Mealey's California Insurance
-
June 24, 2019
Bad Faith Dispute Over Flood Damage Remanded To State Court
RIVERSIDE, Calif. — A federal judge in California on June 12 ruled that an adjuster was not improperly joined in an insurance breach of contract and bad faith lawsuit against a homeowners insurance provider and remanded the action to state court (Maria Gast v. Universal North America Insurance Co., et al., No. 19-0647, C.D. Calif., 2019 U.S. Dist. LEXIS 99582).
-
June 21, 2019
Federal Judge Remands Suit Alleging Insurer Unlawfully Charged Credit Card
LOS ANGELES — A California federal judge on June 19 remanded a lawsuit alleging that an insurer unlawfully and fraudulently charged $1,132.41 to a credit card, finding that the insurer failed to establish by a preponderance of the evidence that the amount in controversy is more than $50,000 to warrant federal jurisdiction (Shahnaz Niknam v. Safeco Insurance Company, et al., No. 19-04937, C.D. Calif., 2019 U.S. Dist. LEXIS 102787).
-
June 19, 2019
Judge Confirms In Part Award Over Reinsurance Participation Agreements
SAN FRANCISCO — In a dispute over fees allegedly owed under two reinsurance participation agreements (RPA), a California federal judge on June 17 confirmed in part a final arbitration award with the exception of the arbitrator’s order increasing the interest rate applied to sums owed under the first RPA (Mike Rose’s Auto Body Inc. v. Applied Underwriters Captive Risk Assurance Company Inc., No. 16-01864, N.D. Calif., 2019 U.S. Dist. LEXIS 100943).
-
June 19, 2019
California Panel Affirms No Homeowners Coverage For Jewelry Store Shooting
SAN FRANCISCO — A California appeals panel on June 17 affirmed that there is no coverage under a homeowners insurance policy's personal injury provision for the discharge of a firearm after a robbery attempt, finding that the victim has failed to present any evidence to create a triable issue of material fact as to whether the first shot in the robbery attempt was intentional (CSAA Insurance Exchange, et al. v. Oscar Herrera, No. A153429, Calif. App., 1st Dist., 2019 Cal. App. Unpub. LEXIS 4061).
-
June 18, 2019
Specific Matter Exclusion Bars Coverage For Alleged Scheme, 9th Circuit Affirms
PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on June 14 affirmed a lower federal court’s ruling that an insurance policy’s specific matter exclusion bars coverage for underlying lawsuits alleging that an insured's directors and officers participated in a scheme to transfer encumbered properties to their relatives while avoiding banks' interests in the properties (Ocean Towers Housing Corporation v. Evanston Insurance Co., No. 17-56838, 9th Cir., 2019 U.S. App. LEXIS 17971).
-
June 18, 2019
California Panel Upholds $6.3M Penalty For Claims Submitted By Sham Law Firms
LOS ANGELES — A California appeals panel on June 17 affirmed a jury’s decision to order two women to pay $6.3 million for violating California Penal Code Section 550 when creating sham law firms to submit fraudulent claims to Allstate Insurance Co., finding that the trial court judge did not abuse his discretion when denying one defendant’s ex parte motion for a stay and that the defendants’ submission of claims from sham firms violated the statute (People, ex rel. Allstate Insurance Company, et al. v. Christine Suh, et al., No. B280293, Calif. App., 2nd Dist., 7th Div., 2019 Cal. Unpub. LEXIS 4058).
-
June 18, 2019
Insurer Sues Insurer For Equitable Contribution Of Construction Defect Case
LOS ANGELES — A general contractor’s insurer sued a subcontractor’s insurer on June 14 in a California federal court, asserting claims for declaratory relief and equitable contribution regarding coverage for an underlying construction defect case against the general contractor and subcontractor (Kinsale Insurance Co. v. HDI Global Specialty SE, No. 19-05219, C.D. Calif.).
-
June 14, 2019
Judge Asks If Breach Of Contract Case Against Insolvent Insurer Should Be Dismissed
LOS ANGELES — A California federal judge on June 12 ordered insureds to show cause why their breach of contract case against an insolvent insurer should not be dismissed and, instead, handled in the insurer’s liquidation (Yancy Alvarez, et al. v. Access General Insurance Co., No. 18-336, C.D. Calif., 2019 U.S. Dist. LEXIS 98817).
-
June 12, 2019
CIGA: Claims Against Government Were Improperly Dismissed On Preemption
SAN FRANCISCO — In their dispute over who is responsible for payment to insureds of workers’ compensation plans that become insolvent, Secretary of Health and Human Services Alex Azar II and the California Insurance Guarantee Association (CIGA) in a May 25 brief tell the Ninth Circuit U.S. Court of Appeals that a lower court’s judgment is final and appealable because the judgment resolved all their respective claims, rights and liabilities (California Insurance Guarantee Association v. Alex Azar II, et al., Nos. 17-56526 & 17-56528, 9th Cir.).
-
June 11, 2019
Insured’s Suit Over Damaged Computer Chips Dismissed For Lack Of Jurisdiction
SAN FRANCISCO — A California federal magistrate judge on June 7 held that a global manufacturer of semiconductor microelectronic devices has failed to demonstrate that 17 foreign underwriters “purposefully availed themselves of the privilege of conducting activities in California,” granting the underwriters’ motion to dismiss the insured’s lawsuit seeking coverage for damaged computer-memory chips and equipment for lack of personal jurisdiction (Micron Technology, Inc., et al. v. Factory Mutual Insurance Company, et al., No. 18-07689, N.D. Calif., 2019 U.S. Dist. LEXIS 96257).
