Mealey's California Insurance

  • May 24, 2017

    California High Court Is Set To Rule On Coverage For Molestation Suit

    SAN FRANCISCO — An employer in an April 10 reply brief urges the California Supreme Court to find that claims against an employer for negligent hiring, retention and supervision of its employee qualify as an “occurrence” under the employer’s commercial general liability (CGL) policy and that an “accident” can include unintended consequences of the employer’s intentional acts (Liberty Surplus Insurance Corporation, et al. v. Ledesma and Meyer Construction Company, Inc., et al., No. S236765, Calif. Sup.).

  • May 22, 2017

    Appeals Panel Says Policy Limits Were Exhausted, No Further Duty To Defend Exists

    LOS ANGELES — The Second District California Court of Appeal on May 18 reversed a trial court’s judgment in favor of an insured in a silica coverage case after determining that the insured released its right to assert any bad faith claims against the insurer and after finding that the insurer has no further duty to defend the insured because the insurer’s policy limits were exhausted in 2013 (Truck Insurance Exchange v. Moldex Metric Inc., et al., No. B272378, Calif. App., 2nd Dist., 2017 Cal. App. Unpub. LEXIS 3485).

  • May 22, 2017

    Abuse Exclusion Bars Coverage For Wrongful Death Verdict, 9th Circuit Affirms

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on May 17 rejected a doctor and his wife’s argument that they were entitled to coverage for an adverse verdict in a wrongful death suit because their homeowners insurance policy's abuse exclusion was not applicable, affirming a lower federal court’s summary judgment ruling in favor of the insurer (American Family Mutual Insurance Co. v. Carlos F. Verdugo, M.D., et al., Nos. 16-15687 and 16-15717, 9th Cir., 2017 U.S. App. LEXIS 8828).

  • May 17, 2017

    California Federal Judge Orders Parties To File Joint Proposed Judgment On Attorney Fees

    SAN FRANCISCO — A California federal judge on May 15 ordered a disability claimant and a disability insurer to submit a joint proposed judgment on the claimant’s motion for attorney fees after finding that the claimant is not entitled to collect attorney fees for all the tasks completed by the claimant’s attorney (Marlon Montoya v. Reliance Standard Life Insurance Co., No. 14-2740, N.D. Calif.; 2017 U.S. Dist. LEXIS 73781).

  • May 16, 2017

    California Appellate Panel Affirms Dismissal Of Bad Faith Suit As Time-Barred

    LOS ANGELES — A state trial court’s dismissal of an insured’s breach of contract and bad faith claims in a homeowners insurance dispute was proper because the insured’s claims were filed after the claims’ one-year statute of limitations had run, a California appellate panel ruled in affirming on May 12 (Heather A. Smillie v. State Farm General Insurance Co., No. B268353, Calif. App., 2nd Dist., Div. 8, 2017 Calif. App. Unpub. LEXIS 3252).

  • May 12, 2017

    9th Circuit Panel Says Wrong Standard Of Review Applied In Disability Suit

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on May 11 reversed a district court’s ruling in favor of a disability insurer after determining that the district court applied the wrong standard of review pursuant to California law (Talana Orzechowski v. The Boeing Company Non-Union Long-Term Disability Plan, et al., No. 14-55919, 9th Cir., 2017 U.S. App. LEXIS 8348).

  • May 12, 2017

    Judge Bars Testimony In Reinsurance Risk Company’s Breach Of Contract Case

    SAN FRANCISCO — A California federal judge excluded on May 10 lay opinion testimony by a reinsurance risk management company’s chief financial officer in a breach of contract lawsuit about funds that were improperly withdrawn from bank accounts (Les Fields/C.C.H.I. Insurance Services v. Stuart M. Hines, et al., No. 15-03728, N.D. Calif., 2017 U.S. Dist. LEXIS 71620).

  • May 11, 2017

    9th Circuit Partly Reverses Ruling In Coverage Dispute Over Intellectual Property

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on May 9 affirmed in part, reversed in part and remanded a coverage dispute arising from an underlying lawsuit alleging that insureds breached an intellectual property agreement and committed trade libel and tortious inducement to breach of contract (The Burlington Insurance Co. v. Minadora Holdings, LLC, et al., Nos. 15-55702 and 15-56657, 9th Cir., 2017 U.S. App. LEXIS 8232).

  • May 9, 2017

    Judge Grants Insureds’ Motion To Stay Professional Liability Coverage Dispute

    SAN DIEGO — A California federal judge on May 5 granted insureds’ motion to stay a professional liability coverage dispute pending resolution of an underlying lawsuit alleging that they committed fraudulent conduct in managing a 40-unit mixed-use condominium complex in San Diego (Admiral Insurance Co. v. Urban Housing Partners, Inc., et al., No.: 16-2720, S.D. Calif., 2017 U.S. Dist. LEXIS 69303).

  • May 9, 2017

    Federal Magistrate Judge Recommends Default Judgment Be Entered Against Insured

    SAN JOSE, Calif. — A California federal magistrate judge on May 3 recommended that a default judgment be entered against an insured because the insured failed to response to its insurers’ complaint seeking a declaration that no coverage is owed for an underlying construction defects suit and because no coverage exists for the underlying suit based on the insured’s misrepresentation in a policy application (Associated Industries Insurance Co. Inc., et al. v. Detail Construction & Waterproofing, Inc., No. 16-6042, N.D. Calif., 2017 U.S. Dist. LEXIS 67722).

