesh Pitamber & Kusum Pitamber, et al., No. 17-61, D. Neb.).

  • August 14, 2019

    Insurer Granted Summary Judgment In Homeowners Insurance Coverage Dispute

    SAN DIEGO — A federal judge in California on Aug. 12 granted an insurer’s summary judgment motion in an insurance breach of contract and bad faith lawsuit stemming from a wildfire damage claim, ruling that no triable issues of fact exist to support the insureds’ arguments that the insurer improperly narrowed its investigation of their claim to show that no damage existed (Jensen Shirley, et al. v. Allstate Insurance Co., No. 18-994, S.D. Calif., 2019 U.S. Dist. LEXIS 135776).

  • August 14, 2019

    Alabama Law Applies To Contamination Dispute, 9th Circuit Says In Reversing

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Aug. 13 reversed a district court’s ruling that California law, rather than Alabama law, applies to an environmental contamination coverage suit because each of the policies at issue clearly mentions Alabama as the place of the performance (Arrow Electronics Inc. v. Aetna Casualty & Surety Co., et al., No. 18-55810, 9th Cir.).

  • August 14, 2019

    Majority Affirms Ruling In Favor Of Excess Directors, Officers Liability Insurer

    SAN FRANCISCO — A majority of a Ninth Circuit U.S. Court of Appeals panel on Aug. 12 affirmed a lower court’s summary judgment ruling in favor of a first-level excess directors and officers liability insurer on a software company insured’s breach of contract and bad faith claims, finding that the insured was not liable for any portion of an underlying settlement and the insured’s alleged breach was not the proximate cause of the insured’s purported damages (Genesis Insurance Co. v. National Union Fire Insurance Company of Pittsburgh, Pa., et al., No. 17-17362, 9th Cir., 2019 U.S. App. LEXIS 23956).

  • August 13, 2019

    Judge Awards Law Firm Attorney Fees In Professional Liability Coverage Dispute

    LOS ANGELES — A federal judge in California on Aug. 1 awarded Dickstein Shapiro $346,697.50 in reasonable attorneys fees in a dispute over professional liability coverage for an underlying $17.5 million settlement of a malpractice lawsuit brought against one of the law firm’s former partners and denied an excess insurer’s motion for reconsideration of a previous ruling as to coverage allocation (Scottsdale Insurance Company v. Dickstein Shapiro LLP et al., No. 18- 02893, C.D. Calif., 2019 U.S. Dist. LEXIS 133045).

  • August 13, 2019

    Insured Abandoned Tortious Bad Faith Claim By Not Filing Response, Judge Says

    SAN DIEGO — A California federal judge on Aug. 9 dismissed an insured’s claims for tortious breach of the implied covenant of good faith and fair dealing and punitive damages against a homeowners insurer after determining that the insured abandon her rights to the claim by failing to file an opposition to the insurer’s motion to dismiss (Roblee Larson-Valentine v. Travelers Commercial Insurance Co., No. 19-1209, S.D. Calif., 2019 U.S. Dist. LEXIS 134660).

  • August 12, 2019

    2 Out Of 3 Plaintiffs Settle Cases Over Reinsurance Participation Agreement

    SACRAMENTO, Calif. — All but one plaintiff in two putative class actions said on Aug. 7 to a California federal judge that they have agreed in principal to settle disputes over a reinsurance participation agreement (RPA) entered into by California businesses when buying a workers’ compensation program (Shasta Linen Supply Inc. v. Applied Underwriters Inc., et al., No. 16-158, Pet Food Express Ltd., et al. v. Applied Underwriters Inc., et al., No. 16-1211, E.D. Calif.).

  • August 9, 2019

    Reinsurer Asks 9th Circuit To Reverse Denial Of Motion To Intervene In $3.2M Case

    SAN FRANCISCO — A reinsurer argues in its Aug. 7 opening brief that the Ninth Circuit U.S. Court of Appeals should reverse a lower court’s order denying the reinsurer’s motion to intervene and remand to allow the reinsurer to file its complaint-in-intervention and proceed with its claims in a creditor’s dispute over a $3.2 million judgment (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al. v. Knight Insurance Company Ltd., Nos. 19-55346 & 19-55347, 9th Cir.).