-
June 11, 2019
9th Circuit Majority Finds Sexual Molestation Exclusion Bars Coverage, Reverses
PASADENA, Calif. — A majority of the Ninth Circuit U.S. Court of Appeals on June 10 held that a sexual molestation exclusion in a renter insurance policy’s child care liability endorsement expressly excluded coverage for the operator of a small child-care facility for claims arising from acts of sexual molestation committed by her adult son “regardless of the theory for liability” (Holly Bayes v. State Farm General Insurance Company, No. 17-56035, 9th Cir.).
-
June 10, 2019
Pollution Exclusion Does Not Apply To Oil Contaminated By Insured’s Work, Appellant Says
LOS ANGELES — A trial court correctly determined that a pollution exclusion does not bar coverage for contamination of oil in a storage tank caused by an insured’s work; however, the trial court incorrectly determined that the insurer was entitled to rescind the insured’s policy, the party seeking coverage for damage caused by the insured’s work argues in a May 22 brief to the Second District California Court of Appeal (NRG Delta LLC v. Endurance American Specialty Insurance Co., No. B285909, Calif. App., 2nd Dist., Div. 5, 2019 CA App. Ct. Briefs LEXIS 1450).
-
June 10, 2019
Judge Dismisses Flood Coverage Suit After Parties Announce Confidential Settlement
SAN FRANCISCO — A California federal judge on May 29 signed an order dismissing with prejudice insureds’ lawsuit arising from flood damage one day after the insureds and their insurer announced that they reached a confidential settlement following mediation (Alicia Martin v. CSAA Insurance Exchange, et al., No. 17-04066, N.D. Calif.).
-
June 10, 2019
Panel: Exclusion Does Not Bar Coverage For Suit Over ‘Dangerous’ Soccer Field
PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on June 7 reversed a lower federal court’s finding that a policy exclusion barred coverage for an underlying lawsuit alleging personal injury and damages for the "dangerous condition” of a soccer field, finding that the terms of the exclusion are ambiguous (Oak Park Unified School District v. Philadelphia Indemnity Insurance Company, No. 18-55033, 9th Cir., 2019 U.S. App. LEXIS 17182).
-
June 10, 2019
Airport Liability Insurer Properly Denied Coverage; Bad Faith Claim Fails
FRESNO, Calif. — A California federal judge on June 5 determined that an insured’s assignee cannot proceed on claims for breach of contract and bad faith against an airport liability insurer because the policy at issue clearly excluded coverage for the insured’s negligence, which allegedly caused a helicopter to crash (Gary R. Farrar, et al. v. American National Property and Casualty Co., No. 15-1177, E.D. Calif., 2019 U.S. Dist. LEXIS 94487).
-
June 6, 2019
California High Court Hears Arguments On Notice Provision In Environmental Dispute
SAN FRANCISCO — The California Supreme Court on June 4 heard oral arguments regarding whether California’s common-law notice-prejudice rule is a fundamental public policy and should be applied to a policy’s notice provision and consent provision in an environmental contamination coverage suit (Pitzer College v. Indian Harbor Insurance Co., No. S239510, Calif. Sup.).
-
June 6, 2019
Panel: Insurer Not Relieved Of Duty Based Upon Care, Custody, Control Exclusion
SAN DIEGO — A California appeals panel on June 5 reversed a lower court’s ruling that an insurer had no duty to defend a general contractor in a construction defect case based upon the exclusion in an additional insured endorsement for damage to “property in the care, custody or control of the additional insured” (McMillin Homes Construction Inc. v. National Fire & Marine Insurance Co., No. D074219, Calif. App., 4th Dist., Div. 1, 2019 Cal. App. LEXIS 514).
-
June 5, 2019
Disability Insurer, Claimant Reach Agreement In Dispute Over Calculation Of Benefits
SAN FRANCISCO — Following the settlement of a long-term disability (LTD) benefits dispute, the Ninth Circuit U.S. Court of Appeals on June 3 dismissed the disability insurer’s appeal of a district court decision to remand the claim to the plan administrator to recalculate the claimant’s monthly benefits to include the claimant’s commissions and monthly and quarterly bonuses (Remy Renault v. Unum Life Ins. Co. of America, et al., No. 19-55254, 9th Cir., 2019 U.S. App. LEXIS 16740).
-
June 3, 2019
Criminal Acts Exclusion Does Not Bar Coverage For Class Action, Panel Affirms
SANTA ANA, Calif. — A California appeals panel on May 31 affirmed a lower court's finding that coverage is owed for claims that an insured violated California Penal Code Section 632 by improperly recording a private interview without her knowledge and published it to third parties, rejecting an insurer’s argument that coverage is excluded under a commercial general liability insurance policy’s criminal acts exclusion (Nautilus Insurance Company v. Monique Mingione, No. G055914, Calif. App., 4th Dist., Div. 3, 2019 Cal. App. Unpub. LEXIS 3759).
-
May 31, 2019
Man Says Insurer Owes Him Full Payment Of Medical Costs Related To Accident
SAN FRANCISCO — A panel of the Ninth Circuit U.S. Court of Appeals is scheduled to hear oral arguments on July 8 in an insurance coverage dispute in which an insured contends he is entitled to full payment of medical expenses from his insurer related to injuries he suffered in a car accident (Seberaino Jimenez v. Progressive Preferred Insurance Company, No. 18-16411, 9th Cir.).