  • May 9, 2017

    Insurer Says No Defense Owed For Suit Alleging Mattresses Emitted Chemical Odor

    SAN FRANCISCO — An insurer has no duty to defend an underlying consumer class action lawsuit alleging that an insured’s mattresses were defective because the underlying suit alleges only intentional conduct on the part of the insured and does not allege an accident as required by the policy at issue, the insurer maintains in an April 14 reply brief filed in the Ninth Circuit U.S. Court of Appeals (Hartford Fire Insurance Co. v. Tempur-Sealy International Inc., et al., No. 16-16056, 9th Cir.).

  • May 8, 2017

    California Federal Judge Allows Counterclaims In Sewage Spill Coverage Suit

    LOS ANGELES — A California federal judge on May 4 partially granted a motion to assert breach of contract and bad faith counterclaims against an insurer in a coverage dispute arising out of a sewage spill after determining that the insurer would not be prejudiced if the counterclaims were asserted by the defendants (Travelers Property Casualty Company of America v. Mountain Movers Engineering Contactors Inc., No. 16-2127, S.D. Calif.; 2017 U.S. Dist. LEXIS 68575).

  • May 8, 2017

    No Jurisdiction Under CAFA’s ‘Mass Action’ Provision, Judge Rules In Remanding

    RIVERSIDE, Calif. — A California federal judge on May 3 granted insurers’ motion to remand a lawsuit arising from claims over defective water supply lines, finding that the 26 insurers, acting as subrogees of 145 insureds, are the only plaintiffs and therefore fail to satisfy the “mass action” provision under the Class Action Fairness Act (CAFA) to retain jurisdiction (Liberty Mutual Fire Insurance Co. v. EZ-Flo International Inc., No. 17-228, C.D. Calif., 2017 U.S. Dist. LEXIS 67761).

  • May 5, 2017

    Judge Vacates 3 Demands Of Reimbursement Against CIGA For Workers’ Claims

    LOS ANGELES — California Insurance Guarantee Association (CIGA) is entitled to an order vacating and setting aside three reimbursement demands of $119,122 made under workers’ compensation insurance policies, a California federal judge ruled May 3 (California Insurance Guarantee Association v. Thomas E. Price, Secretary of Health and Human Services, et al., No. 15-cv-01113, C.D. Calif., 2017 U.S. Dist. LEXIS 67589).

  • May 5, 2017

    9th Circuit Asked To Decide Whether Summary Judgment Was Proper In Bad Faith Suit

    SAN FRANCISCO — Parties in an insurance dispute asked the Ninth Circuit U.S. Court of Appeals recently to determine whether a federal district court erred in granting an insurer’s motion for summary judgment on claims that it breached its duty to defend and acted in bad faith in denying coverage under an indemnity insurance policy (Sunrise Specialty Co. Inc., et al. v. Scottsdale Insurance Co., No. 16-16856, 9th Cir.).

  • May 3, 2017

    Federal Judge Stays Defects Coverage Suit Until Underlying Suits Are Resolved

    SAN FRANCISCO — A California federal judge on April 26 denied an insurer’s motion for summary judgment and stayed the insurer’s suit until two underlying suits alleging claims related to the insured’s alleged negligent workmanship are resolved because there are multiple issues of material dispute that need to be resolved before a coverage decision can be made (Tokio Marine Specialty Insurance Co. v. Thompson Brooks Inc., et al., No. 17-514, N.D. Calif., 2017 U.S. Dist. LEXIS 63542).

  • May 2, 2017

    Insurer Owes Insured For Prejudgment Interest, Some Attorney Fees, 9th Circuit Says

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 27 ruled that a business liability insurer has a duty to indemnify its insured for prejudgment interest on underlying damages for breach of contract and underlying attorney fees and costs attributable to California Labor Code claims brought by a former employee, reversing and vacating in part and remanding for further proceedings (Michael Feiz Medical Corp. v. Scottsdale Insurance Co., No. 15-56652, 9th Cir., 2017 U.S. App. LEXIS 7495).

  • May 1, 2017

    Prior Knowledge, Prior Litigation Exclusions Bar Coverage, 9th Circuit Affirms

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 28 affirmed a lower federal court’s finding that a business and management insurance policy’s prior knowledge and prior litigation exclusions bars coverage for an underlying lawsuit against management insureds (Douglas Woo, et al. v. Scottsdale Insurance Co., No. 14-56992, 9th Cir., 2017 U.S. App. LEXIS 7616).

  • April 27, 2017

    California Federal Judge Tosses Intentional Infliction Of Emotional Distress Claims

    SACRAMENTO, Calif. — A California federal judge on April 20 dismissed with prejudice an elderly man’s claims of intentional infliction of emotional distress (IIED) against Mutual of Omaha because the man has not identified “any extreme and outrageous conduct” by the defendant (Donald Mann v. Mutual of Omaha, et al., No. 16-2560, E.D. Calif., 2017 U.S. Dist. LEXIS 60579).

  • April 27, 2017

    Business Pursuits Exclusion Bars Coverage For Injury, 9th Circuit Affirms

    PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 20 affirmed a lower federal court’s ruling in favor of an insurer in a coverage dispute arising from an underlying injury claim by a day laborer (Barbara Kellerer v. Allied Property and Casualty Insurance Co., No. 15-56653, 9th Cir., 2017 U.S. App. LEXIS 6903).