  • August 9, 2019

    Federal Judge Says Disability Claimant’s Suit Is Barred By Res Judicata

    LOS ANGELES — A disability claimant’s suit seeking long-term disability (LTD) benefits must be dismissed because the LTD claim was disposed of in a prior lawsuit filed by the claimant against the disability insurer, a California federal judge said Aug. 7 (Yvette Williby v. Aetna Life Insurance Co., No. 18-10639, C.D. Calif., 2019 U.S. Dist. LEXIS 133814).

  • August 6, 2019

    Bad Faith Claim Against Disability Insurer Will Proceed, Judge Says

    SAN JOSE, Calif. — A bad faith claim alleged against a disability insurer can proceed because questions of fact exist as to whether the insurer’s termination of long-term disability benefits was unreasonable and as to whether the bad faith claim is subject to the applicable two-year statute of limitations, a California federal judge said Aug. 2 in denying the insurer’s motion for summary judgment (Stephanie Jensen v. Dearborn National Life Insurance Co., No. 17-7320, N.D. Calif., 2019 U.S. Dist. LEXIS 129835).

  • August 6, 2019

    Private-Label Manufacturer Appeals No-Coverage Ruling For Suit Against Wal-Mart

    SAN FRANCISCO — A private label manufacturer for Wal-Mart Inc. recently asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling in favor of a commercial general liability insurer in its lawsuit seeking coverage for an underlying trademark infringement action brought against Wal-Mart, arguing that disputed issues of material fact preclude a summary judgment ruling (Hybrid Promotions LLC v. Federal Insurance Co., No. 18-56658, 9th Cir.).

  • August 5, 2019

    9th Circuit Dismisses Appeals Over Ruling In Reinsurer’s Fraudulent Transfer Case

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on July 31 dismissed two separate appeals concerning a lower court’s findings that there are fact issues over a reinsurer’s claim that there was a fraudulent transfer to avoid a $3.2 million judgment under theories of both actual and constructive fraud (Odyssey Reinsurance Co. v. David Dostalik, et al., No. 19-55575 & Odyssey Reinsurance Co. v. Claims Technology Services Corp., et al., No. 19-55576, 9th Cir.).

  • July 31, 2019

    Panel Upholds $13.4M Restitution Order For Workers’ Compensation Premium Fraud

    SANTA ANA, Calif. — A California appeals panel on July 23 affirmed a trial court judge’s ruling ordering a man convicted on 33 counts of insurance premium fraud to pay $13.4 million in restitution, finding that the judge properly calculated the amount based on information presented by the defendant’s expert (People v. Michael Vincent Petronella, No. G054524, Calif. App., 4th Dist., 3rd Div., 2019 Cal. App. Unpub. LEXIS 4916).

  • July 29, 2019

    Judge Remands Insurance Fraud Suit Over AbbVie’s Marketing Of Humira

    SAN FRANCISCO — A federal judge in California on July 24 remanded a lawsuit accusing AbbVie Inc. of violating California’s Insurance Fraud Prevention Act when marketing Humira by paying kickbacks to doctors who prescribed the autoimmune disorder treatment, finding that the state is a real party in interest (California ex rel. Lazaro Suarez v. AbbVie Inc., No. 18-cv-06392-JD, N.D. Calif., 2019 U.S. Dist. LEXIS 124463).

  • July 26, 2019

    Breach Of Contract, Bad Faith Claims To Proceed Against Auto Insurer

    SAN JOSE, Calif. — Insureds who allege that their auto insurer acted in bad faith and breached its contract in handling two separate auto accident claims presented sufficient evidence in support of their claims, a California federal judge said July 24 in denying the insurer’s motion for summary judgment (Gina Armas, et al. v. USAA Casualty Insurance Co., No. 17-6909, N.D. Calif., 2019 U.S. Dist. LEXIS 123690).

  • July 23, 2019

    California Panel Affirms No Coverage For Tenant’s Theft Of Insured’s Property

    SAN DIEGO — A California appeals panel on July 22 affirmed a lower court’s ruling that a homeowners insurance policy unambiguously excludes coverage for the theft of the insured’s personal property by one of her tenants, rejecting the insured’s argument that the exclusion does not apply or is ambiguous (Shirley Pearson  v. State Farm General Insurance Company, No. D074426, Calif. App., 4th Dist., Div. 1; 2019 Cal. App. Unpub. LEXIS 4829).