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Mealey's California Insurance

  • April 15, 2024

    Pipeline Operators, Property Owners Agree To Settle Oil Spill Claims For $70M

    LOS ANGELES — In California federal court, two companies that formerly operated an oil pipeline that ruptured and contaminated residential property in southern California filed a motion for preliminary approval of a class action settlement that would see the companies pay $70 million to property owners who were affected by the rupture.

  • April 11, 2024

    Insurer Accused Of Using AI Software To Deny Claims ‘En Masse’ In Class Suit

    OAKLAND, Calif. — An insured filed a putative class action in California state court accusing his insurer of violating California’s insurance regulations and its unfair competition law (UCL) by using artificial intelligence (AI) software to deny claims for coverage.

  • April 10, 2024

    Pharma Companies Seek High Court Review Of Ruling Reversing FCA Suit Dismissal

    WASHINGTON, D.C. — Pharmaceutical companies accused of violating the False Claims Act (FCA) by artificially inflating drug prices filed a petition for writ of certiorari in the U.S. Supreme Court, seeking review of the Ninth Circuit U.S. Court of Appeals’ reversal of a district court’s dismissal of a qui tam suit against them, arguing, in part, that the panel “created a circuit split by holding that a relator can avoid the public disclosure bar by ‘stitching together’ public disclosures.”

  • April 10, 2024

    No Evidence Supports Bad Faith Claim Against Auto Insurer, Federal Judge Says

    LOS ANGELES — An insured failed to present any evidence supporting its allegation that its auto insurer acted in bad faith by failing to properly settle underlying bodily injury claims arising out of an auto accident for which the insured conceded liability, a California federal judge said in granting the auto insurer’s motion for summary judgment.

  • April 08, 2024

    Driver Appeals Grant Of Summary Judgment On UCL Claim For ‘Unfair’ COVID Premiums

    SAN FRANCISCO — A driver on April 5 appealed to the Ninth Circuit U.S. Court of Appeals a California federal judge’s grant of summary judgment in favor of GEICO after finding that it did not violate California’s unfair competition law (UCL) by unfairly profiting from a premium giveback program initiated during the COVID-19 pandemic.

  • April 05, 2024

    Bad Faith Claim Against Auto Insurer To Proceed, California Federal Judge Says

    FRESNO, Calif. —  An insured’s claim for bad faith against an auto insurer can proceed because the disparity between an arbitrator’s determination of the insured’s damages and the available policy limit supports the insured’s bad faith claim, a California federal judge said in denying the insurer’s motion for judgment on the pleadings.

  • April 01, 2024

    9th Circuit Panel Refuses To Rehear Ruling In $40M Commercial Crime Coverage Suit

    PASADENA, Calif. — A panel of the Ninth Circuit U.S. Court of Appeals on March 29 voted unanimously to deny insurers’ petition for panel rehearing challenging its reversal of 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, standing by its 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 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.